Looming ICASA BEE regulations threaten to harm the entire economy

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The telecommunications and internet services industry in South Africa faces a significant threat in the form of ICASA’s Ownership Regulations. These regulations have, among other things, introduced burdensome racial requirements that hinder fair competition and threaten the viability of businesses in a critical sector of the economy.

Individual licensees are required to comply with stringent ownership equity criteria, including the historically disadvantaged groups (HDG) equity requirement and the Black equity requirement. Failure to meet these requirements can lead to debilitating fines and penalties, placing countless businesses in jeopardy.

What’s at Stake?

The linkage of Black Economic Empowerment (BEE) requirements to license conditions – what Sakeliga calls ‘third-wave BEE’ – sets a dangerous precedent. It paves the way for escalating racial requirements as a prerequisite to operate as a business that could stifle business formation, innovation, and investment and inflict hundreds of billions of rands of economic damage.

The Urgent need for Action

With the enforcement date of March 30, 2024, looming, it is crucial for stakeholders to unite and challenge these regulations before they become established in the industry. While litigation may not be completed by the deadline, the need for action to roll back the regulations can hardly be overstated. Responsible business communities cannot allow regulations that impose harmful and unreasonable burdens and penalties on their operations to become the norm.

Sakeliga's Mission: Building Scalable Solutions to State Failure

Your Support is Crucial

We cannot undertake this challenge alone. Through financial support of our litigation effort, concerned stakeholders in the telecommunications and internet services industry and beyond can stand with Sakeliga in opposition to these damaging regulations. Widespread support is crucial in demonstrating the far-reaching effect of these regulations and the urgent need for reform.

Our Proposed Approach

Sakeliga, along with other concerned parties, is gearing up to challenge these regulations in court. Our legal team has identified multiple grounds on which these regulations can be contested, including:

  1. The regulations’ penalties for non-compliance may exceed the authority granted by empowering legislation, rendering them unconstitutional.
  2. ICASA’s deviation from the ICT Sector Code in formulating these regulations raises questions of legality and fairness.
  3. Amendments made to the regulations in 2022 were done without due process, further undermining their legitimacy.
  4. The requirements imposed by the regulations may unreasonably interfere with businesses’ rights to choose their trade or profession.
  5. Existing license holders’ rights and legitimate expectations may be unfairly impacted by these regulations, constituting unfair administrative action.

Take Action Now

The time to act is now. We urge concerned stakeholders in this industry and beyond to rally behind our efforts to challenge ICASA’s Ownership Regulations. With successful strategic litigation, Sakeliga and its supporters together can keep this industry and others vulnerable to similar attacks open for business, productive, and beneficial to society.

To read Sakeliga’s full memorandum on the proposed regulations, click here.

For enquiries related to our litigation in this case, click here.

To support Sakeliga’s litigation efforts against ICASA as well as other high-impact court challenges, click here.

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