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Legislation is a primary source of South African law and is often relied on because it is written. Therefore, it ought to be drafted properly to avoid any challenges in interpretation that may occur if any person is aggrieved by the implementation or non-implementation or incorrect implementation of that piece of legislation.
One of the principles of legislative drafting, which I argue is among the most important, is ‘accuracy and unambiguity’.
Meyer and Malherbe write that ‘a law should not as a result of inaccurate or imprecise formulation, or because of over-simplification, create more questions than provide answers – or create more loopholes than it shuts down’ (University of Johannesburg, Certificate in Legislative Drafting Study Notes, 2009).
In the case of Minister of Finance v Afribusiness NPC 2022 (4) SA 362 (CC), Afribusiness NPC initially approached the Gauteng Local Division of the High Court challenging the validity of the Preferential Procurement Regulations, 2017, in the main alleging that the minister, in issuing same, had acted ultra vires. The issues before the court were deliberately limited to the ultra vires issue and hence, I will approach the judgment from that perspective.
The application was dismissed and Afribusiness appealed to the Supreme Court of Appeal (SCA).
Judgment was delivered in favour of Afribusiness by the SCA with the regulations being declared invalid, but such invalidity was suspended for a period of 12 months in November 2020.
The minister appealed the SCA judgment to the Constitutional Court (CC), which again ruled in favour of Afribusiness. It is the interpretation given by the Justices of the CC, both in the majority and minority judgments, that are scrutinised in this analysis.
The Constitution, in s 217(1), provides that: ‘When an organ of state in the national, provincial or local sphere of government, or any other institution identified in national legislation, contracts for goods or services, it must do so in accordance with a system which is fair, equitable, transparent, competitive and cost-effective.’
Section 217(2), however, seeks to accommodate the previously disadvantaged groups by stating that: ‘Subsection (1) does not prevent the organs of state or institutions referred to in that subsection from implementing a procurement policy providing for –
(a) categories of preference in the allocation of contracts; and
(b) the protection or advancement of persons, or categories of persons, disadvantaged by unfair discrimination’.
Section 217(3) directs that ‘national legislation must prescribe a framework within which the policy referred to in subsection (2) [preferential procurement] must be implemented’. It was as a sequel to this directive that the Preferential Procurement Policy Framework Act 5 of 2000 (PPPFA) was enacted.
Section 2(1) of the PPPFA stipulates that: ‘An organ of state must determine its preferential procurement policy and implement it … .’
On the other hand, s 5 of the PPPFA allows for the minister to make regulations and states that: ‘The Minister may make regulations regarding any matter that may be necessary or expedient to prescribe in order to achieve the objects of this Act.’
On close reading of s 2(1) of the PPPFA, it immediately seems that there is a contradiction between the power given to the minister in s 5 and the power given to organs of state by s 2(1).
In Road Accident Fund v Makwetlane (SCA) (unreported case no 649/2002, 17-2-2005) (Ponnan AJA) at para 13, Ponnan AJA (as he then was) cautions that: ‘It is unnecessary to define with precision the nature of the act performed by the Minister, for, however defined, and whatever its true nature, the conduct of the Minister in promulgating the regulation is subject to constitutional scrutiny. It is a concept central to our constitutional order that neither the legislature nor the executive may exercise any power or perform any function beyond that conferred by law.’ The CC had, therefore, in Afribusiness, admitted at para 29, that central to the enquiry it was supposed to make was whether the minister had the power to promulgate the Preferential Procurement Regulations, 2017. Afribusiness had argued that the Preferential Procurement Regulations, 2017 must be read subject to the empowering legislation, and if the Regulations purport to vary s 2 of the PPPFA, they are ultra vires.
Further per Mhlantla J, the CC pointed out that: ‘As we know, regulations are subordinate legislation. It is trite law that subordinate legislation must be created within the limits of the empowering statute. If they are not, the exercise of the power is unlawful and may be set aside like an unlawful act of any other functionary who has acted outside the powers conferred upon her by the legislature. This means any regulations promulgated by the Minister under the [PPPFA], including the impugned regulations, must be consistent with the [PPPFA]. If they are not, the Minister acted beyond the scope of the powers conferred on him by the legislature.’
The CC at para 43 reminded the parties that it ‘has reaffirmed on several occasions that words in a statutory provision must be given their ordinary meaning and read in their proper context in a manner that enables the provision to achieve its purpose’.
This then brings us to the key words at issue in as far as the PPPFA is concerned, namely ‘necessary and expedient’. One may ask what is ‘necessary and expedient’? Was it ‘necessary and expedient’ to issue these regulations such that they ought to have been issued even when organs of state, permitted by s 2 of the PPPFA, could determine their own preferential procurement policies?
The dictionary defines the word ‘necessary’ as: ‘Required to be done, achieved, or … inevitable’ ((see Concise Oxford English Dictionary (New York: Oxford University Press 2011)).
On the other hand, the dictionary defines the word ‘expedient’ as: ‘Convenient and practical although possibly improper or immoral’ (see Concise Oxford English Dictionary (op cit)).
These definitions immediately give rise to the following questions:
The point can be best made by citing a few examples of clauses from various Acts, allowing for the promulgation of regulations with the PPPFA’s clause among those.
Section 30 of the Financial and Fiscal Commission Act 99 of 1997 (the FFC Act) states that: ‘The Minister, with the concurrence of the Commission, may make regulations, not inconsistent with this Act or any other Act of Parliament, prescribing procedures to facilitate the performance by the Commission of its functions.’
Section 5(1) of the PPPFA states that: ‘The Minister may make regulations regarding any matter that may be necessary or expedient to prescribe in order to achieve the objects of this Act.’
Section 87(1) of the National Gambling Act 7 of 2004 (the Gambling Act) meanwhile states that: ‘The Minister may make regulations regarding –
(a) any forms required to be used for the purposes of this Act;
(b) the maximum number of any kind of licence, relating to gambling to be granted in the Republic or in each province, subject to section 45.’
When we closely look at these provisions, they have the following attributes:
We can, therefore, say for now lessons about regulations are that they must –
The above may be the reason why Madlanga J at para 118 seemed to be convinced by Afribusiness’ argument that s 5 is at odds with s 2 of the PPPFA. He held that: ‘The antecedent question is: Does a Minister have the power to make regulations of this nature in the first place? If she or he does not, the matter ends there; the regulations are invalid for being ultra vires the enabling section. And this is no small matter. Conduct by an organ of state that has no foundation in some law breaches the principle of legality, which is a subset of the rule of law, a foundational value of the Constitution.’
He goes on to say: ‘If the Minister is of the view that organs of state are failing to do what they are required to in terms of s 2(1), she or he must find other legally cognisable means to get them to do what they must do. For example, she or he might engage organs of state politically to make s 2(1) determinations of preferential procurement policies that meet with her or his idea of preference. Or, she or he could introduce a Bill in Parliament with a view to amending the Procurement Act such that the Act itself contains her or his desired preferential procurement policy. Of course, the content of either option must pass constitutional muster.’
The purpose of the PPPFA, which emanates from the Constitution, is too important a purpose to have had its further advancement through regulations, declared unlawful because of the vague, unclear and inconsistent manner in which the regulatory provisions were drafted.
The time that is usually allocated for a Bill to be introduced is often very limited. However, attempts must, always be made to ensure that the Act, when it is passed, is implementable with its regulatory provisions. If it takes amending the legislation to have the intended objectives achieved, then that is a route that must be taken, as opposed to try to provide in regulations, what was not intended to be the case or have regulations that contradict the Act.
Where regulatory provisions indicate that it would be ultra vires to promulgate certain regulations, it may be advisable to consider amendments to the regulations or relevant provisions in the Acts than to take a chance, for if you cannot pass the ultra vires test, you then violate the principle of legality.
It should be a relief for any person who exercises a power to promulgate regulations to say: ‘I am specifically authorised by the law makers to promulgate regulations on this matter.’
The next and only remaining issue will then be the content of those regulations.
With the CC on 30 May 2022 clarifying that the impugned regulations are valid until 15 February 2023, the minister has an opportunity in my view to amend the PPPFA as opposed to seeking to issue regulations on behalf of organs of state, unless there is a clear agreement that organs of state will adopt those regulations.
Lonwabo Sopela LLB (WSU) PG Dip Labour PG Dip Contracts (UJ) is a Senior State Law Advisor at the Eastern Cape Office of the Chief State Law Advisor in Bhisho. Mr Sopela writes in his personal capacity.
This article was first published in De Rebus in 2022 (Dec) DR 21.
