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How and whether race, sex, and disability may be considered in evaluating applications for disaster relief. 

Sex, Race, and Disaster Relief:

A Glimpse into the High Court Judgment in Democratic Alliance v The President of the Republic of South Africa and others

Introduction

On 19 June 2020, a full bench (3 judges) of the Pretoria High Court handed down a judgement declaring that the current criteria for determining who would receive financial relief from the Debt Finance Scheme and Business Growth Resilience Fund were unlawful, and that factors such as Race, Sex and Disability may be taken into account when determining who may benefit from such relief.   

This paper will briefly highlight:

• A Brief Factual Background to the case;
• What relief the DA sought from the court;
• The grounds for the challenge and opposition;
• Summarised observations and findings of the court; and
• A summary of the court order.

Brief Factual Background

As a result of the Covid-19 pandemic and declaration of a national lockdown, the government sought to dispense funds to small businesses in an effort to ensure their survival during lockdown. The Minister of Small Business Development established two funds to provide financial relief to SMME’s: the Debt Finance Scheme (“DFS”) and the Business Growth Resilience Fund (“BGRF”).

During March and April 2020, however, the Minister issued statements and documents to the effect that applications for relief will be evaluated on various criteria including race, sex, disability, and age. However, it was not stated how much weight each of the factors would carry.

The DA launched an application to cancel the criteria and prevent the Minister from using race, sex, disability, etc as criterion for evaluating applications.  The Minister opposed, and the EFF intervened in order to make additional submissions to the Court.

Grounds for the Challenging Opposition

The question that the court had to determine was whether BEE status, race, gender, and disability can be used as a basis for a decision regarding who may receive disaster relief from the funds.

The main grounds upon which the DA challenged the system included the following:

• Need – not race, sex, or age – should determine who gets relief.
• The system and criteria used to determine who should receive disaster relief from the funds must be based on a predictable system that determines, in advance, how factors such as sex, race, and disability would be weighed relative to each other and other factors. However, the current criteria was excessively vague and provided no calibration or weighting to guide the applicants and decision makers.
• As a result, potential applicants would not know what is relevant, and what should be included or emphasised in their applications;
• Relying on race and gender is opposed to section 27(2) of the Disaster Management Act in that transformation is not a basis for determining who gets relief; and
• The BBBEE Act does not apply to the distribution of money from the funds. Hence, even if race and gender were relevant, the BBBEE scoring system could not be utilised in the evaluation process.

Defence and Justifications by the Respondents

The EFF and the Respondents opposed on, inter alia, the following grounds:

• As relief is intended to assist those who are rendered more vulnerable by the state of disaster, there can be no appropriate consideration of vulnerability in South Africa if one were to exclude race;
• Transformation and BBBEE is a concept that emanates from the Constitution and must run through all government action and decisions – it is not something the government can turn on and off from time to time;
• The fact that the lockdown has impacted the poor (the vast majority of whom are previously disadvantaged) is evident; and
• The minister was, in terms of section 27(2), entitled to specify any steps and recommendations that may be necessary to alleviate and minimise the effect of the disaster. This included given priority to on the basis of race, sex, etc.

Summarised Observations and Findings of the Court

In the judgement , the court found that

• Generations of children born since 1996 and yet to be born will suffer the consequences of poverty, disempowerment, etc generated and sustained by the institutions of apartheid.
• There is a need to reconstruct our society and a commitment to historical redress that is evident in the constitution.
• The state of disaster has highlighted that our society is still fragmented along racial and gender lines, as is evident by the current geography of our cities a quarter of a century after democracy. The need for scarce resources falls overwhelmingly on the poor, the vast majority of which are black. The brunt of the effect of Covid-19 has fallen on this vulnerable group as a result of our past and the current racial divide in contemporary South Africa.
• Hence, factors such as race and sex were indeed relevant in assessing vulnerability in South Africa and the Minister may make regulations that specify steps to contain and minimise the effects of a disaster.
• However, legislation must to be clear. The minister may not leave the issue of disbursement of funds subject to a vague statement that priority would be given to women, the youth, and the disabled without any guidance as to what weight is to be given to these criteria.
• Furthermore, it is thus obvious that the current criteria fall fowl of the basic principle of the rule of law that the exercise of public power must be certain, even if discretion to allocate funds is permissible.

Summary of Order of the Court

In light of the above, the court ordered that:

• The criteria are vague and legally non-compliant. Therefore, they are canceled, and declared unlawful;
• The Court’s order does not affect any funds which have already been distributed; and
• In the reformulation of criteria, the Minister must take into account race, gender, youth, and disability.

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