Judgement: Victory for freedom to do business in South Africa

Businesses are now free trade with only their self-issued permits, and without government licences relating to the State of Disaster. No enforcement agency may require a CIPC certificate or any other licence that was not required before the State of Disaster was declared. (Judgement linked to below.)

While several types of businesses, as announced in the level three regulations, remain prohibited, all other businesses are free to operate without first obtaining some new government license from national, provincial, or local government, or any other organ of state.

This is the situation after business group Sakeliga’s victory in court today and Minister Ebrahim Patel and the CIPC’s pre-emptory withdrawal of the CIPC certificate system on Sunday. In the judgement, the unwithdrawn regulations by the Minister of Small Business Development were set aside, and the unlawful status of any would-be CIPC certificate enforcement was confirmed. Judgement was awarded with costs.

“The court case is a victory for freedom to do business in South Africa. Under the guise of a medical crisis, the state was implementing a general system of business licensing in South Africa,” says Piet le Roux, CEO of Sakeliga.

“Through uncertainty and red tape, government severely restricted businesses’ ability to operate even when permitted under the often arbitrary and harmful regulations. Especially hard-hit were businesses not registered with the CIPC (most businesses in South Africa), chiefly small and medium-sized enterprises, such as sole-proprietors of all stripes, including so-called informal traders,” says Le Roux.

With regard to the withdrawal of the CIPC certificate system on Sunday, the judge found that there exists no legal requirement to have or produce a CIPC certificate: “No enforcement officer is therefore entitled to demand the production of a CIPC certificate by any business, whatever the nature of the business, and will act unlawfully if he does so or if he or she arrests or fines or takes any action against a person for failing to produce such certificate.”

Le Roux maintains that business licencing is as unacceptable now as it was in 2013 when then Minister Rob Davies attempted to develop and pass a Business Licensing Act: “Just as there is no justification for requiring government permission before consumption, so there is no justification for requiring government permission before production.”

“Regrettably, much that is arbitrary and harmful in the State of Disaster regulations remain even after this judgement,” Le Roux says. “Several types of businesses are still unreasonably excluded from doing business. This and much more must be tackled, and many are working to correct it through litigation and otherwise. We wish them all the best and will continue to do our best too.”

Sakeliga points out that, as concurred by the state’s attorney during court proceedings, businesses and persons who suffered or suffers harm because of unlawful requirements, such as to produce CIPC certificates, could consider suing for damages.

“Sakeliga wishes to thank its members, the public, and all business owners who supported this application – including those who served as deponents for supplementary affidavits. Ultimately, this victory belongs to them.”

Click here for the judgement as handed down.