5 Consolidated version of the Treaty on the Functioning of the European Union [2012] OJ C326/01 (TFEU).
6 Easterbrook "Workable Antitrust Policy" 1986 84 Mich L Rev 1696 1702; see also Stigler "The Origin of the Sherman Act" 1985 14 The Journal of Legal Studies 1-12.
7 Case C-26/62 NV Algemene Transport- en Expeditie Onderneming van Gend & Loos v Netherlands Inland Revenue Administration [1963] ECR 95; see further O'Donoghue and Padilla Law and Economics of Article 102 TFEU 2ed (2013) 55, where the authors write about the various influences on Article 102 TFEU.
8 O'Donoghue et al Law and Economics of Article 102 TFEU 62.
9 Case C-52/09 P Konkurrensverket v TeliaSonera Sverige AB [2011] ECR I-00527 par 2021.
10 Ibid.
11 See Mestmäcker "The development of German and European competition law with special reference to the EU Commission's Article 82 Guidance of 2θ08" in Pace European Competition Law: The Impact of the Commission's Guidance on Article 102 (2011) 35.
12 O'Donoghue et al Law and Economics of Article 102 TFEU 62.
13 Ibid.
14 See, for example, in Brooke Group Ltd v Brown & Williamson Tobacco Corp (1993) 509 US 209, the US Supreme Court's reluctance to treat price cuts as predatory was based, among other factors, on the concern that the strict rule could chill legitimate price competition. The court stated that, as a general rule, "the exclusionary effect of prices above a relevant measure of cost either reflects the lower cost structure of the alleged predator, and so represents competition on the merits, or is beyond the practical ability of a judicial tribunal to control without courting intolerable "risks of chilling legitimate price cutting"; see also Verizon Communications Inc v Law Offices of Curtis V Trinko, LLP (2004) 540 US 398 414, where it was held that "[u]nder the best of circumstances, applying the requirements of §2 'can be difficult' because 'the means of illicit exclusion, like the means of legitimate competition, are myriad.' [...] Mistaken inferences and the resulting false condemnations 'are especially costly, because they chill the very conduct the antitrust laws are designed to protect.'"; Concord Boat Corp v Brunswick Corp (8th Cir 2000) 207 F 3d 1061, which noted that "[b]ecause cutting prices in order to increase business often is the very essence of competition, which antitrust laws were designed to encourage, it 'is beyond the practical ability of a judicial tribunal to control [above cost discounting] without courting intolerable risks of chilling legitimate price cutting.'"; and United States v AMR Corp (10th Cir 2003) 335 F 3d 1114, which stated that "caution in predatory pricing cases is the watchword 'as the costs of an erroneous finding are high'".
15 United States v Aluminum Co of America (2d Cir 1945) 148 F 2d 416.
16 Case C-322/81 NV Nederlandsche Banden Industrie Michelin v Commission of the European Communities [1983] ECR 3461 ("Michelin") par 57 and Joined Cases C-395/96 P and C-396/96 P Compagnie Maritime Belge Transports v Commission of the European Communities [2000] ECR I-1365 par 37.
17 See US v Grinnell Corp (1966) 384 US 563 570-571, where it can be seen that from the earliest cases construing the provision, the US courts have recognised that section 2 does not attempt to make the size of a firm, however large, or the existence of unexerted power on its part an offence when unaccompanied by unlawful conduct in the exercise of its power.
18 Guidance Communication on the Commission's enforcement priorities in applying Article 82 of the EC Treaty to abusive exclusionary conduct by dominant undertakings [2009] OJ C45/02 ("the Guidance Paper") par 6; see also Case C-8/08 T-Mobile Netherlands BV, KPN Mobile NV, Orange Nederland NV and Vodafone Libertel NV v Raad van bestuur van de Nederlandse Mededingingsautoriteit [2009] ECR I-4529 par 38, noting that the Treaty's competition rules are designed to protect not only the immediate interests of individual competitors or consumers, but also to protect the structure of the market and thus competition as such. Dominant firms are therefore entitled to compete "on the merits" in relation to pricing, contractual conditions, output, quality, innovation, cost reduction and efficiency. See Bellamy and Child European Union Law of Competition 8ed (2018) 860. For a US perspective, see Hovenkamp "Exclusion and the Sherman Act" 2005 72 U Chi L Rev 149-150, which refers to the "Areeda-Turner laundry list" of competition on the merits, including '"non-exploitative pricing, higher output, improved quality, energetic market penetration, successful research and development, cost-reducing innovations, and the like"' but stating that such a standard "may do an adequate job of characterizing past decisions. But it is not always very helpful in evaluating novel practices".
19 Case C-6/72 Europemballage Corporation and Continental Can Company Inc v Commission of the European Communities [1973] ECR 215 par 26.
20 Case C-280/08 P Deutsche Telekom AG v European Commission [2010] ECR I-09555 par 176; see also TeliaSonera Sverige AB supra par 21-22, which notes that the function of the competition rules of the Treaty, including article 102 TFEU, is to "prevent competition from being distorted to the detriment of the public interest, individual undertakings and consumers, thereby ensuring the well-being of the European Union"; and see Joined Cases C-501/06 P, C-513/06 P, C-515/06 P and C-519/06 P GlaxoSmithKline Services Unlimited v Commission of the European Communities [2009] ECR I-09291 par 63, where it was stated that "the Court has held that [...] like other competition rules laid down in the Treaty [...] [it] aims to protect not only the interests of competitors or of consumers, but also the structure of the market and, in so doing, competition as such".
21 Case C-209/10 Post Danmark A/S v Konkurrencerädet EU:C:2012:172 par 22 ("Post Danmark /"); Case C-413/14 P Intel Corp. vEuropean Commission EU:C:2017:632 par 134.
22 O'Donoghue et al Law and Economics of Article 102 TFEU 6.
23 Case COMP/38.233 Wanadoo Interactive, European Commission Decision of 16 July 2003; Case T-340/03 France Télécom SA v Commission of the European Communities [2007] ECR II-00107; Case C-202/07 France Télécom SA v Commission of the European Communities [2009] ECR I-02369.
24 Michelin supra par 57. It is often the case that, owing to historical advantages benefitting network incumbents, a tougher standard of abuse is applied to dominant (incumbent) network operators in regulated network industries through an expansive view of the doctrine of "special responsibility". See Post Danmark / supra par 23.
25 S 3 of 89 of 1998.
26 S 1 of 89 of 1998.
27 S 6 of 89 of 1998.
28 See Michelin supra par 47 "[a] finding that an undertaking has a dominant position is not in itself a recrimination but simply means that, irrespective of the reasons for which it has such a dominant position, the undertaking concerned has a special responsibility not to allow its conduct to impair genuine undistorted competition on the common market".
29 S 7(a) of 89 of 1998. See Competition Commission v South African Airways (Pty) Ltd 18/CR/Mar01 par 87.
30 S 7(b) of 89 of 1998.
31 S 7(c) of 89 of 1998.
32 See Continental Can supra; Case 85/76 Hoffmann-La Roche & Co. AG v Commission of the European Communities [1979] ECR 461 par 38-41 and 48; US v Microsoft Corp (DC Cir 2001) 253 F 3d 34; see also United States v Grinnell Corp (1966) 384 US 563.
33 Werden "Assigning Market Shares" 2002 70 Antitrust Law Journal 67-104.
34 Werden 2002 70 Antitrust Law Journal fn. 2 where the author explains that the use of term "assignment" reflects "the wide range of conscious choices to be made" and that "[t]his task goes well beyond 'calculation' and 'measurement' - two terms conventionally used to describe it".
35 For a discussion and analysis on the calculation, measurement and assignment of market shares see Werden 2002 70 Antitrust Law Journal 67-104; O'Donoghue et al Law and Economics of Article 102 TFEU 144-145; Bellamy et al European Union Law of Competition 871 -878; Bishop and Walker The Economics of EC Competition Law: Concepts, Application and Measurement 3ed (2010) 65; Niels, Jenkins & Kavanagh Economics for Competition Lawyers 2ed (2016) 100-103.
36 Werden 2002 70 Antitrust Law Journal 104.
37 See Evans and Schmalensee "The Antitrust Analysis of Multi-Sided Platform Businesses" 2012 Coase-Sandor Institute for Law & Economics Working Paper No. 623; O'Donoghue et al Law and Economics of Article 102 TFEU 146.
38 18/CR/Mar01 par 87.
39 See for eg., Dansby and Willig "Industry Performance Gradient Indexes" 1979 64 The American Economic Review 249-260; Motta Competition Policy: Theory and Practice (2004) ch 3; United States Department of Justice and the Federal Trade Commission Horizontal Merger Guidelines (2010) ch 5; Rey "Towards a Theory of Competition Policy" (2014) IDEI University of Toulouse 32-34.
40 Bellamy et al European Union Law of Competition 871 -872.
41 Hoffmann-La Roche supra par 39.
42 Geradin, Hofer, Louis, Petit and Walker "The Concept of Dominance in EC Competition Law" Global Competition Law Centre Research Paper on the Modernization of Article 82 EC (2005) College of Europe 10.
43 Ibid.
44 Geradin et al Global Competition Law Centre Research Paper on the Modernization of Article 82 EC 10-15; O'Donoghue et al Law and Economics of Article 102 TFEU ch 4; Bishop et al The Economics of EC Competition Law ch 3.
45 Posner and Landes "Market Power in Antitrust Cases" 1980 94 Harvard Law Review 937996; Bishop et al The Economics of EC Competition Law ch 3; Motta Competition Policy ch 3.
46 Harbord and Hoehn "Barriers to Entry and Exit in European Competition Policy" 1994 14 International Review of Law and Economics 411-435; Kaplow and Shapiro "Antitrust" 2007 2 Handbook of Law and Economics ch 15.
47 For instance, under art 102 TFEU, the European Court of Justice held in Hoffmann-La Roche supra that generally a very large share, in the absence of exceptional circumstances, is sufficient evidence of the existence of a dominant position. On that basis, the European Court of Justice held, in Case C-62/86 AKZO Chemie BV v Commission of the European Communities [1991] ECR I-03359 par 59-60, that 50% is a large market share, and when accompanied by the fact that AKZO's market share remained stable over a period of three years, this was sufficient proof of a dominant position. A market share in excess of 50% therefore, in the absence of countervailing indications, creates a rebuttable presumption of dominance in the EU.
48 Bloch, Kamann, Brown and Schmidt "A Comparative Analysis of Article 82 and Section 2 of the Sherman Act" 2006 7 Business Law International 151.
49 Ibid.
50 Bloch et al 2006 Business Law International 152.
51 Ibid.
52 See Bellamy et al European Union Law of Competition 873-877 and O'Donoghue et al Law and Economics of Article 102 TFEU 147-150 for a full discussion of the general indicators relating to the level of market shares in the EU.
53 Bloch et al 2006 Business Law International 152.
54 Ibid.
55 As regards the possible policy reasons behind this approach, see Sutherland and Kemp Competition Law of South Africa (2017) Issue 21 Lexis Library s 7.7.6.5 and Mackenzie "Are South Africa's Predatory Pricing Rules Suitable?" (September 2014) available at http://www.compcom.co.za/wp-content/uploads/2014/09/Neil-Mackenzie-Predatory-Pricing-in-SA.pdf (accessed 2015-03-22) section 2.
56 Competition Commission v South African Airways (Pty) Ltd supra par 87.
57 Sutherland et al Competition Law of South Africa 7-26.
58 S 1 of 89 of 1998.
59 See Case 27/76 United Brands Company and United Brands Continental BV v Commission of the European Communities [1978] ECR 207 par 65; Hoffmann-La Roche supra par 38.
60 DG Competition discussion paper on the application of Article 82 of the Treaty to exclusionary abuses (2005) par 21.
61 Geradin et al Global Competition Law Centre Research Paper on the Modernization of Article 82 EC 3.
62 Neven, Nutall and Seabright "Merger in Daylight: The Economics and Politics of European Merger Control" 1993 Center for Economic Policy Research 18.
63 The Guidance Paper par 10.
64 For example, in wholesale markets when a firm's customers are not the end consumers, the firm will still not be able to behave independently of consumers. This is because demand for intermediate goods is a "derived" demand - that is, it is ultimately determined by end consumers. See Geradin et al Global Competition Law Centre Research Paper on the Modernization of Article 82 EC fn. 5.
65 See s 8(4) of 89 of 1998.
66 United States v. E. /. du Pont de Nemours & Co. (1956) 351 U.S. 391.
67 NCAA v. Board of Regents of the University of Oklahoma. (1984) 468 U.S. 85, 109 n.38; see also, for instance, United States v Microsoft Corp (DC Cir 2001) 253 F 3d 51; Eastman Kodak Co. v. Image Technical Servs. Inc. (1992) 504 U.S. 451, 464; Jefferson Parish Hosp. Dist. No. 2 v. Hyde (1984) 466 U.S. 2, 27 n.46; and Carlton and Perloff Modern Industrial Organization 4ed (2005) 642; Posner and Landes 1980 94 Harvard Law Review 939.
68 Posner Antitrust Law 2ed (2001) 265; Motta Competition Policy 115-116.
69 Motta Competition Policy 115.
70 Carlton "Market Definition: Use and Abuse" Spring 2007 Competition Policy International 7.
71 Eastman Kodak Co. supra 481.
72 Krattenmaker, Lande and Salop "Monopoly Power and Market Power in Antitrust Law" 1987 76 Georgetown Law Journal 246-247.
73 See, for eg., Bacchus Indus., Inc. v. Arvin Indus., Inc. (10th Cir. 1991) 939 F.2d 887, 894, which defines monopoly power as "substantial" market power; Deauville Corp. v. Federated Dept Stores, Inc. (5th Cir. 1985) 756 F.2d 1183, 1192 n.6, which defines monopoly power as an "extreme degree of market power"; Areeda and Hovenkamp Fundamentals of Antitrust Law 2ed (2002) 318, which states that "the Sherman Act § 2 notion of monopoly power is conventionally understood to mean 'substantial' market power"; Posner and Landes 1980 94 Harvard Law Review 937, which defines monopoly power as "a high degree of market power".
74 DG Competition discussion paper on the application of Article 82 of the Treaty to exclusionary abuses (2005) par 24; see also The Guidance Paper par 11; Commission Working Document on the Proposed New Regulatory Framework for Electronic Communications Networks and Services: Draft Guidelines on market analysis and the calculation of significant market power COM (2001) 175 final par 65; Commission Notice Guidelines on Vertical Restraints (2000) OJ C291/01 par 119.
75 UK Office of Fair Trading Competition Law Guideline: Assessment of Market Power 2004 OFT 415 par 1.2 and 1.4.
76 The Guidance Paper par 10; Geradin et al Global Competition Law Centre Research Paper on the Modernization of Article 82 EC 4; Motta Competition Policy 35.
77 72/CR/Dec03.
78 Nationwide Poles v Sasol Oil supra par 70-71.
79 Nationwide Poles v Sasol Oil supra par 71.
80 See Stigler The Organization of Industry (1968) for an analysis of this type of market power.
81 Geradin et al Global Competition Law Centre Research Paper on the Modernization of Article 82 EC 5.
82 For instance, high profits, price-cost margins, demand elasticity and evidence of anticompetitive effects.
83 This means firms already in the market. The effectiveness of existing competition is gauged, among others, by market share over time and ease of expansion. The focus is thus on the competitive constraints imposed by the existing sellers and the position of actual competitors on the market, which looks at the market position of the dominant firm and its competitors.
84 This means future expansion by actual competitors and firms that may enter the market and prevent exercise of market power in the long run. The effectiveness of potential competition is gauged by barriers to entry (and expansion).
85 This means credible threats to switch to new suppliers or sponsor new entry and growth.
86 Krattenmaker et al 1987 Georgetown Law Journal 249.

^rND^1A01^nYvette^sBasson^rND^1A01^nYvette^sBasson^rND^1A01^nYvette^sBasson

ARTICLES

 

The compliance of the south african social security system with the international covenant on economic, social and cultural rights

 

 

Yvette Basson

LLB LLM LLD Lecturer, Faculty of Law University of the Western Cape

 

 

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SUMMARY

The ratification of the International Covenant on Economic, Social and Cultural Rights by South Africa has resulted in the provisions thereof becoming binding on the South African legislature. The right to social security is entrenched in the iCeSCR, which provides for the elements of a social security system that must be complied with by states. This article sets out what is required of states in terms of the right to social security in the ICESCR by way of crystallising the elements of a social security system. Thereafter, the South Africa social security system is compared to these elements to determine whether there is compliance with the right to social security in the ICESCR.

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1 INTRODUCTION

The International Covenant on Economic, Social and Cultural Rights (ICESCR)¹ is one of the instruments that form the International Bill of Rights.² One of the stated purposes of the ICESCR is the promotion of the general welfare of persons in a democratic society.³ The recognition that certain rights have an impact on the dignity of each person is an integral part of the ICESCR. To this end, the Preamble to the ICESCR provides that each person should be permitted to benefit from the exercise of his rights, which include economic, social, cultural, civil and political rights.⁴ Accordingly, the ICESCR makes provision for the realisation of numerous rights of the aforementioned categories. The content of the ICESCR includes provisions relating to the right to work,⁵ the right to social security⁶ and the right to an adequate standard of living.⁷

Approximately 165 countries have signed and ratified the ICESCR, which means that these countries are compelled to implement its provisions into their domestic law.⁸ However, a lack of ratification does not mean that countries that have only signed the ICESCR are unaffected by the provisions therein. Countries that have signed and not ratified the ICESCR are obliged to refrain from enacting laws which conflict with the provisions of the ICESCR.⁹

Until late 2014, South Africa was only a signatory to the ICESCR.¹⁰ A concerted campaign by numerous stakeholders resulted in the ratification of the ICESCR by South Africa on 12 January 2015.¹¹ Upon ratification, South Africa became bound by the provisions in the ICESCR and has an obligation to domesticate the provisions therein.¹² The role of South Africa as a State Party has now shifted from a passive one, in terms of which they were merely prevented from enacting laws in conflict with the provisions of the ICESCR,¹³ to an active one, in terms of which the provisions of the ICESCR must now be incorporated into South African legislation.¹⁴ For purposes of this article, the provisions of the ICESCR relating to social security schemes is discussed.

1 1 The right of access to social security in South Africa

Section 27(1)(c) of the Constitution of the Republic of South Africa provides that "everyone has the right of access to social security, including, if they are unable to support themselves and their dependants, appropriate social assistance". This right is part of the collection of socio-economic rights found in the Bill of Rights. Section 7 of the Constitution emphasises this importance and further, provides important information on how the socioeconomic rights in the Bill of Rights are to be handled by the state. Section 7(2) provides that "[t]he state must respect, protect, promote and fulfil the rights in the Bill of Rights".

According to Ngcobo CJ,

"[t]his obligation goes beyond a mere negative obligation not to act in a manner that would infringe or restrict a right. Rather, it entails positive duties on the state to take deliberate, reasonable measures to give effect to all of the fundamental rights contained in the Bill of Rights".¹⁵

It was also found in Glenister v President of the Republic of South Africa that, in interpreting the content of the obligation created by section 7(2), it was not necessary to prescribe exactly which steps the state has to take to meet its obligation in terms of the section.¹⁶ However, the chosen steps must be reasonable and effective, and must be steps that would be taken by a reasonable decision-maker in the circumstances.¹⁷ This means that any steps taken in relation to the realisation of the right of access to social security must be done in a manner that respects, protects, promotes and fulfils the right, and these steps must be reasonable.

According to the South African Human Rights Commission (SAHRC), the obligation to respect a right means that the state must not hinder the exercising of that right.¹⁸ This includes an obligation not to limit the enjoyment of a particular right already in existence.¹⁹ The protection of a right entails the state preventing violations of that right by third parties (the violation of the right by the state is already prohibited through the obligation to respect the right).²⁰ The state must also promote rights in the Bill of Rights, which involves the provision of information about the right to persons entitled to it.²¹ In other words, the state must educate persons about which rights they are entitled to and the scope and content of those rights. Finally, the obligation to fulfil rights obliges the state to take appropriate legislative and other measures which contribute to the full realisation of the rights in the Bill of Rights.²² The obligation to fulfil rights is somewhat curtailed by the principle that such fulfilment must be progressively realised using the resources available to the state.²³

1 2 Application of the right of access to social security

The right of access to social security is guaranteed for "everyone" in terms of section 27(1)(c) of the Constitution. In the case of Khosa v Minister of Social Development,²⁴the Constitutional Court considered the meaning of the word "everyone" for purposes of the right of access to social security. Following the reasoning of the court in this case, it is implicit in the use of the word "everyone" that the right of access to social security is guaranteed to persons who are permanent residents or citizens of South Africa.²⁵

According to section 27(2), "[t]he state must take reasonable legislative and other measures, within its available resources, to achieve the progressive realisation of these rights".²⁶ The terms "reasonable measures", "available resources" and "progressive realisation" have specific meanings for the right of access to social security, which are discussed in the paragraphs hereafter.

Government of the Republic of South Africa v Grootboom²⁷is the landmark case in relation to these terms. According to the Constitutional Court, in evaluating measures taken by the state to ensure access to social security the court is not concerned with the availability of "more desirable" measures, but rather with whether the measures taken were "reasonable".²⁸The court recognises that many different measures may be considered reasonable in any set of circumstances and, as long as the particular measures chosen can be considered reasonable in the circumstances, the requirement of reasonable measures is met.²⁹

It was previously said that the right of access to social security cannot be enforced (or realised) upon demand,³⁰ and this is echoed in the requirement that the right be progressively realised. According to the Constitutional Court in the Grootboom case,

"The goal of the Constitution is that the basic needs of all in our society be effectively met and the requirement of progressive realisation means that the state must take steps to achieve this goal. It means that accessibility should be progressively facilitated: legal, administrative, operational and financial hurdles should be examined and, where possible, lowered over time."³¹

Progressive realisation of social security includes, but is not limited to, increasing the level of coverage and benefits.³² This view is supported by the statement that achieving progressive realisation of socio-economic rights consists of more than increasing the finances allocated to the realisation of a particular right.³³ The focus should rather be on how many people have actually been awarded the benefit attached to a particular socio-economic right.

The question of available resources raises the ever-present issue of social spending. Essentially, the right of access to social security is limited by the stipulation that the state is only compelled to provide social security benefits where it has the resources to do so. If the state is able to prove that it does not have the resources to meet its social security obligations, the resultant (internal) limitation of social security rights is justifiable. This does not mean that the state can entirely avoid its social security obligations merely by asserting that it does not possess adequate resources.³⁴ In the Khosa case, the court stated that the limitation of the right of access to social security may be justifiable on the basis of a lack of resources, but the manner in which the existing resources are allocated must be consistent with the Bill of Rights in general.³⁵

 

2 THE RIGHT TO SOCIAL SECURITY IN THE ICESCR

Article 9 of the ICESCR provides that "States Parties to the present Covenant recognize the right of everyone to social security, including social insurance." This article creates the right of individuals to social security, and a corresponding obligation on States Parties to provide such social security. However, Article 9 on its own does not provide much indication as to the scope and content of social security systems, beyond the allusion to social insurance.

In order to give content to the right to social security, the General Comments released by the Committee for Economic, Social and Cultural Rights (CESCR) need to be considered. The CESCR was established in 1985 for the purpose of monitoring the implementation of the ICESCR by States Parties.³⁶ It is made up of 18 independent experts who are tasked with receiving state reports on the progress of implementation of the ICESCR and publishing their interpretation of the provisions of the ICESCR in the form of general comments.³⁷

For purposes of social security, General Comment 19 provides information for States Parties to comply with Article 9 of the ICESCR.

2 1 General Comment 19

The right to social security is defined by the CESCR as the right to access and maintain benefits, whether in cash or in kind, without discrimination in order to ensure protection from a number of contingencies that result in a lack of work-related income, or unaffordable health care or insufficient family support.

According to General Comment 19, social security systems should be established in terms of the domestic law of each country and the administration thereof should be the responsibility of a public authority.³⁸This means that it is up to each State Party to decide how to administer its own social security system, and that such administration must be transparent. The CESCR also confirms that there are a number of contingencies for which any social security system should provide coverage.³⁹ These contingencies are sickness, disability, maternity, employment injury, unemployment, old age or death of a family member.⁴⁰However, the General Comment does not provide more specific examples of events leading to loss of income resulting from these contingencies, nor does it refer to any monetary amounts which may be provided to persons affected by such contingencies.⁴¹

In order to inform the approach of state parties in implementing the right to social security, the General Comment requires states parties to respect, protect and fulfil the right to social security.⁴² This echoes the obligation to respect, protect, promote and fulfil the right of access to social security in the Constitution, although the explanations of each term are not identical. In respecting and protecting the right to social security, it has been suggested that the state must not only provide legislative protection to existing private and collective social security schemes but also that non-state social security schemes must be established.⁴³ The fulfilment of the right to social security is more straightforward, in that the state party is merely required to have a legislative framework in place for a social security system.⁴⁴

General Comment 19 provides for basic principles which must be present in any social security system.⁴⁵ In the following paragraphs these basic principles as well as the obligations discussed above are explained and applied to the South African social security system in order to gauge whether South Africa's social security system complies with them.

 

3 INDICATORS FOR COMPLIANCE WITH THE ICESCR

From the discussion of General Comment 19, several indicators can be crystallised that can be used to determine whether a country's social security system meets the requirements established by the ICESCR. These indicators are:

- the existence of a social security system

- the administration of such social security system by a public authority

- the coverage of a minimum of nine named contingencies

- the level of coverage provided by the social security system

- the level and duration of benefits provided

- the use of benefits in the realisation of other rights in the ICESCR

The Office of the High Commissioner of the United Nations summarises the key elements of the right to social security as availability, adequacy, affordability and accessibility.⁴⁶ The implementation of the right to social security must therefore be informed by these three principles.⁴⁷ Each of these elements can be linked to one of the indicators named above.

3 1 The existence of a social security scheme

This indicator could also be called the availability of a social security system. This indicator is arguably the easiest one to satisfy, in that all that need be proved is that a social security system providing benefits is in place. This is also reminiscent of the requirement to fulfil the right to social security in General Comment 19, which also only requires that a legislative framework for social security be in place.⁴⁸ The system may consist of a single scheme or a variety of schemes;⁴⁹ the accessibility and adequacy of these schemes becomes relevant when applying the other indicators.

In terms of section 27 of the Constitution of the Republic of South Africa, everyone has a right of access to social security.⁵⁰ There is thus a constitutional basis for the social security system in South Africa, subject to certain limitations and qualifying criteria. In addition, numerous pieces of legislation give effect to this constitutional right. These include the Social Assistance Act,⁵¹ Unemployment Insurance Fund Act,⁵² Compensation for Occupational Injuries and Diseases Act and the Pension Funds Act.⁵³ The Social Assistance Act makes provision for social grants administered by the State, and the other legislation mentioned establishes and provides structure for various social insurance schemes. The social security system therefore exists and consists of multiple schemes as envisaged by the UN High Commissioner.

3 2 Administration by a public authority

The ICESCR requires that the social security system of a member state be administered by a public authority. Neither the ICESCR nor the General Comment relating to social security provides a definition of "public authority". However, a public authority is defined as any government or public institution at national, regional or local level. It is submitted that a government department or institution that performs a public function and is financially accountable to a national or regional institution would be appropriate for administration of social security in terms of the ICESCR.

This indicator ties in with the obligation to protect the existing social security system. Through requiring the administration of social security schemes to be transparent and publicly accountable, a number of harmful behaviours affecting the funding of social security may be prevented. Since State Parties must protect their social security systems and considering that these schemes are often funded by public monies, requiring that the administrating authorities subject themselves to public scrutiny is particularly appropriate.

3 2 1 Administration of social assistance

The administration of social assistance in South Africa is the responsibility of the Department of Social Development,⁵⁴ which is a state department under the leadership of the Minister of Social Development. In terms of national legislation, the Minister may delegate the administration of social assistance,⁵⁵ and has done so. The delegation of responsibility to the South African Social Security Agency (SASSA) was done in terms of the South African Social Security Agency Act in 2004.⁵⁶ The express purpose of SASSA is to act as the sole agency involved in the management, administration and payment of social assistance in South Africa.⁵⁷ Since SASSA is subject to the provisions of the Public Finance Management Act⁵⁸which regulates the management of finances in national and provincial government and is a juristic person,⁵⁹ this satisfies the requirement relating to administration by a public authority.

3 2 2 Administration of social insurance

Social insurance in South Africa is somewhat fragmented, in that there are a number of available schemes and each of these is run by a different institution. The major social insurance schemes are the Unemployment Insurance Fund, the Compensation for Occupational Injuries and Diseases Fund and retirement schemes. One can therefore not say that social insurance is administered by a public authority in its entirety without looking at the management of each scheme in turn.

The Unemployment Insurance Fund (UIF) was established in terms of the Unemployment Insurance Act⁶⁰ in 2001. The UIF provides benefits for persons who were employed and making contributions to the UIF and who are no longer able to work as a result of contingencies such as pregnancy, illness and dismissal.⁶¹ The entity responsible for the administration and management of the fund is the Department of Labour, which is a state department forming part of the South African government.⁶² The UIF is also subject to the provisions of the Public Finance Management Act.⁶³ The UIF thus satisfies the requirement of administration by a public authority.

The Compensation for Occupational Injuries and Diseases Fund (COIDA Fund) was established in terms of the Compensation for Occupational Injuries and Diseases Act (COIDA) in 1993.⁶⁴ The purpose of the COIDA fund is to compensate workers who are injured or become ill in the course of their employment and are unable to work because of such injury or illness.⁶⁵The COIDA Fund is also administered by the Director-General of the Department of Labour,⁶⁶ and as such is administered by a public authority.

Retirement schemes in South African are numerous and varied - there are over 5000 active retirement funds in South Africa.⁶⁷ Each of these funds has its own board of trustees and management. However, these funds are subject to the provisions of the Pension Funds Act,⁶⁸ which provides for the regulatory framework within which each of these funds must operate. In addition, retirement funds are subject to the rules of the Financial Services Conduct Authority,⁶⁹ which is empowered to investigate and regulate the conduct of financial service providers in South Africa, including retirement funds.⁷⁰ While there is no single administrator for retirement funds in South Africa, the regulatory framework established by the Pension Funds Act may be considered a public authority for purposes of this discussion.

Since each of the major social insurance schemes in South Africa is managed by a public agency, it is submitted that social insurance as a whole complies with the ICESCR requirement of management by a public authority and the obligation to protect social security schemes.

3 3 Coverage of contingencies

According to General Comment 19, the social security systems of States Parties should provide coverage for contingencies from the nine principal branches of social security.⁷¹ These branches are health care, sickness, old age, unemployment, employment injury, family and child support, maternity, disability, and survivors and orphans.⁷²

Social assistance in South Africa provides social grants for persons who are unable to provide for their own maintenance needs.⁷³ There are grants payable to persons who are unable to meet their own maintenance needs as a result of disability, old age and for families with children under 18 and families with disabled children who are unable to meet the financial needs of those children.⁷⁴ Social insurance provides financial assistance for persons who have become unemployed as a result of illness, maternity, dismissal, retrenchment, occupational injury, occupational diseases and for survivors in the event of the death of the breadwinner. The UIF is the source of many of these benefits.⁷⁵ Benefits in the form of partial income replacement for persons who are injured or become ill in the course of their employment are payable from the COIDA Fund.⁷⁶

Between the contingencies covered by social grants and social insurance schemes, all the contingencies specified by the CESCR are provided for in the South African social security landscape.

3 4 Level of coverage

This indicator refers to the reach of social security. Put in simpler terms, the number of people covered by social security needs to be assessed in order to establish whether such coverage is adequate or not. This component of the right to social security ties in with the element of accessibility as specified by the UN High Commissioner.

3 4 1 Coverage of social assistance

As per section 27(1)(c) of the Constitution, the right of access to social security includes social assistance for persons who are unable to provide for their own maintenance needs.⁷⁷ The right of access to social assistance is thus inclusive as indicated by the use of the word "everyone",⁷⁸ but qualified through providing that persons only gain access to social assistance if they are unable to provide for their own maintenance needs. This qualification takes the form of the use of a means test applied to persons applying for social assistance.⁷⁹ The purpose of the means test is to prevent persons receiving social grants when their financial needs are being met through their own endeavours.⁸⁰ It has been argued that the means test should be abolished and that social assistance should be awarded to any person applying for it.⁸¹ It is submitted that this argument is flawed, since it would place an undue burden on an already financially strained state. As of February 2019, there were approximately 18 million social grant recipients in South Africa.⁸² This number was higher than the number of persons employed in formal employment at that time⁸³ and comprised approximately 30 per cent of the total population.⁸⁴ It is submitted that social assistance coverage in South Africa is currently in compliance with Article 9 of the ICESCR in relation to the extent of coverage, since such a large number of persons are in receipt of a social grant.

It must be noted that this indicator is subject to the internal limitation in section 27 of the Constitution, which provides that the right of access to social security is subject to available resources.⁸⁵

Since social assistance is funded through general revenue (which includes income tax),⁸⁶ the amount that is available for distribution through social assistance is limited. This limitation is as a result of the low levels of formal employment in the country,⁸⁷ which consequently results in a relatively low number of persons paying income tax. The less tax paid by those who are in formal employment, the less money there is available for social assistance grants. The state may thus claim that the current number of social assistance grant recipients and the concomitant social spending is the best that can be done within the currently available resources.

3 4 1 1 Impact of COVID 19 on social assistance

In April 2020, President Cyril Ramaphosa announced a range of measures that would benefit social grant recipients during the nationwide lockdown in response to the international outbreak of COVID-19.⁸⁸ These measures include the availability of a lesser used social grant, called social relief of distress⁸⁹ and the temporary increase in the amounts received by all existing social grant recipients. The source of funds for these increases was not the general revenue used for the standard social grants but was an amount that was re-directed from other parts of the budget allocated to other expenditure.⁹⁰ In addition, funds were made available from other state administered funds such as the UIF and sources from local and international sources.⁹¹

The rapid response of the state to the needs of social assistance recipients is indicative of the state's commitment to providing financial assistance to those in dire need and is to be commended. However, it is submitted that the increased amounts made available temporarily do not mean that there is more money available to social grant recipients under normal circumstances. As indicated above, the funds used for the new and increased social grants are not sourced from general revenue, which is the dedicated source of funds for social grants. These funds were made available through emergency and temporary measures and cannot be used to make the argument that the state is not using its available resources to increase the amounts paid to social grant recipients in normal circumstances.

3 4 2 Coverage of social insurance

It is more complicated to determine the exact level of coverage of social insurance schemes in South Africa. Social insurance consists of a number of schemes that may have no relation to each other, save that they can only be accessed through employment.⁹² The three primary social insurance schemes are the UIF, the COIDA Fund and retirement funds.

The pre-requisite of employment makes social insurance schemes exclusive in nature, since the unemployment rate in South Africa at the end of 2019 was 29.1%.⁹³ This means that a third of the working age population has no access to social insurance. Further, these schemes are only accessible to certain categories of employees and exclude workers in informal employment, casual workers and often government employees and members of the military also.⁹⁴ Considering that so many persons are excluded from social insurance, it is submitted that the level of coverage currently provided does not comply with Article 9 of the ICESCR.

3 5 Level and duration of benefits

The level and duration of benefits provided by a social security scheme must be adequate and must be provided as long as the individual is negatively affected by the particular contingency they are receiving benefits for. This means that the benefits provided must be enough to meet the recipients' basic needs and the benefits should not be ceased while the recipient needs them.

3 5 1 Level of benefits provided by social assistance

The level of benefits refers to the amount of money paid to recipients of such benefits. In order to satisfy this requirement, the amount paid must be adequate. What is meant by adequate is not easy to establish, considering that there are many factors contributing towards the financial needs of persons negatively affected by the named contingencies. It is submitted that, in the South African context, this amount should allow a grant recipient to provide for their own maintenance needs, since this is the primary qualifier for social assistance in the Constitution. For purposes of this article, the amounts paid through social assistance are provided and then analysed to gauge whether these are "adequate".

3 5 1 1 Minimum wage as an indicator of adequacy

Social grants for older persons and persons with disabilities provide the same amount to recipients (this is not taking into consideration any supplementary grants such as the grant in aid). As of April 2020, this amount is R1860 per month per recipient⁹⁵ (excluding the additional temporary amount payable as a result of the COVID19 outbreak).⁹⁶ From this amount, a recipient is expected to provide for all their daily needs, such as food, rent and electricity.⁹⁷

As of 1 January 2019, the National Minimum Wage in South Africa is R20 per hour.⁹⁸ This amount was increased to R20.76 for employees, effective 1 March 2020.⁹⁹ The primary aim of introducing a minimum wage is to address the extreme levels of income inequality in South Africa.¹⁰⁰ Based on a work week of 40 hours (excluding any overtime that may be required), this equates to approximately R43 000 per annum. A person earning a minimum wage therefore earns approximately R3600 per month. This means that a social grant recipient is expected to meet their own maintenance needs with slightly more than half the amount that is considered adequate as a minimum wage. It is submitted that this amount cannot be considered adequate for purposes of meeting the requirements of the ICESCR.

However, one must still consider the impact of the internal limitations on the right of access to social security found in section 27(2), which are that the right must be realised progressively and within the available resources. As discussed above, the resources available to the state are finite and do not leave much room for increasing social grant amounts. The issue of progressive realisation is addressed through the annual increase of the amounts payable to social grant recipients.¹⁰¹ Each year in the annual budget speech, social grant amounts are increased by a small amount, usually less than R100 per social grant recipient. Considering that the concept of progressive realisation only requires that the state take steps to increase the level of benefits payable, it can thus be said that the annual increase to social grants amounts to progressive realisation. The state is thus progressively realising the right of access to social assistance through this annual increase, albeit that such realisation is slow because of the small amount by which the grant is increased.

The question, then, is whether the current inadequate amount is justified by the clear progressive realisation and the limitation of available resources. It is submitted that the low amount payable is, in fact, justified through an examination of these limitations. As mentioned previously, state expenditure on social grants is already substantial and the growing number of social grant recipients makes increasing the amount payable infeasible. In addition, the state is meeting its obligation to progressively realise the right of access to social assistance through annual increases in social grant amounts.

Despite the initial finding that the social grants in South Africa are not compliant with the ICESCR, it is submitting that the amount paid is justifiable by the requirements of the Constitution, which take precedence over the provisions of international law.

3 5 2 Level of benefits provided by social insurance

The benefits payable through social insurance schemes are not only extremely varied, but also tailored to each individual recipient. In the case of UIF benefits, the amount payable depends on the amount the employee has contributed to the UIF and for how long they made contributions.¹⁰² The actual individual benefit is paid on a sliding scale based on the recipients' salary.¹⁰³ This means that the more an employee earns, the smaller percentage of their salary will be paid in UIF benefits. COIDA Fund benefits are calculated on an individual basis and depend upon the nature and extent of the illness or injury experienced by the employee.¹⁰⁴ Retirement fund benefits depend on the amount and duration of contributions made by the recipient and, in some cases, tax must be paid on benefits received.¹⁰⁵ For these reasons, it is not possible to establish whether social insurance payments as a whole are adequate in South Africa. Such an in-depth analysis would have to take place on a case by case basis for each scheme and is therefore beyond the scope of this article.

3 5 3 Duration of social assistance benefits

In terms of social assistance, the social grant is payable for as long as the recipient is unable to meet their financial needs.¹⁰⁶ The right of access to social security is thus qualified, and the use of a means test has been implemented in order to determine the financial need of applicants for social assistance.¹⁰⁷ If an applicant for (or recipient of) a social grant earns money in excess of a specified amount, they become ineligible for the social grant and the grant will either not be awarded,¹⁰⁸ or, in the case of a person already receiving a grant, the payment of the grant will cease.¹⁰⁹ The threshold for income is currently R82 400 per annum for single persons and R164 880 for married persons.¹¹⁰ An applicant or recipient is thus permitted to have an income, as long as the income does not exceed these amounts. Any income received will cause the amount received from the social grant to be adjusted pro rata.¹¹¹ The principle applicable here is that once income exceeds these amounts, a recipient is no longer unable to meet their own maintenance needs and the contingency has therefore effectively ended.¹¹²

In addition to the use of the means test, a social grant will also lapse if the contingency for which it is paid is no longer applicable. In particular, if a recipient of a disability grant is no longer considered disabled and declared medically fit to work, the grant will lapse.¹¹³ Similarly, if a social grant is paid in respect of a child, the grant will lapse when the child reaches the age of majority.¹¹⁴

A further example of social assistance benefits only being paid while needed is the availability of the temporary social relief of distress grant made available to persons affected by the outbreak of COVID-19 who have consequently lost income.¹¹⁵ As of May 2020, the social relief of distress grant will be payable to successful applicants for 6 months.¹¹⁶ The increases in social grant amounts already being paid are also effective for 6 months.¹¹⁷

The state is thus clearly cognisant of the need to provide social assistance when it is most needed by recipients.

It is thus submitted that social assistance (both in the form of temporary grants and permanent grants) therefore does provide benefits for the duration of the financial need of the recipient and meets the requirement of adequate duration of benefits.

3 5 4 Duration of social insurance benefits

The social insurance schemes in South Africa are not means tested. This means that there are no income thresholds attached to the receipt of social insurance benefits. However, certain social insurance benefits may cease before the contingency has ended. For example, UIF benefits paid to an unemployed person may be exhausted before the recipient has secured further employment.¹¹⁸ This is also the case where UIF benefits are paid to and exhausted by a recipient who is no longer working as a result of illness or incapacity who has not yet been able to return to work. Since UIF benefits may not be payable for the entirety of the period that a person is unemployed, it may appear as though the duration of benefits is not adequate. However, it must be borne in mind that UIF benefits are funded through contributions by the employee and their employer and are capped at a certain amount.¹¹⁹ The duration of UIF benefits is thus a legislative principle and is aimed at encouraging recipients to secure employment and providing benefits beyond this is not possible.

In the case of COIDA Fund benefits, the duration of benefits depends on the nature of the illness or injury experienced by the recipient of benefits. Employees with permanent disablements will receive benefits for life;¹²⁰those with temporary disablements receive benefits for the duration of the illness or injury.¹²¹ It is submitted that the duration of COIDA benefits is adequate.

Finally, retirement fund benefits are paid once a member of a retirement fund reaches retirement age. Retirement fund benefits can be paid as a pension or as a lump sum.¹²² In the case of a pension, one third of retirement fund savings is paid out immediately at retirement and the balance of the amount is usually payable until the death of the recipient.¹²³ A provident fund pays out in one lump sum upon the retirement of the employee.¹²⁴ It is submitted that the provision of benefits until death is adequate. In the case of a lump sum, the recipient must manage their finances themselves in order to ensure that the amount will cover their financial needs for the rest of their life. Since there is no oversight in this management of funds, the longevity of this lump sum is entirely individual and adequacy can therefore not be assessed.

3 6 Use of benefits to realise other rights

The United Nations recognises that all rights are interrelated,¹²⁵ and that the realisation of one of these rights could contribute towards the full realisation of other rights. The provision of financial assistance through social security schemes to persons with disabilities creates opportunities for social inclusion and better participation in society.¹²⁶ For example, the provision of adequate financial assistance may enable a person with a disability to make use of rehabilitation services or create the opportunity for further education. The provision of adequate social security benefits is thus vital for a number of related rights which are provided for in the ICESCR. In the case of the right to social security, the clearest link exists between it and the right to an adequate standard of living.¹²⁷

3 6 1 Social assistance

The right to social security has been recognised as a chief contributor to achievement to the right of an adequate standard of living guaranteed in terms of international law.¹²⁸ However, an incomplete realisation of the right to social security would not result in as great a contribution towards the realisation of other rights.¹²⁹ Considering that that the benefits provided by social grants are not sufficient to meet the maintenance needs of social grant recipients,¹³⁰ it is submitted that social assistance is not sufficient to realise the right to an adequate standard of living as envisaged in international law, and may have a similar effect on the realisation of other rights related to the right to social security.

It must be noted that financial assistance does not comprise the entirety of a social security system. Goods and services such as free utilities, subsidised housing and free healthcare also form part of the broader concept of social protection.¹³¹ In South Africa, many basic goods and services are either free or substantially subsidised, although the standard of these services is not necessarily adequate.¹³² Unfortunately a full discussion of the adequacy of these measures is beyond the scope of this article. Nonetheless, it is submitted that the social assistance amount payable that is the subject of this discussion is not sufficient to realise an adequate standard of living either on its own, or in conjunction with sub-par additional goods and services.

3 6 2 Social insurance

An assessment of whether social insurance benefits are being used to realise an adequate standard of living for persons with disabilities is not as simple. This is because each recipient of COIDA Fund and UIF benefits receives a benefit that is based on their salary, which means benefits are highly individualised.¹³³ The level of social insurance benefits available may contribute greatly towards the realisation of an adequate standard of living for a person in receipt thereof. However, while social insurance schemes are inaccessible to large numbers of persons as a result of unemployment in South Africa,¹³⁴ the level of benefit is irrelevant. It is thus submitted that social insurance benefits are not currently contributing towards the achievement of an adequate standard of living since so many are excluded from social insurance schemes.

 

4 REPORTING AND ENFORCEMENT MECHANISMS

In terms of Article 16 of the ICESCR,

"The States Parties to the present Covenant undertake to submit in conformity with this part of the Covenant reports on the measures which they have adopted and the progress made in achieving the observance of the rights recognized herein."

This means that States Parties are required to compile and submit reports on the status of the implementation of the provisions of the ICESCR periodically. South Africa submitted the initial report in 2017,¹³⁵ as required by Article 17 of the ICESCR. The section on the right to social security is woefully inadequate. The report includes only two pages of information related to social security in South Africa, and merely states selected statistics related to social assistance without attempting to show the adequacy of the benefits provided through social security.¹³⁶ Essentially, the report only confirms the existence of social assistance and the institutions involved in the administration thereof.

The report omits social insurance, save for one recommendation relating to the extension of coverage of the UIF.¹³⁷ While reporting on social insurance is problematic, the omission of one of the two main branches of social security is not acceptable for reporting purposes. It is clear upon reading the section on social security in the country report that much more information and analysis must be provided in order to establish whether the South African social security system meets the requirements of the ICESCR. A mere statement of information relating to social assistance is not enough.

The lack of information in the section on social security has been noted and addressed by the CESCR in its "Concluding Remarks" on the Country Report.¹³⁸ The CESCR has also made a number of recommendations relating to social assistance, including the increasing of the monthly amount paid and the abolition of the means test for certain applicants.¹³⁹ It is respectfully submitted that the Concluding Remarks do not provide enough information in order to rectify the current problems with social assistance, and that the recommendations relating to social assistance are too vague to be meaningful at this stage. If South Africa does not implement the Concluding Remarks, it is unclear what the sanctions would be. The current reporting and monitoring mechanisms appear to be somewhat toothless, in that the CESCR cannot compel a State Party to comply with its recommendations. Real change requires firmer and more harsh consequences for continued non-compliance with the ICESCR and the Concluding Remarks made by the CESCR.

 

5 CONCLUSION AND RECOMMENDATIONS

From the above discussion, the duty of South Africa to comply with the provisions of the ICESCR in relation to social security has been established.¹⁴⁰ These requirements are the existence of a social security system; the administration of such social security system by a public authority; the coverage of a minimum of nine named contingencies; the level of coverage provided by the social security system; the level and duration of benefits provided; the use of benefits in the realisation of other rights in the ICESCR.

5 1 Conclusion

Upon critical analysis of the elements of the right to social security in the ICESCR, it becomes apparent that South Africa's current social security system falls short in a number of areas. In particular,¹⁴¹ the extent of coverage by social insurance¹⁴² and the use of social assistance benefits to realise other rights¹⁴³ fall short of what is required in terms of the ICESCR. Since there has been no appreciable improvement in these areas since the release of the Concluding Remarks by the CESCR, it is submitted that South Africa is currently non-compliant with the ICESCR and needs to take meaningful steps in order to address the areas of concern as discussed above.

5 2 Recommendations

The high unemployment rate in South Africa is the greatest contributor towards a lack of access to social insurance. The implementation of a national social security fund has been mooted for a number of years by the state but has not yet come to fruition. The introduction of such a fund, with universal coverage for retirement benefits would substantially increase the level of coverage of social insurance benefits. The mechanisms of such a fund have never been published in great detail; best practice in countries with such universal funds would have to be considered, along with the input of economic experts to implement such a fund successfully.

The question of the use of social assistance benefits to realise other rights is not an easy one to answer. As mentioned above, South Africa is currently progressively realising this right within the available resources. How, then, can social assistance be used to more effectively realise other rights, such as the standard of living? It is submitted that social assistance grants can contribute more towards the realisation of other rights if other aspects of social security are improved. For example, the introduction of a functioning basic universal healthcare system would alleviate the burden of paying medical costs from the meagre amount currently paid to social grant recipients.

 

 

1 The International Covenant on Economic, Social and Cultural Rights adopted and opened for signature, ratification and accession by General Assembly resolution 2200A (XXI) of 16 December 1966.
2 United Nations General Assembly Resolution 217 (1948) A/RES/217(III).
3 Art 4 of the ICESCR.
4 Preamble to the ICESCR.
5 For e.g., Art 6(1) provides that "[t]he States Parties to the present Covenant recognize the right to work, which includes the right of everyone to the opportunity to gain his living by work which he freely chooses or accepts, and will take appropriate steps to safeguard this right".
6 Art 9 of the ICESCR provides that "[t]he States Parties to the present Covenant recognize the right of everyone to social security, including social insurance".
7 Art 11 of the ICESCR provides that "[t]he States Parties to the present Covenant recognize the right of everyone to an adequate standard of living for himself and his family, including adequate food, clothing and housing, and to the continuous improvement of living conditions. The States Parties will take appropriate steps to ensure the realization of this right, recognizing to this effect the essential importance of international co-operation based on free consent".
8 S 27(2) of the ICESCR provides that each state ratifying the ICESCR becomes bound by its provisions three months after such ratification. UN Committee on Economic, Social and Cultural Rights "Status of the International Covenant on Economic, Social and Cultural Rights" http://www.ohchr.org/Documents/Issues/HRIndicators/DataICESCR.xls (accessed 2014-05-14).
9 Art 18 of the Vienna Convention on the Law of Treaties, 1969. Puta-Chekwe and Flood "From Division to Integration: Economic, Social and Cultural Rights as Basic Human Rights" in Merali and Oosterveld Giving Meaning to Economic, Social and Cultural Rights (2001) 47. CESCR was first invited to prepare general comments in 1987 - Economic and Social Council Resolution 1987/5. See also Tomuschat Human Rights: Between Idealism and Realism (2008) 190.
10 South Africa signed the ICESCR on 3 October 1994. UN Treaty Body Database https://tbinternet.ohchr.org/_layouts/15/TreatyBodyExternal/Treaty.aspx?CountryID=162&Lang=EN (accessed 2020-02-04).
11 The stakeholders were, inter alia, Black Sash, the Community Law Centre at the University of the Western Cape and the Socio-economic Rights Institute of South Africa. See Dullah Omar Institute https://dullahomarinstitute.org.za/socio-economic-rights/international-covenant-on-economic-social-and-cultural-rights-icescr (accessed 2020-02-04).
12 Art 27(2) provides that the provisions of the ICESCR enter into force three months after the deposit of ratification documents by the state party.
13 S 39(2) of the Constitution of the Republic of South Africa, 1996 provides that international law must be taken into consideration when interpreting national legislation, irrespective of whether that international law has been ratified. This section does not place a positive obligation to incorporate unratified international law into national legislation.
14 Art 2 of the ICESCR.
15 Glenister v President of the Republic of South Africa 2011 (3) SA 347 (CC) par 105.
16 Glenister v President of the Republic of South Africa supra par 191.
17 Ibid.
18 SAHRC 7 Report on Economic and Social Rights 2006-2009 (2009) vi.
19 Ibid.
20 SAHRC (2009) v.
21 Ibid.
22 Glenister v President of the Republic of South Africa supra par 107.
23 Wiid The Right to Social Security of Persons with Disabilities in South Africa (doctoral thesis, University of the Western Cape) 2015 87.
24 Khosa v Minister of Social Development, Mahlaule v Minister of Social Development 2004 (6) SA 505 (CC).
25 Khosa v Minister of Social Development, Mahlaule and v Minister of Social Development supra par 49.
26 S 27(2) of the Constitution of the Republic of South Africa, 1996.
27 Government of the Republic of South Africa v Grootboom 2001 (1) SA 46 (CC).
28 Government of the Republic of South Africa v Grootboom supra par 41.
29 Wiid The Right to Social Security of Persons with Disabilities in South Africa 88.
30 Minister of Health v Treatment Action Campaign (2) 2002 (5) SA 721 (CC) par 39.
31 Government of the Republic of South Africa v Grootboom supra par 45.
32 Wiid The Right to Social Security of Persons with Disabilities in South Africa 92.
33 Ngxuza v The Permanent Secretary, Department of Welfare, Eastern Cape 2001 (2) SA 609 (E).
34 Olivier, Smit, Kalula (ed) Social Security: A Legal Analysis (2003) 76.
35 Khosa v Minister of Social Development, Mahlaule v Minister of Social Development supra par 45.
36 The implementation of the provisions of the ICESCR by states that have ratified it is monitored by the Committee on Economic, Social and Cultural Rights (CESCR). This committee is also responsible for releasing general comments on the ICESCR in order to clarify the obligations created by its various provisions. The CESCR was established in 1985 in terms of the Economic and Social Council Resolution 1985/17.
37 United Nations Human Rights Office of the High Commissioner "Committee on Economic, Social and Cultural Rights" https://www.ohchr.org/EN/HRBodies/CESCR/Pages/CESCRIntro.aspx (accessed 2020-02-21).
38 General Comment 19 Part II.
39 General Comment 19 Item 2.
40 General Comment 19 Item 2.
41 Scruggs and Zimmerman "Implementation of the Human Right to Social Security Around the World. A Preliminary Empirical Assessment of National Social Protections Laws" in Minkler (ed) The State of Economic and Social Human Rights (2013) 119.
42 Vonk "The Fundamental Right of Social Assistance: a Global, a Regional (Europe and Africa) and a National Perspective (Germany, the Netherlands and South Africa)" 2019 21(3) European Journal of Social Security 219 228.
43 Ibid.
44 Ibid.
45 General Comment 19 Item 31.
46 Office of the High Commissioner "Toolkit on the Rights to Social Security" https://www.ohchr.org/EN/Issues/RightSocialSecurity/Pages/SocialSecurity.aspx (accessed 2020-02-21).
47 Stamm "The Human Right to Social Security and Its Impact on Socio-Political Action in Germany and Finland" 2017 2 Journal of Human Rights and Social Work 25 28.
48 Vonk 2019 European Journal of Social Security 219 228.
49 Office of the High Commissioner https://www.ohchr.org/EN/Issues/RightSocialSecurity/ Pages/SocialSecurity.aspx (accessed 2020-02-21).
50 S 27(1)(c) of the Constitution of the Republic of South Africa, 1996.
51 13 of 2004.
52 63 of 2001.
53 24 of 1956.
54 National Government of South Africa "Department of Social Development" https://nationalgovernment.co.za/units/view/38/department-of-social-development-dsd (accessed 2020-02-21).
55 S 29 of Act 13 of 2004.
56 Act 9 of 2004.
57 S 3 of Act 9 of 2004.
58 Act 1 of 1999.
59 S 2(2) of Act 9 of 2004.
60 S 1 of Act 63 of 2001.
61 S 2 read with s 12 of Act 63 of 2001.
62 S 58 of Act 63 of 2001.
63 Act 1 of 1999.
64 S 15 of the Compensation for Occupational Injuries and Diseases Act 130 of 1993.
65 S 22 of Act 130 of 1993.
66 Ch 2 of Act 130 of 1993.
67 Financial Services Board Annual Report (2018) 42.
68 24 of 1956.
69 Financial Services Conduct Authority "Who We Are" https://www.fsca.co.za/Pages/Vision-and-Mission.aspx (accessed 2020-02-21).
70 Financial Sector Regulation Act 9 of 2017.
71 Item 2 of General Comment 19.
72 Ibid.
73 S 27(1 )(c) of the Constitution of the Republic of South Africa, 1996.
74 Ch 2 of Act 13 of 2004.
75 The UIF pays benefits for maternity, adoption, illness, dismissal, retrenchment and the death of the breadwinner. See Parts B-F of Act 63 of 2001.
76 S 22 of Act 130 of 1993.
77 S 27(1 )(c) of the Constitution of the Republic of South Africa, 1996.
78 The word "everyone" refers to South African citizens and permanent residents as decided by the Court in Khosa v Minister of Social Development, Mahlaule v Minister of Social Development supra par 49.
79 Ss 5(2)(a) and (b) of 13 of 2004.
80 Economic Policy Research Institute "Social Security Take-Up and the Means Test in South Africa" (2001) EPRI Research Paper #24 3.
81 Reports of the Taylor Committee into a Social Security System for South Africa (2002) 24; Nyenti and Mpedi "The Impact of SADC Social Protection Instruments on the Setting Up of a Minimum Social Protection Floor in South African Countries" 2012 15(1) Potchefstroom Electronic Law Journal 244 269.
82 Minister of Finance Budget Speech 2019/2020 https://www.sanews.gov.za/south-africa/increased-allocations-grants-education-and-health (accessed 2020-02-21).
83 Quarterly Labour Force Survey Q2 2019 provides that there were 11 220 000 people in formal in employment from January to March 2019.
84 Statistics South African Mid-Year Population Estimates 2019 estimates that the mid-year population was 58,78 million.
85 S 27(2) of the Constitution.
86 Strydom (ed) Essential Social Security (2006) 7.
87 The Statistics SA Quarterly Labour Force survey (2019) estimates the number of people in formal, non-agricultural employment at 10 142 000.
88 Speech made by President Cyril Ramaphosa (21 April 2020) https://www.gov.za/speeches/president-cyril-ramaphosa-additional-coronavirus-covid-19-economic-and-social-relief (accessed 2020-05-23).
89 LAWSA XIII Social Security: Core Elements par 188.
90 Speech made by President Cyril Ramaphosa https://www.gov.za/speeches/president-cyril-ramaphosa-additional-coronavirus-covid-19-economic-and-social-relief.
91 Ibid.
92 Olivier and Mpedi "The Extension of Social Protection to Non-Formal Sector Workers -Experiences from SADC and the Caribbean" 2005 19 Zeitschrift fur auslandisches und internationals Arbetis- und Sozialrecht (ZIAS) 150 152.
93 Statistics South Africa Quarterly Labour Force Survey Q4 2019 http://www.statssa.gov.za/?p=12948 (accessed 2020-02-21).
94 For e.g., domestic workers and self-employed persons are excluded from the COIDA Fund in terms of s 1(xix) of 130 of 1993, and migrant and government workers are excluded from the UIF in terms of s 3(1) of 63 of 2001.
95 Minister Tito Mboweni Budget Speech (2020) https://www.gov.za/BudgetSpeech2020 (accessed 2020-05-23).
96 South African Government "Social Grants - Coronavirus COVID19" https://www.gov.za/coronavirus/socialgrants (accessed 2020-05-23).
97 South Africa does have free basic healthcare, so this expense is not necessarily meant to be covered by the grant amount. However, it is widely known that the public healthcare system is rife with problems and may not be reliable. Unfortunately an in-depth discussion of public healthcare in South Africa is beyond the scope of this article, but the existence and availability of such a system must be noted for purposes of the amount payable in terms of social grants.
98 S 6(6) read with Schedule 1 of the National Minimum Wage Act 9 of 2018.
99 This increase was made in terms of s 6 of Act 9 of 2018, which requires an annual review of the minimum wage and allows for adjustments to the minimum wage amount.
100 Preamble to Act 9 of 2018.
101 Government of the Republic of South Africa v Grootboom supra par 45.
102 S 12 of 63 of 2001.
103 S 13 of 63 of 2001.
104 Ch IV of the Compensation for Occupational Injuries and Diseases Act 130 of 1993.
105 Whether tax is payable depends on the amount received - see South African Revenue Service "Retirement Lump Sum Benefits" https://www.sars.gov.za/Tax-Rates/Income-Tax/Pages/Retirement-Lump-Sum-Benefits.aspx (accessed 2020-02-23).
106 Olivier et al Social Security: A Legal Analysis 327.
107 Ibid.
108 Economic Policy Research Institute "Social Security Take-Up and the Means Test in South Africa" EPRI Research Paper 24 3.
109 In terms of s 14(5) of Act 9 of 2004, a recipient of a social grant must inform SASSA of any material changes in their circumstances after applying for the grant. In terms of s 17(1), any person in receipt of amounts they are not entitled can be compelled to repay those amounts to SASSA. It is also an offence to withhold such information and an offence to receive a social grant while knowing that one is not entitled thereto in terms of s 21.
110 SASSA "You and Your Grant 2019/2020" (2019) https://www.sassa.gov.za/Pages/Grant-Booklets.aspx (accessed 2020-02-23) 7.
111 Ibid.
112 Wiid The Right to Social Security of Persons with Disabilities in South Africa 183.
113 SASSA "Disability Grant" https://www.sassa.gov.za/Documents/Grants-Documents/Disability-Grant.pdf (accessed 2020-02-23).
114 SASSA "Child Support Grant" https://www.sassa.gov.za/Documents/Grants-Documents/Child-Support-Grant.pdf (accessed 2020-02-23).
115 Minister Tito Mboweni Budget Speech https://www.gov.za/BudgetSpeech2020.
116 South African Government 'Social Grants - Coronavirus COVID19' https://www.gov.za/coronavirus/socialgrants (accessed on 23/05/2020).
117 South African Government https://www.gov.za/coronavirus/socialgrants.
118 Ss 15 and 16 of Act 63 of 2001.
119 S 13 of Act 63 of 2001 provides that a maximum of 238 days benefit is payable.
120 S 49 read with Schedule 2 of Act 130 of 1993.
121 Ibid.
122 The South African Labour Guide "Pension and Provident Funds" https://www.labourguide.co.za/general/499-pension-and-provident-funds (accessed 202002-24).
123 S 1 of Act 24 of 1956.
124 Ibid.
125 Office of the High Commissioner "Your Human Rights" https://www.ohchr.org/EN/Issues/Pages/WhatareHumanRights.aspx (accessed 2020-02-24).
126 Item 59 of General Comment 19.
127 Item 28 of General Comment 19.
128 Wiid The Right to Social Security of Persons with Disabilities in South Africa 150.
129 Office of the High Commissioner https://www.ohchr.org/EN/Issues/Pages/WhatareHumanRights.aspx.
130 The submission that the amount provided to social grant recipients is justified in terms of the Constitution in paragraph 3.5.1 above does not affect the reality that the amount provided does not facilitate the realisation of an adequate standard of living of these recipients.
131 Report of the Committee of Inquiry into a Comprehensive System of Social Security for South Africa (2002) Transforming the Present - Protecting the Future 41.
132 See generally Statistics South Africa The State of South Africa: In-Depth Analysis of the Community Survey 2016 data (2016).
133 Wiid The Right to Social Security of Persons with Disabilities in South Africa 239.
134 See par 3.4.2 above for a discussion of the impact of unemployment on access to social insurance.
135 Initial Report of South Africa on the International Covenant on Economic, Social and Cultural Rights (2017) https://tbinternet.ohchr.org/_layouts/15/treatybodyexternal/Download.aspx?symbolno=E%2fC.12%2fZAF%2f1 &Lang=en (accessed 2020-02-24).
136 Initial Report of South Africa on the International Covenant on Economic, Social and Cultural Rights https://tbinternet.ohchr.org/_layouts/15/treatybodyexternal/Download.aspx?symbolno=E%2fC.12%2fZAF%2f1&Lang=en 31.
137 CESCR "Concluding Remarks on the Initial Report of South Africa" (2018) https://tbinternet.ohchr.org/_layouts/15/treatybodyexternal/Download.aspx?symbolno=E%2fC.12%2fZAF%2fCO%2f1&Lang=en (accessed 2020-02-24) 9.
138 CESCR https://tbinternet.ohchr.org/_layouts/15/treatybodyexternal/Download.aspx?symbolno=E%2fC. 12%2fZAF%2fCO%2f1 &Lang=en 9.
139 Ibid.
140 See par 3 above.
141 See par 3.5.1 above.
142 See par 3.4.2 above.
143 See par 3.6 above.

^rND^1A01^nAndré^sBoraine^rND^1A01^nAndré^sBoraine^rND^1A01^nAndré^sBoraine

ARTICLES

 

Does the prevention of illegal eviction from and unlawful occupation of land act of 1998 provide adequate family home protection to insolvent debtors or is it still pie in the sky? (part 2)¹

 

 

André Boraine

Blur LLB LLM LLD; Faculty of Law, University of Pretoria

 

 

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SUMMARY

Although some legal systems provide some protection for a debtor's homestead or family home when his or her estate is insolvent, such direct protective measures are absent in South African insolvency law. Such protection during insolvency can be provided by means of some level of exemption for the insolvent's family home or homestead, as in the insolvency laws of the USA, or by providing protection of occupancy to the insolvents and his or her dependants, as is the case in England and Wales.
In view of developments concerning the protection of a debtor's primary residence in South African individual debt collecting and execution procedures (in light of the right to housing provided for in section 26 of the Constitution), the question was posed in Part 1 of this article whether a court hearing an application for compulsory sequestration should apply the same principles, especially if the debtor raises the point that the sequestration order may render him or her homeless. In this respect, no direct authority for this proposition could be found. (Commentators have argued for some time that the position of the homestead of the debtor in insolvency needs the legislature's attention as well, but there has not been real progress in this regard to date.)
However, there are a few judgments in which courts have considered the applicability of the Prevention of Illegal Eviction From and Unlawful Occupation of Land Act 19 of 1998 (the PIE Act) after sequestration of the insolvent's estate. Part 2 of the article is therefore devoted to discussing developments in this regard and to considering what problems are encountered in applying the PIE Act during a debtor's insolvency. Part 2 also considers whether this Act provides sufficient protection to insolvent debtors to prevent them from being evicted from "their" homes when they cannot afford alternative accommodation.

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Against this background, the two parts of the article deal with different aspects of the issue under discussion. Ultimately, the two parts aim to provide some answers to the pertinent question - that is, whether the PIE Act can provide effective interim and/or adequate protection to an insolvent debtor who may be evicted from his or her (former) homestead, in particular in the absence of direct measures in insolvency law to protect insolvents and their dependants under these circumstances. In raising this question, pertinent issues regarding the application of the PIE Act in insolvency are also considered.

 

6 THE ESSENTIALS OF THE PIE ACT

6 1 Overview

The Prevention of Illegal Eviction From and Unlawful Occupation of Land Act 19 of 1998 (PIE Act) came into force on 5 June 1998.² It is clear the Act was inspired by section 26 of the Constitution of the Republic of South Africa, 1996 (Constitution) as in terms of its long title its aims are to provide for the prohibition of unlawful eviction and procedures for the eviction of unlawful occupiers.³ Examples of unlawful occupiers include a person who trespassed on land and established a shelter there (a typical squatter scenario), a former tenant of a terminated or expired lease agreement, or a mortgagor holding over on a property sold or bound to be sold in execution.⁴Among other aims, and in terms of its Preamble, the PIE Act broadly intends to assist in ensuring that no person is deprived of property except in terms of a law of general application and to prevent arbitrary deprivation of property in terms of any law. In particular, it states that no one may be evicted from their home, or have their home demolished without an order of court made after considering all the relevant circumstances. To this end, the Act states that it is desirable that the law should regulate the eviction of unlawful occupiers from land in a fair manner, while recognising the right of landowners to apply to a court for an eviction order in appropriate circumstances. It is notable that section 4(1) makes it clear that this Act trumps the common law or any law relating to eviction.⁵ Also, it is clear the Act may avail an insolvent debtor after sequestration of his or her estate if all the requirements are met, although the PIE Act does not refer to sequestration as such.⁶

In an eviction application, the court considers the rights of the owner as well as the unlawful occupier. It is of major importance that special consideration be given to the rights of the elderly, children, disabled persons and particularly households headed by women, and it should be recognised that the needs of those groups should be considered in a case of eviction.⁷

The operation of the Act is not restricted as to its application to an insolvent's estate after sequestration since the Act prescribes no bar on its application in this respect.⁸ When applied in a sequestration situation, pertinent questions arise relating to whether the trustee has locus standi to bring the application, and under what circumstances the insolvent will be deemed to occupy the property unlawfully.

For the purposes of this article, certain definitions in section 1 of the PIE Act are of importance.

First, the definition of "unlawful occupier" is key and refers to a person who occupies land without the explicit or tacit consent of the owner or person in charge or without any other right in law to occupy such land. This definition does not refer only to the owner of land but refers to any person who occupies land unlawfully, which may of course be the (registered) owner or any other occupant. Also, it is important to note that the definition refers to the explicit or tacit consent of the owner or the person in charge.⁹

After this Act came into operation, the courts grappled with the question (among others) whether the Act included only persons like squatters who occupied land unlawfully - without the consent of the owner - or whether it also referred to persons who at some stage occupied the property legally, such as the owner or a tenant of property, but whose occupation at a later stage became illegal. In Ndlovu v Ngcobo,¹⁰the majority judgment of the Supreme Court of Appeal ruled that the definition would include both categories of occupiers, but at the time of the application for eviction the occupation must have been unlawful. Within the insolvency context therefore, it is important for the applicant to first establish that occupation of the family home is unlawful at the time when he or she seeks eviction.

Read with the Preamble, which states that no one may be evicted from their home without an order of court made after considering all the relevant circumstances, the definition of "building or structure" is very important since it includes any hut, shack, tent or similar structure or any other form of temporary or permanent dwelling or shelter. It is clear from this definition that an ordinary house or apartment of an insolvent debtor falls under the definition. But, this definition is broad enough to include other types of abode that he or she may use as a dwelling or shelter - such as a caravan, a shipping container or even a sheet of plastic or canvas. Cases may emerge where a person occupies bare land for residential purposes. In view of this possibility, the question may well be asked if the PIE Act also applies where the insolvent and his or her dependants occupy the insolvent's holiday apartment, caravan and/or camping tent as their home after they have vacated the primary residence. In terms of the definition, these "structures" seem to fall under the definition, but it must be noted that the Act refers to unlawful occupancy of land whereas the definition of eviction, as referred to below, refers to eviction from occupation of a building or structure or the land. It is submitted that it is important to read this definition in conjunction with the Preamble, which states that no one may be evicted from their home without a court order and after considering all the facts. However, it seems that courts may scrutinise the type of dwelling with a view to establishing whether it is the primary residence of the occupant or if the structure is intended for human dwelling or shelter; if not, the court may well come to the conclusion that the protective measures of the Act do not apply.¹¹

Smith argues that the PIE Act concerns not only land on which buildings are erected but includes all land of a residential nature. In order to ascertain the property (home) to which the PIE Act applies,¹² he refers to the different terms used in the Act in this context; for instance, the Preamble refers to persons being "evicted" from their homes, whereas other parts of the Preamble refer to people being deprived of "property". The PIE Act also states that the law should "regulate the eviction of unlawful occupiers from land". He submits that "property" and "land" should not be interpreted restrictively and, for instance, a holiday home could, depending on the circumstances, be included. In support of a more flexible interpretation, he refers to section 25(4)(0) of the Constitution, where property is described as "not limited to land" and to the use of the words "temporary" and "form of dwelling" in the definition of "building or structure" in s 1 of the PIE Act. In the same vein, Muller et al concludes:

"[w]hile the essential jurisdictional elements had been identified as the unlawful occupation of homes, dwellings and abodes, courts still struggle to ascertain the elements in practice. The result is that some courts continue to grant eviction orders outside the paradigm that was specifically developed to give effect to constitutional imperatives. This cannot continue. Once unlawful occupation had been established, and it is clear that the relevant property embodies housing or shelter, the PIE Act has to be employed." ¹³

It is submitted that the use of the structure is of paramount importance and if used for dwelling or shelter purposes as a home of the occupant - even when deemed to be movable - it should be subject to the eviction procedure of the PIE Act. This aspect must be read with the definition of "evict", which means to deprive a person of occupation of a building or structure, or the land on which such building or structure is erected, against his or her will -and "eviction" has a corresponding meaning. These aspects read together, it seems, mean that eviction may relate to the occupancy of land where the occupier occupies a structure permanently erected on such land, or where he or she merely occupies the land as such for purposes of dwelling or shelter, or it may relate to the mere occupancy of a movable structure stationed on land.¹⁴ In this context, the broad interpretation advocated by Smith and Muller et al is fully endorsed.

In determining whether the occupation of the occupier is lawful, it must be noted that consent to occupy the premises (for temporary or permanent dwelling or shelter purposes) can be granted explicitly or tacitly, in writing or otherwise, by the owner or person in charge of the land in question. As indicated above, the position of the trustee of an insolvent estate differs from that of the sheriff, since the insolvent estate of the insolvent debtor ultimately vests in the trustee. Therefore, it is submitted that continued occupation by the insolvent after sequestration ultimately depends on the decision of the trustee. If an insolvent's occupation of a building or structure that forms part of the estate assets after sequestration is tolerated, it may be interpreted as tacit consent. From a practical point of view, it is submitted that the trustee should make clear whether or not he or she has consented to the insolvent's continued occupation - for instance, by giving notice to vacate to the insolvent or others, such as family members, occupying the residence in order for the property to be realised for the benefit of the creditors. Such a notice may assist in determining if the occupation is (or becomes) unlawful for the purposes of the Act from an evidentiary point of view. But if the trustee allows the insolvent to remain in the house until a later date - the sale date of the property, for instance - the occupation should be taken to be lawful. In practice, the trustee sometimes allows the insolvent to remain in occupation but then attempts to gain a "rental" income from the insolvent. The benefit of such an arrangement is that the property earns income to defray expenses in relation to it and the trustee may save the cost of placing a security guard on the premises to protect it, but (depending on the terms of the arrangement) it may complicate matters when ultimately trying to get the insolvent to vacate the premises.

Since only the owner or an organ of state, as defined in section 239 of the Constitution, has locus standi to evict an occupier of a building or structure, the definition of the term "owner" is important. The definition includes the registered owner of land and an organ of state. The "person in charge" means a person (not necessarily the owner) who has (or, at the relevant time, had) legal authority to give a person permission to enter or reside upon the land in question.¹⁵ It is submitted that the trustee in an insolvent estate should be deemed to be the registered owner of immovable property in the insolvent's estate although the title deed of the immovable property will not be registered in his or her name. In this regard, section 20(1) of the Insolvency Act¹⁶ (the section that vests the estate property in the trustee) must be read with the definition of "owner" in section 102 of the Deeds Registry Act,¹⁷ where this definition includes the trustee.¹⁸ Section 58 of the Deeds Registry Act requires the trustee to transfer immovable property back to the insolvent should it re-vest in the insolvent after rehabilitation and only the trustee is entitled to give transfer of such property after sequestration. In any event, should a court find that the trustee cannot be deemed to be the registered owner as defined, the trustee at least qualifies as the person in charge of the property as defined in section 1 of the PIE Act. So, the trustee clearly has locus standi to bring an application for eviction.

An insolvent individual may also have the use and occupation of a residence registered, for instance, in the name of a company, a close corporation or a trust under such insolvent's control. In Van der Merwe NO v Moodliar NO,¹⁹the residence occupied by the insolvent vested in a company under liquidation owing to its insolvency. The company used to be under the control of the insolvent before its liquidation. In this case, the liquidators of the company successfully applied for the eviction of the insolvent individual who continued to occupy the premises after liquidation of the company; the judge remarked that the liquidators applied for the eviction of the occupants in order to put them in a position, ultimately, to sell the property unoccupied.²⁰ Suffice it to say that, in the Van der Merwe case, the court clearly accepted that the liquidators had locus standi to bring the eviction application in terms of the PIE Act. It is submitted that although the property of a company in liquidation remains vested in the company, the liquidator will be deemed the person in charge of such property; unlike the trustee appointed in terms of the Insolvency Act, the liquidator (upon his or her appointment) merely acquires control of the property.²¹

Section 4(1) of the Act states that, notwithstanding anything to the contrary contained in any law or the common law, the provisions of the section apply to proceedings by an owner or person in charge of land for the eviction of an unlawful occupier. This means that the section must be complied with in the case of an eviction of an unlawful occupant. Whenever an insolvent's occupancy of the structure that he or she uses for dwelling or shelter purposes can be deemed unlawful, the applicant as defined may apply for his or her eviction. Clearly, in many such instances, spouses, children and or other family members occupy the premises as well. Although the structure used for residential purposes probably will be a house or apartment, and subject to a mortgage bond in the majority of insolvency matters, it must be noted that it may also be a property that does not serve as security or it may be a movable asset of the insolvent such as a caravan, tent or a shipping container as mentioned before.²²

Section 4 then sets out the process to be followed by the owner or person in charge of the property, being the applicant with locus standi, and prescribes a 14-day notice of the proceedings to be given to the unlawful occupier and the local municipality. The notice, among other matters, states that the unlawful occupier is entitled to appear before the court and defend the case.

It is notable that the local municipality in whose area of jurisdiction the property is situated must be informed as well. The municipality of course is a body that may be able to provide alternative land or housing, but in practice this seems easier said than done owing to a lack of available land or housing. The municipality is also empowered in terms of section 7 of the Act to facilitate mediation between the interested parties to settle any dispute in terms of the Act. In practice, municipalities are not very active in these proceedings, especially when the applicant is a private individual.²³

On a substantive basis, the court may grant an eviction order where an unlawful occupier has occupied the land in question for less than six months at the time that the proceedings are initiated if it is of the opinion that it is just and equitable to do so and after considering all relevant circumstances, including the rights and needs of the elderly, children, disabled persons and households headed by women.

The relevant circumstances to be considered by the court require a balance between the interests of the owner and the unlawful occupier(s) with a view to finding a "just and equitable" solution.²⁴ Relevant circumstances mentioned in section 4(7) are the rights and needs of the elderly, children, disabled persons and households headed by women. It was intended that a court should have broad discretion to look at various relevant factors that may affect the eviction.²⁵ Smith indicates that the rights in section 4(7) include the rights to human dignity, the right not to be treated in a cruel, inhumane or degrading way, the constitutional rights of children and the availability of alternative accommodation in the context of the State's obligation to provide access to land. ²⁶ Steyn submits that the developments and consideration laid down by the courts in the individual attachment and execution procedures may also be relevant in cases of eviction since there is a clear link between these situations.²⁷

Where an unlawful occupier has occupied the land in question for more than six months at the time the proceedings are initiated, a court may grant an order for eviction under similar circumstances to the previous case, (except where the land is sold in a sale of execution pursuant to a mortgage), whether land has been made available or can reasonably be made available by a municipality or other organ of state or another land owner for the relocation of the unlawful occupier and including the rights and needs of the elderly, children, disabled persons and households headed by women.²⁸ It is submitted that, for the sake of clarity, the exception could have been drafted more elegantly. In Ndlovu v Ncgobo, this exception regarding a house sold in execution was termed an anomaly and it may well be asked whether the exception in itself does not militate against section 26 of the Constitution.²⁹ It is to be noted that the exception refers only to judicial execution following the individual attachment and execution process as described above, since a sale emanating from an insolvent estate is not termed an execution sale in the Insolvency Act.³⁰ It seems the thinking was that a person who could afford a mortgage bond should be able to find alternative accommodation, which may of course not always be the case. Pienaar mentions that the notion of alternative accommodation is very important where the occupation of premises has been for longer than six months.³¹ But the courts seem to draw a distinction between privately owned land and public land. In the first-mentioned instance, the availability of alternative accommodation may be more relevant to the date of the eviction order.

Where the court is satisfied that all the requirements of this section have been complied with, and that no valid defence has been raised by the unlawful occupier, it must grant an order for the eviction of the unlawful occupier, and determine:

(a) a just and equitable date on which the unlawful occupier must vacate the land under the circumstances; and

(b) the date on which an eviction order may be carried out if the unlawful occupier has not vacated the land on the date contemplated in paragraph (a).³²

Importantly for this discussion, section 4(9) of the PIE Act states that in determining a just and equitable date contemplated in subsection (8), the court must have regard to all relevant factors, including the period the unlawful occupier and his or her family have resided on the land in question. Even where the occupant must vacate the premises, the courts must still provide a just and equitable date for this - clearly with the interests of the occupant in finding alternative accommodation in mind.³³

A court that orders the eviction of any person in terms of this section may make an order in terms of section 4(10) for the demolition and removal of the buildings or structures that were occupied by such a person on the land in question.

Any order for the eviction of an unlawful occupier or for the demolition or removal of buildings or structures in terms of this section is subject to the conditions deemed reasonable by the court; and on good cause shown, the court may vary any condition for an eviction order.³⁴

The PIE Act also makes provision for an urgent application to evict in exceptional circumstances as stated in the section.³⁵

6 2 Conclusion

It should be clear from these provisions that a number of matters should be considered when applying the PIE Act to an insolvent debtor and/or his or her dependants in bringing an application to evict them from a building or structure forming part of the insolvent estate. It should be clear that where the insolvent and/or his or her dependants still occupy property after sequestration, the trustee has locus standi (in view of the definition of "owner") to bring an application for eviction by following the PIE Act. It is submitted that this is the case since the Insolvency Act does not state that such occupation becomes unlawful by the mere issuing of a sequestration order. In fact, the continued basis of occupation will be determined by the trustee, probably acting on instructions of the creditors, since the trustee is deemed to be the "owner" in terms of section 20 of the Insolvency Act, but he or she is also the person legally in charge of the land.

From a practical point of view, and if the insolvent still occupies the land at the time that the estate property vests in the trustee, it is submitted that the trustee should provide a notice to the insolvent to vacate the premises as a result of the sequestration process in order to make it clear that he or she may no longer occupy the premises - except where the trustee in fact allows the insolvent to remain in occupation.³⁶ It is important, for purposes of an eviction application, to establish that the insolvent occupies unlawfully since this is a requirement for application of the PIE Act.

In general, where the insolvent remains in occupation of the family homestead, it is a building or structure (as included in the definition) that is occupied, but it must be noted that the insolvent may have vacated the house and moved into a caravan, perhaps parked on the land on which the house stands, or on another property of his or hers or the land of someone else.

The trustee in his or her official capacity as owner and as the person legally in charge of the estate property may bring an application to evict the insolvent if his or her occupancy is deemed to be unlawful. As far as the process is concerned, the trustee should follow the procedural imperatives of the PIE Act but in principle it must also be established that the occupancy by the insolvent is unlawful.

It is clear that, if the court finds the occupancy to be unlawful, the insolvent may ask the court not to grant the eviction order owing to circumstances that the court may consider as relevant considerations for the purposes of deciding on the order it should make. The court has broad powers in making a suitable order and, even where eviction is ordered, the court may determine the terms and conditions, for instance, of when the occupant must vacate the property. It must be noted that even in such an instance, where an eviction is ordered, the Act provides some temporary relief for the occupant. At least, this relief grants him or her time to find alternative accommodation.

Muller et al,³⁷with reference to Port Elizabeth Municipality v People's Dialogue on Land and Shelter,³⁸state that the PIE Act is welfare legislation and cannot be approached from a legalistic point of view since it relates to social and economic factors tied up with fairness, morality and social values, as well as humanity and dignity for all persons.³⁹ Clearly, in view of a more sympathetic approach detected among some judges, this scenario may lead to a more insolvency-specific approach in future. In this regard, it is submitted that the factors considered in Jaftha v Schoeman; Van Rooyen v Stoltz⁴⁰and subsequent cases also may be relevant in order to guide the courts as to these considerations, although this line of cases dealt with attachment of the primary residence of the debtor.

Should an insolvent succeed in maintaining his or her occupancy of the home, it may become relevant to ask how this will be resolved in the long run, since an extended stay may be to the prejudice of creditors relying on the proceeds of the sale of the property and runs contrary to the principle that an insolvent estate should be wound up within a relatively short time span. These questions are not answered by the PIE Act since the Act clearly was not written with an insolvency situation in mind.

Where occupancy is legal, cadit questio; if the insolvent is able lawfully to remain in occupancy, an essential element of the application will be absent.

It is also important to take note that the property of the insolvent may be sold in different ways following the sequestration of his or her estate. The trustee is tasked with taking care of the property of the insolvent and must ensure that it remains intact. On instruction of the creditors, the property may be sold out of hand or by tender, but usually it will be sold by way of a public auction.

It must also be noted that, compared to an attachment and judicial sale following an individual execution procedure, the position in insolvency may be different. There is clear authority that where the debtor's estate has not been sequestrated, then occupation of his or her own house as a rule only becomes unlawful when the property is sold and registered in the name of the purchaser.⁴¹ The purchaser then in terms of the PIE Act is saddled with the process to evict the occupant. This is different from the case of sequestration where, as stated above, the property no longer vests in the insolvent from commencement of sequestration, but vests in the trustee. It is submitted that the trustee may need to take steps to give notice to the insolvent to vacate before occupation will be deemed unlawful. Put differently, the mere fact of sequestration may not make continued occupation by the insolvent unlawful. In some instances, the trustee will be faced with a situation that requires considering assisting the insolvent to rent other premises or allowing the insolvent to continue to stay on the property, sometimes in terms of a "rental" agreement. All these positions need careful consideration by the trustee and creditors since there are pros and cons attached to these options. From a practical point of view and to provide certainty, the trustee should inform the insolvent in writing if he or she must vacate the premises in order to prevent an evidential issue arising concerning the lawfulness or otherwise of the occupation. As indicated, an eviction application may be brought only against a person who occupies unlawfully.

It must be noted that an insolvent may vacate his or her house before or on sequestration and find him- or herself a place of dwelling in, for instance, a caravan or may rent some form of housing from a third party. It is submitted that the eviction of the insolvent under such circumstances and under circumstances where his or occupation has become unlawful may also trigger the application of the PIE Act. In such cases, basic principles should be adhered to and the owner or person in charge must still be identified to bring the eviction application.

 

7 RELEVANT CASE LAW REGARDING THE APPLICATION OF THE PIE ACT IN INSOLVENCY

A number of insolvency cases have dealt with aspects of the PIE Act to date. In this section, the most relevant cases in this regard will be discussed. The section must be read against the backdrop of the discussion of the PIE Act under heading 6 of this article above.

7 1 ABSA Bank v Murray⁴²

In this case, a mortgaged property - the family home of the insolvents (a husband and wife married in community of property) - was sold out of the joint insolvent estate by way of a public auction. ABSA Bank, the former mortgagee, purchased the property at the auction. The bank resold the property but since the insolvents still occupied the property by way of holding over the erstwhile mortgaged property, it instituted an application for the eviction of the insolvents in order to give vacant possession to the purchaser. At the time of the application, the insolvents had occupied the property for longer than six months. (In order to have had locus standi to have lodged the application, it is assumed that the bank was still the owner of the property at the time of its eviction application.)⁴³

It seems the bank, as applicant, followed the PIE Act procedures and the respondents relied on the grounds of "just and equitable" as mentioned in the PIE Act since they had no common-law defence to raise against the eviction order.⁴⁴ The court accepted that the insolvent respondents had been in unlawful occupation for more than six months when proceedings were initiated and it deemed sections 4(7) and (8) to be central to the determination of the application.⁴⁵ In paragraph 15 of the judgment, the court noted that the occupation of the property by the insolvents initially was "lawful due to their previous ownership of the property but subsequently terminated by their sequestration and the consequent realisation of the property by the bank".⁴⁶ This remark may point to authority that sequestration per se may cause the occupation to become unlawful but the full sentence must be read - that is, the court refers to sequestration and consequent realisation of the property. Also, it can be accepted that the bank requested the insolvents to vacate, which it was entitled to do as owner of the property. As to whether there was permission to remain in occupation, the author maintains this to be a factual question; in a case such as this, where the insolvent remained in occupation of the property after commencement of sequestration, the question must be considered for the purposes of bringing the matter within the purview of the PIE Act. Some indirect support for this approach is to be found, in that the court mentions that the insolvents had been aware for over a year of the bank's intention to evict them.⁴⁷

The point of departure for the court regarding the eviction application therefore was a duly-formed opinion that it would be just and equitable in all the relevant circumstances to grant an order for eviction;⁴⁸ in the words of the court, "[t]he 'validity' of the defence depends upon the determination of what would be just and equitable".⁴⁹ The court was mindful of the balance to be struck between the proprietary rights of the owner and the basic human rights of the occupier in making a determination.⁵⁰

The respondents argued that it would not be just and equitable for the court to grant the eviction order and raised the following facts to convince the court not to grant the eviction order,⁵¹ namely:

1. They and their family had lived in the house for almost 20 years.

2. They had not wilfully defaulted on the mortgage bond repayments. The reason for the default was first respondent's loss of employment by reason of a worker complement reduction retrenchment process instituted by first respondent's erstwhile employer. The first respondent had paid R36 000.00 of his retrenchment package in reduction of the mortgage debt, before being sequestrated.

3. The first respondent conducts a business from the garage on the property with the permission of the trustee of respondents' insolvent estate. The first respondent needed the space thus provided to earn a living.

4. The first respondent had offered to pay rent on the property.

5. The first respondent had asked the bank for time until the end of 2002 to raise the funds to repurchase the property. He explained that he intended to do this from the proceeds of an MVA award that his brother expected to receive.

6. The respondents' grandchild (just over 2 years of age) and an 11-year old girl placed in the respondents' care lived in the house together with the respondents.

7. The respondents and their family have no alternative place to stay.

The applicant, however, argued that these factors were legally irrelevant and afforded no basis to refuse the order.⁵² After lengthy reasoning, the court rejected this argument.⁵³ The exception to having to consider just and equitable considerations (where the property has been sold in execution as provided for in sections 4(6) and (7)) was deemed to be central to the matter and thus also considered, but the court held that the exception in section 4(7) would not apply since the house was sold in terms of section 83(8) of the Insolvency Act⁵⁴ and not by an execution sale as provided for in the section 4(7) exception.⁵⁵ Therefore, the facts raised by the insolvents should be considered by the court.

Although the court took a liberal view concerning the assistance to be provided by courts in view of section 26 of the Constitution,⁵⁶ as well as the provision of the PIE Act,⁵⁷ in the end it granted the eviction order since it concluded that the respondents did not qualify for any special consideration in justice and equity entitling them and their dependants to remain in occupation of the property against the owner's right to possession.⁵⁸ The following reasons were advanced by the court:⁵⁹

"The respondents' occupation of the property was a consequence of a mortgage loan contract with the applicant, which had afforded them the financial means to acquire possession of the property. Interference with the effectiveness of the bank's security in cases like this could have far reaching adverse consequences in the housing market inimical to the realisation of the object of the progressive provision of access to housing by the broader community.

The first respondent is a relatively sophisticated and economically active member of the community who was able to provide independently for the needs of his family and dependants, within the limits of his income. He is a small-scale entrepreneur who has established a successful business. The first respondent had in fact offered to pay rent to the applicant. With adequate notice to make arrangements to move to alternative accommodation, there is no reason to believe he will not be able to continue to provide adequately for his and his dependants' basic needs.

The respondents had been aware for over a year of the bank's intention to evict them and accordingly they had already had a considerable period, during which they have occupied the property without any recompense to the owner, to prepare to vacate the property. Accordingly, in terms of ss 4(8) and (9) of the Act, I considered that a period of approximately 6 weeks' notice to vacate the property before an eviction order could be executed was just and equitable in the circumstances."

The importance of this case lies first in that it accepted the applicability of the PIE Act after sequestration, and considered factors to be used to decide whether the insolvent occupant should be evicted following the provisions of the Act. The judgment made clear that the interests of both parties must be considered - especially since the applicant in the matter was the mortgagee.⁶⁰ It must be noted that the mortgagee was the applicant in the eviction application since it bought the property from the insolvent estate. Eviction was sought in order to give possession of the property to the person who purchased it from the mortgagee (the bank). The court clearly pointed out that it did not amount to an execution sale and that the exception provided for in section 4(7) therefore would not apply.⁶¹

In this case, with reference to the ambit of the Act, it was held that the PIE Act applies in cases where occupancy initially is legal but becomes unlawful at a later stage.⁶² It is assumed that the occupation became unlawful when the bank (as the new owner) instructed the insolvent to vacate in view of the fact that it had purchased and resold the property and needed to give vacant possession to the new owner.⁶³

Some of the court's remarks remain important - namely, that one of the requirements of section 4 of the PIE Act, to grant an order for eviction, is a duly formed opinion that the eviction would be just and equitable in all the relevant circumstances, also considering the rights and needs of the occupant.⁶⁴ The court made an important observation:

"The enquiry, in at least insofar as it takes into consideration the effect of an eviction on the person sought to be evicted, will be influenced particularly by the consideration of the effect on that person's basic rights, including that person's constitutional socio economic rights."

The courts need to be sensitive to the social and economic repercussions of exercising the important responsibility granted them by the PIE Act to regulate property rights; this means contextualising the immediate circumstances of the case in terms of the national and social and economic microcosm.⁶⁵ It must be remembered, as pointed out by the court in paragraph 32, that the PIE Act does not provide a mechanism to divest an owner of property; it simply affords a basis upon which the judiciary can and must regulate the exercise of proprietary rights to possession against the unlawful occupier ("to whom the property has become home") in a way that, as far as is practically achievable, is consistent with the Bill of Rights and the founding principles of the Constitution. The court did not want the consideration of such circumstances tied down to a hard-and-fast burden of proof.⁶⁶

The court discussed the reason that local municipalities are formally informed of eviction applications as provided for by the Act: it is to assist the courts in realising socio-economic constitutional rights pertaining to housing, water and related matters. In this regard, the local municipality should assist the court to make decisions that are truly just and equitable. The court mentioned that apparently it is the norm that municipalities do not report to the courts in practice.⁶⁷ However, it should be noted that there seems to be a greater reluctance by municipalities to get involved in matters where the land is private land. Ultimately at play here is the question whether the occupant will be able to find suitable alternative accommodation if he or she is evicted. Trustees who bring eviction applications may of course also assist the court by indicating whether it is possible for the insolvent to find alternative accommodation and may even make proposals in this regard.

The ABSA v Murray case offers a peculiar set of facts where the bank purchased the property from the insolvent estate of the insolvent occupier after sequestration of the estate and then applied for eviction but the same considerations will apply if the trustee applies for an eviction order.

7 2 Mayekiso v Patel NO⁶⁸

This case concerns an appeal against an eviction order following an application in terms of the PIE Act by the trustees of an insolvent joint estate granted against Mr and Ms Mayekiso, the insolvents and the appellants in the current matter. The eviction order granted by the court a quo in 2016 related to their most luxurious house in which they resided for a number of years after sequestration and which was finally sold as part of the estate's assets.⁶⁹ The court a quo granted the eviction application on the ground that the appellants' continued occupation of the house after its sale in execution was unlawful. In an appeal to the full bench, the appellants, who conceded that their occupation was unlawful,⁷⁰ argued that the court a quo had failed properly to consider the effects of the eviction on the family, particularly the minor children.

The facts giving rise to the appeal include that the main asset in the estate is a luxury house purchased in 2007 for R19.95 million rand in cash.⁷¹ The insolvents experienced financial difficulties after 2011 but thwarted an attempted sale in execution in 2014 by an urgent application for sequestration of the joint estate. Their joint estate was subsequently sequestrated in 2014.⁷² The house had a market value of R18m in 2015 and a so-called forced sale value of R13m. The insolvents and their two minor children nevertheless remained in occupation of the house after sequestration. The joint trustees of the estate were formally directed and authorised by written resolution of the creditors at the second meeting of creditors to dispose of any movable and immovable property of the estate.⁷³On 1 December 2014, the trustees made an offer to the insolvents to accommodate their continued occupation of the house as tenants in terms of a formal lease agreement.⁷⁴ The fate of these negotiations is not absolutely clear but the insolvents were not interested in paying rental to the trustees in order to continue occupying the property.⁷⁵ The property was ultimately sold in 2017 for R13.2m. (It must be noted that a contract of lease entered into between a trustee and an insolvent may complicate the eviction process but it is understandable that the trustee will try to recuperate some expenses in relation to the property while the insolvent still occupies the premises. It could be asked what the object of such a rental agreement will be since, although the sequestration divests insolvents of their property, they retain a residual interest in it; it is submitted that it would be the right to occupy and to use it.)

The appellants, having earlier accepted during the appeal that the property had to be sold to satisfy creditors' claims,⁷⁶ nevertheless made an application (among others) to introduce new evidence on appeal - much of it hearsay - to show that one of the trustees was an impostor and not trustworthy⁷⁷ and they argued that this state of affairs rendered the eviction application fundamentally flawed.⁷⁸ This request was rejected by the majority judgment of the court of appeal.

Another point raised by the insolvents was that, since they were the registered owners of the property, they asserted a residual right therein and, based on this claim, they challenged the right of the trustee to deprive them of their occupancy of the property and, as mentioned before, they objected to the request to pay rent. In essence, they argued that their ownership entitled them to occupy the property without paying rental for their right of occupation.⁷⁹ The court, with reference to Hendricks v Hendricks,⁸⁰remarked on this point that the ownership could not amount to the bare dominium in the property. This matter, as well as the objection to locus standi of the trustee was not persisted with in the appeal case.

Following the sequence of events, the trustees continued to offer the property for sale on a public auction.⁸¹ The insolvents at one point brought an urgent application in an attempt to stop the sale of the property and the court was informed that this was an attempt to save the family home.⁸² This application was rejected since the court hearing this earlier application found the applicants had no locus standi to intervene in the matter.⁸³ Hence, the trustees continued with the sale of the property as they had a statutory obligation to realise the assets of the insolvent joint estate. The trustees brought an eviction application in which they indicated that the matter had become urgent since the property was deteriorating on a daily basis, which of course was to the detriment of the creditors.⁸⁴

In opposing the later application to evict them from the house in the court a quo, the insolvents raised a number of substantive as well as procedural defences. They claimed that, since they were still the registered owners, they retained a residual right to challenge the trustees to deprive them of occupation of the property.⁸⁵ They also argued that, as they were still registered owners, they could not be expected to pay rental.⁸⁶ The court a quo however did not accept the argument that their occupation was lawful and indeed concluded that it was unlawful;⁸⁷ this finding rendered the PIE Act applicable. Their argument that the trustees had no locus standi to bring the eviction application raised in the court of first instance was not again raised on appeal.⁸⁸

In view of these concessions, the end result of the appeal was that the appellants relied on the defences provided for in the PIE Act by claiming that the effects of an eviction order in relation to their minor children and the Mayekiso family being left homeless were not properly considered by the court a quo.⁸⁹On appeal, the insolvents ultimately accepted that the property would have to be sold in the end but argued that there would be no risk if they remained in the house and indicated that they would vacate once the property had been sold and registered in the name of a third party.⁹⁰ As indicated above, the property had in fact been sold on 18 September 2017 and the trustees mentioned that the appeal in fact became moot in view of the undertaking to vacate the premises.⁹¹

After the appellants (the insolvents) made certain concessions regarding technical points raised as part of the appeal, the court narrowed down the issues for the purposes of the appeal to the argument that the court a quo failed to have proper regard for the effect of an eviction order on the parties' minor children and further failed to consider the prospect that eviction would render the Mayekiso family homeless.⁹²

The respondents (the trustees) argued that the appeal had become moot since the appellants agreed they would vacate the premises once the property had been sold, and the fact that the property had been transferred to the purchaser.⁹³

An important matter considered on appeal was whether the decision of the court a quo was just and equitable. The appellants relied heavily on the judgment in Port Elizabeth Municipality v Various Occupiers⁹⁴and the Berea judgment⁹⁵ in their submissions that Dolamo J, the judge of first instance, had failed to discharge his constitutional duty in ordering the eviction. The court on appeal indicated that these were not the only authorities to be considered; and mentioned that the application of the PIE Act and the removal of unlawful occupiers of land had generated a considerable body of law in the last 15 years or so with leading appellate cases such as Ndlovu,⁹⁶Blue Moonlight⁹⁷and Changing Tides⁹⁸featuring prominently in the debates before our courts.

In this regard, the argument was raised that the court a quo did not have sufficient evidence before it about the precarious position of the minor children should the eviction order be granted and about the hardship it would cause owing to the homelessness of the family and the displacement of family members.⁹⁹

The court of appeal concluded that the application by the appellants to adduce further evidence was not bona fide; the appeal had to be decided on the record as it stood together with the relevant common-cause facts.¹⁰⁰

In deciding the matter, the court indicated that the facts of each case of alleged illegal occupation are the point of departure¹⁰¹ and in applying the established jurisprudence, when a court applies section 4(6) and (7) of the PIE Act, being the statutory instrument that underpins the section 26(3) basic right, the court needs to know, inter alia:

• whether the land in question is privately owned or whether it belongs to the State (or an arm of government);

• how long the land has been illegally occupied;

• how many people/families/households are likely to be affected by the proposed eviction;

• how many of those households are headed by women;

• how many children are likely to be affected, what their ages are, whether they attend school and if so where;

• whether there are sick or disabled occupiers who might be dependent on public health care;

• whether homelessness is likely to ensue; and

• what alternative options, particularly in respect of emergency housing, can be made available by the local authority concerned.

As to the merit of the defence raised by the appellants, the court found that the presence of children on the property did not necessarily trump the right of the owner (the trustee) to seek the eviction of their parents.¹⁰² Save for raising the possibility of homelessness, the appellants did not point out other factors relating to the children that the court a quo considered material, and the reason was clear, there were none.¹⁰³ The appeal bench accepted that the court a quo gave full consideration to the issue of homelessness and the effect it might have on the minor children, which was the only context in which the children's interests fell and needed to be considered.¹⁰⁴ But the appellants' continuing opulent lifestyle and their ability to conduct drawn-out and expensive litigation suggested unequivocally that homelessness was not a likely consequence of their eviction.¹⁰⁵ It was pointed out that this situation was confirmed by the first appellant, who promised under oath that the family would move out when the property was sold and transferred to its new owner.¹⁰⁶ Accordingly, it was for the court just and equitable in the circumstances to grant an order of eviction.¹⁰⁷ The court in the end did not accept that eviction would render the Mayekiso family homeless and also was not prepared to entertain further evidence on the matter on appeal.¹⁰⁸

It is interesting to note that the court a quo, in granting an eviction order, granted the insolvents a 30-day time of grace to remain on the property with a view to entering into a deal with the trustees concerning a way to save the property that was their home. This grant was made subject to the condition that potential buyers would have reasonable access to the property and that the insolvents would pay the rates and taxes during the remainder of their stay on the premises.¹⁰⁹

In confirming the ultimate eviction order granted by the court a quo, the court of appeal provided a reasonable time for the appellants to vacate the premises. In this way, the needs of the unlawful occupants were addressed to an extent since even where the circumstances do not warrant continued occupation, the court may rule under what conditions the occupant must vacate the property. In this regard, factors such as the end of the school term are taken into consideration.¹¹⁰

In a minority judgment, the dissenting judge, Mantame J, came to a different conclusion and indicated that both the appellant and the respondents should be given the opportunity to adduce further evidence.¹¹¹In essence, he accepted that the court a quo had to look more closely at the position of minor children and the matter of homelessness. The judge alluded to a more liberal approach followed by the courts. He concluded that the sophistication of the appellants' lifestyle was not a sufficient reason not to protect occupancy; he held that the court could not assume that, because the appellants occupied a R19.95 million house, they could not be rendered homeless by eviction.¹¹² The learned judge held the opinion that due process required that an inquiry be made¹¹³ and concluded that the court a quo should have investigated the appellants' arrangements for alternative accommodation and enquired into the circumstances of the children.¹¹⁴Thus, a broader investigation into relevant circumstances as intended in section 4(7) of the PIE Act was supported in the minority judgment. The importance of the statutory obligations of municipalities as prescribed by the PIE Act were also highlighted in this minority judgment.¹¹⁵

7 3 Body Corporate of Redberry Park v Sukude NO¹¹⁶

This was an application for provisional sequestration order by means of compulsory sequestration against an insolvent deceased estate of the late Mr Sukude. The applicant-creditor was the Body Corporate of Redberry Park, established in terms of section 36 of the Sectional Titles Act;¹¹⁷ the insolvent estate was indebted to the body corporate for payment of the statutory imposed levies.

Important to this discussion is that the founding affidavit of the applicant mentioned that an order for sequestration would avoid any problems with possible defences under the PIE Act, which would lead to delays and further prejudice. Although not specifically elaborated on in the judgment, it is assumed that family members of the deceased insolvent debtor occupied the sectional title unit. The applicant raised this matter apparently to convince the court that sequestration would be to the advantage of creditors since, it seems, the argument was that a sequestration order would prevent any unlawful occupant from raising the defences in the PIE Act that might prevent the "owner" from evicting occupants from the premises as it would obviate problems caused by the defences raised in terms of the PIE Act. During argument, the applicant abandoned this suggestion.¹¹⁸

The court held the opinion that the property should in fact be sold in execution and was not convinced that sequestration would be to the advantage of creditors or serve any other purpose. The court agreed that the point relating to the potential advantage of granting a sequestration order with reference to an avoidance of the effects of the PIE Act should be abandoned and mentioned that the court had no doubt that that was in the mind of the applicant when the papers were drawn.¹¹⁹ The court also held the view that such reasons may not be legitimate when seeking to issue sequestration proceedings as opposed simply to following the normal execution process.¹²⁰ This argument did not convince the court that it should exercise its discretion in terms of section 10 of the Insolvency Act¹²¹ to permit the sequestration of the deceased insolvent estate.

In refusing the application for sequestration for lack of proof of advantage to creditors, the court stated that it was not clear why it became necessary for the administrator to be granted an order for the sequestration of the insolvent estate of Sukude (the erstwhile sectional title holder) when there was no apparent reason that the property could not be sold in execution.

The court mentioned that although the applicant did not eschew any reliance on the avoidance of the consequences of the eviction of persons from the unit as a basis for justifying sequestration proceedings, there is no doubt that that was in the mind of the administrator when the papers were drawn. In addition, a main reason the administrator wished to proceed with a sequestration process was to secure an advantage over the mortgagee. The court concluded: "[i]n my view neither of those are legitimate reasons for seeking to issue sequestration proceedings as opposed to simply following the normal execution process against immovable property".

It must be stressed that this application dealt with a compulsory sequestration application. It seems the applicant initially attempted to convince the court that a sequestration order would be to the advantage of creditors since this is one of the key requirements to obtain such an order. In support of factors supporting the advantage of creditors, the applicant apparently tried to imply that the PIE Act would not be applicable after sequestration regarding the eviction of unlawful occupants and, hence, would benefit the body of creditors. Although this point was abandoned during the application, it must be noted that sequestration per se does not obviate the application of the PIE Act. The exception in section 4(7) of the PIE Act will also not avail the applicant in a subsequent eviction order since a sale following sequestration is not an execution sale as envisaged in the section.

Nevertheless, the application for sequestration was dismissed since no information was disclosed by the administrator as to the relative costs of recovering the debt via a sequestration process as opposed to levying execution against the sectional unit in the normal course. The application contained no further indication as to the costs of sequestration. Had these aspects been fully dealt with by the administrator, it would have been of some assistance in arriving at the proper exercise of the court's discretion.¹²²

For the purposes of this article, it is important to note that the court, while considering the advantage-to-creditors requirement, merely accepted that a possible motive for bringing the application was that the applicant thought the sequestration order would obviate/override any defences that may be raised against an eviction claim based on the PIE Act. It seems that there was an issue regarding current occupants of the sectional title unit of the deceased - perhaps family members occupying the unit. On a proper reading of the judgment, the court apparently accepted that such an ulterior motive was in the mind of the applicant, and questioned its legality. The effect of the position taken on the matter is that the court did not want to upset occupants who are entitled to seek the protection offered by the PIE Act from using it when faced with an eviction order.

However, it is clear that granting a sequestration order would not per se prevent the occupants from relying on certain statutory defences provided by the PIE Act when faced with an eviction order.

7 4 Botha NO v Kies¹²³

In this case, the joint trustees in the insolvent estate of the first respondent launched an eviction application on 12 July 2012 against the respondents, which was opposed. At the time of the application, the first and second respondents occupied a sectional title unit, number 2 in a sectional title scheme. The first respondent purchased the property on 28 September 2004 for the amount of R540 000.00 and it was registered in the first respondent's name on 17 March 2005. During 2005 and 2006, two sectional mortgage bonds were registered in favour of First National Bank (FNB), which provided security in the aggregated sum of R1 440 000.00.¹²⁴

On 23 April 2012, and after their appointment, the applicants demanded that the first respondent vacate the property, which notice was served personally on the first respondent on 2 May 2012; he refused to comply with the demand.¹²⁵

Against this eviction application, the first respondent, Mr Kies, raised the defence that a person cannot be a squatter in his own house¹²⁶ - an insolvent cannot occupy "his" or "her" property unlawfully, even after sequestration, according to the argument. The first respondent then alleged that the applicants had no locus standi and that the provisions of the PIE Act were not applicable.¹²⁷

However, the court referred to the provisions of the Insolvency Act,¹²⁸which state in section 20(1) that an insolvent is divested of his estate (the insolvent estate vests in the Master of the High Court, and upon the appointment of the trustees, it vests in them). The Insolvency Act provides that all the property, which according to the definition in the Act includes "movable or immovable property wherever situated within the Republic", so vests in the Master and then in the trustee upon his or her appointment.¹²⁹

At the time of the application, the applicants, in their official capacities, were the owners of the property. The court found that, in view of section 2 read with section 4 of the PIE Act, they had the necessary locus standi to launch the present application.¹³⁰

The insolvents occupied the property without any form of consent from the trustees and the court therefore found them to be the unlawful occupiers of the property.¹³¹ In particular, the court stated: "[t]here is no doubt in my mind that the PIE Act applies."

The court quoted Bekker v Jika¹³²at paragraph 11, where Harms JA stated:

"Since the factors discussed are essentially neutral, one is left with the ordinary meaning of the definition which means that (textually) PIE applies to all unlawful occupiers, irrespective of whether their possession was at an earlier stage lawful."(court's emphasis)

At paragraph 19, Harms JA went on to state:

"Unless the occupier opposes and discloses circumstances relevant to the eviction order, the owner, in principle, will be entitled to an order for eviction. Relevant circumstances are nearly without fail facts within the exclusive knowledge of the occupier and it cannot be expected of an owner to negative in advance facts not known to him and not in issue between the parties." (court's emphasis)

In its judgment, the court in Botha NO v Kies noted in paragraph 18 that it was patently clear that the first respondent was factually insolvent and that there was no equity in the estate.

Relevant to the reasoning of the court was the fact that the creditors at the second meeting of creditors authorised the trustee to sell the property as directed in one of the resolutions adopted at the meeting,¹³³ as follows:

"That the trustee be, and is hereby authorized, to sell or in any other way dispose of any immovable or movable assets of the Insolvent Estate, whether as a going concerns, or otherwise, or whether separately or jointly, with any other person or corporate entity, and on such terms and conditions as the Trustee, in his sole discretion, may decide on and particularly, in his sole discretion, should they decide to sell or otherwise dispose of any such asset, jointly with any other person or corporate entity, on the method and quantum, of division, of the total consideration, by public auction, tender or private treaty, and on such terms and conditions as he, the Trustee, in his sole discretion may deem fit and any other costs thereof which he, in his sole discretion cannot pass over, to be costs of sequestration."

In paragraph 20, the court states that the applicants cannot sell the property while the respondents are occupying the property - hence the application for the eviction of the respondents. It is submitted that this statement by the court should be restated to say that it may impact negatively on the sale value of the property if the insolvent still occupies the premises when the trustee wants to sell it but that such occupation in itself did not prevent the trustee from selling it in accordance with the creditors' resolution. (Clearly it may have a negative effect on the interest in the property should the insolvent still be in occupation at this time.)

In preparation for judgment, the court remarked that "[i]t is clear that the first respondent [that is, the insolvent] cannot accept that he has reached the end of the road and that he has no defence whatsoever".¹³⁴

In support of the application, the court considered the fact that the insolvents had been occupying the property unlawfully, free of charge and to the detriment of the insolvent estate. Furthermore, each day the value of the property was diminishing owing to the lack of maintenance. It could not be marketed and sold and the proceeds distributed to the first respondent's creditors. It had been two years and four months since notice to vacate had been given to the respondents but to no avail.¹³⁵ The court considered all the arguments by counsel for the applicants and the respondents and the provisions of the respective Acts. Important to the court was that the respondents, were not relying on the fact that they were "poor and vulnerable".¹³⁶ The court mentioned that Mr Kies (first respondent) described himself as a pensioner and legal advisor;¹³⁷ and therefore the only inference the court could draw was that he had an income. The court concluded that it would be just and equitable to grant the eviction orders as requested in these circumstances.¹³⁸

It was determined that the continued occupation of the property was to the detriment of the concursus creditorum and could not be further tolerated;¹³⁹hence, the court granted the eviction order.

7 5 Starbuck NO v Halim¹⁴⁰

In this case, an eviction order was granted against an insolvent husband and wife whose joint estate had been sequestrated. Their mortgaged home vested in their insolvent estate but they continued to occupy the premises together with three other persons. The insolvents were first and second respondents in an eviction application brought by the trustees of their estate. After their sequestration, the insolvents apparently rented the house out without the approval of the trustees as required in terms of section 23(2) of the Insolvency Act.¹⁴¹ (The lessee, who also occupied the house was the third respondent in the eviction application.) No defence based on the PIE Act was raised by the respondents, and although the third respondent opposed the application on other grounds, the eviction order was granted against all the respondents.¹⁴² This case is not that significant except that it mentions that the trustees first sent eviction notices to the occupiers, including the insolvents, before bringing the eviction application.¹⁴³ As proposed earlier in this article under heading 6, such a pre-application process is commendable in such a case in order to establish the element of unlawful occupation by the occupiers.

 

8 CONCLUSION

As indicated in the introduction in Part 1¹⁴⁴ of this article, South African insolvency law does not provide direct protection for insolvents insofar as their family home after sequestration is concerned - for instance, by excluding it or some of its equity from the insolvent estate, or by providing for continued occupation after sequestration as is the case in some other legal systems.¹⁴⁵

However, in view of section 26 of the Constitution, South African law has developed rules to protect the right to housing as guaranteed in the Bill of Rights.¹⁴⁶ This development was initiated by case law but the genesis remains the basic rights enshrined in the Bill of Rights. The cases dealing with this matter concern the socio-economic rights of persons - in particular, the right to housing of vulnerable and insolvent debtors whose estates have not been sequestrated. It should be clear that many in fact were not eligible for sequestration owing to the statutory requirements for this process. The judgments, including those of the Constitutional Court, caused rules of individual attachment and execution to be amended in order to provide for judicial oversight in cases of individual execution of the residence of the debtor.¹⁴⁷ This development by case law following the important Jaftha judgment resulted in legislative amendments to the High Court and magistrates' courts procedures dealing with these matters; due process was introduced in deciding whether execution of the primary residence of the debtor should proceed in particular circumstances. Factors to be considered by courts adjudicating such requests are referred to under heading 3 in Part 1 of this article.

As mentioned, these procedures currently are not applicable in a sequestration application and the question is whether these considerations spill over to sequestration applications and, more importantly for this article, whether there are any other measures that protect vulnerable insolvents faced with the prospect of being rendered homeless after the sequestration of their estates.¹⁴⁸ It remains a question whether a court hearing a sequestration application will consider similar factors to those argued in applications for attachment and execution. In a recent case, Jordaan v Jordaan¹⁴⁹an application for voluntary surrender did open the door in an indirect way for such an investigation and approach in the future.¹⁵⁰ The granting of a sequestration order is governed by the Insolvency Act¹⁵¹ but it is submitted that a case could be argued on the lines of Jaftha and subsequent cases should the facts regarding the personal circumstances of the insolvent be similar. With reference to the advantage-of-creditors principle, the respondent-debtor (owner) may argue a case that the sequestration in any event will not be to the advantage of creditors or may indicate alternative arrangements or procedures that could be used in place of a sequestration order. The facts will determine what is or is not possible in this regard.

It seems the protection relating to attachment and execution initially applied to indigent home owners but the courts also had to deal with more affluent property owners, such as those who could afford mortgage bonds over the residences.¹⁵² In such instances, with the rights of secured creditors (the mortgagees) to consider, it seemed the courts were reluctant to provide similar protection. On the other hand, it must be conceded that a debtor who can afford a mortgage bond may well be in a better financial position than the atypical debtor in the Jaftha matter. After initial hesitation, later judgments did consider the plights of those with bonded property as well. It is submitted that the developments affecting a debtor's estate that is not sequestrated either protects his or her continued occupation of the primary residence and/or they afford the debtor an opportunity while still in occupation to enter into a debt rearrangement with the creditor with a view to a time when for instance the debtor's financial position has improved in order for him or her to be able to pay the debt. Nevertheless, the measures developed in this instance were designed to prevent the debtor being rendered homeless and courts hearing such cases should seek solutions that protect the debtor as well as the interests of the creditor.

Against the backdrop of Part 1 of this article, the applicability of and possible protection offered by the PIE Act to insolvents facing eviction from their homesteads following sequestration of their estates have been considered in Part 2. The PIE Act is of general application and to some extent it gives effect to the constitutional imperatives in section 26 of the Constitution by making it compulsory in the case of an eviction application for the applicant owner or person in charge of the occupied property to follow a prescribed process to make an application to court to apply for eviction.¹⁵³

This Act provides statutory defences that an unlawful occupant may raise in an attempt to remain in occupation of his or her house, the ultimate aim being to prevent the debtor from being rendered homeless. The South African legislature decided to apply the protective measures to the "primary residence" of the debtor; this resort is commendable since the notion of a family or matrimonial home may be too restrictive and perhaps militates against basic rights like gender equality.

In this article, the applicability of the PIE Act to protecting the occupancy of insolvents in certain circumstances was considered against the backdrop of pertinent aspects of insolvency law. It is clear that the PIE Act has application in relevant situations after sequestration as well; the insolvent who occupies his or her (former) house unlawfully may rely on the PIE Act with a view to not being evicted under certain conditions and depending on the facts of the case - these being mainly the personal circumstances of the insolvent and his or her dependants.¹⁵⁴ The insolvent's claims are nevertheless pitted against the body of creditors. At the time of opposing an eviction order, the court hearing the sequestration application must amongst other reasons consider if there is an advantage to creditors before granting the order. Insolvency law dictates that the estate property ultimately vests in the trustee; he or she has a statutory duty to realise such assets to the benefit of the creditors in a relatively short prescribed time period. In many instances of consumer insolvency, the primary residence is in fact the main asset in the estate to be used to satisfy the creditors.

A number of court cases have considered the application of the PIE Act in an insolvency context.¹⁵⁵ It is clear from these cases that the PIE Act applies in a sequestration context as well. The theme of the article was inspired by these judgments as referred to under heading 1 and further discussed under heading 4 in Part 1 of this article. In Body Corporate of Redberry Park v Sukude NO¹⁵⁶(an application for compulsory sequestration), the court found, among other determinations, that the applicant had not established that there would be advantage to creditors when the debtor's property was sold in execution; it seemed to the court that the application for sequestration was motivated by the wish to circumvent the provisions of the PIE Act (with reference to the eviction of persons from the dwelling unit) and thereby to secure an advantage over the bond holder.

In another more pertinent judgment, Botha NO v Kies,¹⁵⁷the court accepted that the protective measures of the PIE Act may be to the avail of an insolvent debtor faced with an eviction order by the trustee under applicable circumstances.

Lastly, there is the judgment in Mayekiso v Patel NO,¹⁵⁸where the court considered various aspects of the PIE Act that may be relevant in a sequestration situation. In this case, among other defences, the insolvents relied on those provided in the PIE Act in an attempt to extend their occupation of the family homestead.

It is clear that the PIE Act may provide some relief for an insolvent debtor regarding continued occupation of his or her former home but the question is whether the relief is adequate since the PIE Act was not designed in the first place with formal insolvency in mind. It is also telling that to date no insolvent who has used the PIE defences has succeeded, but the option remains available.¹⁵⁹

In summary, the following aspects of the PIE Act must be considered when applying it in an insolvent situation - that is, when the estate of an insolvent has been sequestrated:

• The granting of a sequestration order that vests the insolvent estate assets or property (including the primary residence of the insolvent) in the trustee and divests the insolvent of his or her ownership is not currently subject to the same judicial oversight as is applicable in a case of a request to attach the primary residence and to declare it specially executable.¹⁶⁰

• After sequestration and where the insolvent still occupies his or her house or land or another building or structure for dwelling or shelter purposes, the PIE Act is in principle applicable where the occupancy of the insolvent amounts to unlawful occupation of such a building or structure or land for residential purposes.¹⁶¹

• The trustee of the estate has the required locus standi to bring the application and will qualify as owner and/or as the person in charge of such property.¹⁶²

• It is submitted that it is not clear on a reading of the Insolvency Act and the PIE Act whether or not sequestration per se causes the continued occupation of the insolvent after sequestration to be unlawful, but a case can be argued that the trustee, once appointed, could grant explicit or tacit permission to the insolvent to remain in occupation. From a practical point of view, and for the sake of certainty, it is submitted that the trustee has the authority to give notice to the insolvent to vacate the premises within a reasonable time.¹⁶³ If the insolvent fails to vacate, then the trustee can bring the eviction application in terms of the PIE Act. The purpose of the notice will be to ensure that the insolvent's occupancy is or has become unlawful in order to bring the matter under the jurisdiction of the PIE Act and to avoid evidentiary issues.

• In practice, the trustee sometimes specifically agrees that the insolvent may remain in the premises on condition that he or she pays a kind of rental for the continued use of the property to the estate. The benefit of such an arrangement may be that the property earns income during the phase after sequestration and before it has been sold as directed by the creditors, but it may create additional problems in getting the insolvent to vacate should it become necessary to so do. Once again, the trustee will have to ensure that the occupation is unlawful before attempting to bring an application for eviction.¹⁶⁴

• It may seem odd that the insolvent who has been the registered owner of the property may rent the property from the trustee but it must be noted that the insolvent is divested of his or her property upon sequestration and that he or she in principle needs permission to occupy the property.

• Usually, the residence of the insolvent is thought to be the only property that is used as a dwelling or shelter for residential purposes but an insolvent may vacate the primary residence either before or after sequestration and move into another property - for instance, his flat or an apartment or even a movable structure such as a caravan, a boat or a shipping container. A movable structure used for such residential purposes could be located on land that forms part of the estate or on land belonging to someone else. It is submitted that the PIE Act will apply if all the requirements are met. It is clear that even such movables can be used for residential purposes as envisaged by the PIE Act.

• An interesting question may arise with regard to a movable asset, such as a caravan, that is used for residential purposes. In view of section 19 of the Insolvency Act, the sheriff has a duty to make an inventory of all movable estate property and to attach it and take possession of it.¹⁶⁵ It seems that, in such a case, section 19 may become subject to the PIE Act. It must be noted that if the insolvent uses his or her caravan as a residence owing to financial problems, the caravan may be parked on land that the insolvent owned (now vesting in the insolvent estate) or the insolvent for instance may rent a parking spot at a caravan park. In the last-mentioned instance, occupation of the land may be legal but after the caravan has been claimed from the insolvent, occupation of the caravan as such may be deemed illegal.

• Where the property used for residential purposes is sold in terms of the resolution of creditors and if the trustee has not evicted the insolvent, it becomes the burden of the new owner to do so. Hence, it is advantageous for the creditors to see to it that the property is sold without the insolvent and/or family members still occupying the premises.¹⁶⁶

• When the court ultimately has to decide on the granting of an eviction order, it will have to consider the relevant factors that should be considered in terms of the PIE Act. In this regard, the approaches developed by the courts following the Jaftha judgment may be of use.¹⁶⁷

• It must be noted that section 4(7) of the PIE Act mentions that the defences that may be raised by the unlawful occupant will not apply if the property is sold in execution on behest of a mortgagee. A sale following a sequestration order is not a sale in execution and the exception in section 4(7) will thus not affect the application of section 4(7) in full.¹⁶⁸

• Where a court decides not to evict an insolvent, due attention must be paid to the duration of the continued occupation since it remains important to wind up the insolvent estate within a reasonable time. The impact of the concursus creditorum therefore must be considered. Even so, the court must set a reasonable period for the insolvent to vacate the premises. This in itself may provide some relief for the insolvent since it provides time to find other accommodation.¹⁶⁹

• As discussed above, there are a number of aspects that must be considered and interpreted when applying the PIE Act - especially in an insolvency matter. The PIE Act was clearly not written with the Insolvency Act and other legislation, such as the Deeds Registry Act, in mind, but it remains the task of the courts to give effect to it. It is a "strong-arm" Act in that it basically trumps other laws in relation to eviction; when applied in insolvency matters together with the aims of the PIE Act, it must be read in conjunction with its basic rights as genesis.

• It is clear that in the absence of a special insolvency dispensation to deal with the protection of the family home in South African insolvency law, the PIE Act at least offers an interim solution to vulnerable insolvents but it seems that the chances are not good for a successful attempt to remain in occupation. Since the PIE Act was not designed to cater for insolvents, its provisions need interpretation (sometimes liberal), to extend the relief to insolvents. It is submitted that an insolvency-specific model, taking all policy considerations into account, is the preferable option in the long run.

• It is clear that further consideration is required of the treatment of attachments of, and evictions from, a movable asset used for residential purposes under similar circumstances.

• In some instances, a person who is insolvent may occupy the premises of a company (or a trust) that may become insolvent. The insolvent may have the use of such property while exerting control over the company. If the company is liquidated, for instance, it seems clear that the liquidator of such company will have locus standi to apply for the eviction of an unlawful occupier. Sometimes such occupier may him- or herself be an insolvent whose personal estate has also been sequestrated, but he or she in fact uses the company or perhaps a trust as a vehicle to be vested with ownership of the house.¹⁷⁰

• In a comparison, the protection offered by the PIE Act is more in line with the position in England than that in the USA.¹⁷¹ Should this matter be addressed in future by the legislature, policy considerations should be considered in working out which approach to follow in local circumstances.

It is submitted that, in the absence of an insolvency-specific family home or primary residence dispensation, the PIE Act offers some protection to insolvent unlawful occupiers of their erstwhile family homes, but a number of vexing questions exist. Therefore it is submitted that such provisions should become part of insolvency law through legislative intervention with a view to establishing protective measures that address issues pertaining to insolvency and that provide certainty about adequate protection regarding the insolvent's right to housing.

 

 

1 See Boraine "Does the Prevention of Illegal Eviction From and Unlawful Occupation of Land Act of 1998 Provide Adequate Family Home Protection to Insolvent Debtors or Is It Still Pie in the Sky? (Part 1)" 2020 41 Obiter 199-225.
2 The PIE Act assists in giving effect to socio-economic rights relating to the right to housing and has its roots, inter alia, in s 26(3) of the Bill of Rights, which provides that "no one may be evicted from their home without an order of court made after consideration of all the relevant circumstances" (Cape Killarney Property Investment (Pty) Ltd v Mahamba 2001 (4) SA 1222 (SCA) 1229E). The PIE Act invests in the courts the right and duty to make the order that, in the circumstances of the case, would be just and equitable, and it prescribes some circumstances that have to be taken into account in determining the terms of the eviction.
3 See Smith Eviction and Rental Claims: A Practical Guide (2013) ch 3; Pienaar Land Reform (2014) ch 10; and Muller, Brits, Pienaar and Boggenpoel Silberberg: The Law of Property 6ed (2019) 751 for comprehensive discussions of the PIE Act. This article however focuses on those sections of the Act that are relevant to the application of the PIE Act in insolvency.
4 Ndlovu v Ngcobo 2003 (1) SA 113 (SCA); see Pienaar Land Reform 703 ff, where she refers to earlier proposed amendments to exclude the PIE Act's application to the latter two categories.
5 The wording of the section states: "[n]otwithstanding anything to the contrary contained in any law or the common law, the provisions of this section apply to proceedings by an owner or person in charge of land for the eviction of an unlawful occupier."
6 The purpose of this article is not to provide a comprehensive discussion of the PIE Act but is to highlight those aspects pertinent to the eviction of an occupier of land for residential purposes - especially insofar as they relate or may relate to the insolvency of the home owner or occupant.
7 S 4(7) of the PIE Act.
8 See par 7 of this article for a discussion of cases where the Act featured in the postsequestration phase of insolvency.
9 The facts of course determine if such consent was granted or not. See, in general, Residents of Joe Slovo Community v Thubelisa Homes 2010 (3) SA 454 (CC) for issues relating to consent in cases of state-owned land as discussed by Muller et al Silberberg 752.
10 Supra.
11 See Barnett v Minister of Land Affairs 2007(6) SA 328B-C, where the court ruled that the Act, for instance, will not cover holiday homes. In this regard, the court appreciated that a person may have more than one residence and it was mindful of the reference in the Preamble to "home" read with s 26(3) of the Constitution, but it found that the term "home" implied an element of regular occupation linked with some degree of permanence (see 327-328). See Ndlovu v Ngcobo supra 124H-125A and Shoprite Checkers Ltd v Jardim 2004 (1) SA 502 (O).
12 The purpose of this article, however, is not to provide a comprehensive discussion of the PIE Act but those aspects pertinent to the eviction of an occupier of land for residential purposes are discussed - especially insofar as they relate or may relate to insolvency of the home owner or occupant.
13 Muller et al Silberberg 753.
14 To "evict" an occupier means to deprive a person of occupation of a building or structure, or the land on which such building or structure is erected, against his or her will, and "eviction" has a corresponding meaning.
15 See further Smith Eviction and Rental Claims par 3.4; Pienaar Land Reform 717 ff.
16 24 of 1936.
17 47 of 1937.
18 See the discussion in the previous paragraph regarding the notion of ownership of the insolvent estate property.
19 Van der Merwe NO v Moodliar NO; Van der Merwe NO v Moodliar NO; Nkhoma NO v Moodliar NO [2019] ZAWCHC 160; [2020] 1 All SA 558 (WCC).
20 An important observation at par 33 is the reference to Kuper J, in SA Clay Industries v Katzenellenbogen NO 1957 (1) SA 220 (W) 224, who said that "the whole machinery of the [Companies] Act is directed towards a speedy liquidation and distribution of the assets of an insolvent estate".
21 S 361 of the Companies Act 61 of 1973 provides that, in any winding-up by the court, all the property concerned shall be deemed to be in the custody and under the control of the Master until a provisional liquidator has been appointed and has assumed office.
22 S 1 of the PIE Act; see definition of "building or structure".
23 See in general Pienaar Land Reform 725; and Modderklip Boerdery (Pty) Ltd 2005 (5) SA 3 (CC), which notes that the courts don't treat the constitutional duty of municipalities to provide housing as an absolute right or duty.
24 Smith Eviction and Rental Claims 3-41, where the author discusses various aspects, such as emotional aspects owing to the trauma suffered when the home is lost, and the dignity of the occupants. See also Port Elizabeth Municipality v Various Occupiers 2005 (1) SA 217 (CC) 233F; Davids v Van Straaten 2005 (4) SA 468 (CPD) 484B-D; Arendse v Arendse 2013 (3) SA 347 (WCC); Machele v Mailula 2010 (2) SA 267 (CC). See also Pienaar Land Reform 727 ff for a discussion of the so-called defences that may be raised.
25 See Smith Eviction and Rental Claims 3-41 with reference to ABSA Bank Ltd v Murray 2004 (2) SA 15 (CPD) 26G.
26 Smith Eviction and Rental Claims 3-42.
27 See Steyn Statutory Regulation of Forced Sale of the Home in South Africa (doctoral thesis, University of Pretoria) 2012 63, where she points out, with reference to Gundwana v Steko 2011 (3) SA 608 (CC) par 23, 41, 44 and 46 and Government of the Republic of South Africa v Grootboom 2000 (11) BCLR 1169 (CC); 2001 (1) SA 46 (CC) par 34 and subsequent cases, that connections have been made between the forced sale of a debtor's home (in individual attachment and execution) and the eviction of a person from his or her home.
28 S 4(7) of the PIE Act.
29 Ndlovu v Ngcobo supra par 10. It is clear the legislature considered the rights and interests of the mortgagee in this instance and decided that it should be of greater importance than the rights of the insolvent under these circumstances. See also Brodie v Kgomasang unreported case no 32683 of 2019 (GJ) par 28.
30 24 of 1936.
31 See Pienaar Land Reform 724, where the author refers to City of Johannesburg v Changing Tides 74 (Pty) Ltd 2012 (6) SA 294 (SCA).
32 S 4(8) of the PIE Act.
33 See Brodie v Kgomasang supra par 27, where it was made clear that the unlawful occupant is entitled to get notice, which must be a fair period: "It is clear that part of the fairness contemplated by PIE is that unlawful occupiers are given a period of time to vacate their homes that is just and equitable. Although it is not explicitly stated, this necessarily means that they must be given sufficient notice to do so."
34 S 4(12) of the PIE Act.
35 S 5 of the PIE Act.
36 See for instance Starbuck NO v Halim (12535/ 2015) [2015] ZAGPPHC 839 par 2, where the trustees served the occupants with written demands to vacate the property.
37 Muller et al Silberberg 756.
38 2000 (2) SA 1074 (SE).
39 See judgment of the Constitutional Court in Port Elizabeth Municipality v Various Occupiers supra.
40 2005 (1) BCLR 78 (CC). Further see Steyn Statutory Regulation of Forced Sale of the Home in South Africa 63 ff at fn 27 above whose points raised are supported.
41 41 Sediba v United Building Society 1993 (3) SA 671 (T).
42 2004 (2) SA 15 (CPD).
43 Par 1 -2.
44 At par 17 read with 23, the court accepted that the common-law grounds for eviction were altered by the PIE Act and the effect of s 26(3) of the Constitution was twofold: first, it imposed a duty upon courts to investigate and address considerations of justice and equity in determining the application for eviction; and, secondly, it provided a broad discretionary power to the court to impinge on the common-law right to obtain possession by the owner to the extent that considerations of justness and equity demand.
45 Par 5.
46 The court at par 13 also applied the interpretation in Ndlovu v Ngcobo supra - namely, that the PIE Act will apply to a case of holding over where the occupation was legal initially but became illegal at a later stage.
47 Par 48. The court also mentioned that they had occupied without recompensing the owner.
48 Par 19.
49 Ibid.
50 Par 21, where the court states that "[i]t does not provide for the negation of either class or category of rights and leaves it to the courts to endeavour to address tension between them justly and equitably".
51 Par 4 and 6.
52 Par 9.
53 Par 10-18.
54 24 of 1936.
55 Par 27.
56 Par 17, where the court mentioned that the substantive reforming effect of s 26(3) of the Constitution was that: first, it unambiguously places a duty upon courts to investigate and address considerations of justice and equity in determining any application for the eviction of any person from his or her home; secondly, it clothes the court with a discretionary power to impinge on the common-law right of the owner to obtain possession of the property to the extent that consideration of justness and equity demand.
57 See for instance par 19, 23, 28 38 and 39.
58 Par 44.
59 Par 46 to 49.
60 Par 21.
61 Par 26 and 27. In this regard, the court at par 25 referred to Ndlovu v Ngcobo supra par 10, where the court found s 4(7) and (8) to be anomalous with regard to the exception following an execution sale in that the rights of the elderly, children, disabled persons and households headed by woman would not have to be considered.
62 Par 13 and 15 with reference to the SCA judgment in Ndlovu v Ngcobo supra.
63 Par 2.
64 Par 22.
65 Ibid.
66 Par 38: "I consider that it is inappropriate to fix an ultimate onus of proof on either side. The court's decision falls to be made on the basis of all the relevant facts and considerations available to it." It is to be noted that the SCA found it unnecessary to decide this point in that matter; see Ndlovu v Ngcobo supra par 19.
67 Par 40 and 41.
68 2019 (2) SA 522 (WCC).
69 Par 4-10.
70 Par 21.
71 Par 4.
72 Par 5-8.
73 Par 10.
74 Par 11.
75 Par 12.
76 Par 25.
77 Ibid.
78 Par 28.
79 Par 20.
80 2016 (1) SA 511 (SCA) 7.
81 Mayekiso v Patel NO supra par 12.
82 Par 14.
83 Par 16 and 17.
84 Par 19.
85 Par 20.
86 Par 21. This amounted to no more than bare dominium with reference to Hendricks v Hendricks supra par 7.
87 Par 21.
88 Par 22.
89 Par 23.
90 Par 25.
91 Par 20.
92 Par 23.
93 Par 26.
94 Supra.
95 Occupiers, Berea vDe Wet N.O. 2017 (5) SA 346 (CC).
96 Ndlovu v Ngcobo supra; Bekker v Jika 2003 (1) SA 113 (SCA).
97 City of Johannesburg Metropolitan Municipality v Blue Moonlight Properties 39 (Pty) Ltd 2012 (2) SA 104 (CC).
98 City of Johannesburg v Changing Tides 74 (Pty) Ltd supra.
99 Mayekiso v Patel NO supra par 60.
100 Par 54-55 and 58-59.
101 Par 58.
102 Par 60.
103 Par 66.
104 Par 67.
105 Par 4 and 69-70. With regard to the dilatory tactics applied by the insolvents, the court accepted that the liabilities of the estate had to be settled with the house being sold in a speedy and efficient way; see par 52.
106 Par 71.
107 Par 74.
108 Par 70-72. Since it was not clear that the application to adduce further evidence was bona fide, the appeal had to be decided on the record as it stood together with the relevant common-cause facts; see par 54-55 and 58-59.
109 Par 38-39.
110 Par 76.
111 Par 45 of the minority judgment.
112 Par 35 of the minority judgment.
113 Par 28 ff of the minority judgment.
114 Par 41 of the minority judgment.
115 Par 32-33.
116 [2015] JOL 33408 (KZD).
117 95 of 1986.
118 Body Corporate of Redberry Park v Sukude NO supra par 9.
119 Par 11.
120 Ibid.
121 24 of 1936.
122 Par 12.
123 (40111/2012) [2014] ZAGPPHC 809.
124 Par 1-4.
125 Par 4-5.
126 Par 6-7.
127 Par 7.
128 24 of 1936.
129 Par 8.
130 Par 9.
131 Par 12.
132 Supra (referred to as Ndlovu v Ncgobo in this article).
133 Botha NO v Kies supra par 19.
134 Par 22.
135 Par 23.
136 Par 24.
137 Ibid.
138 Par 23 and 24.
139 Par 25.
140 (12535/ 2015) [2015] ZAGPPHC 839.
141 24 of 1936.
142 Par 12-16 and 19.
143 Par 2.
144 See heading 1 in Part 1 of this article.
145 See heading 2 in Part 1 of this article.
146 See heading 3 in Part 1 of this article.
147 Ibid.
148 See heading 4 in Part 1 of this article.
149 [2020] JOL 46613 (FS).
150 See heading 3 and 4 in Part 1 of this article.
151 24 of 1936.
152 See heading 3 in Part 1 of this article.
153 See heading 4 in Part 1 of this article.
154 See heading 4 and 5 in Part 1 of this article.
155 See heading 5 in Part 1 of this article.
156 Supra.
157 Supra.
158 Supra.
159 See heading 6 of this article.
160 See heading 3 in Part 1 of this article.
161 See heading 6 and 7 of this article.
162 Ibid.
163 See heading 6 and 7 of this article and see Starbuck NO v Halim supra.
164 See heading 4 in Part 1 of this article and heading 6 and 7 above.
165 See heading 4 in Part 1 of this article and heading 6 above.
166 See ABSA Bank v Murray supra under heading 6.2 of this article.
167 See heading 3 in Part 1 of this article.
168 See heading 4 in Part 1 of this article and heading 6 above.
169 See heading 6 of this article and Brodie v Kgomasang supra.
170 See heading 6.1 of this article and Van der Merwe NO v Moodliar NO supra.
171 See heading 2 in Part 1 of this article.

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ARTICLES

 

The compliance of the south african social security system with the international covenant on economic, social and cultural rights

 

 

Yvette Basson

LLB LLM LLD Lecturer, Faculty of Law University of the Western Cape

 

 

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SUMMARY

The ratification of the International Covenant on Economic, Social and Cultural Rights by South Africa has resulted in the provisions thereof becoming binding on the South African legislature. The right to social security is entrenched in the iCeSCR, which provides for the elements of a social security system that must be complied with by states. This article sets out what is required of states in terms of the right to social security in the ICESCR by way of crystallising the elements of a social security system. Thereafter, the South Africa social security system is compared to these elements to determine whether there is compliance with the right to social security in the ICESCR.

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1 INTRODUCTION

The International Covenant on Economic, Social and Cultural Rights (ICESCR)¹ is one of the instruments that form the International Bill of Rights.² One of the stated purposes of the ICESCR is the promotion of the general welfare of persons in a democratic society.³ The recognition that certain rights have an impact on the dignity of each person is an integral part of the ICESCR. To this end, the Preamble to the ICESCR provides that each person should be permitted to benefit from the exercise of his rights, which include economic, social, cultural, civil and political rights.⁴ Accordingly, the ICESCR makes provision for the realisation of numerous rights of the aforementioned categories. The content of the ICESCR includes provisions relating to the right to work,⁵ the right to social security⁶ and the right to an adequate standard of living.⁷

Approximately 165 countries have signed and ratified the ICESCR, which means that these countries are compelled to implement its provisions into their domestic law.⁸ However, a lack of ratification does not mean that countries that have only signed the ICESCR are unaffected by the provisions therein. Countries that have signed and not ratified the ICESCR are obliged to refrain from enacting laws which conflict with the provisions of the ICESCR.⁹

Until late 2014, South Africa was only a signatory to the ICESCR.¹⁰ A concerted campaign by numerous stakeholders resulted in the ratification of the ICESCR by South Africa on 12 January 2015.¹¹ Upon ratification, South Africa became bound by the provisions in the ICESCR and has an obligation to domesticate the provisions therein.¹² The role of South Africa as a State Party has now shifted from a passive one, in terms of which they were merely prevented from enacting laws in conflict with the provisions of the ICESCR,¹³ to an active one, in terms of which the provisions of the ICESCR must now be incorporated into South African legislation.¹⁴ For purposes of this article, the provisions of the ICESCR relating to social security schemes is discussed.

1 1 The right of access to social security in South Africa

Section 27(1)(c) of the Constitution of the Republic of South Africa provides that "everyone has the right of access to social security, including, if they are unable to support themselves and their dependants, appropriate social assistance". This right is part of the collection of socio-economic rights found in the Bill of Rights. Section 7 of the Constitution emphasises this importance and further, provides important information on how the socioeconomic rights in the Bill of Rights are to be handled by the state. Section 7(2) provides that "[t]he state must respect, protect, promote and fulfil the rights in the Bill of Rights".

According to Ngcobo CJ,

"[t]his obligation goes beyond a mere negative obligation not to act in a manner that would infringe or restrict a right. Rather, it entails positive duties on the state to take deliberate, reasonable measures to give effect to all of the fundamental rights contained in the Bill of Rights".¹⁵

It was also found in Glenister v President of the Republic of South Africa that, in interpreting the content of the obligation created by section 7(2), it was not necessary to prescribe exactly which steps the state has to take to meet its obligation in terms of the section.¹⁶ However, the chosen steps must be reasonable and effective, and must be steps that would be taken by a reasonable decision-maker in the circumstances.¹⁷ This means that any steps taken in relation to the realisation of the right of access to social security must be done in a manner that respects, protects, promotes and fulfils the right, and these steps must be reasonable.

According to the South African Human Rights Commission (SAHRC), the obligation to respect a right means that the state must not hinder the exercising of that right.¹⁸ This includes an obligation not to limit the enjoyment of a particular right already in existence.¹⁹ The protection of a right entails the state preventing violations of that right by third parties (the violation of the right by the state is already prohibited through the obligation to respect the right).²⁰ The state must also promote rights in the Bill of Rights, which involves the provision of information about the right to persons entitled to it.²¹ In other words, the state must educate persons about which rights they are entitled to and the scope and content of those rights. Finally, the obligation to fulfil rights obliges the state to take appropriate legislative and other measures which contribute to the full realisation of the rights in the Bill of Rights.²² The obligation to fulfil rights is somewhat curtailed by the principle that such fulfilment must be progressively realised using the resources available to the state.²³

1 2 Application of the right of access to social security

The right of access to social security is guaranteed for "everyone" in terms of section 27(1)(c) of the Constitution. In the case of Khosa v Minister of Social Development,²⁴the Constitutional Court considered the meaning of the word "everyone" for purposes of the right of access to social security. Following the reasoning of the court in this case, it is implicit in the use of the word "everyone" that the right of access to social security is guaranteed to persons who are permanent residents or citizens of South Africa.²⁵

According to section 27(2), "[t]he state must take reasonable legislative and other measures, within its available resources, to achieve the progressive realisation of these rights".²⁶ The terms "reasonable measures", "available resources" and "progressive realisation" have specific meanings for the right of access to social security, which are discussed in the paragraphs hereafter.

Government of the Republic of South Africa v Grootboom²⁷is the landmark case in relation to these terms. According to the Constitutional Court, in evaluating measures taken by the state to ensure access to social security the court is not concerned with the availability of "more desirable" measures, but rather with whether the measures taken were "reasonable".²⁸The court recognises that many different measures may be considered reasonable in any set of circumstances and, as long as the particular measures chosen can be considered reasonable in the circumstances, the requirement of reasonable measures is met.²⁹

It was previously said that the right of access to social security cannot be enforced (or realised) upon demand,³⁰ and this is echoed in the requirement that the right be progressively realised. According to the Constitutional Court in the Grootboom case,

"The goal of the Constitution is that the basic needs of all in our society be effectively met and the requirement of progressive realisation means that the state must take steps to achieve this goal. It means that accessibility should be progressively facilitated: legal, administrative, operational and financial hurdles should be examined and, where possible, lowered over time."³¹

Progressive realisation of social security includes, but is not limited to, increasing the level of coverage and benefits.³² This view is supported by the statement that achieving progressive realisation of socio-economic rights consists of more than increasing the finances allocated to the realisation of a particular right.³³ The focus should rather be on how many people have actually been awarded the benefit attached to a particular socio-economic right.

The question of available resources raises the ever-present issue of social spending. Essentially, the right of access to social security is limited by the stipulation that the state is only compelled to provide social security benefits where it has the resources to do so. If the state is able to prove that it does not have the resources to meet its social security obligations, the resultant (internal) limitation of social security rights is justifiable. This does not mean that the state can entirely avoid its social security obligations merely by asserting that it does not possess adequate resources.³⁴ In the Khosa case, the court stated that the limitation of the right of access to social security may be justifiable on the basis of a lack of resources, but the manner in which the existing resources are allocated must be consistent with the Bill of Rights in general.³⁵

 

2 THE RIGHT TO SOCIAL SECURITY IN THE ICESCR

Article 9 of the ICESCR provides that "States Parties to the present Covenant recognize the right of everyone to social security, including social insurance." This article creates the right of individuals to social security, and a corresponding obligation on States Parties to provide such social security. However, Article 9 on its own does not provide much indication as to the scope and content of social security systems, beyond the allusion to social insurance.

In order to give content to the right to social security, the General Comments released by the Committee for Economic, Social and Cultural Rights (CESCR) need to be considered. The CESCR was established in 1985 for the purpose of monitoring the implementation of the ICESCR by States Parties.³⁶ It is made up of 18 independent experts who are tasked with receiving state reports on the progress of implementation of the ICESCR and publishing their interpretation of the provisions of the ICESCR in the form of general comments.³⁷

For purposes of social security, General Comment 19 provides information for States Parties to comply with Article 9 of the ICESCR.

2 1 General Comment 19

The right to social security is defined by the CESCR as the right to access and maintain benefits, whether in cash or in kind, without discrimination in order to ensure protection from a number of contingencies that result in a lack of work-related income, or unaffordable health care or insufficient family support.

According to General Comment 19, social security systems should be established in terms of the domestic law of each country and the administration thereof should be the responsibility of a public authority.³⁸This means that it is up to each State Party to decide how to administer its own social security system, and that such administration must be transparent. The CESCR also confirms that there are a number of contingencies for which any social security system should provide coverage.³⁹ These contingencies are sickness, disability, maternity, employment injury, unemployment, old age or death of a family member.⁴⁰However, the General Comment does not provide more specific examples of events leading to loss of income resulting from these contingencies, nor does it refer to any monetary amounts which may be provided to persons affected by such contingencies.⁴¹

In order to inform the approach of state parties in implementing the right to social security, the General Comment requires states parties to respect, protect and fulfil the right to social security.⁴² This echoes the obligation to respect, protect, promote and fulfil the right of access to social security in the Constitution, although the explanations of each term are not identical. In respecting and protecting the right to social security, it has been suggested that the state must not only provide legislative protection to existing private and collective social security schemes but also that non-state social security schemes must be established.⁴³ The fulfilment of the right to social security is more straightforward, in that the state party is merely required to have a legislative framework in place for a social security system.⁴⁴

General Comment 19 provides for basic principles which must be present in any social security system.⁴⁵ In the following paragraphs these basic principles as well as the obligations discussed above are explained and applied to the South African social security system in order to gauge whether South Africa's social security system complies with them.

 

3 INDICATORS FOR COMPLIANCE WITH THE ICESCR

From the discussion of General Comment 19, several indicators can be crystallised that can be used to determine whether a country's social security system meets the requirements established by the ICESCR. These indicators are:

- the existence of a social security system

- the administration of such social security system by a public authority

- the coverage of a minimum of nine named contingencies

- the level of coverage provided by the social security system

- the level and duration of benefits provided

- the use of benefits in the realisation of other rights in the ICESCR

The Office of the High Commissioner of the United Nations summarises the key elements of the right to social security as availability, adequacy, affordability and accessibility.⁴⁶ The implementation of the right to social security must therefore be informed by these three principles.⁴⁷ Each of these elements can be linked to one of the indicators named above.

3 1 The existence of a social security scheme

This indicator could also be called the availability of a social security system. This indicator is arguably the easiest one to satisfy, in that all that need be proved is that a social security system providing benefits is in place. This is also reminiscent of the requirement to fulfil the right to social security in General Comment 19, which also only requires that a legislative framework for social security be in place.⁴⁸ The system may consist of a single scheme or a variety of schemes;⁴⁹ the accessibility and adequacy of these schemes becomes relevant when applying the other indicators.

In terms of section 27 of the Constitution of the Republic of South Africa, everyone has a right of access to social security.⁵⁰ There is thus a constitutional basis for the social security system in South Africa, subject to certain limitations and qualifying criteria. In addition, numerous pieces of legislation give effect to this constitutional right. These include the Social Assistance Act,⁵¹ Unemployment Insurance Fund Act,⁵² Compensation for Occupational Injuries and Diseases Act and the Pension Funds Act.⁵³ The Social Assistance Act makes provision for social grants administered by the State, and the other legislation mentioned establishes and provides structure for various social insurance schemes. The social security system therefore exists and consists of multiple schemes as envisaged by the UN High Commissioner.

3 2 Administration by a public authority

The ICESCR requires that the social security system of a member state be administered by a public authority. Neither the ICESCR nor the General Comment relating to social security provides a definition of "public authority". However, a public authority is defined as any government or public institution at national, regional or local level. It is submitted that a government department or institution that performs a public function and is financially accountable to a national or regional institution would be appropriate for administration of social security in terms of the ICESCR.

This indicator ties in with the obligation to protect the existing social security system. Through requiring the administration of social security schemes to be transparent and publicly accountable, a number of harmful behaviours affecting the funding of social security may be prevented. Since State Parties must protect their social security systems and considering that these schemes are often funded by public monies, requiring that the administrating authorities subject themselves to public scrutiny is particularly appropriate.

3 2 1 Administration of social assistance

The administration of social assistance in South Africa is the responsibility of the Department of Social Development,⁵⁴ which is a state department under the leadership of the Minister of Social Development. In terms of national legislation, the Minister may delegate the administration of social assistance,⁵⁵ and has done so. The delegation of responsibility to the South African Social Security Agency (SASSA) was done in terms of the South African Social Security Agency Act in 2004.⁵⁶ The express purpose of SASSA is to act as the sole agency involved in the management, administration and payment of social assistance in South Africa.⁵⁷ Since SASSA is subject to the provisions of the Public Finance Management Act⁵⁸which regulates the management of finances in national and provincial government and is a juristic person,⁵⁹ this satisfies the requirement relating to administration by a public authority.

3 2 2 Administration of social insurance

Social insurance in South Africa is somewhat fragmented, in that there are a number of available schemes and each of these is run by a different institution. The major social insurance schemes are the Unemployment Insurance Fund, the Compensation for Occupational Injuries and Diseases Fund and retirement schemes. One can therefore not say that social insurance is administered by a public authority in its entirety without looking at the management of each scheme in turn.

The Unemployment Insurance Fund (UIF) was established in terms of the Unemployment Insurance Act⁶⁰ in 2001. The UIF provides benefits for persons who were employed and making contributions to the UIF and who are no longer able to work as a result of contingencies such as pregnancy, illness and dismissal.⁶¹ The entity responsible for the administration and management of the fund is the Department of Labour, which is a state department forming part of the South African government.⁶² The UIF is also subject to the provisions of the Public Finance Management Act.⁶³ The UIF thus satisfies the requirement of administration by a public authority.

The Compensation for Occupational Injuries and Diseases Fund (COIDA Fund) was established in terms of the Compensation for Occupational Injuries and Diseases Act (COIDA) in 1993.⁶⁴ The purpose of the COIDA fund is to compensate workers who are injured or become ill in the course of their employment and are unable to work because of such injury or illness.⁶⁵The COIDA Fund is also administered by the Director-General of the Department of Labour,⁶⁶ and as such is administered by a public authority.

Retirement schemes in South African are numerous and varied - there are over 5000 active retirement funds in South Africa.⁶⁷ Each of these funds has its own board of trustees and management. However, these funds are subject to the provisions of the Pension Funds Act,⁶⁸ which provides for the regulatory framework within which each of these funds must operate. In addition, retirement funds are subject to the rules of the Financial Services Conduct Authority,⁶⁹ which is empowered to investigate and regulate the conduct of financial service providers in South Africa, including retirement funds.⁷⁰ While there is no single administrator for retirement funds in South Africa, the regulatory framework established by the Pension Funds Act may be considered a public authority for purposes of this discussion.

Since each of the major social insurance schemes in South Africa is managed by a public agency, it is submitted that social insurance as a whole complies with the ICESCR requirement of management by a public authority and the obligation to protect social security schemes.

3 3 Coverage of contingencies

According to General Comment 19, the social security systems of States Parties should provide coverage for contingencies from the nine principal branches of social security.⁷¹ These branches are health care, sickness, old age, unemployment, employment injury, family and child support, maternity, disability, and survivors and orphans.⁷²

Social assistance in South Africa provides social grants for persons who are unable to provide for their own maintenance needs.⁷³ There are grants payable to persons who are unable to meet their own maintenance needs as a result of disability, old age and for families with children under 18 and families with disabled children who are unable to meet the financial needs of those children.⁷⁴ Social insurance provides financial assistance for persons who have become unemployed as a result of illness, maternity, dismissal, retrenchment, occupational injury, occupational diseases and for survivors in the event of the death of the breadwinner. The UIF is the source of many of these benefits.⁷⁵ Benefits in the form of partial income replacement for persons who are injured or become ill in the course of their employment are payable from the COIDA Fund.⁷⁶

Between the contingencies covered by social grants and social insurance schemes, all the contingencies specified by the CESCR are provided for in the South African social security landscape.

3 4 Level of coverage

This indicator refers to the reach of social security. Put in simpler terms, the number of people covered by social security needs to be assessed in order to establish whether such coverage is adequate or not. This component of the right to social security ties in with the element of accessibility as specified by the UN High Commissioner.

3 4 1 Coverage of social assistance

As per section 27(1)(c) of the Constitution, the right of access to social security includes social assistance for persons who are unable to provide for their own maintenance needs.⁷⁷ The right of access to social assistance is thus inclusive as indicated by the use of the word "everyone",⁷⁸ but qualified through providing that persons only gain access to social assistance if they are unable to provide for their own maintenance needs. This qualification takes the form of the use of a means test applied to persons applying for social assistance.⁷⁹ The purpose of the means test is to prevent persons receiving social grants when their financial needs are being met through their own endeavours.⁸⁰ It has been argued that the means test should be abolished and that social assistance should be awarded to any person applying for it.⁸¹ It is submitted that this argument is flawed, since it would place an undue burden on an already financially strained state. As of February 2019, there were approximately 18 million social grant recipients in South Africa.⁸² This number was higher than the number of persons employed in formal employment at that time⁸³ and comprised approximately 30 per cent of the total population.⁸⁴ It is submitted that social assistance coverage in South Africa is currently in compliance with Article 9 of the ICESCR in relation to the extent of coverage, since such a large number of persons are in receipt of a social grant.

It must be noted that this indicator is subject to the internal limitation in section 27 of the Constitution, which provides that the right of access to social security is subject to available resources.⁸⁵

Since social assistance is funded through general revenue (which includes income tax),⁸⁶ the amount that is available for distribution through social assistance is limited. This limitation is as a result of the low levels of formal employment in the country,⁸⁷ which consequently results in a relatively low number of persons paying income tax. The less tax paid by those who are in formal employment, the less money there is available for social assistance grants. The state may thus claim that the current number of social assistance grant recipients and the concomitant social spending is the best that can be done within the currently available resources.

3 4 1 1 Impact of COVID 19 on social assistance

In April 2020, President Cyril Ramaphosa announced a range of measures that would benefit social grant recipients during the nationwide lockdown in response to the international outbreak of COVID-19.⁸⁸ These measures include the availability of a lesser used social grant, called social relief of distress⁸⁹ and the temporary increase in the amounts received by all existing social grant recipients. The source of funds for these increases was not the general revenue used for the standard social grants but was an amount that was re-directed from other parts of the budget allocated to other expenditure.⁹⁰ In addition, funds were made available from other state administered funds such as the UIF and sources from local and international sources.⁹¹

The rapid response of the state to the needs of social assistance recipients is indicative of the state's commitment to providing financial assistance to those in dire need and is to be commended. However, it is submitted that the increased amounts made available temporarily do not mean that there is more money available to social grant recipients under normal circumstances. As indicated above, the funds used for the new and increased social grants are not sourced from general revenue, which is the dedicated source of funds for social grants. These funds were made available through emergency and temporary measures and cannot be used to make the argument that the state is not using its available resources to increase the amounts paid to social grant recipients in normal circumstances.

3 4 2 Coverage of social insurance

It is more complicated to determine the exact level of coverage of social insurance schemes in South Africa. Social insurance consists of a number of schemes that may have no relation to each other, save that they can only be accessed through employment.⁹² The three primary social insurance schemes are the UIF, the COIDA Fund and retirement funds.

The pre-requisite of employment makes social insurance schemes exclusive in nature, since the unemployment rate in South Africa at the end of 2019 was 29.1%.⁹³ This means that a third of the working age population has no access to social insurance. Further, these schemes are only accessible to certain categories of employees and exclude workers in informal employment, casual workers and often government employees and members of the military also.⁹⁴ Considering that so many persons are excluded from social insurance, it is submitted that the level of coverage currently provided does not comply with Article 9 of the ICESCR.

3 5 Level and duration of benefits

The level and duration of benefits provided by a social security scheme must be adequate and must be provided as long as the individual is negatively affected by the particular contingency they are receiving benefits for. This means that the benefits provided must be enough to meet the recipients' basic needs and the benefits should not be ceased while the recipient needs them.

3 5 1 Level of benefits provided by social assistance

The level of benefits refers to the amount of money paid to recipients of such benefits. In order to satisfy this requirement, the amount paid must be adequate. What is meant by adequate is not easy to establish, considering that there are many factors contributing towards the financial needs of persons negatively affected by the named contingencies. It is submitted that, in the South African context, this amount should allow a grant recipient to provide for their own maintenance needs, since this is the primary qualifier for social assistance in the Constitution. For purposes of this article, the amounts paid through social assistance are provided and then analysed to gauge whether these are "adequate".

3 5 1 1 Minimum wage as an indicator of adequacy

Social grants for older persons and persons with disabilities provide the same amount to recipients (this is not taking into consideration any supplementary grants such as the grant in aid). As of April 2020, this amount is R1860 per month per recipient⁹⁵ (excluding the additional temporary amount payable as a result of the COVID19 outbreak).⁹⁶ From this amount, a recipient is expected to provide for all their daily needs, such as food, rent and electricity.⁹⁷

As of 1 January 2019, the National Minimum Wage in South Africa is R20 per hour.⁹⁸ This amount was increased to R20.76 for employees, effective 1 March 2020.⁹⁹ The primary aim of introducing a minimum wage is to address the extreme levels of income inequality in South Africa.¹⁰⁰ Based on a work week of 40 hours (excluding any overtime that may be required), this equates to approximately R43 000 per annum. A person earning a minimum wage therefore earns approximately R3600 per month. This means that a social grant recipient is expected to meet their own maintenance needs with slightly more than half the amount that is considered adequate as a minimum wage. It is submitted that this amount cannot be considered adequate for purposes of meeting the requirements of the ICESCR.

However, one must still consider the impact of the internal limitations on the right of access to social security found in section 27(2), which are that the right must be realised progressively and within the available resources. As discussed above, the resources available to the state are finite and do not leave much room for increasing social grant amounts. The issue of progressive realisation is addressed through the annual increase of the amounts payable to social grant recipients.¹⁰¹ Each year in the annual budget speech, social grant amounts are increased by a small amount, usually less than R100 per social grant recipient. Considering that the concept of progressive realisation only requires that the state take steps to increase the level of benefits payable, it can thus be said that the annual increase to social grants amounts to progressive realisation. The state is thus progressively realising the right of access to social assistance through this annual increase, albeit that such realisation is slow because of the small amount by which the grant is increased.

The question, then, is whether the current inadequate amount is justified by the clear progressive realisation and the limitation of available resources. It is submitted that the low amount payable is, in fact, justified through an examination of these limitations. As mentioned previously, state expenditure on social grants is already substantial and the growing number of social grant recipients makes increasing the amount payable infeasible. In addition, the state is meeting its obligation to progressively realise the right of access to social assistance through annual increases in social grant amounts.

Despite the initial finding that the social grants in South Africa are not compliant with the ICESCR, it is submitting that the amount paid is justifiable by the requirements of the Constitution, which take precedence over the provisions of international law.

3 5 2 Level of benefits provided by social insurance

The benefits payable through social insurance schemes are not only extremely varied, but also tailored to each individual recipient. In the case of UIF benefits, the amount payable depends on the amount the employee has contributed to the UIF and for how long they made contributions.¹⁰² The actual individual benefit is paid on a sliding scale based on the recipients' salary.¹⁰³ This means that the more an employee earns, the smaller percentage of their salary will be paid in UIF benefits. COIDA Fund benefits are calculated on an individual basis and depend upon the nature and extent of the illness or injury experienced by the employee.¹⁰⁴ Retirement fund benefits depend on the amount and duration of contributions made by the recipient and, in some cases, tax must be paid on benefits received.¹⁰⁵ For these reasons, it is not possible to establish whether social insurance payments as a whole are adequate in South Africa. Such an in-depth analysis would have to take place on a case by case basis for each scheme and is therefore beyond the scope of this article.

3 5 3 Duration of social assistance benefits

In terms of social assistance, the social grant is payable for as long as the recipient is unable to meet their financial needs.¹⁰⁶ The right of access to social security is thus qualified, and the use of a means test has been implemented in order to determine the financial need of applicants for social assistance.¹⁰⁷ If an applicant for (or recipient of) a social grant earns money in excess of a specified amount, they become ineligible for the social grant and the grant will either not be awarded,¹⁰⁸ or, in the case of a person already receiving a grant, the payment of the grant will cease.¹⁰⁹ The threshold for income is currently R82 400 per annum for single persons and R164 880 for married persons.¹¹⁰ An applicant or recipient is thus permitted to have an income, as long as the income does not exceed these amounts. Any income received will cause the amount received from the social grant to be adjusted pro rata.¹¹¹ The principle applicable here is that once income exceeds these amounts, a recipient is no longer unable to meet their own maintenance needs and the contingency has therefore effectively ended.¹¹²

In addition to the use of the means test, a social grant will also lapse if the contingency for which it is paid is no longer applicable. In particular, if a recipient of a disability grant is no longer considered disabled and declared medically fit to work, the grant will lapse.¹¹³ Similarly, if a social grant is paid in respect of a child, the grant will lapse when the child reaches the age of majority.¹¹⁴

A further example of social assistance benefits only being paid while needed is the availability of the temporary social relief of distress grant made available to persons affected by the outbreak of COVID-19 who have consequently lost income.¹¹⁵ As of May 2020, the social relief of distress grant will be payable to successful applicants for 6 months.¹¹⁶ The increases in social grant amounts already being paid are also effective for 6 months.¹¹⁷

The state is thus clearly cognisant of the need to provide social assistance when it is most needed by recipients.

It is thus submitted that social assistance (both in the form of temporary grants and permanent grants) therefore does provide benefits for the duration of the financial need of the recipient and meets the requirement of adequate duration of benefits.

3 5 4 Duration of social insurance benefits

The social insurance schemes in South Africa are not means tested. This means that there are no income thresholds attached to the receipt of social insurance benefits. However, certain social insurance benefits may cease before the contingency has ended. For example, UIF benefits paid to an unemployed person may be exhausted before the recipient has secured further employment.¹¹⁸ This is also the case where UIF benefits are paid to and exhausted by a recipient who is no longer working as a result of illness or incapacity who has not yet been able to return to work. Since UIF benefits may not be payable for the entirety of the period that a person is unemployed, it may appear as though the duration of benefits is not adequate. However, it must be borne in mind that UIF benefits are funded through contributions by the employee and their employer and are capped at a certain amount.¹¹⁹ The duration of UIF benefits is thus a legislative principle and is aimed at encouraging recipients to secure employment and providing benefits beyond this is not possible.

In the case of COIDA Fund benefits, the duration of benefits depends on the nature of the illness or injury experienced by the recipient of benefits. Employees with permanent disablements will receive benefits for life;¹²⁰those with temporary disablements receive benefits for the duration of the illness or injury.¹²¹ It is submitted that the duration of COIDA benefits is adequate.

Finally, retirement fund benefits are paid once a member of a retirement fund reaches retirement age. Retirement fund benefits can be paid as a pension or as a lump sum.¹²² In the case of a pension, one third of retirement fund savings is paid out immediately at retirement and the balance of the amount is usually payable until the death of the recipient.¹²³ A provident fund pays out in one lump sum upon the retirement of the employee.¹²⁴ It is submitted that the provision of benefits until death is adequate. In the case of a lump sum, the recipient must manage their finances themselves in order to ensure that the amount will cover their financial needs for the rest of their life. Since there is no oversight in this management of funds, the longevity of this lump sum is entirely individual and adequacy can therefore not be assessed.

3 6 Use of benefits to realise other rights

The United Nations recognises that all rights are interrelated,¹²⁵ and that the realisation of one of these rights could contribute towards the full realisation of other rights. The provision of financial assistance through social security schemes to persons with disabilities creates opportunities for social inclusion and better participation in society.¹²⁶ For example, the provision of adequate financial assistance may enable a person with a disability to make use of rehabilitation services or create the opportunity for further education. The provision of adequate social security benefits is thus vital for a number of related rights which are provided for in the ICESCR. In the case of the right to social security, the clearest link exists between it and the right to an adequate standard of living.¹²⁷

3 6 1 Social assistance

The right to social security has been recognised as a chief contributor to achievement to the right of an adequate standard of living guaranteed in terms of international law.¹²⁸ However, an incomplete realisation of the right to social security would not result in as great a contribution towards the realisation of other rights.¹²⁹ Considering that that the benefits provided by social grants are not sufficient to meet the maintenance needs of social grant recipients,¹³⁰ it is submitted that social assistance is not sufficient to realise the right to an adequate standard of living as envisaged in international law, and may have a similar effect on the realisation of other rights related to the right to social security.

It must be noted that financial assistance does not comprise the entirety of a social security system. Goods and services such as free utilities, subsidised housing and free healthcare also form part of the broader concept of social protection.¹³¹ In South Africa, many basic goods and services are either free or substantially subsidised, although the standard of these services is not necessarily adequate.¹³² Unfortunately a full discussion of the adequacy of these measures is beyond the scope of this article. Nonetheless, it is submitted that the social assistance amount payable that is the subject of this discussion is not sufficient to realise an adequate standard of living either on its own, or in conjunction with sub-par additional goods and services.

3 6 2 Social insurance

An assessment of whether social insurance benefits are being used to realise an adequate standard of living for persons with disabilities is not as simple. This is because each recipient of COIDA Fund and UIF benefits receives a benefit that is based on their salary, which means benefits are highly individualised.¹³³ The level of social insurance benefits available may contribute greatly towards the realisation of an adequate standard of living for a person in receipt thereof. However, while social insurance schemes are inaccessible to large numbers of persons as a result of unemployment in South Africa,¹³⁴ the level of benefit is irrelevant. It is thus submitted that social insurance benefits are not currently contributing towards the achievement of an adequate standard of living since so many are excluded from social insurance schemes.

 

4 REPORTING AND ENFORCEMENT MECHANISMS

In terms of Article 16 of the ICESCR,

"The States Parties to the present Covenant undertake to submit in conformity with this part of the Covenant reports on the measures which they have adopted and the progress made in achieving the observance of the rights recognized herein."

This means that States Parties are required to compile and submit reports on the status of the implementation of the provisions of the ICESCR periodically. South Africa submitted the initial report in 2017,¹³⁵ as required by Article 17 of the ICESCR. The section on the right to social security is woefully inadequate. The report includes only two pages of information related to social security in South Africa, and merely states selected statistics related to social assistance without attempting to show the adequacy of the benefits provided through social security.¹³⁶ Essentially, the report only confirms the existence of social assistance and the institutions involved in the administration thereof.

The report omits social insurance, save for one recommendation relating to the extension of coverage of the UIF.¹³⁷ While reporting on social insurance is problematic, the omission of one of the two main branches of social security is not acceptable for reporting purposes. It is clear upon reading the section on social security in the country report that much more information and analysis must be provided in order to establish whether the South African social security system meets the requirements of the ICESCR. A mere statement of information relating to social assistance is not enough.

The lack of information in the section on social security has been noted and addressed by the CESCR in its "Concluding Remarks" on the Country Report.¹³⁸ The CESCR has also made a number of recommendations relating to social assistance, including the increasing of the monthly amount paid and the abolition of the means test for certain applicants.¹³⁹ It is respectfully submitted that the Concluding Remarks do not provide enough information in order to rectify the current problems with social assistance, and that the recommendations relating to social assistance are too vague to be meaningful at this stage. If South Africa does not implement the Concluding Remarks, it is unclear what the sanctions would be. The current reporting and monitoring mechanisms appear to be somewhat toothless, in that the CESCR cannot compel a State Party to comply with its recommendations. Real change requires firmer and more harsh consequences for continued non-compliance with the ICESCR and the Concluding Remarks made by the CESCR.

 

5 CONCLUSION AND RECOMMENDATIONS

From the above discussion, the duty of South Africa to comply with the provisions of the ICESCR in relation to social security has been established.¹⁴⁰ These requirements are the existence of a social security system; the administration of such social security system by a public authority; the coverage of a minimum of nine named contingencies; the level of coverage provided by the social security system; the level and duration of benefits provided; the use of benefits in the realisation of other rights in the ICESCR.

5 1 Conclusion

Upon critical analysis of the elements of the right to social security in the ICESCR, it becomes apparent that South Africa's current social security system falls short in a number of areas. In particular,¹⁴¹ the extent of coverage by social insurance¹⁴² and the use of social assistance benefits to realise other rights¹⁴³ fall short of what is required in terms of the ICESCR. Since there has been no appreciable improvement in these areas since the release of the Concluding Remarks by the CESCR, it is submitted that South Africa is currently non-compliant with the ICESCR and needs to take meaningful steps in order to address the areas of concern as discussed above.

5 2 Recommendations

The high unemployment rate in South Africa is the greatest contributor towards a lack of access to social insurance. The implementation of a national social security fund has been mooted for a number of years by the state but has not yet come to fruition. The introduction of such a fund, with universal coverage for retirement benefits would substantially increase the level of coverage of social insurance benefits. The mechanisms of such a fund have never been published in great detail; best practice in countries with such universal funds would have to be considered, along with the input of economic experts to implement such a fund successfully.

The question of the use of social assistance benefits to realise other rights is not an easy one to answer. As mentioned above, South Africa is currently progressively realising this right within the available resources. How, then, can social assistance be used to more effectively realise other rights, such as the standard of living? It is submitted that social assistance grants can contribute more towards the realisation of other rights if other aspects of social security are improved. For example, the introduction of a functioning basic universal healthcare system would alleviate the burden of paying medical costs from the meagre amount currently paid to social grant recipients.

 

 

1 The International Covenant on Economic, Social and Cultural Rights adopted and opened for signature, ratification and accession by General Assembly resolution 2200A (XXI) of 16 December 1966.
2 United Nations General Assembly Resolution 217 (1948) A/RES/217(III).
3 Art 4 of the ICESCR.
4 Preamble to the ICESCR.
5 For e.g., Art 6(1) provides that "[t]he States Parties to the present Covenant recognize the right to work, which includes the right of everyone to the opportunity to gain his living by work which he freely chooses or accepts, and will take appropriate steps to safeguard this right".
6 Art 9 of the ICESCR provides that "[t]he States Parties to the present Covenant recognize the right of everyone to social security, including social insurance".
7 Art 11 of the ICESCR provides that "[t]he States Parties to the present Covenant recognize the right of everyone to an adequate standard of living for himself and his family, including adequate food, clothing and housing, and to the continuous improvement of living conditions. The States Parties will take appropriate steps to ensure the realization of this right, recognizing to this effect the essential importance of international co-operation based on free consent".
8 S 27(2) of the ICESCR provides that each state ratifying the ICESCR becomes bound by its provisions three months after such ratification. UN Committee on Economic, Social and Cultural Rights "Status of the International Covenant on Economic, Social and Cultural Rights" http://www.ohchr.org/Documents/Issues/HRIndicators/DataICESCR.xls (accessed 2014-05-14).
9 Art 18 of the Vienna Convention on the Law of Treaties, 1969. Puta-Chekwe and Flood "From Division to Integration: Economic, Social and Cultural Rights as Basic Human Rights" in Merali and Oosterveld Giving Meaning to Economic, Social and Cultural Rights (2001) 47. CESCR was first invited to prepare general comments in 1987 - Economic and Social Council Resolution 1987/5. See also Tomuschat Human Rights: Between Idealism and Realism (2008) 190.
10 South Africa signed the ICESCR on 3 October 1994. UN Treaty Body Database https://tbinternet.ohchr.org/_layouts/15/TreatyBodyExternal/Treaty.aspx?CountryID=162&Lang=EN (accessed 2020-02-04).
11 The stakeholders were, inter alia, Black Sash, the Community Law Centre at the University of the Western Cape and the Socio-economic Rights Institute of South Africa. See Dullah Omar Institute https://dullahomarinstitute.org.za/socio-economic-rights/international-covenant-on-economic-social-and-cultural-rights-icescr (accessed 2020-02-04).
12 Art 27(2) provides that the provisions of the ICESCR enter into force three months after the deposit of ratification documents by the state party.
13 S 39(2) of the Constitution of the Republic of South Africa, 1996 provides that international law must be taken into consideration when interpreting national legislation, irrespective of whether that international law has been ratified. This section does not place a positive obligation to incorporate unratified international law into national legislation.
14 Art 2 of the ICESCR.
15 Glenister v President of the Republic of South Africa 2011 (3) SA 347 (CC) par 105.
16 Glenister v President of the Republic of South Africa supra par 191.
17 Ibid.
18 SAHRC 7 Report on Economic and Social Rights 2006-2009 (2009) vi.
19 Ibid.
20 SAHRC (2009) v.
21 Ibid.
22 Glenister v President of the Republic of South Africa supra par 107.
23 Wiid The Right to Social Security of Persons with Disabilities in South Africa (doctoral thesis, University of the Western Cape) 2015 87.
24 Khosa v Minister of Social Development, Mahlaule v Minister of Social Development 2004 (6) SA 505 (CC).
25 Khosa v Minister of Social Development, Mahlaule and v Minister of Social Development supra par 49.
26 S 27(2) of the Constitution of the Republic of South Africa, 1996.
27 Government of the Republic of South Africa v Grootboom 2001 (1) SA 46 (CC).
28 Government of the Republic of South Africa v Grootboom supra par 41.
29 Wiid The Right to Social Security of Persons with Disabilities in South Africa 88.
30 Minister of Health v Treatment Action Campaign (2) 2002 (5) SA 721 (CC) par 39.
31 Government of the Republic of South Africa v Grootboom supra par 45.
32 Wiid The Right to Social Security of Persons with Disabilities in South Africa 92.
33 Ngxuza v The Permanent Secretary, Department of Welfare, Eastern Cape 2001 (2) SA 609 (E).
34 Olivier, Smit, Kalula (ed) Social Security: A Legal Analysis (2003) 76.
35 Khosa v Minister of Social Development, Mahlaule v Minister of Social Development supra par 45.
36 The implementation of the provisions of the ICESCR by states that have ratified it is monitored by the Committee on Economic, Social and Cultural Rights (CESCR). This committee is also responsible for releasing general comments on the ICESCR in order to clarify the obligations created by its various provisions. The CESCR was established in 1985 in terms of the Economic and Social Council Resolution 1985/17.
37 United Nations Human Rights Office of the High Commissioner "Committee on Economic, Social and Cultural Rights" https://www.ohchr.org/EN/HRBodies/CESCR/Pages/CESCRIntro.aspx (accessed 2020-02-21).
38 General Comment 19 Part II.
39 General Comment 19 Item 2.
40 General Comment 19 Item 2.
41 Scruggs and Zimmerman "Implementation of the Human Right to Social Security Around the World. A Preliminary Empirical Assessment of National Social Protections Laws" in Minkler (ed) The State of Economic and Social Human Rights (2013) 119.
42 Vonk "The Fundamental Right of Social Assistance: a Global, a Regional (Europe and Africa) and a National Perspective (Germany, the Netherlands and South Africa)" 2019 21(3) European Journal of Social Security 219 228.
43 Ibid.
44 Ibid.
45 General Comment 19 Item 31.
46 Office of the High Commissioner "Toolkit on the Rights to Social Security" https://www.ohchr.org/EN/Issues/RightSocialSecurity/Pages/SocialSecurity.aspx (accessed 2020-02-21).
47 Stamm "The Human Right to Social Security and Its Impact on Socio-Political Action in Germany and Finland" 2017 2 Journal of Human Rights and Social Work 25 28.
48 Vonk 2019 European Journal of Social Security 219 228.
49 Office of the High Commissioner https://www.ohchr.org/EN/Issues/RightSocialSecurity/Pages/SocialSecurity.aspx (accessed 2020-02-21).
50 S 27(1)(c) of the Constitution of the Republic of South Africa, 1996.
51 13 of 2004.
52 63 of 2001.
53 24 of 1956.
54 National Government of South Africa "Department of Social Development" https://nationalgovernment.co.za/units/view/38/department-of-social-development-dsd (accessed 2020-02-21).
55 S 29 of Act 13 of 2004.
56 Act 9 of 2004.
57 S 3 of Act 9 of 2004.
58 Act 1 of 1999.
59 S 2(2) of Act 9 of 2004.
60 S 1 of Act 63 of 2001.
61 S 2 read with s 12 of Act 63 of 2001.
62 S 58 of Act 63 of 2001.
63 Act 1 of 1999.
64 S 15 of the Compensation for Occupational Injuries and Diseases Act 130 of 1993.
65 S 22 of Act 130 of 1993.
66 Ch 2 of Act 130 of 1993.
67 Financial Services Board Annual Report (2018) 42.
68 24 of 1956.
69 Financial Services Conduct Authority "Who We Are" https://www.fsca.co.za/Pages/Vision-and-Mission.aspx (accessed 2020-02-21).
70 Financial Sector Regulation Act 9 of 2017.
71 Item 2 of General Comment 19.
72 Ibid.
73 S 27(1 )(c) of the Constitution of the Republic of South Africa, 1996.
74 Ch 2 of Act 13 of 2004.
75 The UIF pays benefits for maternity, adoption, illness, dismissal, retrenchment and the death of the breadwinner. See Parts B-F of Act 63 of 2001.
76 S 22 of Act 130 of 1993.
77 S 27(1 )(c) of the Constitution of the Republic of South Africa, 1996.
78 The word "everyone" refers to South African citizens and permanent residents as decided by the Court in Khosa v Minister of Social Development, Mahlaule v Minister of Social Development supra par 49.
79 Ss 5(2)(a) and (b) of 13 of 2004.
80 Economic Policy Research Institute "Social Security Take-Up and the Means Test in South Africa" (2001) EPRI Research Paper #24 3.
81 Reports of the Taylor Committee into a Social Security System for South Africa (2002) 24; Nyenti and Mpedi "The Impact of SADC Social Protection Instruments on the Setting Up of a Minimum Social Protection Floor in South African Countries" 2012 15(1) Potchefstroom Electronic Law Journal 244 269.
82 Minister of Finance Budget Speech 2019/2020 https://www.sanews.gov.za/south-africa/increased-allocations-grants-education-and-health (accessed 2020-02-21).
83 Quarterly Labour Force Survey Q2 2019 provides that there were 11 220 000 people in formal in employment from January to March 2019.
84 Statistics South African Mid-Year Population Estimates 2019 estimates that the mid-year population was 58,78 million.
85 S 27(2) of the Constitution.
86 Strydom (ed) Essential Social Security (2006) 7.
87 The Statistics SA Quarterly Labour Force survey (2019) estimates the number of people in formal, non-agricultural employment at 10 142 000.
88 Speech made by President Cyril Ramaphosa (21 April 2020) https://www.gov.za/speeches/president-cyril-ramaphosa-additional-coronavirus-covid-19-economic-and-social-relief (accessed 2020-05-23).
89 LA WSA XIII Social Security: Core Elements par 188.
90 Speech made by President Cyril Ramaphosa https://www.gov.za/speeches/president-cyril-ramaphosa-additional-coronavirus-covid-19-economic-and-social-relief.
91 Ibid.
92 Olivier and Mpedi "The Extension of Social Protection to Non-Formal Sector Workers -Experiences from SADC and the Caribbean" 2005 19 Zeitschrift fur auslandisches und internationals Arbetis- und Sozialrecht (ZIAS) 150 152.
93 Statistics South Africa Quarterly Labour Force Survey Q4 2019 http://www.statssa.gov.za/?p=12948 (accessed 2020-02-21).
94 For e.g., domestic workers and self-employed persons are excluded from the COIDA Fund in terms of s 1(xix) of 130 of 1993, and migrant and government workers are excluded from the UIF in terms of s 3(1) of 63 of 2001.
95 Minister Tito Mboweni Budget Speech (2020) https://www.gov.za/BudgetSpeech2020 (accessed 2020-05-23).
96 South African Government "Social Grants - Coronavirus COVID19" https://www.gov.za/coronavirus/socialgrants (accessed 2020-05-23).
97 South Africa does have free basic healthcare, so this expense is not necessarily meant to be covered by the grant amount. However, it is widely known that the public healthcare system is rife with problems and may not be reliable. Unfortunately an in-depth discussion of public healthcare in South Africa is beyond the scope of this article, but the existence and availability of such a system must be noted for purposes of the amount payable in terms of social grants.
98 S 6(6) read with Schedule 1 of the National Minimum Wage Act 9 of 2018.
99 This increase was made in terms of s 6 of Act 9 of 2018, which requires an annual review of the minimum wage and allows for adjustments to the minimum wage amount.
100 Preamble to Act 9 of 2018.
101 Government of the Republic of South Africa v Grootboom supra par 45.
102 S 12 of 63 of 2001.
103 S 13 of 63 of 2001.
104 Ch IV of the Compensation for Occupational Injuries and Diseases Act 130 of 1993.
105 Whether tax is payable depends on the amount received - see South African Revenue Service "Retirement Lump Sum Benefits" https://www.sars.gov.za/Tax-Rates/Income-Tax/Pages/Retirement-Lump-Sum-Benefits.aspx (accessed 2020-02-23).
106 Olivier et al Social Security: A Legal Analysis 327.
107 Ibid.
108 Economic Policy Research Institute "Social Security Take-Up and the Means Test in South Africa" EPRI Research Paper 24 3.
109 In terms of s 14(5) of Act 9 of 2004, a recipient of a social grant must inform SASSA of any material changes in their circumstances after applying for the grant. In terms of s 17(1), any person in receipt of amounts they are not entitled can be compelled to repay those amounts to SASSA. It is also an offence to withhold such information and an offence to receive a social grant while knowing that one is not entitled thereto in terms of s 21.
110 SASSA "You and Your Grant 2019/2020" (2019) https://www.sassa.gov.za/Pages/Grant-Booklets.aspx (accessed 2020-02-23) 7.
111 Ibid.
112 Wiid The Right to Social Security of Persons with Disabilities in South Africa 183.
113 SASSA "Disability Grant" https://www.sassa.gov.za/Documents/Grants-Documents/Disability-Grant.pdf (accessed 2020-02-23).
114 SASSA "Child Support Grant" https://www.sassa.gov.za/Documents/Grants-Documents/Child-Support-Grant.pdf (accessed 2020-02-23).
115 Minister Tito Mboweni Budget Speech https://www.gov.za/BudgetSpeech2020.
116 South African Government 'Social Grants - Coronavirus COVID19' https://www.gov.za/coronavirus/socialgrants (accessed on 23/05/2020).
117 South African Government https://www.gov.za/coronavirus/socialgrants.
118 Ss 15 and 16 of Act 63 of 2001.
119 S 13 of Act 63 of 2001 provides that a maximum of 238 days benefit is payable.
120 S 49 read with Schedule 2 of Act 130 of 1993.
121 Ibid.
122 The South African Labour Guide "Pension and Provident Funds" https://www.labourguide.co.za/general/499-pension-and-provident-funds (accessed 202002-24).
123 S 1 of Act 24 of 1956.
124 Ibid.
125 Office of the High Commissioner "Your Human Rights" https://www.ohchr.org/EN/Issues/Pages/WhatareHumanRights.aspx (accessed 2020-02-24).
126 Item 59 of General Comment 19.
127 Item 28 of General Comment 19.
128 Wiid The Right to Social Security of Persons with Disabilities in South Africa 150.
129 Office of the High Commissioner https://www.ohchr.org/EN/Issues/Pages/WhatareHumanRights.aspx.
130 The submission that the amount provided to social grant recipients is justified in terms of the Constitution in paragraph 3.5.1 above does not affect the reality that the amount provided does not facilitate the realisation of an adequate standard of living of these recipients.
131 Report of the Committee of Inquiry into a Comprehensive System of Social Security for South Africa (2002) Transforming the Present - Protecting the Future 41.
132 See generally Statistics South Africa The State of South Africa: In-Depth Analysis of the Community Survey 2016 data (2016).
133 Wiid The Right to Social Security of Persons with Disabilities in South Africa 239.
134 See par 3.4.2 above for a discussion of the impact of unemployment on access to social insurance.
135 Initial Report of South Africa on the International Covenant on Economic, Social and Cultural Rights (2017) https://tbinternet.ohchr.org/_layouts/15/treatybodyexternal/Download.aspx?symbolno=E%2fC.12%2fZAF%2f1&Lang=en (accessed 2020-02-24).
136 Initial Report of South Africa on the International Covenant on Economic, Social and Cultural Rights https://tbinternet.ohchr.org/_layouts/15/treatybodyexternal/Download.aspx?symbolno=E%2fC.12%2fZAF%2f1&Lang=en 31.
137 CESCR "Concluding Remarks on the Initial Report of South Africa" (2018) https://tbinternet.ohchr.org/_layouts/15/treatybodyexternal/Download.aspx?symbolno=E%2fC.12%2fZAF%2fCO%2f1&Lang=en (accessed 2020-02-24) 9.
138 CESCR https://tbinternet.ohchr.org/_layouts/15/treatybodyexternal/Download.aspx?symbolno=E%2fC.12%2fZAF%2fCO%2f1&Lang=en 9.
139 Ibid.
140 See par 3 above.
141 See par 3.5.1 above.
142 See par 3.4.2 above.
143 See par 3.6 above.

^rND^1A01^nStephen Allister^sPeté^rND^1A01^nStephen Allister^sPeté^rND^1A01^nStephen Allister^sPeté

ARTICLES

 

Commissions of inquiry as a response to crisis: the role of the jali commission in creating public awareness of corruption (part 1)

 

 

Stephen Allister Peté

BA LLB LLM M Phil PhD; Associate Professor of Law, School of Law, University of KwaZulu-Natal

 

 

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SUMMARY

When the government of a liberal constitutional democracy is confronted by some or other existential crisis that threatens a major institution of state or the very foundations of the democracy itself, it will often appoint a high-level judicial commission of inquiry as part of its response to the crisis. South Africa is no exception to this tendency, as is evidenced in recent years by the appointment of no fewer than four such commissions in response to a series of crises related to ongoing corruption within state institutions - commonly referred to by ordinary South Africans as "state capture". This has raised questions as to the alleged benefits of such commissions when viewed in relation to their considerable costs. This article seeks to contribute to this general debate by focusing on one of the purported benefits of such commissions that may be somewhat under-appreciated. This is the creation of public awareness, during the life of the commission itself, about the nature and extent of the particular grave threat that confronts the society in question. It is contended that, mediated by a free and vibrant press, the public narrative that emerges during the operation of a commission of inquiry may serve to make a liberal democratic society more resilient in the face of threats to that society's continued existence. This article seeks to support this contention by focusing on an important precursor to the more recent commissions of inquiry on corruption in South Africa - that is, the Jali Commission of Inquiry into corruption within the South African penal system, which sat in the early years of the new millennium. By analysing the many articles and reports that appeared in a range of South African newspapers during the initial hearings of the Jali Commission, this article documents the emergence of an important public narrative on corruption within South Africa's prisons, and reflects upon the ultimate significance of this narrative. This article is divided into two parts: the first part deals with the initial hearings of the Jali Commission in KwaZulu-Natal, and the second part with subsequent hearings in the Free State.

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1 INTRODUCTION

At the time of writing this article - just over a quarter of a century since the collapse of the apartheid system - South Africa finds itself in a difficult position. With the economy of the country devastated by the effects of rampant criminality within both the public and private sectors, South Africa appears to have run out of easy political and economic options.¹ There is open acknowledgement (even from powerful politicians within the ruling party) that "state capture" has played a major role in weakening the country.²Furthermore, the realisation that many years of rampant corruption have caused incalculable damage to South Africa's economy and polity extends to the South African public at large.³ Without necessarily seeing eye to eye on all the details, South Africans as a whole seem to agree on both the general cause and extent of the problem. Clearly, acknowledgement of a problem is a necessary first step towards its eventual resolution.

The focus of this article is on a tool that various governments in South Africa, both pre- and post-apartheid, have adopted when confronted with public crises of significant magnitude - that is, the appointment of a highlevel public commission of inquiry. The present series of crises faced by the country - all involving the general issue of corruption - have resulted in the appointment of a series of commissions of inquiry into various manifestations of the problem. Within nine months of replacing Jacob Zuma as president of South Africa in February 2018, Cyril Ramaphosa appointed no fewer than four commissions of inquiry: the Zondo Commission (also known as the State Capture Inquiry) into allegations of state capture; the Nugent Commission (also known as the SARS Commission) into tax administration and governance by the South African Revenue Service; the Mpati Commission (also known as the PIC Inquiry) into allegations of impropriety regarding the Public Investment Corporation; and the Mokgoro Enquiry (also known as the NPA Enquiry) into the fitness of the deputy national director of public prosecutions, Nomgcobo Jiba, and the special director of public prosecutions, Lawrence Mrwebi, to hold office.⁴ With the appointment of so many commissions of inquiry within such a short period of time, questions have arisen as to whether such inquiries are worth the considerable costs involved in their operation.⁵

Following a brief overview of certain of the traditional arguments advanced both for and against the appointment of commissions of inquiry in times of public crisis, this article focuses on one particular objective that is said to form part of the aims of a commission of inquiry appointed in such circumstances - that is, the objective of educating the public on the nature and scope of the crisis in question, including the attribution of responsibility for what went wrong. This article does not focus on the educative and/or archival role of the final report produced by each such commission of inquiry, the production of which is clearly a formal objective of each such inquiry. Rather, this article seeks to shed light on the process that happens during the life of such commissions - at least within a constitutional democracy, with a vibrant free press, when the process works well.

This article contends that the true impact of a public commission of inquiry within a constitutional democracy such as South Africa is not restricted to the "official" impact of its final report on government functionaries. Much of the impact of such a commission of inquiry depends upon the narrative that is constructed in and mediated via the public media (in particular, the free press) during the life of a commission. So stated, this point may seem somewhat obvious. However, it is the contention of this article that the creation of public awareness over an extended period of time, about the nature and scope of a serious social problem (such as the existence of large-scale corruption within a range of important social institutions), is a significant but under-appreciated benefit of the appointment of a public commission of inquiry in times of crisis.⁶ Of course, a vibrant free press will report upon the existence of social ills and create public awareness, even in the absence of a commission of inquiry. This article argues, however, that the appointment of a public commission of inquiry provides an official "stamp of approval" to the often-difficult process of dragging a particularly intractable and serious social problem into the public spotlight. It is contended that, in the best cases, media reporting around the often long drawn-out proceedings of a public commission of inquiry serves to keep serious threats to constitutional democracy constantly in the public mind; it is an intangible but important bulwark against those forces that seek to undermine the principles of such a constitutional democracy.

This article seeks to illustrate the point by an in-depth analysis of the media reporting surrounding an important precursor to the various commissions of inquiry appointed in 2018 that are mentioned above. The commission in question is the Jali Commission of Inquiry into corruption within the South African penal system, which sat between 2001 and 2005. By examining a large number of reports that appeared in a range of national newspapers during the first months of operation of the Jali Commission, this article seeks to achieve two main objectives: first, to set out the narrative in all its urgency and immediacy, as it was actually conveyed to the South African public over many weeks, through factual reporting and editorial commentary; secondly, to comment on the possible significance of this narrative, and its implication for the wider question of whether such expensive public commissions of inquiry (including commissions that are at present ongoing) are ultimately justified in a country such as South Africa.

In setting out the narrative in accordance with the first objective, this article seeks to capture what may be referred to as a "living history" (the basic details of which were later confirmed in the official report of the Jali Commission (Jali Commission Report))⁷ of the often banal manner in which corruption was able to take hold and thrive within an important part of the South African state apparatus - namely, the Department of Correctional Services - during the post-liberation period. It also seeks to capture the immediate public reactions of South Africans to the "drama of corruption" that was being played out before them. In commenting on the narrative in accordance with the second objective, this article seeks to gauge the effects upon the South African public psyche - in particular, whether such effects may in some way have better prepared South Africans for present and future battles against the scourge of corruption.

It is clear that, in order to achieve its objectives, this article needs to cover much ground. The hearings of the Jali Commission took place over a number of years across the length and breadth of South Africa, with hundreds of newspaper articles being written about the hearings. It is thus impossible - in a relatively short article such as this - to cover in a nuanced way the public discourse surrounding all the hearings of the commission. Therefore, this article restricts itself to a close analysis of the debates surrounding the first two sets of hearings: those held in KwaZulu-Natal, and those in the Free State. In accordance with this focus, the article is divided into two parts: the first part deals with the initial hearings of the commission in KwaZulu-Natal; and the second part deals with the hearings in the Free State. Although not all hearings of the commission are dealt with, it is submitted that the picture of corruption that emerges within the public narratives surrounding this issue is sufficiently detailed and nuanced so as to allow valid conclusions to be drawn.

 

2 COMMISSIONS OF INQUIRY: ARGUMENTS FOR AND AGAINST

Scholars commenting on the value of judicial commissions of inquiry often mention that such commissions can be an important government instrument. Usually, of course, this instrument is reserved for dealing with matters of great public importance, such as a nationwide crisis of confidence. For example, commenting on the value of appointing commissions of inquiry in South Africa - albeit during the apartheid period - Professor AJ Middleton points out that the practice is "sometimes regarded with a certain degree of scepticism", but notes the value of such commissions as "an important tool of government". ⁸ Another example of this traditional argument that commissions of inquiry are an important part of the government's "toolbox" is advanced by Canadian Justice John H. Gomery, who states as follows:

"Public inquiries are a regular part of the political landscape in Canada. There have been over four hundred of them since Confederation in 1867, if you include provincial commissions of inquiry ... They constitute what has been described by the Supreme Court of Canada as 'a significant and useful part' of our democratic traditions, both in Canada and elsewhere."⁹

This generally positive view of commissions of inquiry as being useful "democratic tools" that may assist a government with its duties (such as adopting rational policies in response to problems) is not, however, adopted by all scholars in this field. Adam Ashforth, for example, argues that commissions of inquiry are a special kind of institution within the modern state, standing apart from the main institutions of political power and deploying "forensic procedures" in their investigations. As opposed to being simple "policy-making instruments", Ashforth regards their work as "reckoning schemes of legitimation" that "serve in constituting a realm of discourse through which collective action vis-á-vis Society by those who act in the name of the State becomes thinkable, and thereby organizable".¹⁰Ashforth's more critical stance on the role of commissions of inquiry within capitalist liberal democracies is well expressed in the following quotation:

"[T]he hearing of oral evidence continues as a central time- and money-consuming pastime of public inquiries. The main reason for this lies in the veracity lent to inquiry by public hearings. Public 'sittings' by Commissions of Inquiry can be considered as a form of symbolic ritual, akin to the holding of Court but in a modern rationalized form, wherein the subjects of State power speak, and are heard. As such, they have rather less to do with the 'gathering of facts' than with expressing the truth of power. That 'truth' being that State power serves the interest of all citizens and is open to their views. On the symbolic level, then, by appointing a Commission of Inquiry a Government pays homage to this truth and serves notice of its desire to serve the common interest in the most rational way."¹¹

Having noted the above critique (which operates at a somewhat abstract ideological level), it is useful to touch briefly on certain of the more prosaic arguments frequently raised in opposition to the use of commissions of inquiry in capitalist liberal democracies. One such argument is that commissions of inquiry may operate as a means for corrupt or incompetent politicians who are under immediate pressure from the public to account for a crisis caused by their misdeeds or incompetence to temporarily shift the focus away from themselves, in the hope that the delay caused by the investigative process will result in the public forgetting about whatever issue gave rise to the public anger in the first place. The regularity with which this argument is put forward is clearly expressed in the following quotation:

"[I]f Commission reports appear to be frequently ignored by the governments which commission them, they are ignored in the vast majority of instances by the general public. Another well-known and cynical suggestion is that Commissions of Inquiry serve no other purpose than obfuscation and delay."¹²

Another frequent argument against the appointment of commissions of inquiry is that they may cost far more than they are worth. This common concern is clearly articulated in the following extract from an opinion piece on the cost of recent commissions into various forms of corruption in South Africa:

"These commissions are not coming cheap at all. For example, the Inquiry into State Capture will cost no less than R230 million in the first six months and it is expected to run for two years or more ... From this, one can conclusively deduce that taxpayers will part with close to a billion rand to sustain these commissions. The irony of it all is that to uncover the truth is coming at a huge price. But that is also the sad truth about corruption: it is costly."¹³

Clearly, the various sceptical arguments mentioned above are valid to a certain degree. The purpose of this article, however, is to focus on one of the more beneficial aspects of public commissions of inquiry in a constitutional democracy such as South Africa. As pointed out in the introduction to this article, this involves the important role that such commissions play in informing and educating the public about particularly serious threats to constitutional democracy itself. This article contends that, having been in some sense "inoculated", an educated and informed public is better able to mount an effective defence against those who would subvert the basic rights and freedoms characteristic of liberal constitutional democracies. As was pointed out in the introduction to this article, however, not all aspects of the "educational function" of such commissions are examined here. In order to appreciate the particular point of focus of this article concerning the educative function of such commissions, it is useful to make reference to a set of distinctions made by Adam Ashforth in this regard. Ashforth maintains that the "discursive work" of commissions of inquiry takes place in three phases. The first phase is "investigative" and takes place "during the life of the particular Commission when the Commissioners, official representatives of the State chosen by the Government from the ranks of Civil Society, are engaged in discussion with representatives of social interests".¹⁴ The second phase, which Ashforth calls the "persuasive phase", begins after the publication of the commission report, which Ashforth characterises as an "invitation to discussion", symbolising "a sort of dialogue between the State on the one hand and Society on the other".¹⁵ The third phase is the "archival" phase, during which "reports enter a dialogue with history" and "become a source of historical 'facts'".¹⁶ The focus of this article is on the "discursive work" that takes place during the investigative phase referred to above - that is, during the life of the commission of inquiry.

As pointed out in the introduction, a central task of this article is to examine closely the many articles and reports that appeared in a range of South African newspapers during the first part of the life of the important Jali Commission of Inquiry into the South African penal system, just after the turn of the millennium.¹⁷ It is contended that, coupled with a free and vibrant press, the evidence given before a public commission of inquiry can be a powerful instrument to protect a liberal constitutional democracy against the ravages of corruption and other forms of malfeasance perpetrated by the powerful. Of course, this applies not just to South Africa, but to constitutional democracies generally, as is illustrated in the following comment of Canadian Justice John H. Gomery:

"[A]ll of these powerful people were obliged to answer questions about their actions and involvement in a controversial government program whether they wanted to or not. They were expected to explain their actions, and to account for the manner in which they had discharged their public responsibilities, to an independent body carrying out its investigation in public, in the full glare of television coverage."¹⁸

Returning to the specific application of this point in the South African context, it is submitted that (when confronting the worst abuses of power, such as occurred in South Africa during the apartheid period, or the systemic corruption that has undermined entire institutions of state during the postapartheid period), the "public narrative" that accompanies a major public commission of inquiry is an essential part of what makes such commissions effective in defending democracy and the rule of law. It is not simply the narrative contained in the eventual report of a particular commission of inquiry that serves effectively to counter the corrosive effects of corruption and abuse of power, but also the public narrative that accompanies hearings of the commission and which is reflected in the public media. In commenting on the potential value of two prominent South African commissions of inquiry set up in recent years in the aftermath of the controversial Zuma presidency to investigate various forms of irregularity and corruption, Cathleen Powell makes this point cogently:

"[C]ommissions of inquiry don't remove an issue from the public eye if they're run openly and transparently. Instead, they draw the public in to the issue, educating and inviting engagement. The most important work of the Zondo and Nugent Commissions might be done before their formal function - the submission of their reports - is completed."¹⁹

Powell points out that, in performing their educational function, commissions of inquiry may serve to ensure public "buy-in for important processes of change and renewal."²⁰ It is submitted that Powell's point is particularly crucial when taking into account the sheer scale and extent of the social, political and economic problems faced by South Africa as a result of decades of corruption. Calling on ordinary South Africans to make significant personal sacrifices - to put right the damage caused by the corrupt activities of others over many years - is clearly not possible without significant public "buy-in", as Powell terms it. It is argued in this article that a properly and expertly conducted commission of inquiry, working in tandem with a responsible free press, is able to operate as a powerful tool to achieve this crucial public "buy-in".

 

3 PUBLIC DISCOURSE SURROUNDING THE HEARINGS OF THE JALI COMMISSION IN KWAZULU -NATAL

The subheadings below trace the public narrative as reflected in the many newspaper articles and reports that emerged around the initial hearings of the Jali Commission of Inquiry, which were held in KwaZulu-Natal. The public shock and anger that greeted the revelations are apparent in the narrative that emerged.

3 1 The establishment of the Commission

The immediate event that gave rise to the establishment of the Jali Commission of Inquiry into alleged incidents of corruption, maladministration, violence and intimidation within the South African penal system was a brutal murder that took place on 26 June 2001. The victim was a certain Ms Thuthukile Bhengu, who had been in charge of Human Resource Management in the KwaZulu-Natal Provincial Office of the Department of Correctional Services. She was gunned down in the study of her home near Pietermaritzburg's Napierville Prison.²¹

Although it was generally known that violence and intimidation existed within the Department of Correctional Services, the murder of Thuthukile Bhengu was particularly shocking to members of the Department, because, in the words of the final report of the Jali Commission of Inquiry published four and a half years later, "even though ... sinister forces operating in the Department had been violent towards male and female members previously, at no stage had a female member been murdered". ²² The Commission commented further that, "[i]n the eyes of the ordinary law abiding members" of the Department, the murder of Thuthukile Bhengu "gave the impression that the sinister forces within the Department were prepared to go to any extent to achieve their objectives".²³ The Commission noted that, during this period, intimidation and fear were prevalent within the Department, including its Head Office.²⁴

Following Thuthukile Bhengu's murder, the Minister of Correctional Services, Ben Skhosana, decided to call for a national inquiry. In August 2001, Durban High Court Judge Thabani Jali was appointed to head a national commission of inquiry to investigate and report on incidents of corruption, maladministration, violence or intimidation within the Department of Correctional Services.²⁵

On 1 February 2002, it was reported that eight prisons throughout the country were to be investigated by the Commission, with the Durban-Westville and Pietermaritzburg Prisons being at the centre of the inquiries.²⁶On 4 February 2002, the Commission started hearings in the Durban magistrates' court that were due to last for five weeks.²⁷ Advocate Vas Soni, who was leading evidence for the Commission, stated that three prisons in KwaZulu-Natal were part of the initial enquiry. They were the Durban-Westville Prison, the Ncome Prison in northern KwaZulu-Natal, and the Pietermaritzburg Prison. It was at the Ncome Prison that senior correctional officer Sipho Khumalo had been shot dead by a colleague in 1999, and at the Pietermaritzburg Prison that Thuthukile Bhengu had been murdered in 2001. It was also reported that Bhengu's killers were expected to appear in court in June 2002.²⁸

3 2 Shocking allegations of rampant corruption in the prisons of KwaZulu-Natal

Press reports conveyed the seriousness of the situation confronting South Africa's penal system at this time. For example, in addressing Mr Justice Thabani Jali at the start of the Commission on 4 February 2002, Advocate Vasi Soni was reported to have stated that the prison system needed a complete overhaul - so that the climate of fear, which allowed lawless behaviour to prevail within the system, could be eradicated. Referring to prison officials who saw themselves as "untouchable and above the law", he stated that it was the task of the Commission "not only to touch (the untouchables) but also to bring them down", and added that the Commission was "the last chance saloon" for the Department of Correctional Services".²⁹He referred to two specific instances of corruption. In one instance, an official allegedly extorted money from a former prisoner. The Department of Correctional Services was supplied with proof in the form of bank slips that payments had been made into the official's bank account, but the only action taken against him was that he was transferred. In another instance, it was alleged that five officials had submitted fraudulent qualifications. While the cases against three of the officials were still pending, the other two had simply received a written warning. According to Soni:

"This is an invitation to other officials that they can do what they want without any action being taken."³⁰

The KwaZulu-Natal Commissioner of Correctional Services, Mr Patrick Gillingham, was cross-examined by Advocate Soni. He asked a number of questions based on allegations of corruption within the Durban-Westville Prison and which had been published in the press. Among these questions were the following: how a convicted drug dealer had received parole without serving a day in prison; how a tycoon had served a two-year sentence while living in a palatial home and in various five-star hotels; why the prison employed people with criminal records; how a prisoner received a job as a warder at Westville Prison; and how the chairman of the parole board could say that child abuse was not a serious crime. Furthermore, with regard to a man who was referred to in the press as "Westville's Mr Untouchable", Soni asked the following:

"Who is this man who is untouchable at Westville Prison who is so highly placed that nobody can do anything to him? What action has been taken against him for what can only be described as criminal acts? Has he been arrested? Is he suspended?"³¹

The Commissioner said that he would reply to these questions at a later stage.³²

On 5 February 2002, the manager of the elite Emergency Support Team (EST) at the Westville Prison, Hendrik van Heerden, gave evidence before the Jali Commission, which made for sensational reading in the press. He told the Commission he was certain that prisoners were being taken out of the prison in the boots of cars in order to commit crimes:

"It's the perfect crime. The prisoner will never be convicted unless he is caught in the act because he is officially in prison when the crime takes place. They are usually back in time for the afternoon count. If you wanted a particular type of criminal for a particular crime, you could easily find that person in prison."³³

Van Heerden also alleged that vehicles were admitted to the prison without searches; that guards sold and rented their departmental residences to persons not employed by the Department of Correctional Services; and that guards ran shebeens from their quarters. He claimed that a high level of fear and intimidation existed within the Department of Correctional Services, and he told the Commission that his office had been ransacked when it became known that he was due to testify at the Commission. He stated further:

"I know guards who have information but are afraid for their lives. This commission will fail unless intimidation is addressed and people come forward. It is unfortunate that you can't protect everyone all the time and 'accidents' will happen."³⁴

Van Heerden claimed that a particularly high level of intimidation and fear pervaded the Pietermaritzburg New Prison:

"[People there] shoot first and ask questions later. There is a sense of people getting away with things in Pietermaritzburg. Intimidation is so high even the EST is scared of doing its job."³⁵

Van Heerden also informed the Commission that he suspected corruption among investigating officers at the prison. He told the Commission of an incident in which the Emergency Security Team had confiscated a batch of mandrax tablets from prisoners, and had then marked them before handing them to a prison officer for investigation. The marked batch of tablets found its way back into the hands of prisoners, and was again confiscated by the EST during a subsequent raid. Van Heerden told the Commission that the main drug couriers in the prison appeared to be warders who were employed by drug syndicates that operated both inside and outside the prison. Several guards who had been caught with drugs had not been dismissed. The main route for smuggling drugs into the prison appeared to be through the kitchen.³⁶

On the same day that Van Heerden gave his evidence, Michael Johannes Buitendag, a prison warder at Westville Prison, also appeared before the Commission. He stated that he had addressed 36 written complaints to the Department of Correctional Services to repair damaged scanners, X-ray machines and metal detectors, but without success. He stated that he had written the report so many times that he could "write it blind-folded".³⁷ The equipment was necessary to check prisoners for illicit drugs and weapons. He stated that most drugs entered the Westville Prison through the kitchen. Another witness, Bongani Shadrack Gumede, who was an investigator in the Youth Centre, told the Commission that drugs were a major problem in the prison and that he believed that about 90 members of the prison staff were involved.³⁸

The following day, the commission heard evidence surrounding the remark by the head of the parole board at Westville Prison, Bongani Magubane, that child abuse was not a serious crime like murder or rape. The remark had been made in court in support of a convicted child-molester's parole application. The prosecutor who had opposed the parole application, Vanshree Moodley, told the commission that she had found Magubane's statement "incredible and disgusting". ³⁹ The commission recommended that Magubane be relieved of his duties as chairman of the parole board.⁴⁰

On 7 February 2002, the Natal Witness commented on the testimony given before the commission, inter alia, as follows:

"Some alarming testimony is presently being given to the commission, and those who do so are also to be commended because of the risk they take of possible retribution ... It seems that civilised prison norms have yet to be achieved in this country."⁴¹

The next day, the commission was in the news once again. It was reported that the provincial correctional officer for functional services, Innocent Zulu, told the commission that Pietermaritzburg's New Prison was the most problematic prison in KwaZulu-Natal. The high number of escapes from the prison indicated that there was "definitely something wrong", and that the prison appeared to have a unique culture of intimidation. During the hearing, reference was made to a senior departmental investigator from the Department of Correctional Services Anti-Corruption Unit who was forced to leave KwaZulu-Natal because his life was threatened. Zulu admitted that there were many people in the Department of Correctional Services with relatives also working in the department, but he denied that he was instrumental in securing a job for his wife in the department during 1998.⁴²

A few days later, Police and Prison Civil Rights Union shop steward, Fanu Makhathini, told the commission that corruption, nepotism and favouritism were so rife at Westville Prison that warders were ashamed to wear their uniforms in public. Warders in uniform were pestered by members of the public, who offered them bribes in return for jobs or tenders.⁴³

On 11 February 2002, further dramatic details concerning evidence presented to the commission appeared in the press. It was reported that Claude King, a prisoner confined in Westville Prison, had asked the commission for police protection before testifying against corrupt warders. He told the commission that several threats had been made against him since it became known that he was cooperating with the commission. Prisoner Gregory Christensen told the commission that he had paid two warders to take him home on a number of occasions to visit his wife. One warder had charged him R500 per visit and the other had charged him R100 per visit. Once this became too expensive for Christensen, one of the guards offered him money in return for Christensen's assistance in selling drugs inside the prison. The guard supplied R500 worth of cannabis for Christensen to sell every week. Christensen later began dealing in mandrax on behalf of the guards. He bought mandrax tablets for R20 each from the guards and sold them to other drug dealers inside the prison for R25 each, and directly to drug users for R30 each. He sold up to 50 tablets per week. Eventually he acquired a cellphone that he would use to purchase drugs from dealers outside the prison. Guards would pick up the drugs and transport them to the prison in return for R500. Many guards were involved in the scheme. Christensen eventually reported his activities, and those of the corrupt guards, to a senior warder, but by the time he returned to his section, two of the corrupt guards already knew that he had discussed their illegal activities. He told the commission that he had no confidence in the system.⁴⁴ Advocate Vas Soni later commented on Christensen's attempt to extricate himself from the drug syndicate:

"The whole prison system crumbled and crushed a vulnerable man who wanted to get out of a vicious circle of drug dealing."⁴⁵

Press coverage of the dramatic evidence presented to the commission continued the next day when it was reported that Judge Jali had agreed to afford Claude King protection by having him removed from KwaZulu-Natal. King gave evidence in support of the evidence given by Gregory Christensen. He stated that he was present when a warder, Mr Karl Viljoen, gave Christensen mandrax tablets. He also told the commission that warders Devan Maharaj, Devan Brijlall and Leon Pakiri had given mandrax to Christensen. Christensen's wife Joanne also supported Christensen's testimony. She told the commission that guards had brought her husband home on about 20 separate occasions for illegal visits. She was able to describe the car driven by one of the guards and told the commission that her son was conceived during one of the illegal visits.⁴⁶

On 13 February 2002, a prisoner sentenced to life for the murder of two young boys and confined in the Westville Prison, Kistensamy Govender, told the commission that the kitchen area of the prison was the "nerve-centre for smuggling". Prisoners and warders came together in this area for food. Prisoners sent to wash the warders' cars retrieved drugs and alcohol, wrapped in black plastic bin bags, from the vehicles. These bags were then stored in the kitchen storeroom. Govender alleged that on one occasion he had opened a bucket of peanut butter in the kitchen storeroom and found that it was full of cannabis. He testified further that he had once seen a warder, Nhlanhla Radebe, giving a prisoner three plastic bags of cannabis, which were later found in that prisoner's cell. This incident was never investigated. Govender stated that he sold surplus bread to the prisoners, and that for every R100 he made, he gave R80 to Andre Ntombela who ran the kitchen.⁴⁷ X-rated movies, alcohol and drugs were readily available over the counter at the prison kitchen. A nip of spirits cost R20 and a full bottle cost R100. He told the Commission that he watched X-rated movies at least twice a week.⁴⁸ Govender was also reported to have told the Commission:

"When I was transferred to Medium C, it was like walking into a casino. Warders and prisoners gambled together. Alcohol, drugs and sex were freely available. I became part of that."⁴⁹

Advocate Vas Soni later praised the prisoners who had testified and called for President Thabo Mbeki to appoint a "crack task team" to investigate charges against the warders who had been implicated in drug dealing. He stated that it would be a complete waste of taxpayers' money to leave the criminal investigation to the Westville Prison prison authorities who had proved themselves to be hopelessly inefficient.⁵⁰ Advocate Soni also called for the dismissal or transfer of the deputy head of Westville Prison, Maduramuthoo Sigamoney - accusing him of ignoring the unlawful conduct of warders and inmates and turning a blind eye to the illegal activities within the prison.⁵¹

On 15 February 2002, the Sowetan commented inter alia in an editorial:

"The shocking testimonies of prisoners, particularly about syndicates operating in cahoots with warders in the prison, are consistent with claims made by other inmates at other institutions in the past. Such evidence is not entirely unexpected but instead confirms long-standing suspicions that some of the country's prisons have become dens of corruption in the iron grip of a coterie of powerful warders. Many of the prisoners have been known to act as middlemen in the chain of corrupt activities to protect their principles, who invariably are warders. Essentially, as evidence before the commission has underlined, prisoners have become nothing more than a captive market for corrupt warders who peddle anything from drugs to blue movies with impunity."⁵²

Extensive press coverage of the evidence presented to the commission continued in the days that followed. On 18 February 2002, Westville Prison area manager Terence Moses Sibiya gave evidence. He stated that the prison had the highest number of staff assaults on prisoners in KwaZulu-Natal. He told the commission about one incident, which involved six warders who had assaulted a prisoner by the name of Elvis Ngcobo. The prisoner died and the warders were found guilty of "causing the death" at a disciplinary hearing. Aside from a verbal warning, no other action was taken against the warders. According to Sibiya:

"The outcome was not a reasonable outcome but policy does not allow us to take the matter further."⁵³

Judge Jali challenged Sibiya, and asked him whether he needed policy documents to tell him that a murder investigation should be opened in this case. He stated that the matter should have been raised with the provincial or national correctional services commissioner.⁵⁴

Another incident involved a finding by an internal prison tribunal, to the effect that an official had allowed a certain prisoner to spend "more nights out of prison than inside". The prisoner concerned was a certain Chicago Mtshali, who, according to the Sowetan, had "made newspaper headlines recently for his escapades outside prison while still a prisoner".⁵⁵ The official concerned was let off with a mere warning, and although Sibiya was dissatisfied with this sentence, he did not intervene. It emerged during the hearing that warnings were the standard sentence for crimes committed by warders at Westville Prison - no matter how serious these crimes happened to be. Commenting on Sibiya's apparent inability to take positive action to prevent these abuses, Advocate Soni stated:

"All these things pass before your eyes but like a spectator, you do nothing to stop them."⁵⁶

On 21 February 2002, senior warder at the Westville Prison Rabson Hlabisa testified. He alleged that on one occasion during December 2001, the head of the Medium C section at Westville Prison, Bongani Ngcobo, was so drunk when reporting for duty that he could hardly stand. He told the commission that Ngcobo regularly came to work drunk and was frequently absent from work. Ngcobo denied the allegations.⁵⁷

On 26 February 2002, Ntombodumo Delubom, who was employed in the Employee Assistance Programme at Westville Prison, testified. She complained that sexism was preventing promotions based on merit within the Correctional Services Department in KwaZulu-Natal. She told the commission that black men with no training were promoted to powerful positions, but that women were ignored. She pointed out that even the head of the female section at the Westville Prison was a male. Managers lacked both leadership and management skills, and were unable to inspire their subordinates. Supervisors were rigid and resistant to change. Supervisors were also guilty of favouritism, and there was a tendency for them to cover up disciplinary infractions by their family and friends. This favouritism went hand in hand with racism, with supervisors always favouring employees from their own racial or ethnic group.⁵⁸

Further sensational reports appeared in the press on 28 February 2002. It was reported that the panel-beating workshop at the Westville Prison might have been used to "doctor" stolen vehicles. The chief investigator for the commission, Advocate Jerome Brauns SC, described the following startling allegation that had been made to the commission:

"We've been told that prisoners have been given 'shopping lists' of desirable vehicles and then let out for the night by corrupt officials . They return with stolen cars, and the chassis and engine numbers are doctored in the prison workshop while the cars are given a respray prior to resale. These are just some of the allegations we ve had, but hard evidence is difficult to come by. We've been given the names of some of some of those allegedly involved, but they, of course, deny all knowledge. Intimidation is very high in these circles and people will talk to us in confidence, but are afraid to speak on the record."⁵⁹

On 5 March 2002, evidence was led before the commission in relation to the employment of Thembi Zulu, the wife of Innocent Zulu who was head of functional services of the Correctional Services Department in KwaZulu-Natal. It was alleged that Innocent Zulu had arranged for the transfer of his wife (who was also a member of the Correctional Services Department) from the Stanger Prison to the Westville Prison. It was irregular for a husband to sign the transfer form of his own wife. Furthermore, according to the evidence, Thembi Zulu was not on the shortlist of applicants for the Westville position, and there was doubt as to whether she was ever stationed at the Stanger Prison. The only time Thembi Zulu was seen at the Stanger Prison was on the day of her "transfer" to Westville Prison. On that day, she arrived at the Stanger Prison in a car driven by her husband, and her name appeared on the prison register for that day; her name did not, however, appear on the duty list for that day. On the following day, it was recorded that she was absent on sick leave, after which it was recorded that she had been transferred to Westville Prison.⁶⁰ It then emerged that Thembi Zulu had a previous criminal conviction for theft, and was ineligible to hold a post in any government department. However, the provincial head of human resources for the Department of Correctional Services in KwaZulu-Natal, Nhlanhla Ndumo, gave evidence that it was accepted policy to employ persons with minor criminal convictions. He stated that the policy did not exist in written form, but had been agreed upon by prison officials at a seminar.⁶¹ Evidence was then put forward about a "letter of condonation" that had been written on behalf of Thembi Zulu, paving the way for her appointment. Innocent Zulu admitted that he had instructed a prison official, Ronnie Erasmus, to write the letter of condonation, which was then signed by the provincial commissioner of Correctional Services, Thembi Kgosidinsi, who was working in the same office as Innocent Zulu.⁶²

A few weeks later, yet more sensational details of evidence presented to the commission appeared in the press. On 26 March 2002, it was revealed that the head of security at the Westville Prison, Tyron Baker, was the official who had been nicknamed "Mr Untouchable" by the press. One of Baker's alleged victims, Mrs Ray Miller, gave evidence. She had spent 13 months in prison awaiting trial on charges of fraud, and alleged that she had paid R6 000 into Baker's bank account after he had threatened that he could make her life in prison "either comfortable or terrible".⁶³ She alleged further that Baker had asked her for R3 000, which she had paid, before he would allow her to be taken to hospital outside prison. Baker told the commission he had a problem testifying, since he was facing criminal charges and a departmental inquiry concerning the matter before the commission.⁶⁴

On 4 April 2002, prison officer Winston Naidoo gave evidence. He alleged that he, together with a colleague by the name of Shabalala, had been bribed to ensure preferential treatment of a woman prisoner, Neethie Naidoo. Neethie Naidoo had been convicted of involvement in a cash-in-transit heist, and had been sentenced to three years correctional supervision. Winston Naidoo alleged that Neethie Naidoo's husband, Yegan Naidoo, was a friend of a certain "Vishnu", who allegedly supplied mandrax tablets to Innocent Zulu, the provincial correctional officer for functional services. Yegan Naidoo offered to pay a substantial bribe to ensure that his wife was given easy clerical work for her correctional supervision. Zulu allegedly urged Winston Naidoo to assist Yegan Naidoo. Winston Naidoo and his colleague Shabalala then arranged for Neethie Naidoo to be placed in an administrative capacity at the "Wings of Love" institution during her correctional supervision - for which they were paid R19 000 in bribes by Yegan Naidoo. Winston gave evidence that he had accepted a further bribe of R2 000 from Yegan Naidoo in order to arrange the transfer of Neethie Naidoo from Wings of Love to the Chatsworth Secondary School.⁶⁵

3 3 Corruption with a nasty ideological twist: "Operation Quiet Storm"

As disturbing as the instances of alleged corruption referred to above might have been, the South African public was to be shocked to its core by explosive allegations of corruption with a particularly nasty ideological twist. On 20 February 2002, Philemon Ntuli, senior official and spokesman for the Department of Correctional Services in KwaZulu-Natal and a former leader of the Police and Prisons Civil Rights Union (POPCRU), gave evidence. He told the commission of a plan called "Operation Quiet Storm" that was designed to place appointees of POPCRU in high managerial positions throughout the penal system in KwaZulu-Natal. The aim was to bring about transformation in the operation of the prisons in the province. The plan was originally formulated in 1997 at a meeting in Pietermaritzburg, when it was decided that conservative white officials and their black "lackeys" should be replaced with "progressive" black officials. It was decided that Khulekani Sithole should become the National Commissioner of Correctional Services, and that Maxwell Ntoni should become the KwaZulu-Natal Commissioner of Correctional Services. It was also decided that Nhlanhla Ngubo should become the head of the inspectorate, while Nhlanhla Ndumo should become the personnel officer. According to Ntuli, the implementation of the plan included engaging management in arduous meetings, frustrating management, making demands, taking officials hostage, preventing management from entering their offices, as well as engaging in protest action and go-slows. Ntuli told the commission that the plan had gone horribly wrong, resulting in murders and corruption within the prisons:

"Those who benefited from the plan have betrayed it and entrenched their power, resulting in corruption, nepotism, favouritism, bribery and murders."⁶⁶

According to Ntuli, ordinary officials were terrified of those in power:

"People are too afraid and intimidated to challenge their actions, no matter how unlawful, irregular or improper. They rule with an iron fist."⁶⁷

Immediately after testifying, Ntuli was put into a police protection programme.⁶⁸

Just under two months later, on 15 April 2002, Ntuli gave further evidence before the commission. He alleged that managers in key positions in the prisons of the province, including himself, owed their promotions to Operation Quiet Storm. Ntuli alleged that Operation Quiet Storm was a reign of terror orchestrated by Nhlanhla Ndumo, Russel Ngubo and Thami Memela, who were all senior officials in the Department of Correctional Services. At the time of Ntuli's evidence, these officials were in custody facing charges of murder, arising from the death during 1998 of Ernest Nzimande, an Induna at Impendle, as well as charges of the attempted murder of three of Nzimande's companions. Ntuli told the commission:

"I never knew that I was employed by a filthy department. I never knew that one was living at the mercy of certain people."⁶⁹

Ntuli made further allegations of corruption against senior members of the Department of Correctional Services. He told the commission that Durban businessman Mari Mutho had been sentenced to three-and-a-half years' imprisonment but had never spent a day in prison, although he was given a prison number. The matter was investigated by an anti-corruption unit and

referred to Raphepheng Mataka, who was head of human resources at the time, but no action was taken and the case was covered up. Ntuli also claimed that Mataka failed to act when anti-corruption members from Pretoria, after being visited in their hotel by persons wearing balaclavas, hurried back home without completing their work. Ntuli claimed that Mataka was not suitably qualified for the position of deputy commissioner (human resources). Ntuli stated that, according to records, Mataka had a legal qualification, but no relevant experience when he was appointed to this important human resources position. Ntuli told the commission that Mataka had been promoted twice a year, which was against departmental policy. Ntuli also made allegations of nepotism within the department. He claimed that the wife of the former national commissioner, Khulekani Sithole, was appointed by the Department of Home Affairs in exchange for the appointment of the wife of the former Home Affairs Director-General, Albert Mokoena, by Correctional Services. Ntuli claimed further that the head of the Pietermaritzburg female prison, Zodwa Dandile, was involved in the murder of Thuthu Bhengu, the director of provincial human resources - in that she (Dandile) lured Bhengu to the window of her residence by making a hoax phone call. Bhengu was then shot through the window and killed. Ntuli also alleged that Russel Ngubo and Nhlanhla Ndumo had been either directly or indirectly involved in the murder of Bhengu, as she had been investigating allegations of corruption within the Department. Ntuli alleged further that the former commissioner of correctional services in Mpumalanga province, Mr Zwi Mdletshe, had a falsified matriculation certificate, which he used to gain promotion to the department's head office. He alleged that Mdletshe was promoted to a position in head office although he was not in possession of a diploma or a degree, which was a requirement to occupy such a position. Ntuli alleged further that Lindi Mzimela, the daughter of the former minister of Correctional Services, Dr Sipho Mzimela, had been fraudulently appointed as a warder in the department at the time her father was still in office. He told the commission that Lindi Mzimela was employed as a warder without being in possession of a matriculation certificate when she was still 19 years old. According to Ntuli, it was a requirement that prospective warders be at least 21 years old and in possession of a valid matriculation certificate.⁷⁰Mataka denied Ntuli's allegations, stating that Ntuli was bitter because he had failed to secure a position in the POPCRU national leadership and a departmental promotional post.⁷¹

The widespread publication in the nation's press of the shocking details summarised above must have been deeply worrying to the average South African. In an editorial dated 17 April 2002, the Natal Witness commented on the evidence given by Ntuli, inter alia, as follows:

"This testimony indicates that individuals (and possibly party-political) groups have been manipulating the affairs of the prison system in this province for their own ends and calls into question the viability of the KwaZulu-Natal prison system ... It reveals that Popcru had developed a long-term strategy of circumventing the principle of accountability to the minister of correctional services and had thereby turned prisons into petty fiefdoms accountable to no one . The evidence for mismanagement and corruption and for violent criminal behaviour among senior management of the prison is growing, and, because the rot in such institutions starts at the top, it's impossible that this has not affected the running of the prison at every level."⁷²

Approximately a month later, an editorial in the Natal Witness summed up the public mood regarding the shocking evidence presented to the Jali Commission, as follows:

"The revelations of crime and corruption emerging from the Jali Commission investigations get worse and worse. Forging matric certificates is small beer compared to the use of prisoners to commit crimes. And some of those thefts and robberies (complete with ' in-jail-at-the-time' alibis) are in turn eclipsed by the use of prisoners to murder political opponents, or colleagues in the Prisons' Service who don't kowtow to the corrupt ruling clique . The more one learns about the goings-on, the more obvious it seems that there must be a ruthless clean-up. The buck must stop somewhere; someone must take final responsibility for the web of evil that has been spun in the Correctional Services in this province. Someone must see that the guilty are removed and punished, and that decent officials can begin to rebuild a service whose credibility and reputation have been destroyed from within."⁷³

The sensational revelations in the press outlined above, which arose from dramatic evidence presented to the Jali Commission and which pointed to extensive corruption in the prisons of KwaZulu-Natal, must have left few South Africans in any doubt that the reputation of the post-apartheid penal system was in tatters. Unfortunately, more sensational revelations were to follow. The media frenzy that surrounded the evidence detailing massive corruption in the Durban-Westville Management Area was to be repeated in relation to evidence concerning the other eight management areas investigated by the commission. Since it is beyond the scope of this article to examine in detail all nine management areas, only one further management area is examined through the lens of the public media. The management area covered in Part 2 of this article is Bloemfontein - in particular, the widespread corruption that was revealed at the Grootvlei Prison.

 

4 CONCLUSION

Part 1 of this article has traced the public narrative around the hearings of the Jali Commission of Inquiry into corruption in the South African penal system, held in KwaZulu-Natal in the first half of 2002. Although only allegations at the time, the first shocking details that emerged in the press, of systematic and widespread corruption within the Department of Correctional Services, painted an extremely disturbing picture. It was a picture that was to become seared into the South African public imagination in the years that followed. It is submitted that, among the many elements that must have made this picture particularly worrying to South Africans at the time were the following: the extent of the corruption; its almost "commonplace" acceptance by all involved; the fact that it appeared to have infected the Department of Correctional Services from the very top to the very bottom; the immense suffering clearly caused to powerless and vulnerable individuals; the apparent ease with which corrupt officials and prisoners were able to achieve their corrupt aims; the overall impunity with which corrupt activities were carried out; the twisted political ideology employed by certain corrupt officials to rationalise their activities; and the overall toxic nature of what was clearly a deeply ingrained culture of corruption in the context of a country recovering from decades of oppression while trying to build strong democratic institutions. It is submitted that the Jali Commission of Inquiry may be seen as a "canary in the coal mine"; it was able to detect the corrosive effects of widespread state corruption at a relatively early stage during the post-apartheid period. Part 1 of this article has shown that, from as early as 2002, the dangers of this type of corruption were there for all South Africans to see.

As to the wider implications of the above for more recent commissions of inquiry into the threats posed by corruption in South Africa (such as the ongoing Zondo Commission of Inquiry into State Capture), it is clear that the influence and relevance of such a high-profile public commission of inquiry extends far beyond any recommendations it may make in the legal report published after it has fulfilled its mandate. Such commissions are constituted and operate within a particular milieu, both influencing and influenced by the social, political and economic forces that surround them. This dialectical process is mediated through the public media, which often plays a major role before, during and after the operation of such a commission.⁷⁴ As Raanan Sulitzeanu-Kenan points out, such commissions "whether willingly or not, play a political role by often providing critical information about issues of governance and responsibility, either through the course of their investigation, or in those reports and parts thereof that get publicized".⁷⁵ The "critical information" provided to the South African public by the Jali Commission was not sufficient to completely "cure" the penal system or to prevent massive corruption from emerging within other institutions of state in the years which followed. It is submitted, however, that the public narrative that emerged from the hearings of the commission did indeed serve to stamp out much of the corruption within South African prisons, as well as, at the very least, to prepare the South African public for the long battle against corruption that was to follow and, as noted in the introduction to this article, which is reaching its peak at the time these words are being written.

As stated in the introduction, Part 2 of this article will analyse the public narrative surrounding the hearings of the Jali Commission of Inquiry held in the Free State in 2002. It will also advance further arguments as to why commissions of inquiry of this type are useful and important in defending liberal constitutional democracies against existential threats such as that posed by the scourge of corruption.

 

 

1 According to the journalist, author and anti-apartheid activist Jacques Pauw: "Our state institutions have been hijacked for the benefit of the elite few. The public protector's State of Capture report and the thousands of leaked Gupta e-mails have painted a sordid picture of the extent to which the state, the government, the ANC and the president have been infiltrated and turned into enablers of the violation of our sovereignty. This has impoverished the nation, crippled key state institutions and jeopardised our security." Pauw The President's Keepers: Those Keeping Zuma in Power and Out of Prison (Kindle ed.) (2017) ch 17 par 2.
2 On 25 January 2018, the then-Deputy President of South Africa, Cyril Ramaphosa, told Zeinab Badawi, who was interviewing him for the British Broadcasting Corporation's (BBC) Hardtalk programme: "Everyone agrees that our state was captured by corrupt elements, by people who purported to be close to the president, who have been doing really bad things getting into many state institutions" (BBC News (25 January 2018) http://www.bbc.com/news/av/world-africa-42821474/ramaphosa-south-africa-captured-by-corrupt-elements). Another example of open acknowledgement by a top politician of the reality of "state capture", together with the expression a considerable degree of angst, is to be found in the words of Ronnie Kasrils, a member of the National Executive Committee of the African National Congress from 1987 to 2007 and Minister for Intelligence Services in the South African government between 2004 and 2008: "Where and how did the rot all start? And who can we say was responsible? Do we blame individuals, the liberation movement, South African society, capitalism, the world we live in, human nature, an unfathomable enigma? Is there something innate about the human condition which makes people susceptible to greed, the lust for wealth and power? Can such flaws be overcome, can temptation be resisted or at least contained by mere appeals to conscience, by whistleblowing, by tough regulations and penalties?" Kasrils A Simple Man: Kasrils and the Zuma Enigma (Kindle ed.) (2017) ch 32 par 1.
3 The intense emotions that characterise public debates on the issue of corruption in South Africa is apparent in the following quotation from a recently published book on the topic of corruption at the highest levels of the South African state by journalists Adriaan Basson and Pieter du Toit: "Through his misrule, Zuma and his circle of rogue protectors broke not only the country's spirit and moral fibre, but also our hearts. By allowing his son and dodgy friends to run amok and operate what is effectively a parallel state, by appointing compromised individuals to protect him and his cronies from prosecution, by weakening the state's investigative capacities to the point of institutional collapse, and by allowing weak and incompetent sycophants to manage key service-delivery departments, Zuma broke his oath of office and became an enemy of the people he had promised to serve" (Basson and Du Toit Enemy of the People: How Jacob Zuma Stole South Africa and How the People Fought Back (2017) 107-112).
4 What became known as the State Capture Inquiry (or Zondo Commission) was constituted on 8 February 2018, with Deputy Chief Justice Raymond Zondo as Commissioner; the SARS Commission (or Nugent Commission) was constituted on 24 May 2018 with retired Justice Robert Nugent as Commissioner; the PIC Inquiry (or Mpati Commission) was constituted on 17 October 2018, with former Supreme Court of Appeal President Justice Lex Mpati as Commissioner; the NPA Enquiry was constituted on 9 November 2018, with former Justice of the Constitutional Court Yvonne Mokgoro as Chairperson of a three-member Panel.
5 See, for e.g., Powell "South Africa's Commissions of Inquiry: What Good Can They Do?" The Conversation (8 November 2018) https://theconversation.com/south-africas-commissions-of-inquiry-what-good-can-they-do-106558 (accessed 2020-11-25); see also Mohale "Three Reasons Why SA Needed the Commissions of Inquiry" SABCNewsOnline (24 January 2019) https://www.sabcnews.com/sabcnews/three-reasons-why-sa-needed-the-commissions-of-inquiry/ (accessed 2020-11-25).
6 Public awareness, created by free and ready access to relevant information through the media, is clearly crucial to the continued health of a constitutional democracy. This point was made forcefully by South African Constitutional Court Justice Sandile Ngcobo in an address to the Constitutional Conference that took place in 2010 on the topic "Freedom of Information and Freedom of Expression: The Bedrock of Democracy". Justice Ngcobo's views on this important point were summed up as follows: "In the keynote address, Justice Ngcobo spoke about the constitutional rights to freedom of expression and access to justice, and the role of the media in a democratic society ... He said that access to information was the 'oxygen of democracy' and, together with an independent press, was the foundation of democracy ... Justice Ngcobo said that access to information led to transparency in government, which was essential for democracy, and could combat corruption - the biggest threat to democracy. He said that secrecy provided a 'fertile ground for corruption' and that, in terms of the Declaration of Principles on Freedom of Expression in Africa, disclosure of information should be the rule and non-disclosure the exception" (Manyathi "Access to Information is the Oxygen of Democracy: Justice Ngcobo" 2012 De Rebus 12).
7 Jali, Steyn, Sishi and Poswa-Lerotholi Commission of Inquiry Into Alleged Incidents of Corruption, Maladministration, Violence or Intimidation Into the Department of Correctional Services Appointed by Order of the President of the Republic of South Africa in Terms of Proclamation No. 135 of 2001, as Amended: Final Report (December 2005) https://www.gov.za/sites/default/files/gcis_document/201409/jalicommfull0.pdf.
8 Middleton "Notes on the Nature and Conduct of Commissions of Inquiry: South Africa" 1986 XIX Comparative International Law Journal of Southern Africa (CILSA) 252 252 and 256. Professor Middleton cites an article in the New Zealand Law Journal listing the following benefits of a commission of inquiry: "(i) It is an important tool of government; (ii) it provides the means of arriving at a balance between public and private good; (iii) it assists the government to formulate policy; (iv) it enables an examination of conflicting expert opinion; (v) it tests the strength of opposition to a project; (vi) by giving more individuals and groups an opportunity to express their views, public inquiries provide public authorities with a more precise appreciation of the public's requirements and expectations; and (vii) from the citizen's point of view, commissions of inquiry provide an opportunity to participate in the process of decision-making which affects their lives" (Black "Commissions of Inquiry" 1980 19 New Zealand Law Journal (NZLJ) 427, quoted in Middleton 1986 XIX CILSA 256).
9 Gomery "The Pros and Cons of Commissions of Inquiry" 2006 51 McGill Law Journal 786-787.         [ Links ]
10 Ashforth "Reckoning Schemes of Legitimation: On Commissions of Inquiry as Power/Knowledge Forms" 1990 3(1) Journals of Historical Sociology (JHS) 1.         [ Links ]
11 Ashforth 1990 JHS 12.
12 Ashforth 1990 JHS 2.
13 Mohale https://www.sabcnews.com/sabcnews/three-reasons-why-sa-needed-the-commissions-ofinquiry/ (accessed 2020-11-25).
14 Ashforth 1990 JHS 6.
15 Ashforth 1990 JHS 6. The public dialogue referred to by Ashforth around the reports of commissions and committees of inquiry is nicely described in the following words of Gerald Rhodes: "The reports of committees are public documents. They often contain a wealth of information in addition to discussion and specific recommendations for action. They are commented on by newspapers, by professional and technical journals, sometimes by academic commentators. The question is, therefore, what the significance of such reports is, not simply in terms of the reactions of civil servants and ministers poring over them in their offices, but in this wider public context" (Rhodes Committees of Inquiry (1975) 149).
16 Ashforth 1990 JHS 6.
17 At this point, it is worth noting the old adage: "News is a first rough-draft of history." This phrase first appeared in the 13 June 1948 edition of the Washington Post (Washington Post (13 June 1948) https://slate.com/news-and-politics/2010/08/on-the-trail-of-thequestion-who-first-said-or-wrote-that-journalism-is-the-first-rough-draft-of-history.html (accessed 2020-11 - 25).
18 Gomery 2006 McGill LJ 787. Gomery was commenting on the Canadian "Sponsorship Inquiry", which took place in 2006. Of course, not all aspects of the publicity resulting from public evidence given to a high-profile commission of inquiry is necessarily positive and supportive of justice in a liberal constitutional democracy. In counterpoint to his generally favourable opinion of the role of commissions of inquiry in Canada, Justice Gomery quotes Edward Greenspan QC, a Canadian defence lawyer: "Commissions of inquiry are bound by no rules of evidence. Anything goes. At public inquiries, witnesses are able to tarnish the reputation of others before a nationwide television audience. Trials, because of their solemnity, are not televised in Canada. And rightly so" (Gomery 2006 McGill LJ 788).
19 Powell https://theconversation.com/south-africas-commissions-of-inquiry-what-good-can-they-do-106558 (accessed 2020-11-25). Powell's rejection of the common misconception that the appointment of a commission of inquiry automatically leads to a reduction in public concern about the issue being investigated receives solid support from Raanan Sulitzeanu-Kenan. Sulitzeanu-Kenan refutes the "common claim" that "the appointment of an inquiry acts to reduce the level of public interest in the affair [which led to such appointment]", stating that "despite the prevalence of this claim, no empirical support was found for any mitigating effect of inquiry appointment on media salience in recent studies" (Sulitzeanu-Kenan "Reflection in the Shadow of Blame: When Do Politicians Appoint Commissions of Inquiry?" 2010 40(3) British Journal of Political Science (BJPS) 617).
20 Powell https://theconversation.com/south-africas-commissions-of-inquiry-what-good-can-they-do-106558 (accessed 2020-11-25).
21 Two senior correctional officers, Mr Mlungisi Dlamini and Mr Lucky Mpungose, were charged with her murder. They were found guilty in June 2002, and were sentenced to life imprisonment. The evidence before court was that Ms Bhengu had refused to consider a fraudulent job application from Mr Mpungose's fiancée (Jali Commission Report Vol 1 27 fn 43).
22 Jali Commission Report Vol 1 26.
23 Ibid.
24 Ibid.
25 (2001-08-24) Natal Witness 2. The Jali Commission of Inquiry was appointed in terms of Proclamation Number 135 of 2001, published in GG 22718 of 2001-09-27. See Jali Commission Report Vol 1 5.
26 (2002-02-01) Pretoria News 3.
27 (2002-02-01) Daily News 2.
28 (2002-02-05) Star 5.
29 (2002-02-05) Cape Argus 5.
30 (2002-02-05) Cape Argus 5.
31 (2002-02-05) Daily News 3.
32 Ibid.
33 (2002-02-06) Natal Witness 1.
34 (2002-02-06) Natal Witness 1.
35 Ibid.
36 Ibid.
37 (2002-02-06) Daily News 3.
38 Ibid.
39 (2002-02-07) Sowetan 7.
40 (2002-02-07) Daily News 2.
41 (2002-02-07) Natal Witness 8.
42 (2002-02-09) Natal Witness 3.
43 (2002-02-11) Sowetan 4.
44 (2002-02-12) Natal Witness 1. See also (2002-02-12) Sowetan 4.
45 (2002-02-15) Sowetan 7.
46 (2002-02-13) Natal Witness 2. (2002-02-13) Daily News 1.
47 (2002-02-14) Sowetan 6.
48 (2002-02-14) Daily News 3.
49 (2002-02-17) Sunday Tribune 1.
50 (2002-02-15) Sowetan 7.
51 (2002-02-17) Sunday Tribune 1.
52 (2002-02-15) Sowetan 12.
53 (2002-02-19) Cape Argus 5.
54 Ibid.
55 (2002-02-20) Sowetan 4.
56 Ibid.
57 (2002-02-22) Sowetan 4.
58 (2002-02-27) Daily News 2.
59 (2002-02-28) Mail and Guardian 33.
60 (2002-03-06) Sowetan 4.
61 (2002-03-08) Daily News 2.
62 (2002-03-07) Daily News 3.
63 (2002-03-27) Daily News 3.
64 Ibid.
65 (2002-04-05) Natal Witness 2.
66 (2002-02-21) Daily News 3.
67 Ibid.
68 (2002-02-27) Daily News 2.
69 (2002-04-16) Natal Witness 1.
70 (2002-04-18) Natal Witness 1; (2002-04-18) Daily News 1; (2002-04-18) Sowetan 4; (200204-21) Sunday Times 5; (2002-04-21) Sunday Tribune 8.
71 (2002-04-19) Natal Witness 3.
72 (2002-04-17) Natal Witness 8.
73 (2002-05-11) Natal Witness 6.
74 As to the role of the media before the appointment of a commission of inquiry, Sulitzeanu-Kenan notes that the extent to which the media puts pressure on politicians concerning a particular crisis (the "media salience") is central to whether a commission of inquiry will be appointed in the first place. He notes: "Contrary to what could be expected and prescribed, this research suggests that the inherent severity of an issue or event does not directly affect the decision to appoint an inquiry, but is mediated by media salience" (Sulitzeanu-Kenan 2010 BJPS 632).
75 Sulitzeanu-Kenan 2010 BJPS 614.

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NOTES

 

The law and an ancestral request for exhumation

 

 

"No man can outwit the ancestors" ~ African Proverb

 

1 Introduction

Exhumation is the removal of the remains of a dead body from its initial resting place - in other words, when a corpse is removed from a coffin, either to be re-buried at another place, or to dispose of the remains in a different manner as in cremation. A corpse could be the remains of a deceased person or a stillborn child or a fetus. An exhumation may also be undertaken to ascertain the cause of death or to ascertain the identity of the deceased. A court or the immediate family of the deceased may request an exhumation for any of the mentioned reasons. If the family is asked by the ancestors to exhume a grave, certain legal questions may come to the fore. It is the purpose of this note to discuss the legal requirements for exhumations and briefly to address the traditional African cultural belief in which ancestors play a part in life on earth. It is not a complete analysis or an opinion on African culture or beliefs. Ancestral beliefs simply form the background to the real legal questions surrounding exhumations in South Africa.

These notes focus on a recent request put to a funeral undertaker. The immediate family of a deceased woman contacted the funeral undertaker with a request for the exhumation of the grave of their relative buried quite a few years ago. The basis of their request was that the ancestors had indicated to the mother of the deceased that the dead woman was not comfortable. The deceased had been pregnant when she died. She had been buried with the fetus still in her uterus. It had now been "communicated" that she would like the fetus to be removed and cremated. To fulfil the request, the grave of the deceased would need to be opened, the remains of the fetus removed and cremated, and the corpse re-buried. But is this legal?

The common-law crimes of violating a dead body and violating a grave are dealt with in some articles (see Christison and Hoctor "Criminalisation of the Violation of a Grave and the Violation of a Dead Body" 2007 28(1) Obiter 23-43; Snyman Criminal Law 6ed (2015) 435-436), but there seems to be no academic literature on legally permitted exhumations in South Africa. There are a few cases concerning exhumations, but nothing directly relevant to this discussion (see for example, Rex v Lekota 1947 (3) SA 713 (O); R v Sephuma 1948 (3) SA 982 (T); Gillespie v Toplis 1951 (1) SA 290 (C); Dibley v Furter 1951 (4) SA 73 (C); Mphiki v Mphiki (54/2018) [2019] ZANCHC 43 (24 May 2019); Bukula v Nkosi (41333/11) [2014] ZAGPJHC (20 October 2014); see also Christison and Hoctor 2007 Obiter 23 for the long history of the crimes comprising violation of a grave and violation of a dead body).

 

2 Historical background concerning burials

According to Roman law, if a corpse was buried on the land of a person who gave permission for the burial, the grave became res religiosa or locus religiosus (Inst. 2.1.9; C. 3.44.2. and D. 11.7.2.5; C. 3.44.4.1). It was a crime known as sepulchri violatio to violate a locus religiosus (D. 47.12.11). The exhumation of corpses or the disturbance of the bones was also listed under this crime. A further requirement was that the act of exhumation or the disturbance of the bones should have been done dolo malo (with malicious intent) (D. 47.12.3.pr. and 1). It thus seems as if it was not sepulchri violatio to re-bury a corpse or exhume a body if there was a just cause (iusta causa) for the act (D. 47.12.3.4 and C. 3.44.1).

De Vos quotes some Roman-Dutch law writers who argued that graves were not holy and that they could be owned and sold (De Vos "Grafskending" 1952 69(3) SALJ 297; Van Leeuwen R.H.R., 2.1.9). He also refers to the case of Cape Town and District Waterworks Co. Ltd. v Executors of Elders ((1890) 8 S.C. 9), in which Lord de Villiers concluded that the term res religiosa was not part of Roman-Dutch law. Even though the grave is not holy anymore, violation of a grave and violation of a corpse have been accepted as crimes in Roman-Dutch law and are therefore part of the common law in South Africa (see De Vos 1952 SALJ 297-306; Christison and Hoctor 2007 Obiter 23-43). If a body is exhumed with no malicious intentions and according to legislative requirements, as is discussed below, no crime is committed.

 

3 Ancestral beliefs

Followers of traditional African religions believe that ancestors maintain a spiritual connection with their relatives still living. Ancestors are held to be the deceased members of a family. Most ancestral spirits are generally good and kind. It is believed that if they are unhappy, they may cause minor illnesses to warn people they are on the wrong path. To please these unhappy ancestors, offerings of beer and meat are usually made. Ancestral worship is "founded on the belief that the dead live on and are capable of influencing the lives of those who are still living" (Bogopa "Health and Ancestors: The Case of South Africa and Beyond" 2010 Indo-Pacific Journal of Phenomenology 1). It is thus believed that ancestors have mystical powers and authority over the living. Traditional healers often facilitate communication between the living and the dead. Bogopa mentions an example that appeared in a newspaper. A 28-year-old man had been told to pay his father's bride-wealth (ilobola) or else he must live with the consequences. The man was advised by a traditional healer (sangoma) that his poor health was a direct result of his father's failure to pay ilobola for his mother. The ancestors were now holding him (the young man) responsible for the outstanding ilobola ("Outstanding Lobola" 1999 City Press 25 and "Son to Pay" 1999 The Sunday Times).

Lee refers to a man who could not attend his brother's funeral. He later heard that the corpse had fallen out of the coffin while on the way to the burial. Speaking through the man's dreams, the deceased brother stated that he was not comfortable. The man then consulted the elders of the family, as well as the ancestors, about his dreams. The dreams were interpreted to mean that the deceased wanted to be reburied with dignity at the family home (Lee "Death 'on the Move': Funerals, Entrepreneurs and the Rural-Urban Nexus in South Africa" 2011 Africa 239).

Lee also refers to funeral directors in Cape Town, who had noted a growing proportion of their business being taken up by exhumations, especially for re-burial at homes in rural areas. She states that the exhumation process is often initiated by a visitation by the dead person to a family member in a dream or a series of dreams. She gives an example of a father who "visited" his child while the child was sleeping. The father said: "I'm not sleeping well in this place. I'm getting cold". The child then went to dig him out, wrapped the bones in a blanket, bought a coffin and re-buried him at home. Lee concludes by saying that exhumation presents an opportunity for a prolonged conversation with the material remains of the body (Lee 2011 Africa 240-241).

The examples above are analogous to the case of the deceased pregnant woman who reportedly communicated to her mother, via the ancestors and the traditional healer, saying she is not comfortable in the grave with the fetus still inside her body. The request by the mother for an exhumation also seems to be constitutionally acceptable.

The Constitution of the Republic of South Africa, 1996 clearly states in Chapter 2 (the Bill of Rights) that "[e]veryone has the right to freedom of conscience, religion, thought, belief and opinion" (s 15(2). Section 30 states that "[e]veryone has the right to use the language and to participate in the cultural life of their choice". Section 9, the equality clause, also states that no one may discriminate directly or indirectly against anyone based on religion, conscience, belief or culture, among other criteria.

If the mother thus believes the ancestors communicated the discomfort of her daughter in the grave to her and that she must do something to assist the deceased, it should be accepted as a constitutionally valid reason to exhume the body of her daughter. Based on the mother's culture and her belief in the role of the ancestors, the remains of the fetus should be removed from her daughter's corpse and be cremated as requested by the deceased. Apart from the constitutionally valid reason for the request for the exhumation, there is other legislation with which the family should comply in order to effect the exhumation and cremation legally.

 

4 Legislation

4 1 National Health Act 61 of 2003 (NHA)

The NHA does not address the issues of exhumation or reburials directly but section 68(1) authorises the Minister of Health to make regulations regarding, among others, the disposal of human bodies. This has been done in the Regulations Relating to the Management of Human Remains, 2013 (GG No. 36473 of 2013-05-22). The Regulations address the exhumation and reburial of human remains directly. Regulation 26 of the Regulations determines that permission should be granted by the local government having jurisdiction in the location where the exhumation and reburial will take place. If, as in the example above, the remains of the fetus need to be cremated, a cremation permit should be sought from local government by a registered undertaker, who must be based in the same jurisdiction as the local government issuing the exhumation permit (reg 26(2) and (4)). To exhume human remains for cremation is legal (reg 23(3)) as is the reburial of the mother's remains in the same grave.

Whenever an exhumation is to take place, the officer-in-charge of the local government must inform the Provincial Commissioner of the South African Police Service (SAPS) (reg 27(1)(a)). A member of SAPS must be present while the exhumation takes place, as must the local government representative (reg 27(1)(b) and (c)). If human remains are to be removed from the grave, an environmental health practitioner (EHP) of the relevant health authority, or if not available, an EHP from another health authority, or in private practice, but registered with the Health Professions Council of South Africa (HPCSA), should also be present (reg 27(1)(d)). Only people with a direct involvement in the exhumation may be present and it must be done when the cemetery is closed to the public (reg 27(1)(c) and (e)). The EHP must see to it that all health requirements are met during the exhumation process (reg 27(f)). After the remains have been removed, the grave should be covered and sealed again.

4 2 By-Laws

As the Regulations (above) require the involvement of the local government in whose jurisdiction the exhumation takes place, notice should also be taken of the by-laws of the specific municipal area where the exhumation is to take place. As examples, the City of Tshwane Metropolitan Municipality Cemetery and Crematorium By-Law (published in the Provincial Gazette Extraordinary, 9 February 2005, Volume No. 42, Local Authority Notice 266), the City of Johannesburg Metropolitan Municipality Cemeteries and Crematoria By-Law (published under Notice 824 in Gauteng Provincial Gazette Extraordinary No 179 dated 21 May 2004) and the City of Cape Town: Cemeteries, Crematoria and Funeral Undertakers By-Law, 2011 (published in Province of Western Cape: Provincial Gazette no. 6898 on 2011-08-12) are analysed.

4 2 1 The Tshwane By-Law

Section 53 of the Cemetery and Crematorium By-Law of the Metropolitan Municipality of Tshwane states that human remains may be exhumed only if:

"(1) the Premier of Gauteng, the Attorney-General or a magistrate and the reservation certificate holder authorise the exhumation in writing;

(2) the authorisation contemplated in subsection (1) is handed to the [Strategic Executive Officer (SEO)] or his nominated representative in advance;

(3) the family of the deceased person or the funeral director notifies the SEO or his nominated representative or the General Manager not less than three working days in advance of the date and time proposed for the exhumation;

(4) the Senior Administrative Officer is present at the exhumation; and

(5) at least one member of the South African Police Service, who must be notified by the family of the deceased person or the funeral director, is present at the exhumation."

A "reservation certificate holder" is defined in section 1 as a person to whom the right to bury a corpse in a certain grave has been granted. A "Senior Administrative Officer" (SAO) is defined as the person appointed by the municipality to be the officer-in-charge of a cemetery or his or her duly authorised representative. The by-law further determines that the area where the exhumation will take place should be screened off so that the public cannot view the exhumation (s 54). Section 59 states that if an exhumation takes place to remove a corpse from a grave, the reservation certificate holder retains his or her rights in respect of the grave if the corpse is to be returned to that grave. The Tshwane Municipality also has a Fine Schedule for By-law Policing (September 2006 http://www.tshwane.gov.za). According to Code 91929, section 53(1), the approved fine for the execution of an exhumation without official permission by the Premier or the Attorney-General or a magistrate shall be determined by a court of law. In other words, there is no specified amount indicated as a fine, and fines may vary. The same stipulation applies to being present at an exhumation without written permission (Code 91930, s 56). If any of the instructions of the SAO or SAPS are disobeyed at an exhumation, the prescribed fine is R200.00 (Code 91931, s 58).

4 2 2 The Johannesburg By-Law

The Cemeteries and Crematoria By-Law of the City of Johannesburg Metropolitan Municipality states in section 20(1) that no person may exhume or cause to be exhumed a body without the written consent of the-

"(a) Premier of the Gauteng Provincial Government;

(b) the Council;

(c) the provincial Department of Health;

(d) the Administrator of cemeteries; and

(e) the Council's Medical Officer of Health."

Section 20 further determines that the officer-in-charge of the exhumation must inform the Provincial Commissioner of SAPS, as a member of SAPS must always be present when an exhumation takes place (s 20(2) and (3)). An exhumation must not take place when the cemetery is open to the public and only the undertaker, under the supervision of the officer-in-charge, may cause the grave to be excavated for an exhumation (s 20(4) and (5)). If a grave is to be excavated for exhumation, 48 hours' written notice must be given to the officer-in-charge and the administrator of cemeteries before the time of the exhumation, and a prescribed fee must accompany such notice (s 20(6)(a) and (b)). An "officer-in-charge" means the registrar of a crematorium appointed in terms of regulation 21 of the Regulations Relating to Crematoria and Cremations, made in terms of Ordinance No. 18 of 1965, and includes a person authorised by the Council to be in control of any cemetery (s 1).

In a document published online by the City of Johannesburg Parks division, it is stated that a seven-working-day period is required for administrative purposes before an exhumation may be carried out ("Exhumations" http://www.jhbcityparks.com (accessed 2019-09-19)). Permission for an exhumation must be obtained from the office of the Minister of Development and Planning, Gauteng. Permission must also be obtained from the Gauteng Provincial Department of Health, as well as the Medical Officer of Health of the metropolitan council. A fee for the exhumation and/or re-burial is payable at the office of the relevant cemetery. The Johannesburg Metropolitan Council also requires a certified copy of the deceased's death certificate when an application for the exhumation is made. Reference is also made to the Removal of Graves and Dead Bodies Ordinance 7 of 1925. According to this Ordinance, the following must be adhered to at all times: the Commissioner of the Municipal Police Service must be informed by the person executing the exhumation; graves older than 60 years or unknown will need approval from the South African Heritage Resource Agency (SAHRA); exhumation of these graves must be done under the supervision of an accredited archeologist; to get permits from the Provincial Government and SAHRA for unknown graves, there should be a full public participation/ social consultation process recorded. This includes newspaper advertisements in three local and provincial newspapers for a period of 30 days for response and on-site notices for a period of 60 days as well as door-to-door family interviews.

4 2 3 The Cape Town By-Law

The exhumation of bodies is addressed in Chapter 9 of the City of Cape Town: Cemeteries, Crematoria and Funeral Undertakers By-Law, 2011. According to section 45(1), an application for exhumation must be submitted to the City and should include an application form, a copy of the death certificate, a letter or affidavit from the next of kin of the deceased consenting to the exhumation and the prescribed fees should be paid. No exhumation may take place without the written consent of the City and the Provincial Department of Health (s 46(1)). These written documents must be submitted to the environmental health practitioner five working days prior to the approved exhumation date (s 45(2)). An experienced environmental health practitioner and a registered funeral undertaker must be present at the exhumation (s 46(4)). If a re-burial or cremation is to take place, it should happen within 48 hours of the exhumation.

4 2 4 Summary

Different local authorities have different specific requirements -for example, the fees payable and who should or may be present during the exhumation. The Regulations in terms of the Act should be complied with, as it is national legislation. The Regulations state that permission for an exhumation is necessary from local government. In Tshwane, permission should be sought from the Premier, the Attorney-General or a magistrate and the reservation certificate holder. In Johannesburg, there is a list of five people who should give permission, but the Johannesburg by-law differs from the document on their website. The Cape Town by-law only states that the "City" must give permission. Thus, permission is essential although there is a difference in who should give permission. The Regulations also state that the Provincial Commissioner of SAPS should be notified, and that a member of SAPS should be present. This is therefore not negotiable at the local level and should be complied with. Finally, the Regulations require an EHP to be present at an exhumation and this should also be implemented at local level. The requirement of the presence of an EHP is not the case in the different by-laws.

 

5 The fetus

As the request to the funeral undertaker (in the subject case of this note) was to remove a fetus from the exhumed deceased body, it is also necessary to explain the position of a fetus in South African law. According to the Births and Deaths Registration Act 51 of 1992, a corpse "means any dead human body, including the body of any still-born child" (s 1). "Still-born" in relation to a child "means that it has had at least 26 weeks of intra-uterine existence but showed no sign of life after complete birth" (s 1). The relevance of these definitions is that if the fetus was in the deceased body for less than 26 weeks before the woman died, the fetal tissue should be seen and treated as medical waste. If the fetus was in her body for more than 26 weeks when she died, the fetus would be a stillborn baby (see Slabbert "Pregnancy Loss: A Burial or Medical Waste 2017 THRHR 102112). It is the author's argument that this should be irrelevant in the current scenario. The deceased only wanted the fetal remains to be removed so that she would be comfortable. This should be done irrespective of the gestational age of the fetus, which would by now have decomposed. If the grave is exhumed, the fetal material would most probably be found between the legs of the deceased. The gases that form part of decomposition would excrete the fetal material out of the dead body. What could be found might only be the little bones left of the fetus. If a cremation order is then granted, these remains should be cremated in the manner asked for by the deceased mother via the ancestors.

 

6 Conclusion

If a funeral undertaker gets a request such as the one described in this note, it should not be discarded as illegal or impossible to do. It is clear from our legislation that an exhumation for a valid reason is possible. The request to the funeral undertaker was thus valid. The wish of the dead mother communicated to her living relative is valid on constitutional grounds, as it is a cultural belief that the dead can communicate with the living; discrimination against such beliefs is prohibited. It thus seems clear that if the family follows the Regulations in terms of the NHA, as well as the by-laws in the jurisdiction where the exhumation would take place, that it could legally be done.

Magda Slabbert

University of South Africa (UNISA)

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NOTES

 

A consideration of sections 249, 250 and 259 of the proposed third amendment bill to the children's act in light of the best interests principle

 

 

1 Introduction

When Nelson Mandela was elected as the President of the Republic of South Africa in 1994, no one doubted that he was concerned about the children of South Africa and especially those in need of care. He stated:

"There can be no keener revelation of a society's soul than the way in which it treats its children'' (Abrahams and Matthews Promoting Children's Rights in South Africa: A Handbook for Members of Parliament (2011) 3)

With the promulgation of the Constitution in 1996, national legislative recognition was given to the principle that a child's best interests are of paramount importance in every matter concerning the child (s 28(2) of the Constitution of the Republic of South Africa, 1996). Section 28(1)(b) expressly provides for the right of a child to family care, parental care or appropriate alternative care. Based on economic and other factors, developing countries like South Africa experience difficulties in meeting the constitutional right of a child to have his or her best interests met and the placement of an orphaned or abandoned child (OAC) in appropriate alternative care is no exception. In light hereof, the current note considers whether the proposed amendments to the Children's Act (CA, Act 38 of 2005 as amended) introduced by the Third Amendment Bill (GG 42005 of 201902-25), with particular reference to sections 249, 250 and 259 comply with this constitutional right. These three sections are of particular relevance to placing a child in permanent care in the form of both national and intercountry adoption. In particular, section 249 makes provision that no consideration may be given in respect to adoption, section 250 limits the persons who are allowed to provide adoption services and section 259 makes provision for the accreditation for the provision of intercountry adoption services. All three sections are relevant to the adoption process of an OAC. Alternative care options available and the basis for determining which placement decided upon is deemed to be the most appropriate for the child concerned, are considered in light of the proposed amendments. A consideration of the current status of the child welfare system in South Africa as well as the statistics of the many children in need of alternative care, serves to provide a background in determining whether the proposed amendments meet and further the vulnerable OAC's best interests.

 

2 Current statistics and options

A reflection of current statistics of children in need of care in South Africa confirms that many children are in need of both permanent and temporary alternative care (s 150(1)(a) of the CA states that a child is "in need of care and protection" if the child "has been abandoned or orphaned and is without any visible means of support"). The vulnerability of parents, families and children has intensified by recent global, regional and national developments, including the global economic crisis, devastating consequences of the HIV/AIDS pandemic, widespread poverty (Smart Children Affected by HIV/AIDS in South Africa: A Rapid Appraisal of Priorities, Policies and Practices (2003) 3), unwanted pregnancies (Blackie Sad Bad and Mad: Exploring Child Abandonment in South Africa (Unpublished doctoral thesis, University of the Witwatersrand) 2015 19), child abandonment (Vorster "Abandoned Children: South Africa's Little Dirty Secret" (2015) Daily Maverick http://www.dailymaverick.co.za/ (accessed 2017-05-31). Vorster refers to the fact that as of 2015, approximately 3 500 children are abandoned annually in South Africa. The National Adoption Coalition estimate that while there are no statistics available, there is reason to believe that the number of abandoned children has increased http://www.adoptioncoalitionsa.org (accessed 2017-05-31)), rapid urbanisation, and the increased migration of adults and children into and within South Africa in search of economic and political refuge (Department of Social Development South Africa's Child Care and Protection Policy (2018) https://www.sacssp.co.za/NDSD_CCPP_19_DECEMBER.docx 47 (accessed 2019-01-01)). In particular, the impact of the HIV pandemic on children in South Africa cannot be understated and with the largest percentage of HIV/AIDS-infected persons in the world, many children in South Africa are deprived of being nurtured in a family environment (Högbacka "Maternal Thinking in the Context of Stratified Reproduction: Perspectives of Birth Mothers from South Africa" in Gibbons and Rotabi (eds) Intercountry Adoption (2012) 147).

In 2015, Vorster (http://www.dailymaverick.co.za/) noted that approximately 3 500 children are abandoned annually in South Africa and the National Adoption Coalition estimates that about 3,000 children are abandoned each year (Holmes "A Helping Hand for the Young and Forsaken" (2019) https://www.usnews.com/news/best-countries/articles/2019-08-08/south-africa-struggles-to-care-for-abandoned-babies (accessed 2020-05-05)) and that while there are no statistics available, there is reason to believe that the number of abandoned children has increased (Wolfson Vorster Reach Out: The State of Adoption in South Africa http://www.adoptioncoalitionsa.org (accessed 2020-05-30)).

In 2017, South Africa had 1 728 000 paternal orphans, 530 000 maternal orphans, and 505 000 double-orphans (Hall "Children in South Africa" (2018) http://childrencount.uct.ac.za/indicator.php?domain=1&indicator=1#6/-28.692/24.698 (accessed 2020-04-24)). (A paternal orphan is a child whose father has died but whose mother is alive, a maternal orphan is a child whose mother has died but whose father is alive, and a double orphan is a child who has lost both mother and father. See also Hall "Children Count: Statistics on Children in South Africa" (2018) http://childrencount.uct.ac.za/indicator.php?domain=1&indicator=4 (accessed 2020-01-29)). Single-orphan children may have a parent who is able to care for them; double-orphaned children do not. While many of these children are absorbed into the extended family structure, a form of alternative care which is well established in South Africa, many OACs are still placed in state institutions (Blackie Sad, Bad and Mad 9). (Kinship care is family-based care in the child's extended family or with close family friends who are known to the child. An extended family is a multi-generational family that may or may not share the same household. It includes family members who share blood relations, relation by marriage, cohabitation and/or legal relations. Kinship care, which can be formal or informal in nature, is the care for children up to the age of 18, who are, by legal definition, children "in need of care". Kinship care is a form of alternative care of a child within the child's extended family or, in some instances, with close family friends who are known to the child. Kinship carers therefore may include relatives of the child, members of the tribe or clan into which the child is born, godparents, stepparents, or any adult who has a kinship bond with a child.) This approach to placement in alternative care in South Africa must be questioned in light of the internationally accepted best interests of a child principle and it is in this vein that we consider the proposed amendments to sections 249, 250 and 259 of the CA.

Provision is made for various forms of alternative care in the CA. These options can be considered in terms of permanent and impermanent care as follows:

Permanent care

(a) National adoption

(b) Intercountry Adoption

(c) Kinship care can be considered as relatively permanent in nature (Kinship care is extraordinary because, while it is recognised as a means of alternative care, it is generally not temporary in nature. In South Africa, care of an OAC by a relative, or relatives, is common and well established. Besides a few exceptional instances, this form of care is generally not court-ordered. Kinship care is, as a rule, permanent in nature and an important form of care in South Africa).

Impermanent (temporary) care

(a) Foster care, both formal and informal (Kinship care is generally a form of informal placement. The distinguishing characteristic between kinship care and foster care in the general sense is that, except in exceptional circumstances, kinship care is not court-ordered);

(b) Child and youth care centres (CYCC; s 46(1)(a)(ii));

(c) Temporary places of safety (s 46(1)(a)(iii));

(d) Child-headed households (CHH; s 46(1)(b));

(e) Kafalah (Adoption is not recognised in terms of Islamic principles. Instead, kafalah is exercised, meaning that a child is taken care of by a family other than his or her biological family, while familial ties to the biological family remain intact).

The concept that the family forms the foundation of our society is well-established in national and international law. The family unit provides a child with a sense of security and identity. Moreover, the family as a unit plays a pivotal role in the upbringing of children, enabling them to develop to their full potential. Children who have inadequate or no parental care are clearly at risk of being denied such a nurturing environment. Harden opines as follows:

"[C]hild development can be understood as the physical, cognitive, social, and emotional maturation of human beings from conception to adulthood, a process that is influenced by interacting biological and environmental processes. Of the environmental influences, the family arguably has the most profound impact on child development." (Harden "Safety and Stability for Foster Children: A Developmental Perspective" 2004 14(1) The Future of Children: Children, Families, and Foster Care 33.)

Notwithstanding the benefits that permanent care offers and OAC, adoption is ostensibly under threat with the DSD's proposed amendments in its Third Bill. This is a disturbing factor when one considers the number of children in need of placement in South Africa, and where such placement must at all times be in the best interests of the child concerned.

The advantages offered by alternative care that is permanent in nature cannot be underestimated and national adoption undoubtedly remains a placement of priority as it ensures that, as far as is possible, the best interests of the children are met as the placement is permanent and as such, inter alia the stability and sense of belonging that comes with such permanence, allows the child to grow into his or her best self (Trow Van der Walt Intercountry Adoption and Alternative Care: A Model for Determining Placement in the Best Interests of the Child (LLD Nelson Mandela University) 2018 3).

However, national adoption rates remain low (Gerrand and Stevens "Black South Africans' Perceptions and Experiences of the Legal Child Adoption Assessment Process" Scielo (2019) http://www.scielo.org.za/scielo.php?script=scLarttext&pid=S0037-80542019000100005&lng=en&nrm=iso&tlng=en (accessed 2020-06-15)) as evidenced by the decline to only 1,033 adoptions registered adoptions in 2017 and 2018, as opposed to the 2,436 adoptions registered in the 2010 - 2011 recording period (Holmes https://www.usnews.com/news/best-countries/articles/2019-08-08/south-africastruggles-to-care-for-abandoned-babies). On the one hand social workers regard a rigorous time consuming assessment process as essential to ensure that adoption applicants are fit and proper to adopt, a factor not shared by prospective adoptive parents (Gerrand and Stevens http://www.scielo.org.za/scielo.php?script=sci_arttext&pid=S0037-80542019000100005&lng=en&nrm=iso&tlng=en). The rigorousness of the adoption assessment process is contentious and remains a hotly debated issue. A factor contributing to a low adoption rate is the cultural principle against adopting a child outside one's clan (Ntongana and GroundUp Staff "Adoption and Race: We Unpack the Issues" (2014) GroundUp https://www.groundup.org.za/article/adoption-and-race-we-unpack-issues_2294/ (accessed 2020-05-19)). In many black cultures a child is seen as, belonging to and being guided by, the ancestors that carry the same clan name. Where such child is adopted, that order is disturbed (Ntongana and GroundUp Staff https://www.groundup.org.za/article/ adoption-and-race-we-unpack-issues_2294/). The status of the alternative form of permanent care available to an OAC in terms of the CA (s 254), namely intercountry adoption, is uncertain, not least of all following the publication of the proposed amendments to sections 249, 250 and 259 of the CA. (The National Adoption Coalition states that 153 intercountry adoptions were processed in South Africa from 2017-2018 http://www.adoptioncoalitionsa.org (accessed 2019-05-31)).

Since the advent of democracy in South Africa, the discourse on a child's rights has focused on the realisation of the child as a bearer of rights (South African Human Rights Commission "Twenty-five Years of Children's Rights" (2014) https://www.sahrc.org.za/index.php/sahrc-media/news/item/58-twenty-five-years-of-children-s-rights (accessed 2017-12-07)). South Africa's commitment to this approach is evident within inter alia the provisions of the Constitution (s 28) and the CA (Preamble of the CA) and it is with the above-mentioned statistics in mind and the duty that the state bears to protect the rights of the most vulnerable members of the South African society, that serious contemplation must be given to the proposed amendments provided for Third Amendment Bill (the Children's First Amendment and Second Amendment Bills were promulgated in January 2018).

What follows is a consideration of the current procedure followed prior to the publication of the proposed amendments followed by a reflection of the proposed amendments to the three sections of the CA. In conclusion, concerns are raised about the ultimate effect such amendments will have on effecting permanent placements for OACs in need of care in South Africa.

 

3 The proposed Third Amendment Bill

3 1 The procedure

The Department of Social Department (DSD) started the consultation process on the proposal of the amendments to the CA in 2016 (South African Government "Social Development on Proposed Removal of Adoption Fees in Children's Act Amendment" (2019) https://www.gov.za/speeches/adoption-fees-10-jan-2019-0000 (accessed 2020-05-19)). Discussions of the proposed amendments at the National Child Care and Protection Forum (NCCPF) continued for a further two years (the Children's Amendment Bill and the Children's Second Amendment Bill were promulgated in January 2018 and are not the subject of the current note). The subsequent Child Care and Protection Policy (drafted by the DSD) led to the gazetting of the Third Amendment Bill (GG 42248 of 2019-02). The Bill proposes several substantial amendments to the CA, including inter alia amendments in relation to adoption. Several concerns have been raised in respect to the amendments, both substantively and with respect to the procedure followed by the DSD preceding the publication of the Bill. Whilst the DSD did consult with adoption practitioners about the amendments to the CA during 2018, sections 249, 250 and 259 remained unnoticed and were not discussed at the National Child Protection Forum meeting. In fact, those parties involved in the process first became aware of the submissions on the publishing of the Government Gazette in October 2019 and the first consultation about the three afore-mentioned provisions was on 21 November 2019 at the NCPF, just one week prior to the closing of public comments (GG 42248 of 201902). The late submission left very little time for a co-ordinated comeback from relevant parties in the adoption sector. Upon scrutiny of the documentation, it became apparent that the three sections were in fact included with the other amendments some three weeks prior to the NCPF meeting. Preceding the final additions to the Third Amendment Bill, interested parties had undergone intensive consultation with respect to the provisions proposed. However, despite allegations by the DSD to the contrary, no consultation was had with respect to the changes with respect to sections 249, 250 and 259 of the CA (Wolfson Vorster Adoption-Related Amendments to the Children's Act: The Arguments and the Elephants in the Room (2019) Daily Maverick https://www.dailymaverick.co.za/opinionista/2019-02-18-adoption-related-amendments-to-the-childrens-act-the-arguments-and-the-elephants-in-the-room/#gsc.tab=0 (accessed 202006-15)). The DSD made no effort to meaningfully engage with the adoption community regarding the implications of the proposed amendments and the impact on adoptions and adoptable children as a whole. This approach of the DSD has led to criticism, with the adoption community referring to the sudden and unexpected amendments as "an ambush" by Government (Wolfson Vorster https://www.dailymaverick.co.za/opinionista/2019-02-18-adoption-related-amendments-to-the-childrens-act-the-arguments-and-the-elephants-in-the-room/#gsc.tab=0). Criticism of the late submission has led to the suspicion by service providers that the DSD's aim was that these amendments be rushed through without the opportunity for co-ordinated opposition.

Should these amendments be promulgated, they will have a serious effect on those participating and ensuring an adoption process that meets the best interests of the child concerned. In effect, adoptions would effectively become the sole responsibility of the state's social workers. The charging of fees by professionals is already provided for in the DSD's Child Care and Protection Policy (https://www.dailymaverick.co.za/opinionista/2019-02-18-adoption-related-amendments-to-the-childrens-act-the-arguments-and-the-elephants-in-the-room/#gsc.tab=0). The role played by professionals in the effective process of adoption in South Africa at present, is vital and it is submitted that the proposed amendments will have a negative impact on adoptions in and from South Africa.

3 2 Proposed amendments

A consideration of these proposals forms the essence of this note, with respect to both the procedure followed as well as the substantive nature of the proposals. In response to civil society comments on the Bill, the DSD responded by stating that adoption is not a commercial transaction and that the amendments did not bar private social workers or attorneys from provide the adoption service (Department of Social Development "DSD Response to Civil Society Comments on the Draft Children's Amendment Bill" https://www.smartstart.org.za/dsd-response-to-civil-society-comments-on-the-draft-childrens-amendment-bill/ (accessed 2020-06-02)). This has not halted speculation as to the true intention and objective of the DSD concerning these amendments not least of all, the proposed removal of the so-called adoption fee clause (Wolfson Vorster: Proposed New Law Could Do Irreparable Harm to SA's Most Vulnerable (2019) Daily Maverick https://www.dailymaverick.co.za/opinionista/2019-12-05-adoptions-proposed-new-law-could-do-Adoptionsirreparable-harm-to-sas-most-vulnerable/ (accessed 2020-05-19)).

3 2 1 Section 249

The existing section 249 provides for the giving and receiving of fees in respect of adoption services. This section provides:

"(1) No person may-

(a) give or receive, or agree to give or receive, any consideration, in cash or in kind, for the adoption of a child in terms of Chapter 15 or Chapter 16; or

(b) induce a person to give up a child for adoption in terms of Chapter 15 or Chapter 16.

(2) Subsection (1) does not apply to-

(a) the biological mother of a child receiving compensation for-

(i) reasonable medical expenses incurred in connection with her pregnancy, birth of the child and follow-up treatment;

(ii) reasonable expenses incurred for counselling; or

(iii) any other prescribed expenses;

(b) a lawyer, psychologist or other professional person receiving fees and expenses for services provided in connection with an adoption;

(c) the Central Authority of the Republic contemplated in section 257 receiving prescribed fees;

(d) a child protection organisation accredited in terms of section 251 to provide adoption services, receiving the prescribed fees;

(e) a child protection organisation accredited to provide intercountry adoption services receiving the prescribed fees;

(f) an organ of state; or

(g) any other prescribed persons."

Currently, adoption is administered by the DSD. Social workers in the department process adoptions and the DSD also accredits adoption organisations and private social workers. According to a statement made by Oliphant, spokesperson for the department, there are accredited 102 organisations that assist the 59 social workers processing adoptions (Reynolds "Debate Rages on About Law Change That Will Make It Illegal to Charge for Adoption Services (2019) News24 https://www.news24.com/news24/SouthAfrica/News/debate-rages-on-about-law-change-that-will-make-it-illegal-to-charge-for-adoption-services-20190209 (accessed 2020 06-15)).

There is a variety of legally recognised adoptions. Consequently, the need for specialist adoption social worker service providers and professionals is required to serve the best interests of the child in processing such adoptions. The professional services of inter alia lawyers, psychologists and medical practitioners have proved to be of great assistance in ensuring the rights of the child are promoted and protected.

This proposed amendment will prohibit those service providers from charging their fees and in doing so it will not serve the interest of the children. It is, in fact, highly impractical as there will be a restriction on accessing these services which the court may need in making a decision.

The adoption fee clause amendment provides that adoption is one of the designated child protection services as stipulated in section 105 (5) of the CA (s 105(5) provides that: "Designated child protection services include-(a) services aimed at supporting- (i) the proceedings of children's courts; and (ii) the implementation of court orders; (b) services relating to- (i) prevention services; (ii) early intervention services; (iii) the reunification of children in alternative care with their families; (iv) the integration of children into alternative care arrangements; (v) the placement of children in alternative care; and (vi) the adoption of children, including inter-country adoptions; (c) the carrying out of investigations and the making of assessments, in cases of suspected abuse, neglect or abandonment of children; (d) intervention and removal of children in appropriate cases; (e) the drawing up of individual development plans and permanency plans for children removed, or at risk of being removed, from their family; and (f) any other social work service as may be prescribed.") The proposed amendment provides that section 249 of the CA is amended by the deletion of subsection (2) paragraphs (b), (c), (d), (e), (f) and (g). The legal effect hereof is that all professionals involved in the assessing and processing of adoptions, both national and intercountry adoption, would be prohibited from charging any fees in the execution of their professional services. Where an attempt is made to charge for services rendered in the adoption process would be unlawful. Adoptions would effectively become the sole responsibility of the social workers employed by the state. The fact that social workers in the employ of the DSD have unreasonably high caseloads and the serious backlogs have received much attention and concern for the children, leading to a judgment by the Gauteng High Court in Centre for Child Law v Minister of Social Development (North Gauteng High Court) Case number 21726/11.It is evident that the role played by the relevant NGOs and the private sector take great strain away from the DSD as they competently process adoptions for those parties who elect to use accredited private services. The impact of the proposed amendment will have a serious effect on adoptions, not only slowing down adoptions but potentially stopping adoptions altogether. The rationale behind this thinking is questionable especially because the adoption service fees are often calculated on a sliding scale and are not a "revenue generator" but rather to provide handling the costs of a complex process of adoption. The government presently controls the process of adoption, including placements and fees charged. Pieterse, chairperson of the National Adoption Coalition of South Africa, an umbrella organisation with over 100 members, has stated that while the national department subsidises some adoption organisations, most funding" is not comprehensive" and a no-fee legal provision will force some of the organisations to close and cut social workers (Reynolds "Law Change will Make it Illegal to Charge for Adoption Services" (2019) Legislation News South Africa https://www.bizcommunity.com/Article/ 196/717/187177.html (accessed 2020-06-15)).

The DSD avers that the proposed amendments are justified in that access to adoption processes will be made available to all, including those who are not in a position to pay the legislated professional fees incurred when professionals assist in the process. The justification for the amendment in principle is that "fees should not be charged for adoption because it is not a business but a child protection measure" (South African Government https://www.gov.za/speeches/adoption-fees-10-jan-2019-0000). The concern raised by the DSD that exorbitant fees were being charged by professionals involved in the adoption process is questionable (Wolfson Vorster https://www.dailymaverick.co.za/opinionista/2019-02-18-adoption-related-amendments-to-the-childrens-act-the-arguments-and-the-elephants-in-the-room/) specifically when considered in light of the promulgation of the Second Amendment Act (Children's Second Amendment Act, 2016) in terms of which social workers in the DSD are legally permitted to carry out adoptions as from 2017. In terms of the existing provisions of the CA, relevant professionals render their services at the capped rate as prescribed (Social and Associated Worker Act, 110 of 1978). While the state is not permitted to limit the fees charged by private social workers, all fees must be disclosed and justified at court before an adoption order can be granted (Wolfson Vorster https://www.dailymaverick.co.za/opinionista/2019-02-18-adoption-related-amendments-to-the-childrens-act-the-arguments-and-the-elephants-in-the-room/#gsc.tab=0.)

Lastly as free adoptions are currently available through the DSD thereby contradicting the argument forwarded. One is thus left questioning the true intention of the proposed new amendment. It is noted that few adoptions have been processed by the DSD.

One cannot consider the impact of the proposal without having regard to the current realities faced by social workers in South Africa, who would now be faced with the task of assessing and processing all applications for the adoption or otherwise of a child in need of care, without any form of "outside" assistance in achieving the goal of placing a child in appropriate care. Given that all amendments are expected to give effect to the best interests' principle, one has reason to be concerned. Social workers employed by the DSD and involved in the process of determining and monitoring alternative care placements have long found themselves in the unfortunate position of having large unusually high caseloads (Parliamentary Monitoring Group Foster Care System Backlog: Progress Report (2019) https://pmg.org.za/committee-meeting/28808/ (accessed 2020-05-05)). Organisational challenges have been identified as the cause for ineffectiveness among social workers currently employed by the DSD. Included in these causes are inter alia insufficient training, lack of role clarity, inadequate leadership, unrealistic expectations by the DSD, lack of resources or funding and low salaries (Nhedzi and Makofane "The Experiences of Social Workers in the Provision of Family Preservation Services" 2015 51(1) Social Work/Maatskaplike Werk 357).

It is submitted that external professionals play a positive role in ensuring that adoptions (national or abroad) are professionally and timeously processed. In light of the difficulties social workers employed the state face, the effective removal of the external professionals by the propose amendment raises a serious concern and the proposed amendment should be questioned.

3 2 2 Section 250

This section in the proposed Bill concerns those who may or may not provide adoption services in South Africa. Section 250 of the CA currently provides that:

"(1) No person may provide adoption services except-

(a) a child protection organisation accredited in terms of section 251 to provide adoption services;

(b) an adoption social worker;

(c) the Central Authority in the case of intercountry adoptions; or

(d) a child protection organisation accredited in terms of section 259 to provide intercountry adoption services.

(2) Subsection (1) does not prohibit the rendering of professional services in connection with the adoption of a child by a lawyer, psychologist or a member of any other profession."

The proposed amendment to section 250 provides that certain additions and deletions to the article's subsections must be affected. The effect of the proposed deletion of subsection 3 of section 250 prohibits the involvement of any professionals other than social workers in the adoption process. This follows the promulgation of the Second Amendment Act in terms of which social workers from the DSD are now legally permitted to perform adoptions (Children's Second Amendment Act 18 of 2016).

The reality remains that social workers are currently and understaffed in South Africa and the high caseloads that social workers carry at present, seems to make the objective of the state implausible. Few adoptions have been processed by the social workers employed by the DSD since the Second Amendment Act came into operation in 2017 (See also Wolfson Vorster https://www.dailymaverick.co.za/opinionista/2019-02-18-adoption-related-amendments-to-the-childrens-act-the-arguments-and-the-elephants-in-the-room/). This failure to process adoptions is not due to any question of legality regarding the process, but rather to the inability of already overburdened social workers to further stretch their work load. Although the CA aims to ensure the protection of children's rights and ensure that informed decisions are made in their best interests, the number of social workers employed by the DSD is inadequate to keep abreast with the constant demands they face (Trow Van der Walt Intercountry Adoption and Alternative Care in South Africa: A Model for Determining Placement in the Best Interests of the Child). This quandary is aggravated by the fact that many social workers in the DSD lack the necessary specialisation to process adoptions.

3 2 3 Section 259

Section 259 outlines those who are able to perform international adoptions and provides:

"(1) The Central Authority may, on application by a child protection organisation-

(a) accredit such organisation to provide inter-country adoption services; and

(b) approve adoption working agreements contemplated in section 260, as long as the prescribed requirements are met.

(2) The Central Authority may accredit a child protection organisation to provide inter-country adoption services for such period and on such conditions as may be prescribed.

(3) A child protection organisation accredited in terms of this section to provide inter-country adoption services-

(a) may receive the prescribed fees and make the necessary payments in respect of inter-country adoptions; and

(b) must annually submit audited financial statements to the Central Authority of fees received and payments made.

(4) Subsection (1) does not prohibit the rendering of professional services in connection with the adoption of a child by a lawyer, psychologist or a member of another profession."

An amendment to section 259 proposes that the CA be amended to ensure that only state social workers, who are already inundated with cases and untrained in adoptions, would be able to facilitate adoptions.

As regards the effect the amendments will have on the placement of OACs in alternative care, the state referred to section 22 of the Constitution of the Republic of South Africa, maintaining that the proposed amendments do not prohibit private social workers and social workers at Child Protection Organisations from providing adoptions but rather only prohibits them from charging fees as provided for in the principal Act. It is submitted that the consequence will be the same as no organisation can exist without income. The importance of professional and cautious screening of prospective adoptive parents is of utmost importance.

 

4 Constitution

The Constitution provides for the robust protection of children's rights. Section 28 of the Constitution ensures that the "best interests of the child" are paramount in any matter concerning the child. The Constitution expressly provides for a child's right to family and parental care, and to protection of such rights (s 28(1)(b)). Adoption has been recognised as a means of providing the child with care and protection that is unsurpassed by any other form of permanent placement. Louw confirms this approach stating that

"[adoption], more so than any other placement option, must thus in a given case be the best way of securing stability in that particular child's life". (Louw "Intercountry Adoption" in Boezaart (ed) Child Law in South Africa (2017) 184)

The Courts have confirmed that a child's right to family care or parental care as provided for in the Constitution includes the right to be adopted (Fletcher v Fletcher 1948 (1) SA 130 (A) 143. See also Fraser v Naude 1999 (1) SA 1 (CC) 5B-C,1998 11 BCLR 1357 (CC); Jackson v Jackson 2002 (2) SA 303 (SCA) 317 par F). In the constitutional decision of the Minister for Welfare and Population Development v Fitzpatrick (s 259), considered the right of a child to be adopted by a non-South African citizen. Given that the best interests of a child are paramount in all matters concerning a child, Goldstone stated that section 28(1) of the Constitution did not constitute an exhaustive list of children's rights (par 17), and that the provision for the best interests' principle in section 28(2) created a right of a child that had to be interpreted beyond the reach of the provisions in section 28(1). This includes the subjective right of and OAC to be adopted.

 

5 International law

International policy and national legislation have recognised adoption as a preferred solution where natural parents or guardians are unable or unwilling to provide a home for the child concerned (UNGA Guidelines for the Alternative Care of Children adopted by the General Assembly (24 February 2010) A/RES/64/142. The South African Children's Act 38 of 2005 recognises the right of a child to grow up in a family environment and in an atmosphere of love, happiness and understanding. The Hague Convention recognises the right a child has to family care and further provides that intercountry adoption may offer the advantage of a permanent family to a child for whom a suitable family cannot be founds in his or her state of origin. See South African Law Commission Discussion Paper 103 Project Review of the Child Care Act (2002) 1181). International policy (and national legislation) recognises adoption as a preferred solution where natural parents or guardians are unable or unwilling to provide a home for the child concerned. The placement of a child is an obligation that rests on the state and the Constitution guarantees that when growing up in a family environment is not a viable option, appropriate placement of such child must be sought. The primary aim of adoption is to provide a child who cannot be cared for by his or her own parents with a permanent family. The Declaration on Social and Legal Principles Relating to the Protection and Welfare of Children with special reference to Foster Placement and Adoption Nationally and Internationally (1986 Declaration) envisages that the first measure of alternative care should resemble, as far as is possible, a "typical" family environment, and, only when such an environment is unavailable, should regard be had to other "so-considered" less desirable options. This is reflected in all international Declarations and Conventions, which include inter alia, The Convention on the Rights of the Child (ratified by South Africa in 1995), The African Charter on the Rights and Welfare of the Child (ratified by South Africa in 2000) and The Hague Convention on the Protection of Children and Co-operation in respect of Inter-country Adoption (ratified by South Africa in 2003).

 

6 Conclusion

Pro-amendment contenders have stated that the amendments related to child adoption aim to make adoption a free service for all South Africans. The proposed national legislation can only make it more difficult for potential adoptive parents to adopt an OAC. Consequently, the most vulnerable children in our society are denied an opportunity to enjoy a better life. The best interest principle appears to have received little if no attention of the drafters of the amendments. The best-interests principle has been known and used since the nineteenth century (Caufmann, Shulman, Bechtold and Steinberg "Children and the Law" in Bornstein, Leventhal and Lerner (eds) Handbook of Child Psychology and Developmental Science Vol. 4: Ecological Settings and Processes in Developmental Systems 7ed (2015) 616 653). The best interests of the child should be protected in every decision concerning a child's placement. It is submitted that the principle itself, albeit not the sole concern, should moderate any mechanical application of conflicting legal rules. The concept that the family forms the foundation of our society is well established in national and international law (Department of Social Development Republic of South Africa Green Paper on Families: Promoting Family Life and Strengthening Families in South Africa (2011) 73. See also Department of Social Development Republic of South Africa White Paper on Families in South Africa (2013) 3). The family unit provides a child with a sense of security and identity (Moyo The Relevance of Culture and Religion to the Understanding of Children's Rights in South Africa (LLM dissertation, University of Cape Town) 2014 15; Amoateng, Richter, Makiwane and Rama Describing the Structure and Needs of Families in South Africa: Towards the Development of a National Policy Framework for Families (2004) 4). Moreover, the family as a unit plays a pivotal role in the upbringing of children, enabling them to develop to their full potential (Amoateng et al Describing the Structure and Needs of Families 4), opine when referring to the importance of a "family" as follows: "Families are the primary source of individual development and they constitute the building blocks of communities"). The plight of large numbers of children needing family, parental or alternative care is characteristically common in poorer nations. Promoting adoption as a means of permanent placement for a child could play a pivotal role in connecting a child to a safe and nurturing family relationship to last a lifetime. Within the range of options considered to be appropriate alternative care, national adoption is generally the first choice, an approach which is founded on the principle that the child concerned is granted the opportunity to develop in a secure and permanent family environment within the child's country of origin (Kinship care is well established in South Africa and is akin to traditional family/parental care in that the child concerned is raised within a family environment characterised by the stability found in permanent care).

National adoption and international adoption may be viable placement options for children left without parental care. Statistics indicate that a significant number of South African orphans fall into this category, and it is apparent that policies and laws must be set in place to afford such children necessary protection and care. The overall approach of the legislature in South Africa in the past decade has changed from a parent-centred approach to a child-centred approach and judicial decisions have confirmed the paramountcy of a child's best interests as an accepted principle of South African law.

The proposed amendments result in the further burdening of already overworked social workers employed by the DSD and the proposed amendments to sections 249, 250 and 259 appear to go in the face of the duty of the state to ensure that it does everything in its capacity to safeguard a child's rights and guarantee that these rights are protected and promoted. This includes the right to family or parental care where possible. The proposed amendment allegedly aims to make adoptions more accessible to those wishing to adopt an OAC, but the consequential reality is rather the total shut down of all adoptions in South Africa.

With respect to adoption services, the DSD opined that

"[a]doption service should not be commodified but be viewed as a means of protecting the best interests of children by placing them with permanent and suitable families".

The recognition of the importance of placing children in a permanent family environment if further confirmed in section 229 of the CA, which provides the purposes of adoption as being:

"to protect and nurture children by providing a safe, healthy environment with positive support; and to promote the goals of permanency planning by connecting children to other safe and nurturing family relationships intended to last a lifetime." (South African Government https://www.gov.za/speeches/adoption-fees-10-jan-2019-0000)

No one could debate the importance of the benefit of placing an OAC in an environment of permanence. It is submitted with respect that the proposed amendments are not achieving this aim. The importance of permanence in creating a sense of stability and of belonging in an OAC child's life cannot be underestimated, and it is submitted that where no appropriate alternative care can be found in the child's country of origin, namely South Africa, seeking a permanent placement for a child is a priority.

The proposed national legislation will make it more difficult for potential adoptive parents to adopt a South African OAC and it is apparent that the proposed amendments would bring an end, or at least seriously decrease adoption and more specifically intercountry adoption. Such a policy denies the most vulnerable children in our society of an opportunity to enjoy a better life. When considering the placement of a South African child by intercountry adoption, one must question when, and to what extent, the "best interests of a child" principle can play a role in giving more children the chance to enjoy a permanent family life within a family environment. To be effective, the stringent rules involved in the processing of intercountry adoptions is at present largely reliant on the assistance of professional services. It appears the state has chosen to overlook the potential placement of a child abroad, even although such placement could potentially serve the best interests of the child concerned. The proposed amendments will curtail, if not cease, these services. In effect the rights of children to permanent alternative care through adoption will cease.

Glynis van der Walt

Nelson Mandela University

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CASES

 

Judicial guidance on the application of section 49 of the consumer protection act 68 of 2008 - Van Wyk t/a Skydive Mossel Bay v UPS SCS South Africa (Pty) Ltd [2020] 1 All SA 857 (WCC)

 

 

1 Introduction

"A significant portion of consumer law development can indeed be ascribed to legislative responses to business' disclaimers of accountability for negative consequences attendant upon their dealings with consumers." (Van Eeden and Barnard Consumer Protection Law in South Africa (2017) 3)

In South Africa, the legislature's response to the negative consequences resulting from the pervasive use of disclaimers by suppliers has been to regulate the use of these terms through the enactment of a number of provisions in the Consumer Protection Act 68 of 2008 (CPA), including sections 48, 49 and 51. A number of publications have considered the meaning of these provisions and the impact they may have on the use of disclaimers in consumer contracts. (See, for instance, Naudé "The Consumer's 'Right to Fair, Reasonable and Just Terms' Under the New Consumer Protection Act in Comparative Perspective" 2009 SALJ 505; Mupangavanhu "Fairness as a Slippery Concept: The Common Law of Contract and the Consumer Protection Act 68 of 2008" 2015 De Jure 116; Mupangavanhu "Exemption Clauses and the Consumer Protection Act 68 of 2008: An Assessment of Naidoo v Birchwood Hotel 2012 6 SA 170 (GSJ)" 2014 PELJ 1168; Tait and Newman "Exemption Provisions and the Consumer Protection Act, 2008: Some Preliminary Comments" 2014 35(3) Obiter 629.) As a consequence of the widespread use of disclaimers and the adverse consequences they may hold for consumers, any judicial pronouncement on the impact of the CPA on these clauses is significant. In Van Wyk t/a Skydive Mossel Bay v UPS SCS South Africa ([2020] 1 All SA 857 (WCC) (Skydive v UPS)), the Western Cape High Court was afforded the opportunity to consider the impact of aspects of section 49 specifically on the use of a clause in a consumer agreement excluding the risk or liability of suppliers (referred to as an "exemption clause" in this note).

Section 49 of the CPA applies to four distinct types of clause enumerated in section 49(1) - namely, clauses limiting the risk or liability of suppliers in respect of any other person; clauses constituting an assumption of risk or liability by the consumer; clauses imposing an obligation on the consumer to indemnify the supplier for any cause; and clauses requiring a consumer to acknowledge a particular fact. As indicated, in Skydive v UPS, the contentious clause was one excluding the risk or liability of the supplier. The focus of this note then is on the interpretation and application by the court in Skydive v UPS of the relevant provisions of section 49 of the CPA to an exemption clause.

 

2 Facts and legal question

The plaintiff, who operates a skydiving business under the name "Skydive Mossel Bay", instituted action against the defendant for payment of an amount of R386 140,30 plus interest (par 1). The plaintiff had sent an aircraft engine to the United States of America (USA) for an overhaul and subsequently obtained the services of the defendant to collect and transport the engine from the USA to an address in George, South Africa. In terms of the agreement between the parties, the engine was delivered to the agent of the defendant, who had accepted delivery (par 5). The defendant failed to deliver the engine as agreed or at all and in fact informed the plaintiff that the engine had been damaged while in transit resulting in a total loss to the value of the amount claimed (par 6 and 32).

In securing the services of the defendant for the transport of the engine, the parties had negotiated via email. As part of the negotiating process, the defendant had required the plaintiff to complete and sign a credit application form, which was duly done and provided to the defendant (par 27). Although the plaintiff disputed whether this credit application form signed by him (and the terms it contained) formed part of the agreement between the parties, the plaintiff was "constrained to concede that it [the credit application] was a requirement for the agreement between himself and the defendant, and for the delivery of the aircraft engine to eventuate, for him to sign the credit application" (par 66) and that "no agreement could have come into existence without the [p]laintiff having signed the credit application" (par 67). The relevance for current purposes of whether the credit application formed part of the agreement between the parties is that the form signed by the plaintiff contained an exemption clause excluding the liability of the defendant in respect of the plaintiff in certain instances. It is on this clause of the contract excluding his liability that the case of the defendant largely rested. The defendant raised a number of defences, including a special plea in respect of the jurisdiction of the court, but for current purposes the exclusion of liability and the application of section 49 to such an exemption clause are the pertinent issues. Another defence raised - that the CPA does not apply to the agreement between the parties because it is a credit agreement - is considered later.

The defendant relied on the exemption clause contained in the credit application form and signed by the plaintiff. The clause provided that the defendant shall not be liable in respect of the plaintiff for any loss or damage of the goods transported, be it on the grounds of a breach of contract or due to negligence, unless the goods were in the actual possession of the defendant at the time of the loss occurring. It was the defendant's case that the engine was not in the actual possession of the defendant at the time of the loss and that the defendant was therefore not liable for the loss, as provided for in the contract (par 11). In the alternative, the defendant argued that should it be found that the engine was in the possession of the defendant at the time of the loss, then the defendant cannot be held liable for the loss as the contract excluded the liability of the defendant for such loss unless the defendant was found to be grossly negligent - in respect of which the defendant pleaded that it was not negligent, alternatively not grossly negligent, nor that its negligence caused the damage to the engine (par 12).

At this point, it is relevant to point out that the plaintiff's view in respect of the completed and signed credit application form was that it was

"a formality required of the [p]laintiff for the purpose of allocation to him, by the [d]efendant, of an account number (which was a requirement of the US authorities), and not for the purposes of seeking any credit." (par 20 and 72)

The plaintiff testified that he never had the intention of entering into a credit agreement with the defendant nor to exclude the liability of the latter for the loss the plaintiff had suffered but, in completing and signing the credit application form, he had hoped to "facilitate and expedite the process" of having the aircraft engine returned to him from the USA (par 65). It was the version of the plaintiff that the terms of the relevant exemption clause were not pointed out to him nor were they explained to him before signing the document and he did not understand these terms and conditions to be incorporated into or be part of the contract between the parties (par 21 and 43). The plaintiff, however, during cross-examination had to acknowledge:

"he had agreed to the terms and conditions therein, and that all the business would be governed by and be subject to the terms of the standard trading conditions and the terms of the conditions of carriage printed overleaf, and that he had agreed to be bound thereby." (par 71)

Perhaps foreseeing that the completed credit application would be found to constitute the agreement between the parties (or at least be a fundamental part thereof), the plaintiff argued that the agreement between the parties was regulated by the CPA and that, as the agreement between the parties incorporated terms:

"purporting to limit the risk of liability of the [d]efendant, the [p]laintiff was at no relevant time aware thereof and these clauses were not drawn to the [pjlaintiffs attention by the [d]efendant, in a manner and/or form satisfying the requirements of section 49(3) to 49(5) of the CPA." (par 7 and 68)

The plaintiff thus asked for an order in terms of section 52(4)(a)(ii) of the CPA to sever from the agreement between the parties the clause limiting the risk of liability of the defendant (par 8).

In response, the defendant denied that the CPA applied to the agreement and submitted that the plaintiff, as a businessperson and the owner of a skydiving business, had signed the agreement and should accordingly be held to the terms thereof (par 15). Also, the defendant averred that the clauses in question were written in plain language, were "sufficiently conspicuous in the circumstances to attract the attention of an ordinary alert consumer, such as the [p]laintiff" (par 16), and that

"the [p]laintiff, as a businessman and owner of a skydiving business, would have understood the meaning and import of the terms and conditions of the agreement, and specifically those limiting the liability of the [d]efendant." (par 16)

The court held that the credit agreement did indeed form an integral part of the written agreement that existed between the parties (par 69). The question for decision then was simply whether the agreement between the parties complied with the requirements of the CPA (par 70). Stated differently, did the clause in the agreement purporting to limit the liability of the defendant in respect of the plaintiff comply with the requirements contained in section 49(3) to (5) of the CPA?

 

3 Finding of the court

The court found that the defendant was not entitled to rely on the exemption clause in the agreement and consequently made an order in terms of section 52(4)(a)(ii) of the CPA severing the clause from the contract. Consequently, the defendant was held to be liable to the plaintiff in the amount claimed because of the loss of the engine the former had undertaken to transport from the USA and to deliver to the plaintiff in George (par 95 and 116).

 

4 Reasoning of the court and discussion

The court held that the relevant clause of the agreement between the parties fell within the ambit of agreements to which section 49(1)(a), (b) and (c) are applicable, as the clause on which the defendant relied clearly sought to limit exposure to, or indemnify the defendant against, any liability for damages sustained by the plaintiff due to the loss of the aircraft engine (par 89). Having concluded thus, the court considered the purpose of section 49 and then analysed it with a view to ascertaining the legal obligations imposed by the section and how these obligations in turn were, or were not, complied with in the context of the particular facts of this case.

The relevant provisions of section 49 read as follows:

"(1) Any notice to consumers or provision of a consumer agreement that purports to-

(a) limit in any way the risk or liability of the supplier or any other person;

(b) constitute an assumption of risk or liability by the consumer;

(c) impose an obligation on the consumer to indemnify the supplier or any other person for any cause; or

(d) be an acknowledgement of any fact by the consumer, must be drawn to the attention of the consumer in a manner and form that satisfies the formal requirements of subsections (3) to (5).

(2) ...

(3) A provision, condition or notice contemplated in subsection (1) or (2) must be written in plain language, as described in section 22.

(4) The fact, the nature and effect of the provision or notice contemplated in subsection (1) must be drawn to the attention of the consumer-

(a) in a conspicuous manner and form that is likely to attract the attention of an ordinary alert consumer, having regard to the circumstances; and

(b) before the earlier of the time at which the consumer-

(i) enters into the transaction or agreement, begins to engage in the activity, or enters or gains access to the facility; or

(ii) is required or expected to offer consideration for the transaction or agreement.

(5) The consumer must be given an adequate opportunity in the circumstances to receive and comprehend the provision or notice as contemplated in subsection (1)."

The court expressed the fundamental purpose of section 49 as one of ensuring improved access to quality information, which, in turn, will allow consumers to make informed choices based on individual circumstances (par 80). The court later emphasised the importance of informing the consumer "properly, and in practical terms, ... where the provisions in an agreement as stated in subsections (49)(1)(a)-(d) would be applicable" as it would enable consumers to understand the nature and import of the clauses referred to in section 49(1)(a)-(d) when used in a contract (par 85). As a result, consumers would be protected from "a situation where the consumer is caught off-guard, or where a consumer would be tripped up by an unscrupulous or indifferent supplier" (par 88). It is exactly for this reason, the court states, that section 49 was "necessary and long overdue" (par 86). Section 49 serves to ameliorate "the unjust and unfair application of the caveat subscriptor rule" (par 81) and also to "prevent the formalistic application and harsh consequences thereof, as happened in Afrox Healthcare Bpk v Strydom 2002 6 SA 21 (SCA), which applied the principle that was laid down in George v Fairmead (Pty) Ltd 1958 2 SA 465 (a)" (par 82). (The principle enunciated by the Appeal Court in the latter case provides that when a person is required to append his or her signature to a document, the person assents to whatever words appear above such signature and a failure to familiarise himself or herself with the contents of such document cannot serve later to form the basis of a claim of iustus error (472 A-473 A).)

Section 49 (applied in the present context and excluding the obligations imposed by subsection (2), which are not relevant for current purposes) provides for four distinguishable obligations with which a supplier must comply in order for a clause falling within the ambit of section 49(1)(a)-(d) to pass the so-called incorporation requirements set out in section 49(3), (4) and (5) (see Naudé 2009 SALJ 505, as well as Tait and Newman 2014 Obiter 632-636). These are that the clause: (1) must be written in plain language (s 49(3)); (2) that the clause must be drawn to the attention of the consumer in a conspicuous manner (s 49(4)(a)); (3) that the consumer's attention must be so drawn to the clause before the advent of the actions specified in section 49(4)(b); and (4) the consumer must be given an adequate opportunity to receive and comprehend the clause (s 49(5)). (See also Naudé 2009 SALJ 508 and Naudé "Section 49" in Naudé and Eiselen A Commentary on the Consumer Protection Act (Original service, 2014) 49-2. The learned author refers to three requirements, reading the provisions of section 49(4)(a) and (b) as one requirement consisting of two aspects. It is submitted that nothing turns on these slightly different approaches.)

4 1 Section 49(4)(a) and the requirement of conspicuousness

Of particular relevance in the present context is the requirement posed in section 49(4)(a). As indicated, section 49(4)(a) requires that the fact, nature and effect of the relevant clause are to be drawn to the attention of the consumer in a conspicuous manner and form likely to attract the attention of an ordinarily alert consumer, having regard to the circumstances.

In this regard, the court stated that section 49 imposes an obligation on a supplier, wishing to rely on an exemption clause, "to explain the existence, the content and the consequences of such clauses" to the consumer (par 83). It is submitted that the words "existence", "content" and "consequences" are a clearer and simpler version of the terms used in section 49(4)(a) -namely, "fact", "nature" and "effect" - and may assist suppliers in better understanding what is expected of them when making use of an exemption clause.

Noteworthy is the fact that the court stated that suppliers are to ensure these aspects are to be explained to the consumer. Requiring the clause to be explained to the consumer gives rise to the question whether it is the duty of the supplier in a one-on-one type situation to explain verbally to a consumer the fact, nature and effect of the exemption clause. Practically, this may certainly not be possible in a vast majority of situations and to read such a meaning into the provision may well be an "insensible or unbusinesslike" interpretation. In this regard, in Natal Joint Municipal Pension Fund v Endumeni Municipality (2012 4 SA 593 (SCA)), the SCA in setting out the proper approach for interpreting legal texts, including legislation and contracts, stated the following:

"Whatever the nature of the document, consideration must be given to the language used in the light of the ordinary rules of grammar and syntax; the context in which the provision appears; the apparent purpose to which it is directed and the material known to those responsible for its production. Where more than one meaning is possible each possibility must be weighed in the light of all these factors. The process is objective not subjective. A sensible meaning is to be preferred to one that leads to insensible or unbusinesslike results or undermines the apparent purpose of the document. Judges must be alert to, and guard against, the temptation to substitute what they regard as reasonable, sensible or businesslike for the words actually used. To do so in regard to a statute or statutory instrument is to cross the divide between interpretation and legislation." (par 18)

The dictionary meaning of "explain" means "to tell somebody about something in a way that makes it easy to understand" (Wehmeier Oxford Advanced Learner's Dictionary of Current English (2005) 513) and to "tell", in turn, means "to give information to somebody by speaking or writing" (Wehmeier Oxford Advanced Learner's Dictionary of Current English 1522). Considering these meanings, it seems that the court should not be understood to require anything more of a supplier, in terms of section 49(4)(a), than for the supplier to provide the consumer with information - in a conspicuous manner and form and which may be in writing - about the existence, content and consequences of the relevant exemption notice or clause.

The court in casu proceeded to state that the CPA "now clearly places a legal duty upon a supplier of goods or services to bring such clauses clearly and unambiguously to the attention of a consumer when it concludes a transaction with such a consumer" to which the CPA applies (par 84); the court explained that before the CPA came into effect such a legal duty only existed if the clause was considered to be "unexpected" in the particular contract (see par 83 and Afrox Healthcare Bpk v Strydom supra par 36; Hartley v Pyramid Freight (Pty) Ltd t/a Sun Couriers 2007 (2) SA 599 (SCA); Mercurius Motors v Lopez 2008 (3) SA 572 (SCA); see also the discussion in Christie and Bradfield Christie's The Law of Contract in South Africa (2011) 181-186). The benefit introduced by section 49(4)(a) specifically is to require that an exemption clause be brought to the attention of the consumer whenever it is sought to be incorporated into an agreement between the supplier and the consumer and not just in cases where it might be considered, for instance, to be unexpected.

It then seems clear that the expression used by the court for the supplier to explain the existence, the content and the consequences of an exemption clause to the consumer, means to bring "such clauses clearly and unambiguously to the attention of the consumer" (par 84). The court thus understands the duty imposed by section 49(4)(a) to require that a supplier must first provide the consumer with enough information so as to be aware of the existence of the exemption clause. The court further explains that such a clause cannot be

"concealed in an obscure and opaque section of the agreement which the consumer is not aware of, or in a provision of an agreement which would be meaningless to the ordinary consumer. The supplier must be open, transparent, and honest in its dealings with a consumer, if it wants to rely on such a provision in a consumer agreement." (par 87)

Section 49(4)(b) requires that the bringing of the exemption clause to the attention of the consumer must be done before the agreement is concluded, takes effect or the consumer starts to engage in an activity as a consequence of the transaction (par 87).

As indicated, the court expressed the view that one of the purposes of section 49 is to prevent a situation where a consumer is caught unawares of the existence of such a clause or notice by an indifferent or unscrupulous supplier and that may as a result lead to undue hardship and prejudice "if not properly explained or brought to the attention of the consumer" (par 88). The court found:

"The [p]laintiff was furthermore presented with two full pages, which was not very conspicuous or clearly delineated, and in relation to which no effort was made to draw [pjlaintiffs attention to any of the provisions. It was furthermore written in extremely small font, which even this court on the original document found extremely difficult to read, and which contains the very clauses mentioned in section 49(1), against which the act seeks to protect the consumer." (par 89)

Naudé (in Naudé and Eiselen A Commentary on the Consumer Protection Act (Revision service 5, 2020) 49-3) points out that it is unclear what would be regarded as sufficiently conspicuous, but that if the relevant clause "is printed in contrasting typeface close to the primary terms of the contract, and must therefore be noticed by any consumer who reads the primary terms, this may be sufficient." One may argue that where a supplier has drawn the consumer's attention to the clause in a manner such as by physically pointing it out in the contract and specifically then verbally explaining or mentioning it, such action should be considered sufficiently conspicuous for purposes of the CPA, irrespective of where in the contract the exemption clause appears and in what typeface it is. (Of course, proving such a course of action may potentially pose problems for the supplier.) Drawing the clause to the attention of the consumer in a conspicuous manner does not mean that the supplier is obliged orally to explain the clause, its content and consequences to the consumer but, if this is done, this should in all but the most exceptional cases constitute compliance with the requirement that the clause or notice is to be drawn to the attention of the consumer in a conspicuous manner.

In the situation of, for example, a shopping mall where a notice board is employed to convey the exemption clause, different techniques will have to be employed and suppliers must carefully consider the manner and form used to ensure that the exemption clause is conspicuous. Suppliers must think of: the size of the notice board and the font size used for writing the clause; where and how the notice board and the clause thereon are positioned (see Hanson v Liberty Group Ltd (4633/2009) [2011] ZAGPJHC 195); whether the notice is in a well-lit place (see Naidoo v Birchwood Hotel supra); as well as the correct use of headings (see Stearns v Robispec (Pty) Ltd (27949/2017) [2020] ZAGPJHC).

The whole notice (understood here to be terms and conditions including the exemption clause, as well as other information, often written on a notice board and usually placed at the entrance to a facility such as a shopping mall) may be very conspicuous while the exemption clause is hidden. In this regard, in Stearns v Robispec (Pty) Ltd (supra), the court found that although the notice containing the exemption clause was "prominently displayed" (par 31), the "disclaimer should be pertinently brought to the attention of the consumer and not by an inconspicuous clause" (par 32). (It must be noted that this case deals with the use of an exemption clause, but does not consider the application of the CPA to such clause.) Simply put, a supplier may have a large notice board that is very conspicuous in itself, but when the notice board contains a variety of information such as trading hours and that the keys to the safe are not kept on the premises, the exemption clause may easily be hidden inconspicuously in the midst of this information.

However, it is not just the fact (existence) of the exemption clause that must be made conspicuous; section 49(4)(a) requires also that the nature (content) and the effect (consequences) of the exemption clause be brought to the attention of the consumer. The wording of the clause or notice must be in a format and manner that enables the consumer to understand and appreciate the content and consequences of such a clause or notice (see also Van Eeden and Barnard Consumer Protection Law in South Africa 245). An exemption clause may be very conspicuous without the content or consequences necessarily being so. Ensuring that the existence of the exemption clause is made conspicuous is not the same as ensuring the content and consequences of the exemption clause are made conspicuous. It is suggested that the court in casu was sensitive to this - hence the emphasis on suppliers having to be open, transparent and honest in their dealings with a consumer. As the existence of the clause must be conspicuous to a reasonably alert consumer, so too must the content and consequences thereof be easy to ascertain. It may entail, depending on the context, that the exemption clause must, at a first reading and even a cursory one at that, inform the consumer that certain risks are imposed on the consumer or certain liabilities of the supplier are limited or excluded. This may often be the case. In Stearns v Robispec (Pty) Ltd (supra), the court was of the view that the exemption clause contained in the notice and which read "Pick n Pay will not be held responsible for any loss, damage or injury sustained on its premises" (par 30) was "simple, unambiguous and makes it plain that the defendant will not be liable for any loss, damage or injury sustained by anyone on its premises" (par 26). In this matter, the content and consequences of the clause were conspicuous; however, the fact or existence of the clause was found to be inconspicuous. On the other hand, the opposite may also be the case. In Skydive v UPS, for instance, the court said about the exemption clause in this matter:

"I am furthermore in agreement with the submission that even the most experienced business person is unlikely to understand the nature and effect of the clauses in question, without explanation." (par 93)

Clearly, the content and consequences of the exemption clause were not conspicuous, clear and transparent. Ensuring that the content and the consequences of an exemption clause are conspicuous must of necessity pertain to the language employed by the supplier in the clause, which makes the interplay between this requirement and the plain and understandable language requirement contained in section 49(3) particularly relevant.

Enabling the consumer to understand the contents and appreciate the consequences of an exemption clause is largely dependent upon the language used - hence the requirement in section 49(3) that the clause or notice must be written in plain and understandable language as provided for in section 22 of the CPA (par 85). (For more on plain language see the discussion by De Stadler Consumer Law Unlocked (2013) 104-112, as well as Stoop "Section 22" in Naudé and Eiselen A Commentary on the Consumer Protection Act (Revision service 3, 2018) 22-1 -22-17. See also Otto "A Consumer's Right to Plain Language and to be Informed in an Official Language That He Understands as Required by the National Credit Act: Standard Bank of South Africa Ltd v Dlamini 2013 1 SA 219 (KZD)" 2014 THRHR 162-163; Newman "The Application of the Plain and Understandable Language Requirement in Terms of the Consumer Protection Act: Can We Learn From Past Precedent?" 2012 33(3) Obiter 637; Louw "Simply Legal" 2011 De Rebus 22-25; Gouws "A Consumer's Right to Disclosure and Information: Comments on the Plain Language Provisions of the Consumer Protection Act" 2010 SA Merc LJ 79.)

At the heart of the right to plain and understandable language is the right to information and disclosure. Receiving information in plain and understandable language improves consumer awareness, informed decision-making and greater consumer responsibility (Stoop in Naudé and Eiselen A Commentary on the Consumer Protection Act 22-2). The learned author points out that the requirement of plain language promotes procedural fairness in the process of contracting, thereby enabling "consumers to look after their own interests when dealing with suppliers" (Stoop in Naudé and Eiselen A Commentary on the Consumer Protection Act 22-2-22-3). Plain language facilitates transparency, which is vital to procedural fairness (Stoop in Naudé and Eiselen A Commentary on the Consumer Protection Act 22-3). The critical role of plain language in the context of conveying information to the consumer to make the existence, content and consequences of an exemption clause conspicuous cannot be over-emphasised. Making language plain is not as plain as it may sound and Stoop (in Naudé and Eiselen A Commentary on the Consumer Protection Act 22-5-22-10) points out various problematic aspects with the definition of plain language and its implementation. For a notice or document to be in plain language requires, among other things, that a consumer understand the content of a clause and its effect on the consumer. Stoop (in Naudé and Eiselen A Commentary on the Consumer Protection Act 22-7) states that "the consumer must at least clearly understand the legal consequences of a document or terms, and its express and implied meaning". In casu, the court stated in the context of the plain language requirement that it

"places an obligation on a supplier to properly, and in practical terms, inform a consumer where the provisions in an agreement as stated in subsections (1 )(a)-(d) would be applicable." (par 85)

It is not immediately clear exactly what the court is referring to when it talks of where the relevant provisions would be applicable. It may be that the court is referring to the potential legal consequences that an exemption clause may hold for the consumer and that, as explained above, the consumer must at least be able to understand and appreciate the legal consequences of such a clause.

The argument by the defendant that the plaintiff is an experienced businessman, and thus should have been aware of the exemption clauses in the agreement (par 90), was rejected by the court when it stated that a supplier cannot be exempted from the obligations imposed by the CPA (par 91), which obligations the court found to be "absolute" (par 93). It does not follow, according to the court, that even people experienced in business would necessarily expect this type of clause in a particular context (par 92). As mentioned, the court expressed the view that even an experienced businessperson would have been unlikely to understand the clauses of the agreement in question, without explanation. (The clauses in question were not quoted in the judgment, thus not allowing for a consideration thereof.)

From the above, it is clear that the formal requirements contained in section 49(3) to (5) are to be tested objectively and that the level of education and experience of a consumer will not be considered as factors influencing that determination.

4 2 Section 49 and credit agreements

In a final attempt by the defendant to avoid liability, it was argued that in terms of section 5(2)(d) of the CPA, the Act was not applicable to the agreement as it was in fact a credit agreement, and therefore subject to the provisions of the National Credit Act 34 of 2005 (NCA). Section 5(2)(d) of the CPA provides that the CPA does not apply to a transaction if it is a credit agreement in terms of the NCA, "but the goods or services that are the subject of the credit agreement are not excluded from the ambit of this Act". The court held that the agreement between the parties did constitute a credit agreement, but what was at stake here was the supply of a service for consideration, and that service - the transportation of an aircraft engine -was not excluded from the ambit of the CPA in terms of section 5(2)(d) (par 97-98).

Section 5(2)(d) seems to provide a relatively simple formula for determining whether the CPA or the NCA applies in a context where goods or services are supplied in terms of a credit agreement. However, a number of authors have pointed out that this is not as simple as it may seem. (See for instance Melville and Palmer "The Applicability of the Consumer Protection Act to Credit Agreements 2010 SA Merc LJ 272; Stoop "The Overlap Between the Consumer Protection Act 68 of 2008 and the National Credit Act 34 of 2005: A Comparison with Australian Law" 2014 THRHR 135; De Stadler Consumer Law Unlocked 14; Otto, Van Heerden and Barnard "Redress in Terms of the National Credit Act and the Consumer Protection Act for Defective Goods Sold and Financed in Terms of an Instalment Agreement" 2014 SA Merc LJ 247; De Stadler "Section 5" in Naudé and Eiselen Commentary on the Consumer Protection Act (Original service, 2014) 5-32).

In the specific context of the application of section 49, De Stadler in Naudé and Eiselen Commentary on the Consumer Protection Act (Revision service 1, 2016) (5-33) submits that Part G of the CPA, which is the part providing for the consumer's right to fair, just and reasonable terms and conditions and includes section 49, does not apply to credit agreements. Melville and Palmer also suggest (2010 SA Merc LJ 274-275) that section 49 of the CPA would relate to the agreement for the supply of goods or services and would not apply to a credit agreement. The learned authors argue (2010 SA Merc LJ 274 and 278) that if the credit agreement and the agreement for the supply of goods or services (for eg., a sale agreement) are contained in separate agreements then the NCA and CPA may apply to the two agreements respectively - the NCA to the credit agreement and the CPA to the agreement of sale (see also Stoop 2014 THRHR 136). But what if there is one document containing both? Melville and Palmer (2010 SA Merc LJ 274) suggest that where the two agreements are contained in the same document, then the NCA would apply.

It is not clear why (only) the NCA should apply where a single document contains both credit agreement and agreement of purchase and sale (or agreement for the provision of a service, as in casu). Melville and Palmer (2010 SA Merc LJ 274) themselves suggest that "[t]o identify those CPA provisions that do not apply to transactions falling within the NCA, one must start by deciding whether a provision relates to the transaction itself or to the goods and services supplied in terms thereof. The NCA applies to the former, and the CPA applies to the latter" (2010 SA Merc LJ 274). Such an approach, it is submitted, will allow for an assessment on whether a specific clause in the agreement (and when applied in a specific context) is governed by the CPA or the NCA.

It is submitted that this is what transpired in casu. The court considered the exemption clause and the context within which it was sought to be applied and found that it related to the service the parties had contracted for - the delivery of the engine - and not to the credit agreement of which it formed part. The defendant tried to exempt itself from any and all liability that might arise from the loss, damage or non-delivery of the goods it undertook to transport and deliver to the plaintiff while they were not in the actual possession or control of the defendant (par 11), or if in the actual possession or control of the defendant, then liability should only arise where the defendant were found to have been grossly negligent (par 12). It seems clear that these provisions of the agreement pertain to the actual service that was contracted for (in the written email exchanges) and had nothing to do with the credit agreement (contained in the credit application form signed by the plaintiff). It is submitted that the court in casu correctly found that the fact that the clauses exempting the defendant of liability were contained in a document titled "credit application" or "credit agreement" should not change the fact that they related to the service contracted for and that the CPA should therefore find application.

The necessary consequence of this is that an agreement may have to be analysed on a clause-by-clause basis if it comprises both a credit agreement and an agreement for the sale of goods or the provision of a service. Arguably, this may mean that a particular clause, such as an exemption clause, in a given contract and context, may be both subject to and not subject to the CPA (particularly s 49), depending on the end to which the supplier is relying on the exemption clause. If the exemption clause is relied upon to exclude liability for any loss or damage resulting from the performance or non-performance of the service, as in the present case, the CPA will apply and the clause can be tested against the requirements of section 49. However, the clause may also be relied upon to exclude liability on the part of the credit provider for losses or damages resulting for the credit receiver from the manner in which the credit agreement was administered by the credit provider. In such a case, the CPA will not apply and Chapter 5 of the NCA will regulate the situation.

The pragmatic approach of the court in casu, it is submitted, may provide greater clarity on how to address the uncertainty of whether the CPA finds application in a situation involving a credit agreement.

 

5 Concluding remarks

In Skydive v UPS, the court had the opportunity to consider the interpretation and application of the formal incorporation requirements contained in section 49 of the CPA to exemption clauses. The widespread use of these clauses in consumer agreements makes the courts' interpretation and application of these provisions greatly significant for suppliers and consumers alike.

In Skydive v UPS, the court explained that the aim of section 49 is to ensure that consumers are provided with improved access to quality information, which in turn will allow consumers to make informed choices, thus avoiding a situation where consumers are caught unawares by the existence, content or consequences of an exemption clause, and which in turn may lead to harsh consequences for the consumer. To give effect to this end, section 49(4) of the CPA provides that the fact, nature and effect of an exemption clause must be brought to the attention of a consumer in a conspicuous manner and form. What will be considered conspicuous will depend on the facts of the case and one must remember that regard must be had to the particular circumstances prevailing at the time of the conclusion of the agreement. In the final analysis, it will be objectively determined whether the consumer was provided with enough information so as to be aware of the existence of the exemption clause and enough information to allow the consumer to understand the content and appreciate the consequences of the exemption clause. The exemption clause itself, but also its content and consequences, must be open and transparent - that is, conspicuous - to the consumer. Although the clause may itself be conspicuous, the content and consequences of the exemption clause may not be - and vice versa. Making the content and consequences of the exemption clause transparent will depend largely on the effective use of plain and understandable language.

As judicial guidance increasingly assists a better understanding of how to use exemption clauses to ensure compliance with the requirements of the CPA, suppliers will learn and adapt their practices to ensure that their use of exemption clauses are (almost) immune to legal challenge. This will eventually result in the consumer again being in a position where he or she has little protection against the negligence of the supplier. For instance, if all supermarkets comply with the requirements of section 49 when using exemption clauses, consumers will be aware of these clauses and will even understand its content and appreciate its consequences, but will have no choice but to accept these clauses. The consumer could then be said to be informed but not protected. The grey-listing of certain contract clauses may provide some comfort to consumers, in that the onus to prove that the use of such a clause is fair in terms of section 48 of the CPA rests on the supplier. In particular, regulation 44(3)(a) of the Regulations to the CPA provides that clauses exempting suppliers from liability for death or personal injury of consumers are presumed unfair; it would be very interesting to see under what circumstances using an exemption clause to exclude liability for death or personal injury would be fair. In the meantime, could it be that ignorance is bliss?

Mark Tait

Nelson Mandela University

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CASES

 

The contest between religious interests and business interests - TFD network africa (PTY) LTD v faris (2019) 40 ILJ 326 (LAC)

 

 

1 Introduction

The right to freedom of religion is one of the fundamental human rights. This is evident from several sections of the Constitution of the Republic of South Africa, 1996 (the Constitution), including sections 9, 15 and 31. Section 9(4) prohibits unfair discrimination (whether direct or indirect) against anyone on one or more of the grounds listed in section 9(3), which includes religion. Section 15(1) states that everyone has the right to freedom of conscience, religion, thought, belief and opinion, while section 31(1)(a) provides that persons belonging to a religious community may not be denied the right to practise their religion with other members of the community.

In line with the Constitution, labour legislation such as the Labour Relations Act 66 of 1995 (LRA) and the Employment Equity Act 55 of 1998 (EEA) also protects this right. Section 187(1)(/) of the LRA provides that if an employee is discriminated against and is dismissed based on religion, among other grounds, such a dismissal will be deemed to be an automatically unfair dismissal. Section 6(1) of the EEA prohibits unfair discrimination, whether direct or indirect, in any employment policy or practice based on prohibited grounds such as religion. It is evident from all the above provisions that the right to freedom of religion is vital to people's lives, including employees' lives (see Bilchitz and De Freitas "Introduction: The Right to Freedom of Religion in South Africa and Related Challenges" 2012 28 SAJHR 141).

Although an employee has the right to practise religion, he or she also has the common-law duty to render services or to put his or her labour potential at the disposal of the employer as agreed in terms of the contract of employment - except during the employee's annual leave, sick leave and maternity leave. (see Garbers, Le Roux, Strydom, Basson, Christianson, Germishuys-Burchell The New Essential Labour Law Handbook 7ed (2019) 35; Smit v Workmen's Compensation Commissioner 1979 (1) SA 51 (A) 61C; Rycroft "Accommodating Religious or Cultural Beliefs in the Workplace: Kiviets Kroon Country Estate v CCMA; Dlamini v Green Four Security; POPCRU v Department o/ Correctional Services" 2011 SA Merc LJ 109). An employee may therefore be in breach of this duty if he or she refuses to work or deserts his or her employment or absconds from his or her employment or is absent from work without permission. In addition to the above duty, employees have a duty to serve the employer's interests and to act in good faith (Grogan Workplace Law 12ed (2017) 93; Mischke "Acting in Good Faith: Courts Focus on Employee's Fiduciary Duty to the Employer" 2004 14(1) CLL 1).

Often, employees' right to freedom of religion collides with their duty to render services and to serve the employer's interests; employees present various reasons related to their religious practices for their failure to render services (Rycroft 2011 SA Merc LJ 106-113). As a result, employers are regularly required to be lenient and make efforts to accommodate employees' religious beliefs in the workplace. At times, this becomes a burden to employers as they have to accommodate employees with diverse individual religious interests, but also ensure that their businesses remain operational (McGregor "Employees' Right to Freedom of Religion Versus Employers' Commercial Interests: A Balancing Act in Favor of Religious Diversity: A Decade of Cases" 2013 25 SA Merc LJ 223). In a recent Labour Appeal Court (LAC) case of TFD Network Africa (Pty) Ltd v Faris ((2019) 40 ILJ 326 (LAC)) (TFD Network Africa v Faris), the employee could not work on Saturdays because her religion did not allow her to do so. Ultimately, the employer dismissed her based on incapacity. However, the court found that the dismissal was actually automatically unfair because it was based on religion. Religion remains one of the most contentious and problematic areas for employees and employers to deal with in the workplace.

The discussion that follows evaluates the court's finding in view of relevant constitutional provisions, labour law legislation and common law. It further considers the position under American law regarding religion and reasonable accommodation in the workplace.

 

2 Facts

Deidre Faris (Faris) was employed by TFD Network Africa (Pty) Ltd (TFD) in 2012 as part of its graduate management training programme. When Faris was interviewed telephonically and on several other occasions, she informed TFD that she was a Seventh-Day Adventist and therefore she could not work on the holy Sabbath, which falls on a Saturday (par 3 and 5). However, TFD maintained that, during an on-site interview, Faris was told that she would be required to work over weekends as it was an operational requirement of the job, to which she indicated that she had no problem. Clause 3.3 of the contract of employment signed by Faris stated as follows:

"By signing this contract, you undertake and agree to perform such overtime duties as may be reasonably required of you from time to time, provided this does not exceed the limitations laid down in relevant legislation." (par 7)

In terms of her religion, she was required to reserve Saturdays for her religious practices when followers of the religion are not permitted to work. TFD was involved in logistics and warehousing services and it had to conduct monthly stocktaking on weekends. As a result, a roster was drawn up in terms of which TFD managers had to attend monthly stocktakings. However, Faris never attended such stocktakings for religious reasons. Faris was called to a meeting regarding her failure to work on Saturdays, where she confirmed that she could not take part in stocktaking on Saturdays as she was prohibited in terms of her religion from working on Saturdays before sunset. She suggested that she could instead work on Sundays (par 47) but TFD stated that it could not make an exception for Faris. It then continued to institute proceedings against her based on incapacity, which resulted in her dismissal.

Faris referred the matter to the Commission for Conciliation, Mediation and Arbitration (CCMA) and after receiving a certificate of non-resolution, referred the matter to the Labour Court, contending that TFD discriminated against her on religious grounds. The Labour Court found that Faris's dismissal was automatically unfair and granted her 12 months' compensation as well as R60 000 for unfair discrimination. TFD appealed the finding, arguing that Faris was not dismissed because of her religion, but because she could not work on Saturdays, which was an inherent requirement of her job. The LAC, however, also found that Faris was dismissed because of her religion, as there was a direct link between her inability to work on Saturdays and her religious convictions. The court considered the fairness of the discrimination - that is, whether it was connected to a legitimate purpose and whether it impacted unduly on Faris's dignity. In this regard, the court drew a distinction between TFD Network A/rica v Faris (supra) and FAWU v Rainbow Chicken Farms ((2000) 21 ILJ 615 (LC)), which involved Muslims who refused to work on Eid. The court found that the company's insistence that employees work on Eid had not amounted to unfair discrimination because had the employer allowed affected employees to take leave, the factory would have closed. Regarding legitimate purpose, the court in TFD Networks v Faris (supra) held that it was possible for TFD to accommodate Faris without imposing undue hardship or operational difficulty. In relation to Faris's dignity, the court stated:

"[W]ithout question, an employment practice that penalizes an employee for practicing her religion is a palpable invasion of her dignity in that it supposes that her religion is not worthy of protection or respect. It is a form of intolerant compulsion to yield to an instruction at odds with sincerely held beliefs on pain of losing employment. The employee is forced to make an unenviable choice between conscience and livelihood. In such a situation, the dictates of fairness and our constitutional values oblige the employer to exert considerable effort in seeking reasonable accommodation." (par 45)

The LAC therefore found that the employer had an obligation to reasonably accommodate an employee's religious freedom unless it imposed undue hardship on the employer; it upheld the award of 12 months' compensation but discarded the R60 000 that the Labour Court awarded on the basis that it was unduly onerous.

 

3 Protection of the right to freedom of religion in South Africa

3 1 Religion under the Constitution

As stated in the introduction, the right to freedom of religion is protected and referred to in a number of constitutional provisions. Everyone, including employees, has this right and would generally want to enjoy and practise it freely. Courts in general are reluctant to become involved in doctrinal disputes of a religious character (see Taylor v Kurtstag NO 2005 (1) SA 362 (W) par 39). In Prince v President of the Law Society of the Cape of Good Hope (2001 (2) SA 388 (CC) par 97), it was stated that it is undesirable for courts to enter into debates about whether a particular practice is central to a religion, unless there is a genuine dispute as to the centrality of the practice.

In terms of section 39 of the Constitution, when interpreting the Bill of Rights, it is required that international law, among others, be considered. With this in view, it is appropriate to consider article 1 of the United Nations Declaration on the Elimination of All Forms of Intolerance and of Discrimination Based on Religion or Belief, which protects the right to "thought, conscience, and religion or belief", however, without offering any definition of the term "religion". The right to freedom of religion covers, among other things, the right to have a belief, to express that belief publicly and to show or display the belief through, among others, worship and practice (see Currie and De Waal The Bill of Rights Handbook 5ed (2005) 388). In S v Lawrence ((1997) 4 SA 1176 CC), Chaskalson borrowed the definition of the concept of religion from the Canadian Courts (see R v Big M Drug Mart Ltd 1985 1 SCR 295) and stated:

"The essence of the concept of freedom of religion is the right to entertain such religious beliefs as a person chooses, the right to declare religious beliefs openly and without fear of hindrance or reprisal and the right to manifest religious beliefs by worship and practice or by teaching and dissemination." (par 92)

It is evident from this definition that freedom of religion is a belief of a personal nature that an individual has the right to exercise freely. Although employees are free to exercise their right to freedom of religion, it must be noted that, just like any other right, this right is not absolute as it can be limited in terms of section 36 of the Constitution. Therefore, each case involving this right should be considered on its merits.

3 2 Religion under the EEA

3 2 1 Discrimination based on religion

The purpose of the EEA is to achieve equity in the workplace and one of its primary means of achieving this is through the elimination of unfair discrimination (s 2 of the EEA). Section 3 of the EEA states that this Act must be interpreted in compliance with the Constitution, so as to give effect to the purpose of the Act, taking into account any relevant code of good practice issued in terms of the Act or any other employment law, and in compliance with South Africa's international law obligations - in particular those contained in the International Labour Organisation (ILO) Convention 111 concerning Discrimination in Respect of Employment and Occupation, 1958.

Section 6(1) of the EEA prohibits unfair discrimination, whether direct or indirect, in any employment policy or practice on grounds such as religion. At times, employers introduce and implement policies and practices that have an effect on employees' right to freedom of religion. According to section 1 of the EEA, an "employment policy or practice" includes, among others, recruitment procedures, advertising and selection criteria, appointments and appointments processes, job classification and grading, job assignments, the working environment and facilities, and dismissal (see also Leonard Dingier Employee Representative Council v Leonard Dingier (Pty) Ltd (1998) 19 ILJ 285)). As is evident from this definition, the list of employment policies or practices includes dismissal; section 10(1) of the EEA provides that disputes about discriminatory dismissal should be dealt with in terms of Chapter VIII of the LRA. In relation thereto, section 187(1) of the LRA declares a dismissal based on any of the listed grounds to be automatically unfair.

It must be noted that at the heart of unfair discrimination is differentiation. Differentiation in the employment context means that an employer treats employees or applicants for employment differently or it uses policies or practices that exclude certain groups of employees. However, differentiation cannot be equated with discrimination. Differentiation only becomes discrimination when it is made for unacceptable reasons (see Garbers et al The New Essential Labour Law Handbook 354). These reasons include, but are not limited to, those listed under section 6(1) of the EEA. Not all acts of discrimination will be regarded as unfair since section 6(2) of the EEA provides that it is not unfair discrimination to take affirmative action measures consistent with the Act or to distinguish, exclude or prefer any person on the basis of an inherent requirement of a job. The latter exception is relevant to this discussion and is discussed in detail later.

3 2 2 Reasonable accommodation

In line with the above, section 15(2)(c) of the EEA requires designated employers to make attempts to reasonably accommodate the needs of their employees. Those needs include those related to the employees' religion. It must however be noted that in accommodating an employee, the employer must not incur undue hardship. "Reasonable accommodation" is defined as "any modification or adjustment to a job or to the working environment that will enable a person from a designated group to have access to or participate or advance in employment in the workforce of a designated employer" (s 1 of the EEA). Employers may therefore be required to reasonably accommodate employees' religious beliefs and practices in order for their policies or practices not to be seen as unfair discrimination against such employees.

The issue of reasonable accommodation was further emphasised in Kievits Kroon Country Estate (Pty) Ltd v Mmoledi ([2012] 11 BLLR 1099 (LAC)), where the following was stated:

"It would be disingenuous of anybody to deny that our society is characterised by a diversity of cultures, traditions and beliefs. That being the case, there will always be instances where these diverse cultural and traditional beliefs and practices create challenges within our society, the workplace being no exception. The Constitution of the country itself recognises these rights and practices. It must be recognised that some of these cultural beliefs and practices are strongly held by those who subscribe to them and regard them as part of their lives. Those who do not subscribe to the others' cultural beliefs should not trivialise them ... What is required is reasonable accommodation of each other to ensure harmony and to achieve a united society." (par 26)

Furthermore, in MEC for Education, Kwazulu-Natal v Pillay (2008 (1) SA 474 (CC) par 73), the court stated that reasonable accommodation requires that an employer must take positive measures, even if it means incurring additional hardship or expenses, to ensure that all employees enjoy their right to equality. It was held in FAWU v Rainbow Chicken Farms (supra) that a refusal to allow Muslim employees to take a day off for their religious holidays would only be unfair if some employees were allowed to do so and others were not. Furthermore, if the absence of these employees (Muslim butchers) would disrupt the employer's business, the employer was entitled to insist that they remain at work for operational reasons. In SA Clothing and Textile Workers Union v Berg River Textiles - A Division of Seardel Group Trading (Pty) Ltd ((2012) 33 ILJ 972 (LC)), the Labour Court said:

"[I]n particular, the employer must establish that it has taken reasonable steps to accommodate the employee's religious convictions. Ultimately the principle of proportionality must be applied. Thus, an employer may not insist on the employee obeying a workplace rule where that refusal would have little or no consequence to the business." (par 38)

From the above cases, it is evident that employers are expected to make an effort to accommodate their employees for religious reasons for as long as they do not incur unreasonable hardship.

3 3 Religion under the LRA: automatically unfair dismissal

In terms of section 185 of the LRA, employees have the right not to be unfairly dismissed. In the case of dismissal, it is upon the employee to show that there has indeed been a dismissal (see De Beer v SA Export Connection CC t/a Global Paws [2008] 1 BLLR 36 (LC) par 13; Atkins v Datacentrix (Pty) Ltd [2010] 4 BLLR 351 (LC) par 15) and thereafter it is upon the employer to prove that the dismissal was fair. However, the approach is different in cases of an automatically unfair dismissal.

The concept of "automatically unfair dismissal" originates from article 5 of the ILO Convention 158 of 1982 on Termination of Employment. Under the LRA, section 187 provides for this type of dismissal. If an employee is dismissed for one of the reasons contained in section 187 of the LRA, it means there has been an infringement of a basic human right and the dismissal will be regarded as automatically unfair (see Garbers et al The New Essential Labour Law Handbook 151). Through this concept, several constitutional rights (such as the right to equality (s 9), the right to dignity (s 10) and the right to fair labour practices (s 23)) are protected. In terms of section 187(1)(/) of the LRA, it is automatically unfair to dismiss an employee if the reason for the dismissal is that the employer has discriminated unfairly on any one of or more of the grounds listed in the section, which includes religion (see also Department of Correctional Services v POPCRU [2013] 7 BLLR 639 (SCA) par 25). Unlike other forms of dismissal, in the case of an automatically unfair dismissal, the employer cannot defend termination of the employment contract by proving that it was for a fair reason.

An employee who has been dismissed on a prohibited ground may claim unfair discrimination in terms of the EEA in addition to pursuing an automatically unfair dismissal claim (see Gauteng Shared Services Centre v Ditsamai [2012] 4 BLLR 328 (LAC); Atkins v Datacentrix (Pty) Ltd supra); the applicable principles are generally the same in both cases (see also Du Toit, Godfrey, Cooper, Giles, Cohen, Conradie and Steenkamp Labour Relations Law 6ed (2015) 675). In SACTWU v Berg River Textiles (supra), employees did not agree with a new shift that was introduced because of a downturn in trade. They wanted to strike in order to show their resistance to the new system. Before the strike, Williams informed the employer that he could not work on Sundays owing to his religion (Apostolic Faith Mission), which prohibited work on Sundays. He also lodged a grievance in this regard. Mr Williams was later dismissed with others who took part in an unprotected strike. While others pleaded guilty of misconduct, Mr Williams did not plead guilty to misconduct on the basis that his right to freedom of religion entitled him not to work on Sundays (par 23). The Labour Court held that all the other employees were dismissed fairly, but that Mr Williams's dismissal was automatically unfair in terms of section 187(1)(/) of the LRA. In Dlamini v Green Four Security ((2006) 27 ILJ 2098 (LC)), members of the Baptised Nazareth Church who were security guards were dismissed because of their refusal to shave or trim their beards as it was against their religious convictions. They argued that their dismissal was automatically unfair because they were discriminated against on religious grounds. The court found that the security guards were selective about the religious rules they chose to obey and held that the employer had proved that the rule requiring them to be clean shaven served a clear purpose and was seen as an inherent requirement of a security officer's job.

It is imperative, when establishing whether the reason for a dismissal amounts to unfair discrimination, to determine whether the ground for discrimination was "arbitrary" or otherwise unfair on a listed or unlisted ground. Section 187(2) of the LRA, however, states that despite subsection 1(/), a dismissal may be fair if the reason is based on an inherent requirement of the particular job (see also Woolworths (Pty) Ltd v Whitehead [2000] 6 BLLR 640 (LAC) par 41) or a dismissal is based on age if the employee has reached the normal or agreed retirement age for persons employed in that capacity (see also Schmahmann v Concept Communications Natal (Pty) Ltd 1997 ILJ 1333 (LC); Rubenstein v Prices Daelite (Pty) Ltd 2002 ILJ 528 (LC) pars 19-28). The defence is an exception to the general rule on automatically unfair dismissals.

3 4 Exception to the rule: Inherent requirements of a job under the EEA and the LRA

The inherent requirements of a job appear as an exception to the rule against unfair discrimination under both the EEA (s 6(2)) and the LRA (s 187(1)(/)). Neither the EEA nor the LRA define the concept "inherent requirements of a job". "Inherent" has been interpreted by Cooper (see Cooper "The Boundaries of Equality in Labour Law" 2004 25 ILJ 813) to mean:

"existing in something as a permanent attribute or quality; forming an element, especially an essential element, of something, intrinsic, essential' and as an 'indispensable attribute' which 'must relate in an inescapable way to the performing of the job". (835)

According to Grogan (see Grogan Workplace Law 104; Grogan Employment Rights 3ed (2019) 258), the word "inherent" suggests that possession of a particular personal characteristic should be necessary for effectively carrying out the duties attached to a particular position. In IMATU v City of Cape Town ([2005] 11 BLLR 1084 (LC) par 102), it was indicated that this concept means "existing in something, a permanent attribute or quality; forming an element, especially an essential element, of something". In terms of article 2 of the ILO Convention 111, "any distinction, exclusion or preference in respect of a particular job based on an inherent requirement thereof shall not be deemed to be discrimination". It is therefore important that the inherent requirements of a job must relate to the job itself and not the individual employee, in order to qualify as such (see also Dlamini v Green Four Security supra par 52). These are the requirements without which the job cannot be done (see Van Niekerk, Smit, Christianson, McGregor and Van Eck Law@work 4ed (2017) 285-286). It is upon the employer to establish that some inherent characteristic is important for the effective performance of the obligations that attach to a specific job. In Department of Correctional Services v POPCRU (supra), the court considered the inherent-requirement-of-the-job defence where prison officials who wore dreadlocks refused to comply with the employer's rules relating to hairstyles. The court found:

"no evidence was adduced to prove that the respondents' hair, worn over many years before they were ordered to shave it, detracted in any way from the performance of their duties or rendered them vulnerable to manipulation and corruption. Therefore, it was not established that short hair, not worn in dreadlocks, was an inherent requirement of their jobs. A policy is not justified if it restricts a practice of religious belief - and by necessary extension, a cultural belief - that does not affect an employee's ability to perform his duties, nor jeopardise the safety of the public or other employees, nor cause undue hardship to the employer in a practical sense." (par 25)

In Association of Professional Teachers v Minister of Education ((1995) 16 ILJ 1048 (IC) 1081B), the Industrial Court held that a differentiation based on the inherent requirements of a job should only be allowed in very limited circumstances and should not be allowed where the decision to differentiate is based on subconscious perceptions. In Ntai v SAB Ltd ([2001] 2 BLLR 186 (LC) par 88), a stricter test was adopted; the court rejected "mere" commercial rationale as a criterion and adopted a test more akin to business necessity (see Whitehead v Woolworths (Pty) Ltd [1999] 8 BLLR 862 (LC) par 30; Du Toit et al Labour Relations Law 694).

The exception "inherent requirements of the job" will therefore be accepted if a requirement is an essential or permanent element of the job and does not relate to an individual employee.

 

4 Protection of the right to freedom of religion under American Law: The Civil Rights Act of 1964

The Civil Rights Act of 1964 prohibits discrimination based on race, colour, religion, sex or national origin. Title VII of the Civil Rights Act of 1964, in particular, prohibits employers from discriminating against individuals based on religion in hiring, firing and in other terms and conditions of employment (see also EEOC v Abercrombie & Fitch Stores, Inc, 135 S. Ct. 2033 (U.S. 2015). According to Title VII, the term "religion" includes all aspects of religious observance and practice, as well as belief, unless an employer demonstrates that he is unable to reasonably accommodate an employee's or prospective employee's religious observance or practice without undue hardship on the conduct of the employer's business. Title VII is applicable to employers who have 15 or more employees for each working day. These employers are required to reasonably accommodate the religious practices of an employee or prospective employee, unless doing so would create an undue hardship upon the employer. Employees may therefore not be treated more or less favorably because of their religion and may not be required to participate or refrain from participating in a religious activity as a condition of employment. Reasonable accommodation may include the following: shift swaps between employees, flexible scheduling, and transfers to other positions within the company. An employer who claims that accommodation is not feasible because it would result in undue hardship must prove undue hardship and its effect on the business. However, employers are not expected to provide the specific accommodation requested by employees, as long as they have reasonably accommodated the employee (see Ansonia Board of Education v Philbrook, 479 U.S. 60 (1986)). With regard to undue hardship, the United States Supreme Court in Trans World Airlines, Inc v Hardison (432 U.S. 63 (1977)) held that the employer need not incur more than minimal costs in order to accommodate an employee's religious practices. Among other considerations, an accommodation may cause undue hardship if it is costly, compromises workplace safety, decreases workplace efficiency, or infringes on the rights of other employees.

Under American law, an employer is permitted to discriminate against an employee based on a "protected trait" where the trait is "a bona fide occupational qualification, reasonably necessary to the normal operation of that particular business or enterprise". The bona fide occupational qualification must, however, meet three requirements - that is, there must be a direct relationship between the protected trait and the ability to perform the duties; the bona fide qualification must relate to the essence or central mission of the employer's business and there must be no less-restrictive or reasonable alternative (see United Automobile Workers v Johnson Controls, Inc, 499 U.S. 187 (1991)).

 

5 Employee's duty to tender services and the duty of good faith

Under common law, an employee has a duty to tender his or her services (see Smit v Workmen's Compensation Commissioner supra). An employee must make his or her services personally available to the employer. He or she is also required to render his or her services in a satisfactory manner and in accordance with contractual provisions (see NUM v Libanon Gold Mining Co Ltd (1994) 15 ILJ 585 (LAC)). An employee who refuses to work or who deserts his or her employment or who absconds from his or her employment or is absent without permission will be in breach of this duty (see Garbers et al The New Essential Labour Law Handbook 35). Such conduct may also amount to misconduct, which is one of the grounds for the employer to dismiss the employee.

The relationship between employer and employee is one of trust and confidence (see Council for Scientific & Industrial Research v Fijen (1996) 17 ILJ 18 (A) par 26D). The employee owes the employer a fiduciary duty. The duty of good faith requires that an employee should always give priority to the interests of his or her employer (see Nel v Ndaba 1999 ILJ 2666 (LC) par 25). Therefore, his or her conduct when tendering services should not result in his or her private interests conflicting with the execution of his or her duties or interests of the employer (see IMATU v Rustenburg Transitional Council [1999] 12 BLLR 1299 (LC) par 7).

 

6 Evaluation of the court's finding

As a citizen of South Africa, Faris had a right to exercise her constitutionally protected right to freedom of religion without being discriminated against. She had a right to enjoy and practise her religion freely, including to display her belief through worship and practice (see Currie and De Waal The Bill of Rights Handbook 388; article 1 of the United Nations Declaration on the Elimination of All Forms of Intolerance and of Discrimination Based on Religion or Belief). Faris had a right to entertain her religious beliefs and declare them openly, without fear of reprisal (see S v Lawrence supra). It must however be noted that Faris's right to freedom of religion is not absolute as it can be limited in terms of section 36 of the Constitution, as long as the limitation is reasonable and justifiable in an open and democratic society based on human dignity, equality and freedom.

Faris also had protection in terms of section 6(1) of the EEA, which prohibits direct or indirect unfair discrimination based on religion, among other grounds, in any employment policy or practice. TFD had an employment policy or practice that required employees, including Faris, to attend monthly stocktaking. "Employment policy or practice" includes job assignments and dismissal (s 1 of the EEA; Leonard Dingler Employee Representative Council v Leonard Dingler supra). Faris failed to attend to a job assignment in the form of stocktaking for religious reasons and practices. TFD's employment policy or practice therefore discriminated against Faris based on her religion; if she attended the stocktaking, she would not be able to practise her religion. Faris was a Seventh-Day Adventist and could not work on the Sabbath, which is a Saturday, whereas TFD required employees to work on Saturdays. Based on her religion, Saturdays had to be reserved for her religious practices.

Furthermore, that Faris was dismissed for her failure to work on Saturdays meant that she was treated differently based on the employment policy or practice. The differentiation was unfortunately based on religion, which is one of the listed prohibited grounds (see s 6(1) of the EEA; Garbers et al The New Essential Labour Law Handbook 346) and was therefore regarded as unfair discrimination. After the matter was referred to the Labour Court, it found that the dismissal was automatically unfair based on religion as provided for in terms of section 187(1)(f) of the LRA. On appeal, TFD argued that Faris was not dismissed based on religion but because she could not work on Saturdays, which was an inherent requirement of the job. The LAC, however, found that there was a link between her inability to work on Saturday and her religious practices, and therefore that the dismissal was based on religion.

Both the EEA and the LRA provide for the "inherent requirements of a job" to be one of the exceptions in unfair discrimination cases. However, it must be noted that, to qualify as such, the requirement (among others) must be a permanent attribute or quality of the job and if it is so, such distinction or exclusion shall not be regarded as discrimination (see article 2 of the ILO Convention 111; IMATU v City of Cape Town supra). This should be allowed only when it is not based on subconscious perceptions (see Association of Professional Teachers v Minister of Education supra) but it is necessary for the effective carrying out of the duties (see Grogan Workplace Law 104) and is a business necessity (see Ntai v SAB supra; Whitehead v Woolworths (Pty) Ltd supra). Nevertheless, section 15(2)(c) of the EEA requires employers to make attempts to reasonably accommodate the needs of employees (s 15(2)(c); Kievits Kroon Country Estate (Pty) Ltd v Mmoledi supra). However, in doing so, employers must not incur undue hardship. This includes the modification or adjustment of a job to enable an employee to have access to or participate or advance in employment. The employer should take positive steps, even if it means incurring additional hardship or expenses, to ensure that employees enjoy their right to equality (see MEC for Education, Kwazulu-Natal v Pillay supra). When she was employed, Faris informed TFD that she was a Seventh-Day Adventist and that she would not be able to work on Saturdays as it is regarded as the holy Sabbath. In addition, at the meeting that was called to discuss her failure to work on Saturdays, she confirmed that she could not take part in stocktaking on Saturdays. She even suggested that she could instead work on Sundays, but TFD stated that it could not make an exception for her. It is submitted that TFD failed to make any reasonable effort to accommodate Faris.

Similar to the South African position, under Title VII of the Civil Rights Act, 1964 employees may not be treated more or less favourably because of their religion and may not be required to refrain from participating in a religious activity. Nonetheless, the employer also need not incur more than minimal costs in order to accommodate the employee (see Trans World Airlines, Inc v Hardison supra). If a "protected trait" is used as a defence, there must be a direct relationship between the protected trait and the ability to perform duties. The requirement must relate to the essence or central mission of the employer's business and there must be no less-restrictive or reasonable alternative (see United Automobile Workers v Johnson Controls supra). This is similar to the "inherent requirements of a job" exception under South African law.

If Faris's dismissal was based on religion, it qualified as an automatically unfair dismissal in terms of section 187(1)(f) of the LRA (see also article 5 of the ILO Convention 158 of 1982 on Termination of Employment; Department of Correctional Services v POPCRU supra). TFD could therefore not defend the dismissal by proving that it was fair unless it was indeed based on the inherent requirements of the job. These requirements must relate to the job itself and not to the employee (see Dlamini v Green Four Security supra). However, in Faris's case, it was her religion that was an impediment to her working on Saturdays and therefore the discrimination and dismissal were directly linked to the practice of her religion and not to her ability to perform her duties based on the nature of her job. For Faris, there was an alternative to working on Saturday as she offered to work on Sunday, but TFD refused to make reasonable concessions to accommodate her. It must however be stated that, despite her right to freedom of religion, Faris still had a duty to render services or to make her services available to TFD (see Smit v Workmen's Compensation Commissioner supra). Faris had to make efforts to give priority to the interests of TFD (see Nel v Ndaba supra).

Indeed, Faris did this by offering to work on Sundays instead of working on Saturdays, which TFD refused. With this in mind, it is submitted that the court was correct in finding that Faris's dismissal was automatically unfair based on her religion.

 

7 Conclusion

The fact that employees have a right to freedom of religion does not mean that they can neglect their duties to the employer or always put their religious interests above business interests. The right to freedom of religion can be limited and should be exercised in view of other rights and duties such as the duty by the employee to tender services. There must therefore be a balance between the right to freedom of religion and employees' duty to tender services and to act in the interest of the employer. A contract of employment is reciprocal in nature and therefore each party must fulfil its duties in the employment relationship. Employers should however also make efforts to reasonably accommodate religious needs of employees (s 15(2)(c) of the EEA), to enable them to perform their duties, as long as the employer does not as a result incur undue hardship (see Kievits Kroon Country Estate (Pty) Ltd v Mmoledi supra; MEC for Education, Kwazulu-Natal v Pillay supra; SA Clothing and Textile Workers Union v Berg River Textiles supra). It is imperative for employers to offer reasonable accommodation, even if they do not provide the specific accommodation requested by the employee (see Ansonia Board of Education v Philbrook supra). Such a concession by the employer can improve the morale of employees and assist the employer to retain hard-working employees who are staunch in their religious beliefs and practices.

Employees should also from the beginning of an employment relationship inform the employer about their religious commitments and practices at that time or as soon as they arise in order to avoid unnecessary conflict. In Lewis v Media 24 Ltd ((2010) 31 ILJ 2416 (LC)), the applicant (who was a Jewish male) was required to work long and late hours and this caused him to be unable to observe the Sabbath. The employee's contract of employment was as a result terminated because of his absence from work without permission. He alleged that he had been unfairly discriminated against based on religious, cultural and political beliefs. The court found that, when appointed, the employee did not declare to his employer that he was a Jew and neither did he object to work on the Sabbath. The application was accordingly dismissed.

Employers should also avoid hiding behind the "inherent requirements of the job" exception provided for by the EEA and the LRA when dismissing employees based on religion, unless it is relevant and necessary. A refusal by the employer to accommodate an employee based on religion should be based on actual facts. In this constitutional dispensation, employers have an obligation to ensure that employees are treated with respect and dignity regardless of their religion.

ME Manamela

University of South Africa (UNISA)

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CASES

 

Duress by indirect circumstances in english and south african law: a comparison - R v Brandford [2017] 2 All ER 43; [2016] EWCA Crim 1794

 

 

1 Introduction

While duress by means of direct threats can provide a defence in criminal law, the legal question is whether threats conveyed indirectly are capable of providing a valid defence in criminal law. More specifically, can indirect threats then also be used as a means of defending another party's interests that are under attack? There appears to be both academic support and precedent to answer this question in the affirmative (S v Pretorius 1975 2 SA 85 (SWA); Burchell Principles of Criminal Law (2016) 279). In the Pretorius case, the court made it clear that while mens rea is not relevant to the enquiry, the defence must be "confined within the strictest and narrowest limits because of the danger attendant upon allowing a plea of necessity to excuse criminal acts" (289). These limits include that the threat must have been imminent and, more specifically, it must have been necessary for the accused to avert the danger by any reasonable means (285). This is the legal question that arose in R v Brandford ([2017] 2 All ER 43; [2016] EWCA Crim 1794), and which will be examined in the light of a comparison between English law and South African law in relation to the defence of duress and necessity respectively.

 

2 Facts

The accused and her boyfriend were arrested by the police in the course of a police operation that involved the supply and distribution of Class A drugs in the London Borough of Lewisham. A number of drug runners, acting as street dealers, were charged and tried alongside each other (par 6), including the accused's boyfriend, Alford, and one Karemera. The accused was charged with concealing drugs in her vagina. There were 121 packages. Seven consisted of wraps of crack cocaine and 44 wraps contained heroin with an estimated street value of between £1,500 and £2,300 (par 8). It was alleged by the accused that she had only become involved in the conspiracy on the night before her arrest on 26 August 2014. She had agreed to carry drugs for her boyfriend, so assisting the conspiracy (par 9). Her defence was that Alford had approached her for assistance on the basis that he had inherited a debt from a former friend, "Allman", who had been murdered. He alleged that his life would be in danger if the drugs were not distributed (par 10).

On the basis of these facts, a criminal trial resulted in the conviction of each accused on two counts (count 1, concerning cocaine, and count 2, concerning heroin) of supplying controlled drugs in contravention of s 1 of the Criminal Law Act 1977 (par 2). Following the majority verdict of the court on these two counts, Brandford was sentenced to 28 months' imprisonment on count 1 and 28 months' on count 2, which sentences were to run concurrently (par 3).

In the judge's summing up, the judge noted that the appellant had not been physically compelled to secrete the drugs, but had done so at the "urgent request" of her boyfriend (par 20). The judge therefore withdrew the defence of duress from the jury (par 26). The judge was of the view that Brandford's belief in a threat to kill Alford was not reasonable, and nor would a reasonable person of ordinary firmness view it as such, in the absence of immediate conclusive proof that the threat would also be carried out (par 24). This was because she had no first-hand knowledge of the threats (also called "hearsay duress")(par 23). This was so because Alford made use of coded quotes, such as "it would not be nice for me" (par 24). Furthermore, both Alford and Karemera had testified that a loss of drugs would simply result in an extended period of drug dealing (par 24). The appellant had argued unsuccessfully that the judge was incorrect in withdrawing the defence from the jury because the threats had not been conveyed directly to the appellant (par 24).

The grounds of appeal thus related to the judge's treatment of hearsay evidence - that is, the question whether threats always had to be conveyed directly for a successful reliance on a defence of duress (par 23).

 

3 Judgment

In the Court of Appeal, the crux of the appellant's argument concerned the judge's decision to withdraw the defence of duress from the jury (par 1). More specifically, the argument centered on the judge's treatment of "hearsay duress", which, was rejected since there was nothing precluding the use of "hearsay duress" (par 23). The appellant contended that there was no "basic irreconcilability" between the pressure created by a relationship, and fear, which forms the basis of duress (par 23). The court noted that the former term makes use of affection whereas the latter is based on fear. The distinction between these two terms was important since the former term involves pressure bought to bear by one party against another in order to manipulate that person without serious threat of death or injury, and is based on affection shared between the parties.

This distinction between pressure and fear is also noteworthy since pressure will not establish a defence of duress (par 24). The distinction is also important since the English legal system "leans heavily" against use of hearsay evidence, especially where the threat has not been directly conveyed (par 25). The defence counsel argued that the evidence should have been placed before the jury. Defence counsel contended that Brandford was of good character and had in fact only appreciated the severity of the situation the night before the crime was committed and therefore had not voluntarily associated herself with any criminal activity. This, the defence contended, should have been left within the purview of the jury to determine (par 27). However, on analysis of the accepted principles of duress, the court would eventually confirm that that such a defence would not have been accepted by the jury (par 47) and therefore dismissed the ground of appeal and the appeal against Brandford's conviction as a whole (par 51).

The court proceeded to examine whether duress can indeed be regarded as a defence where the duress in question does not include direct threats that lead to the criminal conduct; it came to the conclusion that while it may not necessarily be a fatal bar to a defence, the manner in which the threat is conveyed is but one of the circumstances that the court will take into consideration. Hearsay evidence in cases of duress can be used to demonstrate a defendant's state of mind and that he or she had "good reason to fear death or personal injury" (par 28; see Subramaniam v Public Prosecutor [1956] 1 WLR 965 970).

Another reason that duress should not be available as a defence is based on policy grounds since such a defence would frustrate the legitimate aims of government in controlling the A-class drug trade (par 25). The court proceeded to examine several pertinent decisions in this regard to determine whether defence counsel was correct in its submission that a defence of duress could equally be applicable in the context of threats that were made indirectly. Defence counsel noted there was no authority that precluded the applicability of hearsay duress (par 27).

On the facts of the case, the Court of Appeal noted that while fear (which forms the foundation of duress) and pressure (that emanates from an intimate relationship and which exploits a person's affection) are different, the trial court was incorrect in concluding that they are irreconcilable (par 40). They can operate in a cumulative manner (par 40). In addition, whether or not a defence of duress can be founded rests on whether the pressure based on exploitation of relationship is accompanied by threat of death or serious bodily injury (par 40).

The court confirmed the conviction but allowed the appeal against the sentence, deeming the sentence passed to have been manifestly excessive despite the fact that the accused played a significant role in a category 3 offence as a willing courier of 121 wraps of Class A drugs, with knowledge they would be sold in Portsmouth (par 53). The court substituted her sentence with 21 months' imprisonment (par 56).

As to the question whether the judge should have withdrawn the defence from the jury, the court noted that judges always have a discretion to exercise a "robust and reasoned approach" when it comes to "fanciful" defences such as duress (R v Brandford supra par 44; see also R v Hammond [2013] EWCA Crim 2709 14). Although in this case the trial court judge's "imperfect" reasoning had led to the exclusion of the evidence, it essentially made no difference to the end result: there was no immediacy of threat nor an inability to take evasive action (Laird "Case and Comments:

R v Brandford (Olivia)" 2017 Criminal Law Review 554 556; see also R v Hasan) [2005] 4 All ER 685 28). This was because there was no immediate threat to Alford since the threat had been conveyed the night before they left for London. Furthermore, Brandford had knowingly participated by buying latex gloves and had proceeded to watch him parcel the drugs as well as continued to carry drugs on her person, long after Alford had disposed of his (par 46). This was clearly an example of voluntary association where the jury would have no choice but to convict (par 46).

 

4 The nature of the defence of duress in English law

Brandford raised the question of whether duress can successfully be

invoked as a defence (R v Hasan [2005] UKHL 22, [2005] 2 AC 467) in the case of drug trafficking or drug dealing (Storey "Duress by Indirect Threats" 2017 Journal of Criminal Law 91 94. In this respect, see R v Aikens [2003] EWCA Crim 1573; R v McDonald [2003] EWCA Crim 1170, where the defence was raised, albeit not successfully). The central question is therefore is not whether it can be a defence, but rather whether the defendant can satisfy all the grounds in order for the defence to be successful. For instance it would be beneficial if it could be shown that there is no voluntary association with criminals. (Storey 2017 Journal of Criminal Law 91 94).

The defence of duress by threats can be characterised as necessarily involving a choice of unsavoury alternatives:

"Thus, although the defendant must honestly believe that force is necessary, this belief is not required to be reasonable, as opposed to the requirement that the response be reasonable." (Freer "Driving Force: Self-Defence and Dangerous Driving" 2018 Cambridge Law Journal 9 10)

This choice of alternatives plays a key role since it has the ability to exculpate the defendant in a particular case. However, policy considerations demand that such a defence be narrowly circumscribed Therefore, the defence is only available if the two-prong test is satisfied:

"Would the defendant have been impelled to act as they did because, as a result of what they reasonably believed the threatener had said or done, they had good cause to fear that if they did not so act the threatener would kill or seriously injure them?" (R v Hasan [2005] UKHL 22; [2005] 2 AC 467)

Notably, the above quote suggests that only a limited category of threats could qualify as a defence - that is, if there were threats of death or serious bodily harm (R v Hasan [2005] UKHL 22, [2005] 2 AC 467 par 21) or a threat directed to a member of the defendant's immediate family or a person for whose safety the defendant would reasonably regard themselves as being responsible (R v Brandford supra par 32). In instances where the second stage of the test is reached - that is, where death or serious bodily injury is a likelihood - then the matter was one left for jury determination (see R v Lynness [2002] EWCA Crim 1759 24-25). Thus the question of whether the appellant held a reasonable belief in death or serious bodily harm from Alford becomes a crucial question that needs to be determined (Ashworth and Horder Principles of Criminal Law 7ed (2013) 206), and this is where the primary source of criticism in this case lies. Where no circumstances existed where the defence could be found, then such a defence has to be withdrawn from the jury (R v Bianco [2001] EWCA Crim 2516). Circumstances where such a defence would be withdrawn, for instance, can be found where there was no immediacy of threat, or through the doctrine of prior fault - that is, where a person had voluntarily joined a criminal enterprise (R v Ali [1995] Crim LR 303; R v Heath [2000] Crim LR 109; R v Harmer [2001] EWCA Crim 2930; R v Ali [2008] EWCA Crim 716; R v Hussain [2008] EWCA Crim 1117; see also Percival "Cases in Brief: Brandford [2016] EWCA 1794; December 2, 2016" 2017 1 Archbold Review 2). In Hasan, the court noted:

"[N]othing should turn on foresight of the manner in which, in the event, the dominant party chooses to exploit the defendant's subservience. There need not be foresight of coercion to commit crimes." (R v Hassan supra par 37)

A line of authorities on duress by threats seems to suggest that, while indirect threats can in principle be relied upon (see R v Hudson, R v Taylor [1971] 2 All ER 244, [1971] 2 QB 202), the courts follow a direct approach -that is, the more directly the threat is conveyed, the more likely it will be capable of establishing defence (R v Brandford supra par 39; see also Northern Ireland v Lynch [1975] 1 All ER 913 932, [1975] AC 653 687). However, central to withdrawing the defence from a jury was the view that the crux of the issue is not the manner in which the threat is transmitted, but rather whether the threat was immediate, imminent and whether it was made with sufficient potency to have influenced the accused (Laird 2017 Criminal Law Review 554 556). In other words, the manner in which the threat is relayed is but one fact that the courts take into consideration and does not widen the scope of the defence (Laird 2017 Criminal Law Review 556).

One aspect that was particularly noteworthy about this judgment was the trial court judge's discussion of the context in which indirect threats could be made. The judge was of the view that there was a clear distinction between a person whose free will was overwhelmed as a result of fear as opposed to the case in question where the accused was merely pressurised to act as a result of the romantic relationship that she shared with Alford (R v Brandford supra 23).

The Court of Appeal rejected the trial court's position, noting that the two concepts are different and could in fact operate in a cumulative manner (Laird 2017 Criminal Law Review 557). This is because the pressure based on a relationship exploits infatuation or affection, whereas the second concept (fear, which lies at the heart of duress) is based on fear (R v Brandford supra par 40). Laird points out that this raises two questions: (1) do compulsion and pressure that arise in the context of a certain type of relationship give rise to a new form of defence? (Laird 2017 Criminal Law Review 557); and (2) was there any immediacy of threat to constitute a complete defence? (par 33).

What is noteworthy about this "new" defence is that, like duress, it is also predicated on the principle of compulsion (Laird "Evaluating the Relationship Between Section 45 of the Modern Day Slavery Act 2015 and the Defence of Duress: An Opportunity Missed?" 2016 6 Criminal Law Review 395 398). Furthermore, compulsion must be ascribed to some form of "relevant exploitation" (Laird 2016 Criminal Law Review 395 398). Section 76 of the Serious Crimes Act 2015 provides for the new offence of controlling and coercive behaviour, which is limited to intimate or family relationships and which behaviour is capable of causing harm and special vulnerability to victims in these settings (Edwards "Coercion and Compulsion Re-Imagining Crimes and Defences" 2016 Criminal Law Review 876 877).

The implications of accepting such a defence are radical and problematic at best. First, since compulsion is not defined, it will have to be interpreted broadly. This means that since compulsion is subjectively tested, no evidence of threats or outward action is necessary (Laird 2016 Criminal Law Review 398). Therefore, viewed from the defendant's perspective, she could not have helped but act as she did. Such an approach does not accommodate the restrictive nature of the rest of the elements of the defence (Laird 2016 Criminal Law Review 398). Secondly, what criteria are envisaged in relation to the causation element? It appears that the strict requirement for causation - namely, the "but for" test - is relaxed and a lower criterion would suffice (Laird 2016 Criminal Law Review 398).

Thirdly, the common-law approach to duress, which is expressed in the case of Valderrama-Vega ([1985] Crim. L.R. 220), has raised the problem of the cumulative effect of the pressure under which the defendant operated. In that instance, the Court of Appeal, despite upholding the defendant's conviction, noted that juries should not be directed on the basis of whether the defendant acted solely as a result of threats of death or grievous bodily harm (Laird 2016 Criminal Law Review 397). As Laird notes, this element requires a strict interpretation and if the defendant would have committed the crime irrespective of any "relevant exploitation" or cumulative impact of the relationship, then Brandford would not necessarily have been able to rely on the defence (Laird 2016 Criminal Law Review 397). Not only does such an approach require "mental gymnastics" in determining if defendants would have acted as they did, but, further, it has the potential to greatly narrow the ambit of the defence (Laird 2016 Criminal Law Review 397). For instance, determining the meaning of "compulsion", or more specifically "coercion and controlling" behaviour, is dependent on "case specific factual context" (Edwards 2016 Criminal Law Review 878). Furthermore, practical problems arise in relation to proof concerning what degree of coercion is required and the type of evidence necessary to demonstrate that the defendant was compelled (Edwards 2016 Criminal Law Review 878).

What appears to be clear is that Brandford did not appreciate the true nature of the threat to Alford until the night before the events of 27 August, and any notion of voluntary association could be discounted (R v Brandford supra 27). However, in this instance, the jury was not given an opportunity to canvass this defence and therefore their jurisdiction was usurped in respect of this matter (R v Brandford supra 27). Despite flawed reasoning concerning the basic irreconcilability between fear and pressure based on a relationship, the judge was entitled to withdraw the defence. Therefore, an exploitation of a relationship without a "relevant threat of death or serious injury of sufficient potency, cannot found duress" (R v Brandford supra 40).

In this case, it was clear from the evidence that there was no immediacy of threat. This was demonstrated by the following factors: first, the vagueness of the threats made as well as the absence of the identity of the perpetrator making the threats (R v Brandford supra par 46); secondly, the absence of an immediate threat on the night in question - that is, she was able to purchase latex gloves and other items freely, and was able to contemplate the option of contacting either her father for assistance to pay off those threatening Alford or even the police; thirdly, the existence of the opportunity of escaping from the threat by disposal of the drug (Storey 2017 Journal of Criminal Law 93; see also R v Pommell ([1995] 2 Cr App R 607), despite which, Brandford insisted that Alford continue with the course of action; and finally, Brandford's reaction to the threats in this instance, and threats made on previous occasions such as the January pepper spray incident, the murder of Allman and the June stabbing, which did not correspond with the conduct of an individual who was fearful for Alford's life (R v Brandford supra par 46). These factors demonstrate the point that while indirect threats may form the basis of a defence of duress, in practice, they may provide a reason for withdrawing the defence from the jury (Laird 2017 Criminal Law Review 556).

In relation to the contention that indirect threats can form the basis of new defence as set out in section 45 of the Modern Slavery Act 2015, it has been held that they are insufficient to form the basis of duress on the basis of the above discussion (Laird 2017 Criminal Law Review 557). Nowhere is this more clearly demonstrated than in the traditional test used to assess duress as expounded in R v Graham ([1982] 1 All ER 891, and followed in the subsequent cases of R v Howe [1987] 1 All ER 771; [1987] AC 417); R v Hasan [2005] 2 WLR). In R v Brandford (supra), the court again highlighted the accepted objective test for duress:

"[Would] the sober person of reasonable firmness, sharing the characteristics of the defendant, ... not have responded to whatever he reasonably believed [the threatener] said or did by taking part [in the offence]?" (par 31)

The first leg of the test is subjective in nature - that is, did the defendant entertain an honest belief, as opposed to a reasonable belief, that their life was in danger? (James "Duress: Objective Test" 2007 Journal of Criminal Law 193 194). This means that the reasonable person would share the same characteristics, including psychiatric impairments that would not make them more vulnerable or timid but in fact genuinely more susceptible to threats (James 2007 Journal of Criminal Law 194; see also R v Bowen [1996] 2 Cr App R 157). Does this mean that if the standard for a "reasonable person" is a "reasonable victim of exploitation", does this turn the enquiry into a subjective one? (Laird 2016 Criminal Law Review 400). In addition, the question of what constitutes a relevant characteristic has yet to be determined but would appear to suffer from the same deficiencies as its common-law predecessor (Laird 2016 Criminal Law Review 400).

 

5 South African law

It is instructive to compare the English legal position in relation to the defence of duress as dealt with in Brandford with the position in South African law. In this regard, the defence of necessity in South African law will be juxtaposed with the English law counterpart of duress of circumstances, in order to compare and contrast the nature of the respective defences, and to see whether South African law would take a similar approach to the factual scenario that arose in Brandford.

The legal position pertaining to necessity has been set out in S v Goliath (1972 (3) SA 1 (A)). Necessity can constitute a complete defence, even in cases of murder (S v Bailey 1982 (3) SA 772(A) on the basis that heroism is not expected from ordinary people in life-and-death situations (25B-D). No distinction is made between threats induced by natural causes or by means of human agency (Yeo "Compulsion and Necessity in African Criminal Law" (2009) Journal of African Law 90 93; see also S v Goliath supra 24). For such a defence to be successful, certain conditions must be met. These include that:

a) a legal interest be threatened;

b) the threat have already commenced or be imminent;

c) the threat not be caused by the accused's fault;

d) the threat makes it necessary for the accused to avoid the danger; and

e) reasonable means be used to avert the danger (Burchell South African Criminal Law and Procedure: General Principles of Criminal law (2011) Vol 1 148).

English law requires that the existence of the threat need only be based on an honest belief on the part of the defendant. However, in South African law, because necessity operates as a justification ground, not only must the threat be real, but it must be of such a degree that no reasonable person would be able to withstand it (S v Goliath supra 11D; S v Peterson 1980 (1) SA 938 946 E-F; Burchell "Unravelling Compulsion Draws Provocation and Intoxication Into Focus" 2001 South African Journal of Criminal Justice 363). In other words, the accused's beliefs are not considered a factor regarding the enquiry into unlawfulness (Burchell Criminal Law 4ed (2013) 162). The accused's beliefs only become relevant when his or her conduct is proved to be unlawful - that is, where fault is present on the accused's part (Burchell Principles of Criminal Law 4ed (2013) 166-167). This point is crucial, in light of our new constitutional dispensation, as well as the culture of crime and violence and "blatant" disregard for human life (S v Mandela 2001 (1) SACR 156 (C) 166i-j).

Noting these points, the court in Mandela rejected a defence of necessity where certain factors were absent, such as the immediacy of life-threatening compulsion (168b). After the pronouncement in Mandela, it appears as if necessity has been relegated to the realm of criminal excuse: achieving a compromise between limits of human fortitude and constitutional ideals, such as the right to life (Le Roux "Killing Under Compulsion, Heroism and the Age of Constitutional Democracy" 2002 South African Journal of Criminal Justice 100 104; S v Mandela supra 168c-d). While fault is a requisite condition for necessity (S v Bradbury 1967 (1) SA 387 (A) 404H; S v Lungile 1999 (2) SACR 597 (SCA) 603c-d), case law has demonstrated that convictions will not solely be based on association with an organised crime syndicate that is known for a vengeful disciplinary code of conduct (per Holmes JA in S v Bradbury supra 404H, quoted in S v Mandela supra 164i-j). Rather, fault is merely one of the factors that courts use to determine whether an accused can successfully rely on the defence (Le Roux 2002 South African Journal of Criminal Justice 101). The ruling in Bradbury would be confined to members of a gang who at least know or foresee the violent nature of the gang and its code of vengeance, which they may be compelled to follow (Burchell 2001 South African Journal of Criminal Justice 363).

Although, in theory, the defence could be available in the Brandford scenario if it could be shown that there was no question of voluntary association, it would fail since the issue turns not solely on the question of whether she joined the gang, but rather on the absence of immediacy of life-threatening compulsion (S v Mandela supra 168b) and therefore any action taken was not necessary to avert the danger. Although the appellant in that case had argued that she had not appreciated the true nature of the threat up until the night in question (R v Brandford supra par 27), any reasonable person in the position of the appellant would have appreciated the nature of the threat that Alford faced (par 46). This is because of the length of the appellant's association with Alford and his dealings with the criminal syndicate (R v Brandford supra par 46). These included three previous incidents known to the appellant, which included the January pepper spray incident, the Allman murder,and the June stabbing (R v Brandford supra par 27), which she alleged she only "half believed" (par 27). Further, Brandford's general demeanour and conduct was not indicative of a person who was unduly fearful following this series of linking events (R v Brandford supra par 27).

The effect of the Mandela decision, in a particular context other than that of Brandford, is that the defence of necessity has been relegated to the realm of criminal excuse. Since the accused is exercising a choice to protect his life over that of another person, the defence will only prevail where heroic acts that extend beyond the capacity of a reasonable person would have been necessary to avert any possible harm. In such cases, it would be evident that the accused lacked the requisite culpability needed (S v Mandela supra 167c-e; Le Roux 2002 South African Journal of Criminal Justice 103).

Does this mean that the Mandela case is advocating the normative approach? (Le Roux 2002 South African Journal of Criminal Justice 104). Le Roux notes that in light of the rejection by Davis J of compulsion as a justification ground, a compromise solution was reached: acknowledging the constitutional principle of the right to life but also acknowledging the "limitations of human fortitude: heroism cannot be expected of people who are facing their own death" (Le Roux 2002 South African Journal of Criminal Justice 104). In other words, killing under compulsion would only be a defence where the accused committed the offence without a blameworthy state of mind - that is, with an absence of criminal capacity or knowledge of unlawfulness (Le Roux 2002 South African Journal of Criminal Justice 104). Le Roux noted that the normative evaluation of blameworthiness takes place, not because mens rea is absent, but where and precisely because it is present in terms of the psychological approach (Le Roux 2002 South African Journal of Criminal Justice 104).

However, it is submitted that a move towards a normative approach is problematic for a number of reasons. First, it places traditional necessity and putative necessity on an equal footing as a defence to fault. This could lead to an obfuscation of the two defences since with traditional necessity all requirements for the defence must be met, whereas with putative necessity, the normative concept of fault rests on whether or not the necessity arose from a mistake of law or "unavoidable ignorance" (Van Oosten "The Psychological Fault Concept Versus the Normative Fault Concept: Quo Vadis South African Criminal Law (Continued)" 1995 THRHR 568 574). In contradistinction, relying on putative necessity implies that the requirements for traditional necessity have not been met. The normative concept of fault implies that the defence will only be successful on the basis of circumstances of mistake of law or "unavoidable ignorance" (Van Oosten 1995 THRHR 568 574). However, it seems that if the accused lacked awareness of unlawfulness and there was therefore an absence of intention in terms of psychological fault, the defence would still not be available. Real necessity, on the other hand, affords a full defence despite the presence of intention. It also raises the issue of how an unlawful killing committed in circumstances of necessity with the presence of intention can be harmonised with a conviction on the basis of crime with intention, where awareness of unlawfulness is absent on account of mistake of law or unavoidable ignorance (Van Oosten 1995 THRHR 568 574). Lastly, necessity as a defence to fault, as opposed to unlawfulness, leads to the same result as necessity as a defence to unlawfulness rather than to fault (Van Oosten 1995 THRHR 568 574).

It is submitted that the position in South African law, pre Mandela, is preferable since the traditional justification ground of necessity adequately takes the accused's personal characteristics into account when personalising the objective standard. It does not require, like English law, a standard of heroism (S v Goliath supra 25) that the accused cannot reasonably be expected to meet (Williams "Necessity: Duress of Circumstances or Moral Involuntariness" 2014 Common Law World Review 1 5). Not only is it "morally unfair" to punish those that fall short of the standard but it also breaches the principle of fault (Williams 2014 Common Law World Review 6). South African courts would also not face the dilemma that English courts have faced in deciding which factors should be taken into consideration in the objectiveness enquiry (Virgo "Are the Defence of Provocation, Duress and Self-Defence Consistent?" 2002 Archbold Review 4 6). Although the English approach has been that characteristics are only relevant if sufficiently defined (Virgo 2002 Archbold Review 4 6; see also R v Bowen [1997] 1 W.L.R. 294, 300) and not self-induced (Virgo 2002 Archbold Review 4 6; Cochrane v Her Majesty's Advocate 2001 S.C.C.R. 655 par 21), the problem still rests with the notion that a defence of compulsion may be available in the context of close relationships (Virgo 2002 Archbold Review 6) The problem with this approach is that excuse requires that human frailties be considered as part of the standard of the "reasonable person" whereas "abnormality of mind" denotes a shift of the defence to the realm of excuse. However, as has correctly been pointed out, pressure must always be accompanied by threat of death or serious bodily injury (Laird 2017 Criminal Law Review 557). This was not the case in Brandford, and it therefore would also not be successful in terms of South African law.

In relation to the question whether such a defence would be available under a similar set of facts, the following points are noteworthy. The central focus is whether there was voluntary association. The ruling in Bradbury would be confined to members of a gang who at least know or foresee the violent nature of the gang and its code of vengeance that they may be compelled to follow (Burchell 2001 South African Journal of Criminal Justice 363). Although the appellant argued that she had not appreciated the true nature of the threat up until the night in question (R v Brandford supra par 27), any person in the position of the appellant would have appreciated the nature of the threat that Alford faced (par 46). This is because of the length of the appellant's association with Alford and his dealings with the criminal syndicate (R v Brandford supra par 46). These included three previous incidents known to the appellant, which included the January pepper-spray incident, the Allman murder and the June stabbing (R v Brandford supra par 27), which she alleged she only "half believed" (par 27). Her conduct was also not that of an individual who was unduly fearful following this series of linking events. Her evidence indicated that she only "half believed" what Alford had told her about the modus operandi of the syndicate (for instance, the January pepper spray incident, the Allman murder and the June stabbing (R v Brandford supra par 27)). Even if the defence of necessity were in principle available on the basis of the "relatively low standard" for assessing necessity as set out in S v Goliath (supra), she would not be viewed as having acted reasonably in the circumstances. This is because she had other reasonable alternatives, which clearly demonstrates that she did not act reasonably (S v Goliath supra). These circumstances include a lack of immediacy of life-threatening compulsion (S v Goliath supra) and the fact that she had the opportunity to change her mind, contact the police or ask her father for assistance (S v Mandela 2001 (1) SA 156 (C)).

 

6 Concluding remarks

It is submitted that a bifurcated approach, which is currently followed in the English law of compulsion and duress, is problematic and ought to be avoided at all costs. This approach was given prominence in the case of Mandela, where the court implied that, in cases of compulsion, a normative approach ought to be adopted. It is submitted that a "one-size-fits-all approach" as followed prior to the Mandela decision is to be preferred for the following reasons. First, the dichotomy between justification and excuse plays an indispensable role in extrapolating and expounding the goals that criminal law seeks to achieve. One of these goals is ensuring legitimacy by elucidating the problems in criminal responsibility, which are essentially geared at reflecting community values. The second goal of criminal law is efficiency. This can be achieved by ensuring that the distinction in the law maintains coherence and clarity needed for correctly attributing blame (Mousourakis "Distinguishing Between Justifications and Excuses in the Criminal Law" 1998 Stellenbosch L. Rev. 165 180). These goals can be attained by maintaining the traditional approach to necessity- that is, by treating it as a justification ground. The primary difficulty with adopting a pragmatic approach as has been followed in Mandela and in the English law is that such an approach does not sufficiently maintain key distinctions. The case of Mandela, taken to its logical conclusion, leads to the same primary problems that have been critiqued in the English approach - namely, a failure to maintain critical distinctions. For example, consider the defence of necessity and duress of threats and circumstances. The English courts have gone on to develop duress of circumstances as an excusatory defence, which is problematic since the defence now covers circumstances that are viewed as necessity in other jurisdictions (Williams 2014 Common Law World Review 5). The English approach also appears to incorporate into the liability enquiry aspects that belong in the sentencing enquiry. This is clear when one considers how the courts have grappled with which factors to take into consideration in the test for duress, whether by threats or circumstances. The test now incorporates a subjective criterion: did the defendant in the circumstances as she reasonably believed them to be have good reason to fear that serious bodily harm or death would follow if the offence was not committed (Virgo 2002 Archbold News 4). Excuse requires that human frailties be considered as part of the standard of the "reasonable person", possibly denoting a shift to the realm of excuse (Mousourakis Stellenbosch L. Rev. 178). To prevent this, the courts will have to exercise circumspection when determining which factors should be imputed to the reasonable person standard to ensure that such a standard is not rendered inapplicable. "Abnormality of mind" is a completely different legal defence, one which falls outside the realm of "human frailty" (Mousourakis Stellenbosch L. Rev. 179). The introduction of a novel defence of compulsion, as suggested by Laird, would merely create more confusion, not only conflating two very different defences but also introducing a subjective element into the liability enquiry. In addition, diminished capacity is an issue that is to be dealt with at the sentencing stage of the trial. This novel defence highlighted by Laird was not raised in Brandford. However, it bears reiterating that while courts are final arbiters of the meaning of legal terminology, certainty is essential. If it is correct that, for a defence to qualify as an excuse, it is not essential that the coercive circumstances substantially reduce the decision-making capabilities of the actor involved (Chiesa "Duress, Demanding Heroism, and Proportionality" 2008 Vand. J. Transnat'l L. 741 759), then it creates a misleading understanding of the term "emotional pressure". The implication is that, although the actor may have been faced with a hard choice, it merely had the effect of limiting his capacity, not excluding it. In other words, he retained the capacity to choose (Chiesa 2008 Vand. J. Transnat'l L. 741 759). This distinction plays an important role in South African law. The basic tenets of criminal liability demand that the conduct of the actus reus be proved to be voluntary, or put another way, that it be subject to the conscious will of the accused. Once the accused is shown to be acting voluntarily, there is no need to ask for a second time whether the conduct is voluntary (Louw "The End of the Road for the Defence of Provocation?" (2004) South African Journal of Criminal Justice 200 204). Capacity is not capable of gradation in South African law, but is taken into account at the sentencing phase (S v Bradbury supra 394 F-G; Van Oosten 1995 THRHR 568 579).

In contradistinction, it could be pointed out that in English law, the courts still punish those who substantially lack capacity to control their actions (Chiesa 2008 Vand. J. Transnat'l L. 741 760). Chiesa makes use of the example of the defendant who loses self-control, shoots his wife's rapist, and injures him. In such an instance, the law does not provide the defendant with a partial or full excuse for his conduct should the rapist survive (760). The opposite is also true in South African law. Louw has noted that courts have acquitted the accused despite the presence of capacity (Louw "S v Eadie: Road Rage, Incapacity and Legal Confusion" 2001 South African Journal of Criminal Justice 206 215, discussing S v Moses 1996 (1) SACR 701 (C) 714H-I). Since diminished capacity should rightly be taken into consideration at the sentencing stage of the trial, there must be another important theoretical reason to maintain the distinction between justification and excuse for determining liability (McCauley "Necessity and Duress in Criminal Law: The Confluence of Two Great Tributaries" 1998 Irish Jurist 120 127). This is despite the fact that both justification and excuse could in principle lead to an acquittal.

Another problem that arises concerning the justification/excuse dichotomy is that it presents certain practical problems. For instance, in cases of duress and excuse, a person who assists another in the commission of a crime should be convicted as an accessory, even though the principal offender is excused (Mousourakis 1998 Stellenbosch L. Rev. 166). In contradistinction, an accessory to a crime would escape criminal liability if the principal successfully pleads a justification-based defence (Mousourakis 1998 Stellenbosch L. Rev. 166). The basis for an acquittal would be putative defence. This is the position in South African law, and it is submitted that it would be preferable for a defence of necessity to be assessed on the basis of a test that reflects the proper nature of the inquiry: in general terms, an objective assessment for the actus reus, and a subjective assessment for mens rea (Taitz "Compulsion as a Defence to Murder: South African Perspectives" 1982 Law & Just. - Christian L. Rev. 10 17).

The distinction between justification and excuse is important and should remain a justification ground: the basis on which an acquittal rests serves a "symbolic function in criminal law since if it is raised as legitimate defence, it assumes that the holder of the right can use force against an unlawful attack" (McCauley 1998 Irish Jurist 120 127). Describing a defence as one of justification sends a clear message that the conduct is approved. Furthermore, a person

"cannot turn away from his concrete interests when he is evaluating the [dilemmatic choice with which he is confronted] ... the state acknowledges that, even though from an objective point of view the interests of a person who acts under duress have no more weight than the interests of the actor's innocent victim, it is comprehensible that citizens attach more value to their own ends." (Chiesa 2008 Vand. J. Transnat'l L. 760)

Finally, in accordance with the approach of the Court of Appeal in Brandford, it may be concluded that there is no logical basis for excluding an accused from a defence of necessity on the basis of indirect threats. However, the success of such a defence would be dependent on whether there was "immediacy of life-threatening compulsion".

Samantha Goosen

University of KwaZulu-Natal, Pietermaritzburg

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CASES

 

Thoughts on the decriminalisation of the use or possession of cannabis within private settings - Minister of Justice and Constitutional Development v Prince 2019 (1) SACR 14 (CC)

 

 

1 Introduction

"The illegality of cannabis is outrageous, an impediment to the full utilization of a drug which helps produce the serenity and insight, sensitivity and fellowship so desperately needed in this increasingly mad and dangerous world." (Carl Sagan)

The use or possession of drugs has been a phenomenon since time immemorial. In South Africa, the essential offences pertaining to drugs are provided for in the Drugs and Drug Trafficking Act 140 of 1992 (the Act). The two most important crimes provided for in the Act are "dealing in drugs" and the "use or possession of drugs" (s 4 and 5 of the Act; Snyman Criminal Law (2014) 420-426; Burchell and Milton Principles of Criminal Law (2013) 797806). The Act divides drugs into three general categories - namely, dependence-producing substances; dangerous dependence-producing substances; and undesirable dependence-producing substances. The specific drugs resorting in each of these categories are listed in Schedule 2 of the Act (Burchell and Milton Principles of Criminal Law 803; Snyman Criminal Law 420). The punishment prescribed for the possession, use or dealing in dangerous dependence-producing substances and undesirable dependence-producing substances is harsher than that for possession, use or dealing in dependence-producing substances (Snyman Criminal Law 420). It is interesting, and topical for purposes of the current discussion, that cannabis or dagga is classified in terms of Schedule 2 as an undesirable dependence-producing substance.

The case under discussion (Minister of Justice and Constitutional Development v Prince 2019 (1) SACR 14 (CC)) is of particular importance as the use or possession of cannabis within private settings was addressed from a constitutional perspective and, more pertinently, on a question as to the constitutionality of the criminalisation thereof. Upon first glance, it seems as though the issues addressed in this case correspond with the disputes addressed in the earlier case of Prince v The President, Cape Law Society (2002 (2) SA 794 (CC) (Prince (2)). As is indicated in this contribution, the issues in these two judgments are distinct and differ in many instances.

A critical analysis of the decision under discussion reveals that although the use or possession of cannabis within private settings has, by virtue of the case, been decriminalised against a constitutional backdrop, it also opens the door to critical debate pertaining to various substantive and procedural issues.

 

2 Facts

The salient facts of the decision appear from the judgment delivered by Zondo ACJ (Cameron J, Froneman J, Jafta J, Kathree-Setiloane AJ, Kollapen AJ, Madlanga J, Mhlanta J, Theron J and Zondi AJ concurring; see also judgment of Davis J in Prince v Minister of Justice 2017 (4) SA 229 (WCC) (Prince (1)). The case under discussion dealt essentially with the use or possession of cannabis (dagga) for personal consumption or use within private settings and whether the criminalisation thereof was constitutional.

The applicants brought an application to declare invalid the legislative provisions prohibiting the use of cannabis and the possession, purchase and cultivation thereof for personal use (Prince (1) supra par 4-5). The relevant provisions that were sought to be declared as invalid were sections 4(b) and 5(b) of the Act read with section 22A(10) of the Medicines and Related Substances Control Act 101 of 1965 (Medicines Act) insofar as it related to, and prohibited, the possession and use of cannabis by adults within private settings (Prince (1) supra par 5). More specifically, the applicants argued that the criminal prohibition of the use and possession of cannabis in private settings, such as the home environment or "properly designated places", was unconstitutional (Prince (1) supra par 11). It was submitted that fundamental rights such as equality, dignity and freedom of religion were infringed upon.

The core challenge against the relevant legislative provisions was founded on the right to privacy (Prince (1) supra par 11). It was, in addition, contended that the distinction between cannabis and other harmful substances such as alcohol and tobacco was irrational and accordingly that the limitation to the right to privacy was unjustifiable in terms of section 36(1) of the Constitution, 1996 (the Constitution). After conducting a thorough analysis of the nature and ambit of the right to privacy as provided for in the Constitution as well as the arguments in favour of the limitation of this right, the High Court concluded that the relevant provisions infringed the right to privacy (Prince (1) supra par 21-34). The High Court, in addition, held that the expert evidence presented by the applicants as to why the limitation of the right to privacy was unjustifiable weighed more heavily than the evidence presented by the respondents (Prince (1) supra par 91-92). The High Court further emphasised that the case under discussion was concerned exclusively with the conduct of individuals within the privacy of their own homes or private settings having due regard to the numerous challenges surrounding drug abuse as well as drug abuse among minors (Prince (1)) supra par 107). The High Court embarked on an in-depth analysis with regard to the right to privacy in terms of the Constitution coupled with the justification analysis as provided for in terms of section 36 (Prince (1) supra par 21 -34). The High Court further held:

"The evidence, read as a whole, cannot be taken to justify the use of criminal law for the personal consumption of cannabis. The present prohibition contained in the impugned legislation does not employ the least restrictive means to deal with a social and health problem for which there are now a number of less restrictive options supported by a significant body of expertise. The additional resources that may be unlocked for use or policing of serious crimes cannot be over emphasised." (Prince (1) supra par 106)

The High Court, in addition, found that it would be practical and objectively possible for legislation to provide for a distinction between the use of cannabis and the possession, purchase or cultivation thereof for private use as opposed to other uses (Prince (1)) supra par 110).

The High Court accordingly declared sections 4(b) and 5(b) of the Act read with Part 3 of Schedule 2 of the Act, as well as sections 22A(9)(a)(i) and 22(10) of the Medicines Act, to be inconsistent with the Constitution to the extent that they prohibited the use of cannabis by an adult in a private dwelling where the possession, purchase or cultivation is for the personal consumption by an adult (Prince (1) supra par 132).

The matter was thereafter referred to the Constitutional Court for confirmation of the High Court's order in terms of section 172(2) of the Constitution. The Constitutional Court accordingly had to assess whether the relevant provisions did indeed limit the right to privacy and, if so, whether such limitation was reasonable and justifiable (par 18-19). The Constitutional Court reiterated that the provisions that were attacked on constitutional grounds were only those that prohibited the use, cultivation or possession of cannabis in private by an adult for his or her own personal consumption in private by an adult (par 19).

 

3 Legislative framework

It is from the outset important to take a closer look at the relevant provisions of the Act and the Medicines Act that were declared inconsistent with the Constitution. As stated above, the Act provides for two main offences: the use or possession of drugs, and dealing in drugs (Snyman Criminal Law 420-426; Burchell and Milton Principles of Criminal Law 799-806). Dealing in drugs is the more serious of the two offences, concomitantly carrying harsher sentences or penalties (see s 17(c) and (e) of the Act read with s 13(e) and (f); S v Cwele 2013 (1) SACR 478 SCA; S v Gcoba 2011 (2) SACR 231 (KZP); S v Naidoo 2010 (1) SACR 369 (KZP); S v Mtolo 2009 (1) SACR 443 (O); S v Mlombo 2007 (1) SACR 664 (W); S v Tshabalala 2007 (2) SACR 263 (W)).

To "possess" is defined in the Act "in relation to a drug, [to] include[...] to keep or to store the drug, or to have it in custody or under control or supervision".

The word "include" in terms of the definition clearly denotes that both the conventional meaning of possession and the extended interpretation of possession in terms of the Act will serve to establish whether possession took place. As such, the prosecution can rely on either to prove possession (see Snyman Criminal Law 421-422). Section 4 of the Act deals with the use and possession of drugs. Section 4 reads as follows:

"No person shall use or have in his possession-

(a) any dependence-producing substance; or

(b) any dangerous dependence-producing substance or any undesirable dependence-producing substance, unless ..."

Section 4 proceeds then to provide for an elaborate selection of circumstances in terms of which the possession or use of these substances will be justified, such as a patient acquiring any of the substances in terms of a prescription from a medical practitioner, or a pharmacist who is legally in possession of these substances (Snyman Criminal Law 422; Burchell and Milton Principles of Criminal Law 804).

In Schedule 2 of the Act, cannabis is listed under Part 3 as an undesirable dependence-producing substance. Section 13 of the Act provides for the offences in terms of the Act. Read with section 17, section 13 provides that any person convicted of the use or possession of an undesirable dependence-producing substance, which includes cannabis, potentially faces a sentence or such fine as the court may deem fit to impose or to imprisonment for a period not exceeding 15 years, or to both a fine and imprisonment (see s 13 of the Act; Snyman Criminal Law 423).

The decision under discussion dealt with the application of section 4(b) within the context of the use of possession of cannabis in private settings and whether the criminalisation of it was constitutional.

Section 5 of the Act reads as follows:

"No person shall deal in-

(a) any dependence-producing substance, or

(b) any dangerous dependence-producing substance or any undesirable dependence-producing substance, unless ."

Similar to section 4, section 5 provides for a selection of instances that would normally be classified as dealing, but which are justified in terms of the Act, such as substances acquired by a patient from a medical practitioner in terms of a written prescription, or from a pharmacist in terms of a written prescription (see s 5 of the Act; Snyman Criminal Law 423, 425).

The Act defines "deal in" in relation to a drug as "performing any act in connection with the transhipment, importation, cultivation, collection, manufacture, supply, prescription, administration, sale, transmission or exportation of the drug". It is specifically the "cultivation" of cannabis for personal use and possession thereof that was also placed under constitutional scrutiny in the decision under discussion. As stated above, cannabis is classified in terms of Schedule 2, Part 3 of the Act as an undesirable dependence-producing substance. Accordingly, the punishment prescribed for dealing in cannabis is imprisonment for a period not exceeding 25 years or to both a fine and imprisonment (see s 13(f) of the Act, read together with s 17(e); Snyman Criminal Law 426). In the past, an individual found to have "cultivated" cannabis for personal use could face a harsh sentence for dealing in cannabis (see, for example, S v Mbatha 2012 (2) SACR 551 (KZP)).

Note that the order by the High Court provided for the decriminalisation of the cultivation of cannabis in a private dwelling by an adult for his or her personal use or consumption in private and it was accordingly held that the particular provisions were inconsistent with the right to privacy entrenched in the Constitution (Prince (1) supra par 132). Section 5(b) specifically becomes relevant when assessing the definition of "deal in" as provided for in the Act as discussed above.

Section 22A(9)(a)(i) of the Medicines Act reads as follows:

"No person shall-

(i) acquire, use, possess, manufacture or supply any Schedule 7 or Schedule 8 substance, or manufacture any specified Schedule 5 or Schedule 6 substance unless he or she has been issued with a permit by the Director-General for such acquisition, use, possession, manufacture, or supply: Provided that the Director-General may, subject to such conditions as he or she may determine, acquire or authorise the use of any Schedule 7 or Schedule 8 substance in order to provide a medical practitioner, analyst, researcher or veterinarian therewith on the prescribed conditions for the treatment or prevention of a medical condition in a particular patient, or for the purposes of education, analysis or research."

In terms of Schedule 7 to the Medicines Act, cannabis is one of the listed substances and as such section 22A(9)(a)(i) of the Medicines Act prohibits the acquisition, use, possession, manufacture or supply of cannabis, among other substances.

Section 22(10) provides as follows:

"Notwithstanding anything to the contrary contained in this section, no person shall sell or administer any Scheduled substance or medicine for other than medicinal purposes: Provided that the Minister may, subject to the conditions or requirements stated in such authority, authorise the administration outside any hospital of any Scheduled substance or medicine for the satisfaction or relief of a habit or craving to the person referred to in such authority."

Section 22(10) prohibits the sale or administration of any scheduled substance or medicine for any purpose other than medical purposes.

 

4 Judgment

In delivering judgment, the Constitutional Court had to assess whether to confirm the order of the High Court and if so, to what extent. The court conducted a thorough analysis of the nature and ambit of the right to privacy in terms of section 14 of the Constitution (see also Bernstein v Bester NNO 1996 (2) SA 751 (CC)). With respect to the right to privacy, Zondo ACJ held as follows:

"What this means is that the right to privacy entitles an adult person to use or cultivate or possess cannabis in private for his or her personal consumption. Therefore, to the extent that the impugned provisions criminalise such cultivation, possession or use of cannabis, they limit the right to privacy." (par 58)

The court further proceeded to conduct the limitation analysis in terms of section 36 of the Constitution in order to assess whether the limitation of the right to privacy was reasonable and justifiable in an open and democratic society based on human dignity, equality and freedom (par 59). It was argued on behalf of the State that the goal behind the prohibition pertains to the protection of the health, safety and psychological well-being of the individuals affected by the use of cannabis (par 63).

After analysing the report by the South African Central Drug Authority, it was held that on an assessment of all available data in other countries, it is clear that alcohol causes the most individual and social harm and that the immediate aim should fall on decriminalisation (par 78). The court further emphasised that in many other jurisdictions the possession of cannabis, in small quantities for personal use, has been decriminalised (par 79). The court, in addition, also with reference to Prince (2), pointed out that based on the medical evidence presented there is no indication as to the amount of cannabis that should be consumed in order to be regarded as harmful (par 81). It was accordingly held that the limitation of the right to privacy was not reasonable and justifiable in an open and democratic society (par 101).

In terms of section 5(b) of the Act, Zondo ACJ held as follows:

"The issue of the cultivation of cannabis in private by an adult for personal consumption in private should not be dealt with on the basis that the cultivation must be in a dwelling or private dwelling. It should be dealt with simply on the basis that the cultivation of cannabis by an adult must be in a private place and the cannabis so cultivated must be for that adult person's personal consumption in private.

I am of the view that the prohibition of the performance of any activity in connection with the cultivation of cannabis by an adult in private for his or her personal consumption in private is inconsistent with the right to privacy entrenched in the Constitution and is constitutionally invalid." (par 85-86)

The order of the High Court further declared the provisions dealing with the purchase of cannabis to be inconsistent with the Constitution. The Constitutional Court per Zondo ACJ, however, declined to confirm the order of the High Court in that regard and held:

"If this court were to confirm the order declaring invalid provisions that prohibit the purchase of cannabis, it would, in effect be sanctioning dealing in cannabis. This the court cannot do. Dealing in cannabis is a serious problem in this country and the prohibition of dealing in cannabis is a justifiable limitation of the right to privacy." (par 88)

The Constitutional Court declined to confirm the part of the order of the High Court pertaining to section 22A(10) as it was held that this section prohibits the sale and administration of, among others, cannabis for purposes other than medicinal purposes unless it resorts under one of the exceptions. It was held, however, that the order of the High Court made no reference to the sale or administration of cannabis (par 89). The court, in addition, held that the declaration of invalidity of the use, or possession, or cultivation of cannabis should extend further than merely when it occurs in a home or private dwelling as stipulated by the High Court order. It was accordingly held by Zondo ACJ:

"In my view, as long as the use or possession of cannabis is for the personal consumption of an adult, it is protected. Therefore, provided the use or possession of cannabis is by an adult person in private for his or her personal consumption, it is protected by the right to privacy entrenched in s 14 of our Constitution." (par 100)

It was further held that the order of invalidity would operate prospectively and not retrospectively (par 102).

It was accordingly held that the provisions of section 4(b) and 5(b) of the Act, read with Part 3 of Schedule 2 to the Act, as well as section 22(9)(a)(i) of the Medicines Act, were inconsistent with the right to privacy entrenched in section 14 of the Constitution. It was ordered that during the period awaiting intervention by Parliament, interim relief in the form of reading-in would be granted (par 105). In terms of section 4(b), it was ordered that a sub-paragraph should be included to provide as follows:

"No person shall use or have in his possession-

(b) any dangerous dependence-producing substance or any undesirable dependence-producing substance, unless

(vii) in the case of an adult, the substance is cannabis and he or she uses it or is in possession thereof in private for his or her personal consumption in private."

With regard to section 5(b) of the Act, it was held that the definition of "deal in" should be amended in the following manner in terms of reading-in:

"deal in, in relation to a drug, includes performing any act in connection with the transhipment, importation, cultivation other than the cultivation of cannabis by an adult in a private place for his or her personal consumption in private ..." (par 106)

In terms of section 22A(9)(a)(i) of the Medicines Act, it was held that the following words should be read in after the word "unless":

"in the case of cannabis, he or she, being an adult, uses it or is in possession thereof in private for his or her personal consumption, in private or, in any other case ..." (par 107)

It was, in addition, held that the implications of the reading-in would entail the following:

• an adult may use or be in possession of cannabis in private for his or her personal consumption in private;

• the use, including the smoking of cannabis in public or in the presence of non-consenting adults would not be permitted;

• the use or possession of cannabis in private would only relate to adults; and

• the cultivation of cannabis by an adult in a private place for his or her personal consumption in private would no longer be an offence (par 109).

It was held that the amount of cannabis found in an individual's possession would be an indication as to whether that individual was in possession of cannabis for a purpose other than personal consumption (par 110).

 

5 Assessment

From a constitutional perspective, the judgment under discussion seems sound and in line with the values enshrined in the Constitution. The judgment, however, opens the door to a critical debate on a number of aspects.

The use or possession of cannabis for private use was also challenged on constitutional grounds in Prince (2). In the latter decision, the provisions of section 4(b) of the Act and section 22A of the Medicines Act were challenged on the grounds that they were inconsistent with section 15(1) of the Constitution in terms of failing to provide for an exemption to Rastafari individuals who possess and use cannabis for religious purposes.

The facts, briefly, were that the appellant sought to enter the attorneys' profession and had to register his contract to do articles of clerkship. Since the appellant had had two previous convictions for possession, the second respondent in the matter, the Cape of Good Hope Law Society, declined to register his contract on the basis that the appellant had disclosed that he uses cannabis for religious purposes as he was a member of the Rastafarian religion and was not intending to cease using it (Prince (2) supra par 1-2). In Prince (2), it was contended that the relevant provisions were unconstitutional to the extent that they failed to provide an exemption applicable to the use or possession of cannabis for religious purposes (Prince (2) supra par 27). As indicated above, section 4 of the Act creates a number of exceptions in terms of which the use or possession of cannabis is justified, such as for medical purposes. Accordingly, the decision in Prince (2) did not pertain to the complete decriminalisation of the private use or possession of cannabis, but concerned rather the failure to include religion as one of the exemptions to the prohibition of the private use or possession of cannabis and the question whether the provisions of the Act were overbroad. This is where the judgment under discussion differs essentially from Prince (2) (see in essence Prince (2) supra par 31).

The essential submission in Prince (2) was that the impugned provisions were so overbroad that the unlimited nature of the proscriptions also encompassed the use or possession of cannabis by Rastafarians for religious purposes (Prince (2) supra par 33). In Prince (2), the court had to assess whether a limited exemption from the prohibition of the use or possession of cannabis should be granted to individuals of the Rastafarian religion. The case under discussion, however, dealt with the complete decriminalisation of the use of possession of cannabis for private consumption. It is interesting to reflect on these polar opposites for purposes of assessment of the judgment under discussion.

Prince (2) indicated that providing for limited exemptions to the use or possession of cannabis could become problematic. The majority in Prince (2) (per Chaskalson CJ, Ackerman J and Kriegler J) held:

"There is no objective way in which a law enforcement official could distinguish between the use of cannabis for religious purposes and the use of cannabis for recreation. It would be even more difficult, if not impossible, to distinguish objectively between the possession of cannabis for the one or the other of the above purposes. Nor is there any objective way in which a law enforcement official could determine whether a person found in possession of cannabis, who says that it is possessed for religious purposes, is genuine or not. Indeed in the absence of a carefully controlled chain of permitted supply, it is difficult to imagine how the island of legitimate acquisition and use by Rastafari for the purpose of practicing their religion could be distinguished from the surrounding ocean of illicit trafficking and use." (Prince (2) supra par 130).

The majority in Prince (2) dismissed the appeal. The minority judgments by Sachs J and Ngcobo J, however took the stance that religion could have been accommodated in terms of an exemption in the provisions of the Act (Prince (2) supra par 81 -89 and 170-171).

In his minority judgment, Ngcobo J found the relevant provisions of the Act to be inconsistent with the Constitution and commented as follows:

"I accept that the goal of the impugned provisions is to prevent the abuse of dependent-producing drugs and trafficking in those drugs. I also accept that it is a legitimate goal. The question is whether the means to employ that goal are reasonable. In my view, they are not. The fundamental reason why they are not is because they are overbroad. They are ostensibly aimed at the use of dependence-producing drugs that are inherently harmful and trafficking those drugs. But they are unreasonable in that they target uses that have not been shown to pose a risk of harm or to be incapable of being subjected to strict regulation and control. The net they cast are so wide that uses that pose no risk of harm and that can be effectively be regulated and subjected to government control like other dangerous drugs are hit by the prohibition." (par 81)

There seems to be merit in Ngcobo J's reasoning as the provisions of the Act are in a sense very broad; on the other hand, creating exemptions could become extremely problematic in terms of the practical enforcement thereof. The latter dilemmas are clearly canvassed in the judgment.

It is submitted that the majority decision in Prince (2) should be supported as it would be virtually impossible to enforce such exemptions. The practical and logistical dilemmas would be endless. The case under discussion, however, took the debate to the next level in terms of seeking the complete decriminalisation of the use or possession of cannabis for private consumption as well as of the cultivation of cannabis for personal use on the basis that the provisions of the Act infringed the right to privacy in terms of section 14 of the Constitution. The practical implication of the decriminalisation of the use or possession or cultivation of cannabis for personal use or consumption would entail that an adult person found in possession of small quantities of cannabis or, for example, cultivating cannabis in the form of growing a dagga plant in his or her garden would not be guilty of either possession of drugs in terms of section 4 of the Act, or of dealing in drugs in terms of section 5 of the Act. It is important to note that the judgment only pertains to cannabis and only to adult persons using or possessing cannabis for personal use.

A clear-cut example of the issues canvassed in the judgment under discussion came before the court in the not-too-distant past in S v Mbatha (supra). The latter case is relevant within the current discussion as it illustrates one of the fundamental reasons that a revisitation of the provisions of the Act became pivotal. The facts, briefly, were that the South African Police Services proceeded to the home of the accused as a result of information received. While searching the premises of the accused, the police found a parcel of loose dagga in a clear plastic wrapping alongside the bed. On proceeding with their search outside the premises, they found a clear-plastic bread packet containing dagga seeds alongside the house. In addition, they also found a newspaper bundle containing loose dagga. On further searching the yard of the premises, they found a fully grown dagga plant.

The accused was subsequently charged in the magistrates' court of the district of Dundee of dealing in dagga in contravention of the provisions of section 5(b) of the Act read with sections 1, 13(f), 17(e), 18, 19, 25 and 64 and, in the alternative, with possession or use of dagga in contravention of sections 1, 13(d), 17(d), 18, 19, 25 and 64 of the Act.

The trial magistrate convicted the accused of dealing in dagga and sentenced the accused to eighteen months' imprisonment, wholly suspended for a period of three years on condition that he was not again convicted of contravening sections 5(b) or 4(b) of the Act committed during the period of suspension. The accused was, in addition ordered to pay a fine of R1 000.00 or in default thereof undergo six months' imprisonment. The case was referred for automatic review to Wallis J who referred the matter for argument before the full court in relation to the precise meaning of the word "cultivation" contained in the definition of "deal in" in the Act.

With reference to the interpretation of the term "cultivation", the majority of the court (S v Mbatha supra par 8) relied primarily on the dictum of Cillié JP and Bekker J in the decision of S v Kgupane (1975 (2) SA 73 (T) 75H), where the term "cultivate" was assessed in terms of the forerunner to the Act, namely the Abuse of Dependence Producing Substances and Rehabilitation Centres Act 41 of 1971 (see also S v Guess 1976 (4) SA 715 (A)). Bekker J stated as follows:

"Na my mening geld die volgende: Dat 'n kweker van dagga skuldig is aan 'handeldryf' is nie te betwyfel nie. Hy word regstreeks getref en val binne die trefwydte van die statutêre omskrywing van 'handeldryf wat verskyn in art 1 van die Wet. Kweek van dagga is handeldryf. Die afleiding wat gemaak moet word uit hoofed van omskrywing van 'handeldryf, gesien in die lig van die voorgeskrewe vonnis, is dat dit die bedoeling van die Wetgewer is om die nekslag toe te dien aan kweek van dagga al sou dit deur die kweker vir eie gebruik bestem wees. Met ander woorde, soos ek die artikel vertolk is die verbod gemik op die kweek van die plant ongeag vir watter doel dit ook al bestem is. Natuurlik is dit terselfdertyd dan ook so dat die kweker 'in besit' van die daggaplant is en dat 'n pas ontkiemde plant minder as 115 gram kan weeg. Dit egter, gesien in die lig van die omskrywing van 'handeldryf' bied hom geen uitkoms nie. Die klem val nie op die word 'besit' nie maar op 'kweek' van dagga, wat hom dan binne die trefwydte van handeldryf insleep." (S v Kgupane supra 75H)

In applying the dictum in the Kgupane decision, the majority of the court, per Gyanda J, held:

"I am of the view therefore, that, in spite of the sympathy that may be felt for a user of dagga, who plants a single dagga plant for his own use, but is convicted of dealing in dagga rather than possession thereof, ... it is quite clear that the intention of the legislature was that, in its pursuit of the sharks, unfortunately some minnows might be caught in the same net." (S v Mbatha supra par 12)

The court rejected the argument that "cultivate" should be interpreted within the context of "raising" or "growing" plants for commercial purposes and as such not bringing within the ambit of "cultivate" a user who grew a solitary plant for his or her own use (par 14). A person falling in the latter category would as such not be deemed a "dealer". It was held that such circumstances would at most be relevant for purposes of assessing the question of sentences to be imposed (par 14). It was accordingly held that the court could not assist the ordinary user of dagga who cultivates a dagga plant for his or her own personal use and, as such, not with the motive of cultivating it for the purpose of dealing (par 15). It was held that the accused had correctly been convicted of dealing in dagga (par 16).

It was held by the minority, per Madondo J, that the object of the Act was, inter alia, to provide for the prohibition of the use or possession of, or dealing in drugs as well as acts relating to the manufacture or supply of certain substances or the acquisition or conversion of the proceeds of certain crimes, the recovery of the proceeds of drug trafficking and matters connected thereto (563 f-g). Madondo J, in addition, held as follows:

"It is apparent ... that the Act aims at eliminating financial incentives from illicit trafficking in dagga, but not to brand any act relating to dagga-handling as dealing. Therefore it is appropriate to conclude that the word 'cultivation' should not be interpreted in isolation, but with reference to dealing in dagga. For an accused person to be convicted of dealing in dagga, merely on the basis that he or she has cultivated dagga, a link must be established between cultivation of and dealing in dagga. In other words, the evidence must show beyond a reasonable doubt that the accused person cultivated dagga for the purpose of selling or supplying it to other people. In fact, the state must prove cultivation, prohibition, i.e. dealing in dagga and intention." (S v Mbatha supra 563 g-h)

It was held by Madondo J that the intention of the legislature in prohibiting cultivation of dagga was to prevent its sale or supply and as such the provisions relating to "deal in" should not be construed so as to render a person possessing dagga for personal use, or therapeutic purposes, a dealer (564 e).

An important aspect to which Madondo J alluded in the minority decision relates to the penalties prescribed in the Act in respect of the offence of dealing in drugs. Section 17(e) of the Act provides that any person guilty of the offence of dealing in dagga shall be liable to imprisonment for a period not exceeding 25 years or to both imprisonment and such fine as a court may deem fit (see also Snyman supra 434). It was held that the imposition of minimum imprisonment for an offence that may be committed unknowingly and without the requisite intention depriving the accused person of his or her liberty "[offends against the principles of fundamental justice" (568 g-h).

Madondo J held that there is no indication that the interpretive approach ascribed to the meaning of the word "cultivation", which inherently infringes on the right to be presumed innocent and the right to freedom and security of the person, constituted a legitimate limitation of the rights, nor that such infringement serves a legitimate purpose (570 a-b). It was further held that there is no evidence to indicate that the cultivation of a single dagga plant or a few plants presents a reasonable risk of serious, substantial or significant harm to either the individual concerned or society (570 c-e). As such, an accused person who grows a single dagga plant or a few plants for own use, may face severe punishment and potentially be exposed to the full extent of the confiscation provisions. In terms of section 25 of the Act, such an accused person stands to lose his or her assets, including homes, as section 25 of the Act provides that a conviction of dealing in dagga may be followed by an order for confiscation of assets (570). In terms of section 25 of the Act, a court convicting an accused person of dealing in drugs may, in addition to any punishment that the court may impose, declare that any property, including the immovable property used for the purpose of or in connection with the commission of the offence, be forfeited to the State (570 i-j).

It was held that the legislature had not intended to exclude mens rea as an essential ingredient of the offence of dealing in drugs by including the word "cultivation" in the definition of "deal in" in the Act (572 a-b). It was further held that where a statutory provision imposes an obligation upon an accused person to establish certain facts in order to escape criminal liability, it constitutes a breach of the presumption of innocence enshrined in section 35(3)(h) of the Constitution (572 f-g). In respect of the interpretation of the term "cultivation", Madondo J held:

"The word 'cultivation' should be interpreted restrictively to mean cultivation for commercial purposes or to supply to other people. In order to secure a conviction of dealing, on the ground of dagga cultivation, the state must prove beyond reasonable doubt cultivation, dealing and the mens rea to commit such an offence on the part of the accused. In other words, a connection between cultivation of and dealing in dagga must be proved beyond all reasonable doubt." (573 c-d)

The minority of the court held that the appeal against conviction should succeed and that the conviction of dealing in dagga should be set aside and substituted with a conviction for possession of dagga (573 g).

The decision in Mbatha illustrates the dilemma pertaining to the application of sections 4 and 5 prior to the decriminalisation of possession or use of cannabis, or cultivation thereof, for personal use. The accused was convicted of dealing in dagga merely for cultivating a dagga plant for personal use. As correctly noted in the minority judgment, serious repercussions flow from such conviction in terms of the Act. Had the same accused been charged after judgment in the decision under discussion had been handed down, the accused would not have been guilty of any offence.

Reflecting on the judgment in Mbatha, it becomes clear that the judgment under discussion is constitutionally sound and in line with the foundational principles enshrined in the Constitution.

It is submitted however, that there are certain critical aspects to which the legislature should have regard when drafting the amended legislation in line with the order granted by the Constitutional Court. These aspects open the door to a debate on other constitutional concerns that could be forthcoming after the handing down of the judgment under discussion. Note that the only way to assess whether an individual is in possession of cannabis only for personal consumption is to look at the quantity found in a person's possession. The larger the quantity of cannabis found in an individual's possession, the more likely it is that it is not possessed only for personal consumption. Bear in mind too that, to be lawful, the possession, or use, or cultivation should take place in private. The judgment, however, clearly indicates that "in private" is not confined to a home or private dwelling, as long as the place is not a public space.

Section 40(1)(h) of the Criminal Procedure Act 51 of 1977 (CPA) provides as follows:

"Arrest by peace officer without warrant

(1) A peace officer may without warrant arrest any person-

(h) who is reasonably suspected of committing or of having committed an offence under any law governing the making, supply, possession or conveyance of intoxicating liquor or of dependence-producing drugs or the possession or, disposal of arms and ammunition."

Section 40 of the CPA was not included in the order of the court as one of the provisions held to be constitutionally invalid (par 91 -93). After the handing down of the judgment of the Constitutional Court, it is no longer an offence for an adult to use or be in possession of cannabis in private for his or her own personal consumption. Accordingly, an individual found in possession of cannabis can no longer be arrested by a peace officer for being in such possession. Such possession obviously depends on the quantity found in possession but little to no guidance is provided as to the amount of cannabis found in a person's possession that could lead to a reasonable inference of dealing. It should be borne in mind that dealing in cannabis remains a criminal offence. The problem is alluded to by Zondo ACJ where he held:

"The police officer will need to have regard to all the relevant circumstances and take a view whether the cannabis possessed by a person is for personal consumption. If he or she takes the view, on reasonable grounds, that that person's possession of cannabis is not for personal consumption, he or she may arrest the person. If he or she takes the view that the cannabis in the person's possession is for that person's personal consumption, he or she will not arrest him or her." (par 113)

It is submitted that it will become crucial to educate police officials as to the practical impact of this judgment and, eventually, also the amended sections of the Act. It is trite that providing for a set quantity of cannabis above which a person will be potentially guilty of dealing in cannabis, would be tantamount to reinstating presumed dealing.

Presumed dealing can, in addition, no longer assist the prosecution in terms of proving the offence of dealing in drugs as the presumptions contained in section 21 of the Act were declared unconstitutional (see

specifically S v Zuma 1995 (1) SACR 568 (CC) (1995 (2) SA 642; 1995 (4) BCLR 401) par 33; S v Bhulwana 1995 (2) SACR 748 (CC); S v Gwadiso 1995 (2) SACR 748 (CC) (1996 (1) SA 388; 1995 [12] BCLR 1579; (1996) 1 ALL SA 11) par 15; S v Mbatha supra; S v Prinsloo 1996 (1) SACR 371 (CC) (1996 (2) SA 464; 1996 (3) BCLR 293) par 12; S v Julies 1996 (2) SACR 108 (CC) (1996 (4) SA 313; 1996 (7) BCLR 899) par 3; S v Ntsele 1997 (2) SACR 740 (CC); S v Mjezu 1996 (2) SACR 594 (NC)).

Proper and adequate training and education on these practical aspects are not only necessary, but also pivotal as, in their absence, numerous unlawful arrests could be made.

A further criticism that could be levelled at the judgment relates to dealing in cannabis. The question could be posed as to whether the outcome of the decision does not amount to promoting dealing in cannabis or dagga. The Preamble to the Act makes it specifically clear that the Act intends to provide for:

"the prohibition of the use or possession of, or the dealing in, drugs and of certain acts relating to the manufacture or supply of certain substances or the acquisition or conversion of the proceeds of certain crime."

It should be emphasised that the judgment did not decriminalise the act of dealing in cannabis, but only decriminalised the cultivation of cannabis for personal consumption. It could be argued that since individuals are now free to possess cannabis for personal use, dealing in cannabis will concomitantly escalate. The latter inadvertently arises from the fact that despite the possession of cannabis being legal, it will still not be freely available and will have to be obtained, in the majority of cases, from a dealer. The latter will result in the dealer incurring liability for selling and dealing in drugs, whereas the possessor will not be criminally liable. It could thus be argued that the result of the judgment conflicts with the inherent objects of the Act as stipulated in the Preamble to the Act. It could accordingly be argued that the judgment will indirectly lead to the promotion of dealing in drugs.

Another most important aspect not addressed in the judgment relates to the impact of the judgment on the principle of the best interests of the child, which is paramount in terms of section 28(2) of the Constitution. It is trite that the decriminalisation of the possession or use of cannabis for personal consumption only applies to adult persons. This becomes problematic when parents of children possess or use cannabis for personal use. The question arises as to how this will impact on the best interests of children within those households. How will children be adequately protected from being exposed to the abuse of cannabis by their parents and further from being exposed to using it themselves? Note that minor children under the age of 18 are still subject to the provisions of the Act as well as the Medicines Act. No exception to criminalisation was made for the possession or use of cannabis by children. Children can thus still be criminally prosecuted for possession of cannabis. A child living with parents who use or possess cannabis could be prosecuted if found in possession of cannabis that he or she has obtained while living with parents using or possessing it.

In such a scenario, the parent or parents will not face criminal prosecution, but the child will. It remains an undeniable reality that children often explore and, owing to their youth, do not always comprehend the implications of their actions. As such, they could possess cannabis after seeing their parents using it and not realise that it is a criminal offence for them to possess it. It could be argued that the decriminalisation should also apply to possession by children. However, that would be tantamount to sanctioning the use or possession of cannabis by children, which also conflicts with the best interests of the child principle. If children are found in possession of cannabis while at school, for example, further implications in terms of the South African Schools Act arise (see s 8 as well as s 8A(12) of the South African Schools Act 84 of 1996 (SASA)). Accordingly, exposing children to the possession or use, or cultivation of cannabis could be detrimental to the best interests of the child. It is further important to note that, in terms of section 8A(1) of SASA, all schools are declared as drug-free zones (see Joubert "The South African Schools Act" in Boezaart (ed) Child Law in South Africa 2ed (2017) 886). Children may be subjected to random searches in terms of section 8A(3)(a) and if a child is found in possession of drugs, he or she may be instructed to leave the premises or be denied access (see Joubert in Boezaart Child Law in South Africa 586-587).

An in-depth assessment of the impact of the decision under discussion on the best interests of the child principle falls beyond the scope of this contribution. Suffice it to state that the paramount nature of the best interests of the child principle is well entrenched, not only in the Constitution but also in international instruments (see Article 3 of the United Nations Convention on the Rights of the Child (1989), as well as Article 4 of the African Charter on the Rights and Welfare of the Child (1990); see also Skelton "Constitutional Protection of Children's Rights" in (ed) Boezaart Child Law in South Africa 345-347; Minister of Welfare and Population Development v Fitzpatrick 2000 (3) SA 422 (CC) par 121).

It is submitted that the finding of the Constitutional Court could impact negatively on the best interests of children who are exposed to the possession and use of cannabis. The decriminalisation of the possession or use of cannabis, as stated above does not apply to children. Accordingly, children can still be prosecuted in terms of the Act for possession or use or cultivation of cannabis. It is submitted that this is a serious concern of which the legislature should take account when formulating the amendments flowing from this decision.

 

6 Conclusion

The decision under discussion dealt with a contentious area of criminal law that is not a novel dilemma - the use or possession of cannabis for personal consumption. From the outset, this contribution has indicated that the judgment opens the door to a critical debate on a multitude of aspects. From Prince (2), it was already clear that courts grappled with this issue. It became clear from Prince (2) that merely catering for additional exemptions to the prohibition on the possession or use of cannabis could become problematic in terms of practical enforcement and implementation. The decision in Mbatha illustrated the injustices that could flow from the application of the relevant sections of the Act prior to their being declared constitutionally invalid and the effect of decriminalisation. From a constitutional perspective, the decision by the Constitutional Court seems in line with the basic principles enshrined in the Constitution.

However, there are various concerns in terms of the application of this judgment, with specific reference to the best interests of children within the realm of the decriminalisation of the use or possession of cannabis for private use. It is submitted that these are pivotal aspects of which Parliament should take heed in the ultimate pursuit of bringing the provisions of the Act in line with the foundational principles of the Constitution and further ensuring that other constitutional rights are not overlooked in the process.

Philip Stevens

University of Pretoria

^rND^1A01 A02^nLouis^sVan Tonder^rND^1A01 A02^nLouis^sVan Tonder^rND^1A01 A02^nLouis^sVan Tonder

ARTICLES

 

Predatory pricing: single-firm dominance, exclusionary abuse and predatory prices (Part 1)

 

 

Jan Louis Van Tonder^{I, II}

^ILLB LLM LLM; Postgraduate Certificate, Competition Law Postgraduate Diploma, EU Competition Law Postgraduate Diploma, Economics for Competition Law
^IIResearch Associate, Faculty of Law, Mercantile Law Department, Nelson Mandela University Attorney and Conveyancer of the High Court of South Africa; Solicitor of the Senior Courts of England and Wales

 

 

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SUMMARY

Important pronouncements of legal principle were recently made by the Competition Appeal Court and Constitutional Court on the determination of predatory pricing under section 8 of the Competition Act 89 of 1998. These pronouncements must now be seen in the context of the subsequent commencement of certain provisions of the Competition Amendment Act 18 of 2018, which affect predatory pricing cases under section 8 of the Act. In light of these developments, the main aim of this series of three articles is to evaluate the law relating to the economic concept of predatory pricing under the Competition Act. In this context, the main constituent elements of a predatory pricing case - namely, dominance, identifying an exclusionary abuse and predatory prices - are discussed in three parts. Part One critically evaluates the law on the determination of single-firm dominance under section 7 of the Competition Act. Part Two starts to focus on abuse analysis and discusses the basic forms of abuse, the meaning of abuse, tests that have been developed to identify exclusionary abuse, criticism of the traditional theory of predatory pricing, the main strategic economic theories of predatory pricing and non-pricing theories of predation. Part Three then specifically deals with the law of predatory prices under section 8(c) and 8(d)(iv) of the Competition Act. Pursuant to section 1(3) of the Competition Act, appropriate foreign and international law may be considered when interpreting or applying the Competition Act. This is complementary to section 1(2)(a), which directs that the Competition Act must be interpreted in a manner that is consistent with the Constitution and that gives effect to the purposes set out in section 2. In light hereof, where appropriate, the South African position is compared, mainly with the position in the European Union and the United States.

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1 INTRODUCTION

Competition law aims to promote low prices and prevent high ones. Yet, a predatory pricing case is exactly based on a firm charging a price that is too low. This has been referred to as the paradox of predatory pricing.¹ Society considers predation socially harmful because short-term aggressive price-cutting drives out competitors and results in long-term higher prices. Against this background, important pronouncements of legal principle were recently made by the Competition Appeal Court² and the Constitutional Court³ in the lengthy Media24 case⁴ on the determination of predatory pricing under section 8 of the Competition Act 89 of 1998 (the Act). These decisions must now be seen in the context of the subsequent commencement of certain provisions of the Competition Amendment Act 18 of 2018, which affect predatory pricing cases under section 8 of the Act.

In light of these developments, the main aim of this series of three articles is to evaluate the law relating to the economic concept of predatory pricing under the Act. While competition law is not concerned with low pricing by non-dominant firms, section 8 of the Act prohibits dominant firms from engaging in the exclusionary act of predatory pricing. In this context, the main elements of predatory pricing - namely, dominance, identifying an exclusionary abuse and predatory prices - are discussed in three parts. This first article critically evaluates the law on the determination of single-firm dominance under section 7 of the Act. Part Two starts to focus on the abuse analysis and discusses the basic forms of abuse under section 8, the meaning of abuse, tests that have been developed to identify exclusionary conduct, criticism of the traditional theory of predatory pricing, the main strategic economic theories of predatory pricing and non-pricing theories of predation. Part Three then specifically deals with the law of predatory prices under section 8(c) and 8(d)(iv) of the Act. The competition law systems of the European Union (EU) and the United States (US) are unquestionably the most developed and advanced systems of all competition-law jurisdictions. This means that the South African courts frequently look to their experience for guidance on how to fill the complexities of modern competition law in a unique South African context. Accordingly, throughout these articles and where appropriate, the South African position will be compared (mainly) with the position in these jurisdictions.

If a firm is not found to be dominant, the abuse-of-dominance provisions will not apply. The dominance analysis therefore plays a crucial role in any abuse-of-dominance case. However, while the abuse analysis leans towards economic effects, the dominance analysis adopts a formalistic approach. The main aim of this article is to evaluate critically the law on the determination of single-firm dominance under section 7 of the Act. Under heading 2, this article starts with a short discussion on the differences in approach to dominance under article 102 of the Treaty on the Functioning of the European Union (TFEU)⁵ and section 2 of the United States Sherman Act 1890 (Sherman Act). This background context remains relevant for both Parts Two and Three of this series of articles. As the articles develop, further differences relevant to the elements being discussed in Parts Two and Three will be emphasised where appropriate. Under heading 3, this article then critically evaluates the South African approach to a dominance analysis under section 7 of the Act, and heading 4 provides a conclusion.

 

2 DIFFERENCES IN APPROACH IN THE US AND EU

2 1 General differences

At its core, section 2 of the Sherman Act was enacted in 1890 as part of criminal law, with monopolisation being classified as a felony. During the late nineteenth century, the economic environment of the US was characterised by a number of dominant cartels and conglomerates, or "trusts" as they were known, that had adverse effects for consumers. The main motivation behind US antitrust law was therefore the desire to undo these cartels and conglomerates. As Frank Easterbrook wrote:

"Back in 1890 Senator Sherman and colleagues protested the Sugar Trust and other malefactors and told the judiciary to do something about it. They weren't sure just what. Their statute does not contain a program; it is instead a blank check."⁶

Article 102 TFEU, on the other hand, was inserted in the Treaty of Rome in 1957 (or the EC Treaty) not only to create legal rights and obligations, but also to create a "new legal order of international law".⁷ The origins of European competition law were very different and reflected a desire to break down trade barriers and promote economic integration with the hope that this would lead to a period of stability and peace in the post-war European environment.⁸ In the pursuit of establishing an internal market as set out by article 3(3) of the Treaty on European Union (TEU), article 102 TFEU is a legal instrument used by the EU specifically to address conduct by dominant undertakings in the market that impedes this goal; this also includes a system ensuring that competition law is not distorted.⁹ As the European Court of Justice in Konkurrensverket v TeliaSonera Sverige AB stated, "Article 102 TFEU is one of the competition rules referred to in Article 3(1)(b) TFEU which are necessary for the functioning of that internal market".¹⁰

As time passed, the development of case law strengthened Senator Sherman and his colleagues' interpretation of section 2 of the Sherman Act. Likewise, the practice of the European Commission and the case law of the European courts developed and strengthened the purpose and meaning of article 102 TFEU.¹¹

Against this background, the US has adopted a less interventionist approach to enforcement under section 2 of the Sherman Act than has the EU under article 102 TFEU. The EU institutions appear to have greater confidence in their predictive assessments of the markets.¹² By contrast, the US institutions and courts appear to have less confidence in their predictive abilities, and believe that market forces are better overall at correcting inefficiencies than are government agencies or court interventions.¹³ The quintessence of the US's circumspect approach against excessive intervention is motivated by a judicious assessment of what conduct is truly anti-competitive, with the aim of not chilling competition through mistaken condemnation of ambiguous conduct - that is, preventing false positives.¹⁴As US judge Learned Hand famously stated, "[t]he successful competitor, having been urged to compete, must not be turned upon when he wins."¹⁵

2 2 Substantive differences

Certain substantive differences relating to the conditions and circumstances under which liability can be found for predatory pricing under section 2 of the Sherman Act and article 102 TFEU are also apparent. Although the reasons and effect of the finer differences will be unpacked as the articles develop, it is important to bear in mind at the outset that US antitrust law follows different cost benchmarks and also requires proof of the dominant firm's ability to recoup losses.

According to established case law, article 102 TFEU does not prohibit the mere existence of a dominant position, only its abuse.¹⁶ Moreover, when an undertaking holds a dominant position, its behaviour in the market may be scrutinised for compatibility with article 102 TFEU. EU competition law therefore aims to prevent powerful firms from using their power abusively. On the other hand, section 2 of the Sherman Act does not require a prior formal finding of a dominant position, but seeks to identify anti-competitive conduct that creates or threatens to create a monopoly.¹⁷

The emphasis of the European Commission's enforcement activity in relation to exclusionary conduct is on safeguarding the competitive process in the internal market and ensuring that undertakings that hold a dominant position do not exclude their competitors by means other than competing on the merits.¹⁸ Article 102 TFEU is, therefore, not only concerned with practices that may cause damage to consumers directly¹⁹ but, as the European Court of Justice has explained, this provision also includes practices that are detrimental to consumers through their impact on competition.²⁰ However, the Grand Chamber of the Court of Justice has held that competition on the merits may lead to competitors exiting the market or the marginalisation of competitors that are less efficient and so less attractive to consumers from the point of view of, among other aspects, price, choice, quality or innovation.²¹ Under article 102 TFEU, predatory pricing is a good example of this.²² Below-cost pricing benefits consumers, at least in the short-term, unless and until the low prices are recouped in the following stage through higher prices. However, predatory pricing may be condemned under article 102 TFEU without proof of recoupment, because it can cause a competitor either to exit the market or be marginalised, which alters the structure of competition in a way that may harm consumers.²³

Other distinctive features of article 102 TFEU include: the imposition of a special responsibility on the dominant firm not to allow their conduct to impair genuine undistorted competition on the internal market;²⁴per se impermissible conduct; and, although not important for purposes of these articles, the possibility of bringing proceedings against dominant undertakings for exploitative abuses.

 

3 SINGLE-FIRM DOMINANCE

3 1 Constituent elements of section 8

Following the wording of Chapter 2 Part B of the Act, and assuming that the provisions relating to the territorial application of the Act are met,²⁵ four constituent elements must be satisfied for the abuse of dominance provisions to apply:

(i) a "firm";²⁶

(ii) meeting the financial threshold provisions;²⁷ and

(iii) holding a dominant position;

(iv) must engage in an exclusionary act prohibited by section 8.

The first and second elements focus on the jurisdictional application of the Act and are not the focus of these articles. The existence of a dominant position is considered before the question of any abuse. This requires defining the relevant market. Apart from market definition, these two elements are usually the main issues under section 8.

3 2 Importance of dominance under section 8

Establishing dominance is an essential prerequisite for section 8 to apply. Dominance is the core market power threshold under the Act. However, the Act does not direct that dominance itself is contrary to section 8. If dominance is not proven, the abuse provisions will not apply, regardless of the anti-competitive effects of the conduct in question.

This important point is shared with article 102 TFEU,²⁸ but not with the legal regime under the Sherman Act. In the latter case, a firm that is not yet dominant may commit a violation if its conduct would lead to monopolisation or, in the case of attempted monopolisation, if there were a dangerous probability that it would succeed in doing so. This means, at least in theory, that a firm with a small market share could violate section 2 of the Sherman Act if there were a dangerous probability that its attempt to monopolise would eventually succeed. In contrast, before conduct can fall into a prohibited category under section 8 of the Act (as under article 102 TFEU), it is essential to establish dominance at the time of the alleged abuse.

3 3 Definition of dominance

Section 7 defines the circumstances in which a firm may be found dominant as follows:

(a) a firm with a market share of at least 45 per cent in the relevant market is dominant (this is an irrebuttable presumption);²⁹

(b) a firm with a market share of at least 35 per cent, but less than 45 per cent of the relevant market is presumed to be dominant unless the firm can prove that it does not have market power (this is a rebuttable presumption);³⁰ or

(c) if the firm's market share of the relevant market is below 35 per cent, the complainant has the burden of proving that it has market power.³¹

This codification of dominance means that the dominance analysis entails an assessment of whether a firm falls under one of these three structurally defined circumstances. This codification also does little to provide any comfort to firms in terms of a "safe harbour" - that is, where a firm is so small in a correctly defined market that it is highly unlikely to have market power.

3 4 Analytical framework for assessing dominance

Based on the above definition, and taking the practice of the US and the EU into account,³² a considered determination of whether a firm holds a dominant position should involve the following two steps:

1. Market definition: the relevant (product and geographic) market provides a frame of reference for analysing whether the firm concerned holds a dominant position and, therefore, whether its conduct may be abusive within the meaning of section 8. The main purpose of market definition is to identify in a systematic way the immediate competitive constraints faced by a firm. This step also involves the identification of the competitors in the market, which may include supply-side substitutes.

2. Market power analysis: assessing the degree of market power enjoyed by the firm on the relevant market. In relation to section 7(a), this step involves a consideration of the market share of the firm concerned. As regards section 7(b) and (c), the analysis relates to market share and market power. An analysis of market power may further involve some or all of the following considerations: the nature of the market and the competitive process, barriers to entry, exit and expansion and competitive constraints.

The use of market share as an indicator of dominance is common to all three circumstances of the dominance analysis under section 7, but the Act does not indicate how a firm's market share is to be calculated. This is with good reason,³³ especially in relation to section 7(a). If the assessment of market share is the sole or main basis for the finding of a dominant position, there can be no clearly correct, or even best, basis on which to assign³⁴ market share in all cases.³⁵ This requires that considerable care should be taken in such assignment.³⁶ Although market share is reflected in descriptive statistics for an industry, they are intended for the useful description of the comparative sizes of competitors in the relevant market. Therefore, market share should be the share of some real and measurable industry quantity that reasonably serves as a common denominator for the collection of products in the relevant market.

In difficult cases, the actual computations may be extremely complex, which in turn may limit their robustness in terms of the implications for a dominance analysis.³⁷ Under these circumstances, this will arguably put more pressure on an accurate market definition exercise, especially in relation to section 7(a), to safeguard the robustness of the dominance assessment.

3 5 Section 7(a)

3 5 1 Market share as the sole indicator of dominance

In Competition Commission v South African Airways (Pty) Ltd,³⁸SAA was held to be presumptively dominant. As a result, the Competition Tribunal did not find it necessary to consider in great detail the evidence presented by SAA's expert witnesses to the effect that it does not, in fact, have market power. The Competition Tribunal regarded this evidence as irrelevant, because, on a simple reading of section 7(a), once a firm's market share exceeds the 45 per cent threshold, it is presumed to be dominant; the section states categorically that a firm is presumed dominant if it has 45 per cent of the market. This is to be contrasted with section 7(b) where the presumption of market power is rebuttable.

Market share plays an important role in the market power analysis and is traditionally used as a first indicator of market power.³⁹ However, assessing market share in isolation cannot be used as a guide to conclude effectively that a firm has market power.⁴⁰ The existence of a dominant position may derive from several additional factors which, taken separately, are not necessarily determinative.⁴¹ However, in order to avoid a simplistic checklist approach, the determination of dominance requires a careful assessment of market conditions, in what must necessarily be a case-by-case analysis.⁴²

While market share remains a useful first indicator in this analysis, market share cannot by itself be decisive.⁴³

Depending on the type of market and players in question, assessing market share alone may fail properly to address one or more of the following issues, which in turn can have consequences for the abuse analysis:⁴⁴

• whether market power was attained as a result of superior skill, foresight, and industry;

• conditions of competition in innovative markets;

• accurately capturing market power in markets where products are differentiated from the viewpoint of consumers in terms of time, switching costs, consumer information, branding, product features, product quality, level of service or the location of the seller;

• the firm's profitability;

• the position of the firm's rivals;

• whether the market is growing or declining;

• properly considering that some bidding markets may be characterised by intense competition despite the presence of large market shares;

• whether the firm in question is in fact an unavoidable trading partner;

• taking account of potential competition and buyer power;

• capacity utilisation;

• recognising different levels of vertical integration;

• taking account of multi-sided platforms and network effects;

• the technical or financial resources of a firm;

• cost asymmetries;

• first-mover or incumbency advantages;

• the importance of economies of scale and scope; and

• whether market share ultimately shows a position of strength over a relatively long period of time (for instance, a period between three and five years, depending on the market in question) - that is, lasting market power, which involves a proper assessment of barriers to entry, exit and expansion.

Therefore, observing a firm's high market share on its own can be highly misleading and a poor indicator of market power if the relevant market conditions, market characteristics and competitive constraints faced by the firm are not also assessed in conjunction with the market share of the firm in question.⁴⁵ By only assessing market share, no emphasis is placed on the price-setting power of the firm, or its ability to exclude competition or to behave independently, but makes the finding of dominance a purely mechanical analysis based on market share.⁴⁶ For all these reasons, while section 7(a) creates an irrebuttable presumption for the benefit of the competition authority, this approach to dominance is not consistent with an economic approach.

3 5 2 Threshold level for intervention

It is arguable that the threshold level for intervention set by the legislature is in fact too low. In this regard, the decisional practice and case law of article 102 TFEU differs materially from the treatment of monopolisation conduct under US antitrust law. Under article 102 TFEU, meeting a 50 per cent market share threshold, without more, immediately suggests dominance.⁴⁷An analysis of cases in the US tends to show that monopolisation concerns arise in cases where the firm's market share exceeds 70 per cent.⁴⁸ Even under these circumstances, an analysis of other market conditions in conjunction with market share (the most important of which is the presence or lack of barriers to entry) is required.⁴⁹ In light hereof, US courts have held that a market share of 100 per cent does not necessarily establish monopoly power in the absence of a showing that the respective market is protected by entry barriers.⁵⁰ US antitrust law under section 2 of the Sherman Act therefore appears to be less restrictive than the standards to determine dominance under article 102 TFEU.⁵¹ Accordingly, it has been argued that a significant problem with article 102 TFEU is that the threshold for intervention is too low.⁵²

Bloch argues that this approach has significant ramifications from a policy standpoint in terms of discouraging efficiency-enhancing conduct that is not unlawful.⁵³ This means firms that are found to be "dominant" are prohibited from engaging in business conduct that non-dominant firms are permitted and encouraged to pursue. Thus, article 102 TFEU, when compared to section 2 of the Sherman Act, may impede firms with large market shares in an otherwise competitive market from engaging in pro-competitive conduct, which the law seeks to promote.⁵⁴ Although policy reasons probably justify the mechanical nature of a section 7(a) dominance analysis,⁵⁵ nevertheless, from an economic perspective, it is suggested that the same critique applies to section 7(a).

3 6 Section 7(b) and (c)

Both paragraphs (b) and (c) of section 7 refer to the term "market power", while section 7(a) does not, only referring to the firm in question as dominant once the 45 per cent threshold is crossed. Under section 7(b), the presumption of market power is rebuttable by the firm in question,⁵⁶ and under section 7(c), the complainant is required to prove that the respondent possesses market power.⁵⁷ For purposes of section 7(b) and (c), "market power" means that the firm has the power to control price, to exclude competition, or to behave to an appreciable extent independently of its competitors, customers or suppliers.⁵⁸

Although market share still plays a key role in each of these circumstances in dominance analysis, the definition attempts to capture the main concepts of market power found in the US, EU and, to a certain extent, the United Kingdom (UK). In principle, the term "dominance" is a legal concept, but the assessment of dominance is ultimately influenced by economic considerations. As such, the definition of "market power" requires the identification of corresponding legal and economic concepts.

3 6 1 Basic legal concept of dominance

The latter part of the definition, "behave to an appreciable extent independently of its competitors, customers or suppliers", corresponds with the terminology used in the working definition of dominance established in EU case law under article 102 TFEU. The European Court of Justice in United Brands and Hoffman-La Roche captured this notion by referring to the ability to behave independently and to hinder or exclude competition:

"a position of economic strength enjoyed by an undertaking which enables it to prevent effective competition being maintained on the relevant market by affording it the power to behave to an appreciable extent independently of its competitors, customers and ultimately of its consumers."⁵⁹

In the European Commission's discussion paper on the application of article 102 TFEU to exclusionary abuses, the European Commission treats this definition as consisting of three elements as follows: (a) there must be a position of economic strength in a market which (b) enables the undertaking(s) in question to prevent effective competition being maintained in that market by (c) affording it the power to behave independently to an appreciable extent.⁶⁰ The European Commission considers the latter two elements to be closely linked. However, Geradin, Hofer, Petit and Walker,⁶¹as well as Neven, Nutall and Seabright,⁶² maintain that these elements are one and the same. This is to an extent confirmed by the EU courts, which have never drawn any distinction between these elements, and also appears to be the approach taken by the European Commission in its subsequent guidance paper relevant to its article 102 TFEU enforcement priorities.⁶³

Although the first element does not appear in the South African definition of market power, the latter two elements concern the link between the position of economic strength held by the firm in question and the competitive process. Dominance is the ability to prevent effective competition being maintained in the market and to act to an appreciable extent independently of other competitors. The notion of independence, which is the special feature of dominance, is related to the level of competitive constraints faced by the firm in question. For dominance to exist, the firm concerned must, for a sustained period, not be subject to effective competitive constraints. This means that the firm must have substantial market power.

From an economic perspective, since every firm (even a monopolist) will be constrained by its respective demand curve, no firm can really behave -at least not on a sustainable basis - independently of its competitors, consumers or customers. First, the presence of competitors limits to some extent the commercial behaviour of all firms, since the presence of these competitors affects the firm's demand curve. This applies to firms in a competitive market as well as to a dominant firm. All firms will increase prices to the point at which further price increases would not be profitable. In this sense, competitors do constrain the behaviour of firms so that even a dominant firm does not act independently of its competitors. Secondly, an individual firm's demand curve is also affected by the behaviour and preferences of its customers. Firms invariably face downward-sloping demand curves, indicating that a higher price means that it will have fewer sales. It is not generally open to a firm to raise prices and sell the same quantity as before. Again, this applies to all firms, whether dominant or not.⁶⁴

Strictly speaking, only a true monopolist would be able to behave independently of its competitors, customers and consumers.

This means that the notion of independence, as a useful indicator of dominance, does not provide an adequate basis for differentiating between all firms in a market, whether dominant or not. However, reference to "an appreciable extent" perhaps recognises that most firms have market power and suggests that independence is not absolute, but a matter of degree. This latter part of the definition also recognises that both suppliers and buyers can have market power. Usually, for purposes of clarity, market power refers to a supplier's market power; and where a buyer's market power is at issue, the term "buyer power" is used.⁶⁵ Equally, and depending on the circumstances, when a firm's customers are not the end consumers (for example, in wholesale markets), the term "customers" is likely to refer to those customers.

3 6 2 Basic economic concept of dominance

Although the wording "exclude competition" is common to the US, UK and the EU, the wording "power to control prices" appears to resemble, at least, the first part of the US definition of monopoly power. The US Supreme Court has defined monopoly power specifically as the "power to control prices or exclude competition".⁶⁶ However, the US Supreme Court and lower courts have refined this definition further by incorporating more economic principles associated with the definition of market power, holding that market power is "the ability to raise prices above those that would be charged in a competitive market".⁶⁷

In real-world industries, few firms are pure price takers facing perfectly elastic demand. For example, the unique location of a shop selling widgets may confer the shop with slight market power, because some customers are willing to pay a little more rather than walk an extra block or incur further search costs for the next-closest widgets shop. In economic terms, the widgets shop has some market power, even if only an insignificant degree. In nearly all industries, fixed costs exist and products are differentiated from one another, whether in terms of time, switching costs, consumer information, branding, product features, product quality, level of service or the geographical location of the seller. This means that most firms possess some degree of market power.⁶⁸ One firm may be able to increase price well above competitive levels on a sustainable basis while another may only be able to increase price slightly above the competitive norm for a short time.

But the type of power described is qualitatively identical in both cases. Motta acknowledges that firms would only have no market power in the theoretical models of perfect competition or in the Bertrand model with homogeneous goods and perfectly symmetric firms.⁶⁹ Thus, most firms with downward-sloping demand curves possess a small degree of market power, but this does not warrant intervention by the competition authorities.⁷⁰

Under the Sherman Act, market power and monopoly power are related but not the same. Monopoly power under section 2 requires something greater than market power under section 1,⁷¹ but Krattenmaker, Lande and Salop have argued that they believe market power and monopoly power to be qualitatively identical concepts since both terms refer to anti-competitive economic power that can ultimately compromise consumer welfare.⁷² Their view is that courts should be less concerned with labelling the type of anticompetitive economic power exerted by a firm. Instead, they should focus on the methods by which this power is achieved. Precisely at what point market power becomes so great that the law deems it to be monopoly power is largely a matter of degree rather than one of kind. Clearly, however, monopoly power requires, at a minimum, a substantial degree of market power.⁷³

In Europe, a firm enjoys a dominant position if it has substantial (or significant) market power, which means that it has the ability to raise prices profitably above competitive levels or restrict output significantly below competitive levels for a sustained period. This standard definition of market power is also used by a number of competition authorities in Europe. For instance, the European Commission considers that "[a]n undertaking that is capable of substantially increasing prices above the competitive level for a significant period of time holds substantial market power".⁷⁴ The UK Competition and Markets Authority refer to market power as "the ability to raise prices consistently and profitably above competitive levels".⁷⁵

Dominance should therefore only apply to those firms that possess substantial market power or a very high degree of market power.⁷⁶ But does the reference to the ability of a firm to behave to an "appreciable extent" already equate dominance with substantial (or significant) market power? In recent times, within the EU, the legal notion of independence described earlier has been tied to the economic notion of substantial market power. This reference to an "appreciable extent" suggests that the South African market power definition is not concerned with the trivial amount of market power that most firms enjoy. For example, in Nationwide Poles v Sasol Oil (Pty) Ltd,⁷⁷although the Competition Tribunal concluded that by "dint" of a market share in excess of 45 per cent Sasol had market power, the Competition Tribunal went further and showed that Sasol evidenced its dominance by its exercise of market power, because it priced creosote at a liquid fuels equivalent price rather than with consideration of the wood preservative market for which creosote was used.⁷⁸ The Competition Tribunal held that this bolstered its finding of dominance.⁷⁹

3 6 3 What counts as substantial market power?

Considering that the core (economic) concept underlying the notion of market power is a firm's ability to increase profits and to harm consumers by charging prices above competitive levels, the question then turns on what counts as substantial market power, as opposed to insubstantial or insignificant market power. A firm that is not constrained by competition from a sufficient number of equally efficient existing and potential competitors can profitably raise price or prevent price from falling in two ways.

First, the firm may raise or maintain price above the competitive level directly by restraining its own output.⁸⁰ The first part of the market power definition thus focuses on the power to control price profitably, directly by restraining one's own output. However, in terms of implementation, it is not clear by how much price must exceed the competitive level before there is (substantial) market power. According to Geradin et al, a one-way test can be inferred from the market definition SSNIP methodology.⁸¹ At the same time, market power is also not simply a matter of higher prices. Market power may be exercised by increasing price, reducing quality, range, service and/or by slowing innovation. Thus, the definition should also include, for example, the ability to reduce quality or slow the pace of innovation. It is also well known that determining the competitive price level is a difficult, if not impossible, task. The same unsatisfactory result applies when the competitive level is taken to mean marginal cost. Therefore, while the exercise of substantial market power can be proved by way of direct evidence⁸² of actual exercise of control over prices, it is difficult to find such direct evidence. This means that market power is most likely to be inferred by way of indirect and or circumstantial evidence of the firm's ability to control prices, which can be gauged from an assessment of existing competition,⁸³ potential competition⁸⁴ and buyer power.⁸⁵

A second form of market power is the "power to exclude". According to Krattenmaker, Lande and Salop, this form of market power can be found where:

"[a] firm or group of firms may rise price above the competitive level or prevent it from falling to a lower competitive level by raising its rivals' costs and thereby causing them to restrict output [...] Such allegations are at the bottom of most antitrust cases in which one firm or group of firms is claimed to have harmed competition by foreclosing or excluding its competitors. We denote this power as "exclusionary" [...] market power".⁸⁶

Here the focus is on the dominant firm using its market power to create, maintain or strengthen its position further by engaging in anti-competitive conduct in order to foreclose, exclude or deter competitors from the market. This form of market power is already explicitly taken into account in the US, EU, UK and South Africa (as well as other jurisdictions). Examples of such exclusionary behaviour include predatory pricing, certain forms of price discrimination, refusal to supply and margin squeeze, which invariably leads to foreclosure of competitors or because it raises competitors' costs, limits their capacity to compete effectively or limits the ability of competitors to introduce new, innovative products. Again, the exercise of substantial market power can be proved by way of direct evidence of actual exclusion of competition from the relevant market, but it will also be difficult to find such direct evidence. Hence, substantial market power is usually inferred by way of an indirect assessment of the firm's ability to exclude competition, including existing competition, potential competition and countervailing buyer power. However, care should be taken by the competition authorities to ensure that the aim of the investigation is to protect competition and consumers, not competitors.

 

4 CONCLUSION

It can be seen that exclusionary conduct by a single firm is outside the scope of section 8 unless the firm is found to be a dominant firm within the meaning of section 7. However, when the abuse analysis is leaning towards economic effects, as section 8 suggests, a prior dominance assessment is essential. While the abuse analysis is notoriously difficult and prone to error on any approach, the dominance assessment provides the advantage of efficiently screening out cases where it need not be undertaken.

As to the standard of proof of dominance, section 7 defines dominance mainly in a formalistic manner. In particular, section 7(a) relies only on market share while section 7(b) and (c) rely on market share and market power. In theory, the formalistic and strict nature of section 7(a) should mean that there is more efficient scope for enforcement and perhaps greater scope for private actions. While section 7(b) and (c) are less clear on when a firm is dominant, and probably apply to firms with a mild degree of market power, such firms will in any event be less likely to distort competition than the same conduct by a firm with great market power under section 7(a). So, on balance, the competition authorities can direct their resources better by examining the latter than the former. While the market-share level as indicator for section 7(a) dominance is arguably set quite low, the conditions provided under section 7(b) and (c) also hardly give any comfort.

It is widely understood that the market share of correctly defined markets should at most be used as a way to screen or filter out cases that deserve no further consideration. In the US, and to a certain extent the EU, high market share alone never implies dominance. Unless the market definition exercise has been incorrectly carried out, there can be no significant prospect of single-firm dominance without at least substantial market power. In the context of predatory pricing, consumers suffer only when prices go up relative to where they otherwise would have been - that is, once market power has been enhanced. This does not necessarily mean that demonstrating dominance means prices will inevitably rise if a competitor exits. This may be so if there is a near monopolist in the market and predation also occurs in that same market. But firms only marginally dominant may still face a similar amount of competition after marginalising a small competitor.

The wording of the South African "market power" definition appears to borrow primarily from the experiences in the US and EU and, to date, has not been given much consideration in the case law. The first element of the notion of dominance under the South African definition incorporates an economic concept, which is broadly associated with the concept of market power as understood in the economic literature and found in US antitrust case law. The latter two elements of the definition are broadly consistent with the legal concept of dominance in the US and EU. However, the incorporation of all three elements means that the South African concept of market power is sui generis to South African competition law. It does not correspond with the legal definition of dominance under section 7(a), and also does not fully correspond with the legal or economic concept of dominance under EU competition law. Likewise, the legal definition of dominance under EU competition law corresponds fully with neither the economic concept of dominance nor the US concept of dominance.

In cases that proceed to abuse analysis, the dominance assessment should ideally be integral to - not separate from - the analysis of harm to competition and consumers. Crucially, in this regard, dominance (a legal concept) should be seen as the possession of substantial market power (an economic concept). As a matter of policy, the competition authorities should be encouraged to clarify explicitly that dominance amounts to substantial market power, whether or not this applies to borderline cases.

 

 

1 Crane "The Paradox of Predatory Pricing" 2005 91 Cornell Law Review 1 2-3.
2 Media 24 Proprietary Limited v Competition Commission of South Africa 146/CAC/Sep16.
3 Competition Commission of South Africa v Media 24 (Pty) Limited [2019] ZACC 26.
4 See also Competition Commission v Media 24 (Pty) Ltd [2016] ZACT 86.
5 Consolidated version of the Treaty on the Functioning of the European Union [2012] OJ C326/01 (TFEU).
6 Easterbrook "Workable Antitrust Policy" 1986 84 Mich L Rev 1696 1702; see also Stigler "The Origin of the Sherman Act" 1985 14 The Journal of Legal Studies 1-12.
7 Case C-26/62 NV Algemene Transport- en Expeditie Onderneming van Gend & Loos v Netherlands Inland Revenue Administration [1963] ECR 95; see further O'Donoghue and Padilla Law and Economics of Article 102 TFEU 2ed (2013) 55, where the authors write about the various influences on Article 102 TFEU.
8 O'Donoghue et al Law and Economics of Article 102 TFEU 62.
9 Case C-52/09 P Konkurrensverket v TeliaSonera Sverige AB [2011] ECR I-00527 par 2021.
10 Ibid.
11 See Mestmäcker "The development of German and European competition law with special reference to the EU Commission's Article 82 Guidance of 2θ08" in Pace European Competition Law: The Impact of the Commission's Guidance on Article 102 (2011) 35.
12 O'Donoghue et al Law and Economics of Article 102 TFEU 62.
13 Ibid.
14 See, for example, in Brooke Group Ltd v Brown & Williamson Tobacco Corp (1993) 509 US 209, the US Supreme Court's reluctance to treat price cuts as predatory was based, among other factors, on the concern that the strict rule could chill legitimate price competition. The court stated that, as a general rule, "the exclusionary effect of prices above a relevant measure of cost either reflects the lower cost structure of the alleged predator, and so represents competition on the merits, or is beyond the practical ability of a judicial tribunal to control without courting intolerable "risks of chilling legitimate price cutting"; see also Verizon Communications Inc v Law Offices of Curtis V Trinko, LLP (2004) 540 US 398 414, where it was held that "[u]nder the best of circumstances, applying the requirements of §2 'can be difficult' because 'the means of illicit exclusion, like the means of legitimate competition, are myriad.' [...] Mistaken inferences and the resulting false condemnations 'are especially costly, because they chill the very conduct the antitrust laws are designed to protect.'"; Concord Boat Corp v Brunswick Corp (8th Cir 2000) 207 F 3d 1061, which noted that "[b]ecause cutting prices in order to increase business often is the very essence of competition, which antitrust laws were designed to encourage, it 'is beyond the practical ability of a judicial tribunal to control [above cost discounting] without courting intolerable risks of chilling legitimate price cutting.'"; and United States v AMR Corp (10th Cir 2003) 335 F 3d 1114, which stated that "caution in predatory pricing cases is the watchword 'as the costs of an erroneous finding are high'".
15 United States v Aluminum Co of America (2d Cir 1945) 148 F 2d 416.
16 Case C-322/81 NV Nederlandsche Banden Industrie Michelin v Commission of the European Communities [1983] ECR 3461 ("Michelin") par 57 and Joined Cases C-395/96 P and C-396/96 P Compagnie Maritime Belge Transports v Commission of the European Communities [2000] ECR I-1365 par 37.
17 See US v Grinnell Corp (1966) 384 US 563 570-571, where it can be seen that from the earliest cases construing the provision, the US courts have recognised that section 2 does not attempt to make the size of a firm, however large, or the existence of unexerted power on its part an offence when unaccompanied by unlawful conduct in the exercise of its power.
18 Guidance Communication on the Commission's enforcement priorities in applying Article 82 of the EC Treaty to abusive exclusionary conduct by dominant undertakings [2009] OJ C45/02 ("the Guidance Paper") par 6; see also Case C-8/08 T-Mobile Netherlands BV, KPN Mobile NV, Orange Nederland NV and Vodafone Libertel NV v Raad van bestuur van de Nederlandse Mededingingsautoriteit [2009] ECR I-4529 par 38, noting that the Treaty's competition rules are designed to protect not only the immediate interests of individual competitors or consumers, but also to protect the structure of the market and thus competition as such. Dominant firms are therefore entitled to compete "on the merits" in relation to pricing, contractual conditions, output, quality, innovation, cost reduction and efficiency. See Bellamy and Child European Union Law of Competition 8ed (2018) 860. For a US perspective, see Hovenkamp "Exclusion and the Sherman Act" 2005 72 U Chi L Rev 149-150, which refers to the "Areeda-Turner laundry list" of competition on the merits, including '"non-exploitative pricing, higher output, improved quality, energetic market penetration, successful research and development, cost-reducing innovations, and the like"' but stating that such a standard "may do an adequate job of characterizing past decisions. But it is not always very helpful in evaluating novel practices".
19 Case C-6/72 Europemballage Corporation and Continental Can Company Inc v Commission of the European Communities [1973] ECR 215 par 26.
20 Case C-280/08 P Deutsche Telekom AG v European Commission [2010] ECR I-09555 par 176; see also TeliaSonera Sverige AB supra par 21-22, which notes that the function of the competition rules of the Treaty, including article 102 TFEU, is to "prevent competition from being distorted to the detriment of the public interest, individual undertakings and consumers, thereby ensuring the well-being of the European Union"; and see Joined Cases C-501/06 P, C-513/06 P, C-515/06 P and C-519/06 P GlaxoSmithKline Services Unlimited v Commission of the European Communities [2009] ECR I-09291 par 63, where it was stated that "the Court has held that [...] like other competition rules laid down in the Treaty [...] [it] aims to protect not only the interests of competitors or of consumers, but also the structure of the market and, in so doing, competition as such".
21 Case C-209/10 Post Danmark A/S v Konkurrencerädet EU:C:2012:172 par 22 ("Post Danmark /"); Case C-413/14 P Intel Corp. vEuropean Commission EU:C:2017:632 par 134.
22 O'Donoghue et al Law and Economics of Article 102 TFEU 6.
23 Case COMP/38.233 Wanadoo Interactive, European Commission Decision of 16 July 2003; Case T-340/03 France Télécom SA v Commission of the European Communities [2007] ECR II-00107; Case C-202/07 France Télécom SA v Commission of the European Communities [2009] ECR I-02369.
24 Michelin supra par 57. It is often the case that, owing to historical advantages benefitting network incumbents, a tougher standard of abuse is applied to dominant (incumbent) network operators in regulated network industries through an expansive view of the doctrine of "special responsibility". See Post Danmark / supra par 23.
25 S 3 of 89 of 1998.
26 S 1 of 89 of 1998.
27 S 6 of 89 of 1998.
28 See Michelin supra par 47 "[a] finding that an undertaking has a dominant position is not in itself a recrimination but simply means that, irrespective of the reasons for which it has such a dominant position, the undertaking concerned has a special responsibility not to allow its conduct to impair genuine undistorted competition on the common market".
29 S 7(a) of 89 of 1998. See Competition Commission v South African Airways (Pty) Ltd 18/CR/Mar01 par 87.
30 S 7(b) of 89 of 1998.
31 S 7(c) of 89 of 1998.
32 See Continental Can supra; Case 85/76 Hoffmann-La Roche & Co. AG v Commission of the European Communities [1979] ECR 461 par 38-41 and 48; US v Microsoft Corp (DC Cir 2001) 253 F 3d 34; see also United States v Grinnell Corp (1966) 384 US 563.
33 Werden "Assigning Market Shares" 2002 70 Antitrust Law Journal 67-104.
34 Werden 2002 70 Antitrust Law Journal fn. 2 where the author explains that the use of term "assignment" reflects "the wide range of conscious choices to be made" and that "[t]his task goes well beyond 'calculation' and 'measurement' - two terms conventionally used to describe it".
35 For a discussion and analysis on the calculation, measurement and assignment of market shares see Werden 2002 70 Antitrust Law Journal 67-104; O'Donoghue et al Law and Economics of Article 102 TFEU 144-145; Bellamy et al European Union Law of Competition 871 -878; Bishop and Walker The Economics of EC Competition Law: Concepts, Application and Measurement 3ed (2010) 65; Niels, Jenkins & Kavanagh Economics for Competition Lawyers 2ed (2016) 100-103.
36 Werden 2002 70 Antitrust Law Journal 104.
37 See Evans and Schmalensee "The Antitrust Analysis of Multi-Sided Platform Businesses" 2012 Coase-Sandor Institute for Law & Economics Working Paper No. 623; O'Donoghue et al Law and Economics of Article 102 TFEU 146.
38 18/CR/Mar01 par 87.
39 See for eg., Dansby and Willig "Industry Performance Gradient Indexes" 1979 64 The American Economic Review 249-260; Motta Competition Policy: Theory and Practice (2004) ch 3; United States Department of Justice and the Federal Trade Commission Horizontal Merger Guidelines (2010) ch 5; Rey "Towards a Theory of Competition Policy" (2014) IDEI University of Toulouse 32-34.
40 Bellamy et al European Union Law of Competition 871 -872.
41 Hoffmann-La Roche supra par 39.
42 Geradin, Hofer, Louis, Petit and Walker "The Concept of Dominance in EC Competition Law" Global Competition Law Centre Research Paper on the Modernization of Article 82 EC (2005) College of Europe 10.
43 Ibid.
44 Geradin et al Global Competition Law Centre Research Paper on the Modernization of Article 82 EC 10-15; O'Donoghue et al Law and Economics of Article 102 TFEU ch 4; Bishop et al The Economics of EC Competition Law ch 3.
45 Posner and Landes "Market Power in Antitrust Cases" 1980 94 Harvard Law Review 937996; Bishop et al The Economics of EC Competition Law ch 3; Motta Competition Policy ch 3.
46 Harbord and Hoehn "Barriers to Entry and Exit in European Competition Policy" 1994 14 International Review of Law and Economics 411-435; Kaplow and Shapiro "Antitrust" 2007 2 Handbook of Law and Economics ch 15.
47 For instance, under art 102 TFEU, the European Court of Justice held in Hoffmann-La Roche supra that generally a very large share, in the absence of exceptional circumstances, is sufficient evidence of the existence of a dominant position. On that basis, the European Court of Justice held, in Case C-62/86 AKZO Chemie BV v Commission of the European Communities [1991] ECR I-03359 par 59-60, that 50% is a large market share, and when accompanied by the fact that AKZO's market share remained stable over a period of three years, this was sufficient proof of a dominant position. A market share in excess of 50% therefore, in the absence of countervailing indications, creates a rebuttable presumption of dominance in the EU.
48 Bloch, Kamann, Brown and Schmidt "A Comparative Analysis of Article 82 and Section 2 of the Sherman Act" 2006 7 Business Law International 151.
49 Ibid.
50 Bloch et al 2006 Business Law International 152.
51 Ibid.
52 See Bellamy et al European Union Law of Competition 873-877 and O'Donoghue et al Law and Economics of Article 102 TFEU 147-150 for a full discussion of the general indicators relating to the level of market shares in the EU.
53 Bloch et al 2006 Business Law International 152.
54 Ibid.
55 As regards the possible policy reasons behind this approach, see Sutherland and Kemp Competition Law of South Africa (2017) Issue 21 Lexis Library s 7.7.6.5 and Mackenzie "Are South Africa's Predatory Pricing Rules Suitable?" (September 2014) available at http://www.compcom.co.za/wp-content/uploads/2014/09/Neil-Mackenzie-Predatory-Pricing-in-SA.pdf (accessed 2015-03-22) section 2.
56 Competition Commission v South African Airways (Pty) Ltd supra par 87.
57 Sutherland et al Competition Law of South Africa 7-26.
58 S 1 of 89 of 1998.
59 See Case 27/76 United Brands Company and United Brands Continental BV v Commission of the European Communities [1978] ECR 207 par 65; Hoffmann-La Roche supra par 38.
60 DG Competition discussion paper on the application of Article 82 of the Treaty to exclusionary abuses (2005) par 21.
61 Geradin et al Global Competition Law Centre Research Paper on the Modernization of Article 82 EC 3.
62 Neven, Nutall and Seabright "Merger in Daylight: The Economics and Politics of European Merger Control" 1993 Center for Economic Policy Research 18.
63 The Guidance Paper par 10.
64 For example, in wholesale markets when a firm's customers are not the end consumers, the firm will still not be able to behave independently of consumers. This is because demand for intermediate goods is a "derived" demand - that is, it is ultimately determined by end consumers. See Geradin et al Global Competition Law Centre Research Paper on the Modernization of Article 82 EC fn. 5.
65 See s 8(4) of 89 of 1998.
66 United States v. E. /. du Pont de Nemours & Co. (1956) 351 U.S. 391.
67 NCAA v. Board of Regents of the University of Oklahoma. (1984) 468 U.S. 85, 109 n.38; see also, for instance, United States v Microsoft Corp (DC Cir 2001) 253 F 3d 51; Eastman Kodak Co. v. Image Technical Servs. Inc. (1992) 504 U.S. 451, 464; Jefferson Parish Hosp. Dist. No. 2 v. Hyde (1984) 466 U.S. 2, 27 n.46; and Carlton and Perloff Modern Industrial Organization 4ed (2005) 642; Posner and Landes 1980 94 Harvard Law Review 939.
68 Posner Antitrust Law 2ed (2001) 265; Motta Competition Policy 115-116.
69 Motta Competition Policy 115.
70 Carlton "Market Definition: Use and Abuse" Spring 2007 Competition Policy International 7.
71 Eastman Kodak Co. supra 481.
72 Krattenmaker, Lande and Salop "Monopoly Power and Market Power in Antitrust Law" 1987 76 Georgetown Law Journal 246-247.
73 See, for eg., Bacchus Indus., Inc. v. Arvin Indus., Inc. (10th Cir. 1991) 939 F.2d 887, 894, which defines monopoly power as "substantial" market power; Deauville Corp. v. Federated Dept Stores, Inc. (5th Cir. 1985) 756 F.2d 1183, 1192 n.6, which defines monopoly power as an "extreme degree of market power"; Areeda and Hovenkamp Fundamentals of Antitrust Law 2ed (2002) 318, which states that "the Sherman Act § 2 notion of monopoly power is conventionally understood to mean 'substantial' market power"; Posner and Landes 1980 94 Harvard Law Review 937, which defines monopoly power as "a high degree of market power".
74 DG Competition discussion paper on the application of Article 82 of the Treaty to exclusionary abuses (2005) par 24; see also The Guidance Paper par 11; Commission Working Document on the Proposed New Regulatory Framework for Electronic Communications Networks and Services: Draft Guidelines on market analysis and the calculation of significant market power COM (2001) 175 final par 65; Commission Notice Guidelines on Vertical Restraints (2000) OJ C291/01 par 119.
75 UK Office of Fair Trading Competition Law Guideline: Assessment of Market Power 2004 OFT 415 par 1.2 and 1.4.
76 The Guidance Paper par 10; Geradin et al Global Competition Law Centre Research Paper on the Modernization of Article 82 EC 4; Motta Competition Policy 35.
77 72/CR/Dec03.
78 Nationwide Poles v Sasol Oil supra par 70-71.
79 Nationwide Poles v Sasol Oil supra par 71.
80 See Stigler The Organization of Industry (1968) for an analysis of this type of market power.
81 Geradin et al Global Competition Law Centre Research Paper on the Modernization of Article 82 EC 5.
82 For instance, high profits, price-cost margins, demand elasticity and evidence of anticompetitive effects.
83 This means firms already in the market. The effectiveness of existing competition is gauged, among others, by market share over time and ease of expansion. The focus is thus on the competitive constraints imposed by the existing sellers and the position of actual competitors on the market, which looks at the market position of the dominant firm and its competitors.
84 This means future expansion by actual competitors and firms that may enter the market and prevent exercise of market power in the long run. The effectiveness of potential competition is gauged by barriers to entry (and expansion).
85 This means credible threats to switch to new suppliers or sponsor new entry and growth.
86 Krattenmaker et al 1987 Georgetown Law Journal 249.