Dept of Tourism: Judgement reserved – Solidarity & AfriForum

Race does not play a role in pandemic and therefore BEE cannot play a role in allocation of funds

Solidarity and AfriForum in court against Department of Tourism: judgement reserved

28 April 2020

Judgement in Solidarity and AfriForum’s court case against the Department of Tourism was reserved today in the Northern Gauteng High Court. Judgement will be delivered by email to all parties within the week. This comes after the two organisations resorted to the court to ask that the Department of Tourism’s decision to use race as criterion for granting relief be reviewed.

Solidarity contends that black economic empowerment (BEE) specifically aims to redress the inequalities of the past and that there is no room for it in the use of emergency relief funds in the midst of the Covid-19 pandemic. By regulation micro businesses are exempt from BEE under normal circumstances.

“Race does not play a role in the pandemic and therefore BEE cannot play a role in the allocation of emergency funds,” Dr Dirk Hermann, Solidarity chief executive, said.

The Department used BEE as defence in its court papers. According to the Minister of Tourism, MmamolokoKubayi-Ngubane, the department is obliged by law to grant relief funds only according to BEE requirements.

“BEE and the many administrative and financial obligations that come with it, now suddenly apply to these businesses and that amid the Covid-19 pandemic. The fund excludes large enterprises, most micro enterprises that are white-owned and small enterprises that are not registered for tax purposes, most of which are black-owned,” Hermann contends.

Only companies with a turnover of less than R5 million per year and which are registered for tax purposes qualify for help. Consequently, it only includes a small group of black owners constituting 7% of the sector who will qualify for the lion’s share of the relief fund.

According to Solidarity the flip side of this is that 93% of owners, as well as thousands of small informal black businesses are excluded from any help. In this industry two out of every three employees are black, in other words a total of 350 000 employees will not benefit from the fund.

The fund discriminates on two levels: first against white businesses and secondly against all employees, white and black. Black employees of white employers will not be spared the distress,” Hermann contended.

On 25 March Solidarity filed a complaint with the Human Rights Commission (HRC) after government had indicated that relief funds would be allocated on the basis of race. An urgent application was served on the department on 30 March, and on 28 April the case was heard in the Northern Gauteng High Court along with a similar case brought by AfriForum.

“The Covid-19 crisis doesn’t just affect certain people. It is a pity that in the times of such a universal crisis, politicians cannot set aside their own prejudices for the sake of the overall well-being of the country’s citizens. The Department of Tourism still chooses to see colour rather than need. Many breadwinners, most of whom are black, have lost their income and now cannot benefit from this relief fund. The Department’s relief fund should be available to anyone who needs help, regardless of race,” Hermann concluded.

Issue by Dirk Hermann, Solidarity Chief Executive, 28 April 2020