Race-based criteria for funding aid ruled unlawful
The SCA found yesterday that it was unlawful for the Tourism Minister to require that tourism businesses meet B-BBEE requirements in order to be considered for relief from government's Covid-19 fund, says a Fin24 report.
To mitigate the impact of the coronavirus lockdowns on the tourism industry, government in April 2020 announced a Tourism Relief Fund of R200m allocated to provide once-off payments of up to a maximum of R50 000 to businesses in the tourism industry that were adversely affected.
The Solidarity Trade Union and lobby group AfriForum applied urgently, in separate cases, in the Gauteng High Court (Pretoria) to review and set aside what they described as ‘race-based criteria’ for eligibility for financial assistance from the fund.
Their applications were dismissed with costs and they were refused leave to appeal.
The SCA ruled in favour of AfriForum and Solidarity, who had challenged the Minister's approach.
At the same time, AfriForum and Solidarity agreed that it would not be practical and maybe even impossible for the Minister to try to recover any of the funds already disbursed from the fund.
They wanted the declaratory order from the SCA to the effect that the Minister was not legally obliged by the B-BBEE Act to make eligibility for assistance from the fund subject to the Tourism Sector Code and that her direction was consequently unlawful, which the court granted.
The Minister had argued government was obliged by statute to include B-BBEE criteria in the directions for eligibility to financial assistance, notes the Fin24 report.
‘It is apparent that the purposes of the DMA (Disaster Management Act), on the one hand, and the B-BBEE Act, on the other, are very different and that each statute is directed at achieving different goals: the DMA is aimed at preventing or limiting disasters, mitigating their impact and enabling post-disaster recovery, while the B-BBEE Act is aimed at promoting black economic empowerment in order to enable black people to participate meaningfully in the economy,’ the SCA ruling stated.
Article disclaimer: While we have made every effort to ensure the accuracy of this article, it is not intended to provide final legal advice as facts and situations will differ from case to case, and therefore specific legal advice should be sought with a lawyer.