Here's one way in which Rob Davies' Licensing of Business Bill is unconstitutional

‘Trade' is listed in Schedule 4 of the Constitution as a concurrent competence of government.This means that both the national and provincial spheres have the authority to pass legislation regulating matters which fall within this function. Section 146 of the Constitution explains that should a conflict of law materialise between national and provincial legislation this conflict must be resolved by the Constitutional Court in terms of an elaborate set of ten overrides.

In short, only if none of these overrides can be invoked will provincial legislation prevail over the national legislation.

Sadly, like much of the ANC national Cabinet, Rob Davies shows minimal familiarity with some basic principles of our Constitution. His recently gazetted Licensing of Business Bill does recognise that ‘trade' is a concurrent competence and therefore has implications for the provinces. However, on the topic of conflict of laws, section 5(2)(b) of the proposed national Bill states simply that should any conflict exist between national and provincial legislation the provisions of the national legislation will prevail.

This is plainly not in conformity with the system of multi-sphere governance which the Constitution envisages. Section 5 of the Bill, in its present format, is therefore unconstitutional.

The purpose of the Bill is ostensibly to 'regulate business' - and by 'business' Red Rob means any business. Anyone so bold as to 'offer goods or services for sale to the public' will need to obtain a license and comply with the 45 section Bill as well as the palisade of regulations which are bound to follow. An all powerful new class of 'inspectors' (who can be anyone designated by the Minister) will be able to enter business premises, issue fines for contraventions and generally do everything possible to make doing business in South Africa an unpleasant activity. 

Therefore, a far more important objection to this Bill involves the right to freedom of trade contained in the Bill of Rights. I haven't looked at it closely, but there is the possibility that the proposed national Bill will infringe upon section 22 of the Constitution which states that:

‘Every citizen has the right to choose their trade, occupation or profession freely. The practice of a trade, occupation or profession may be regulated by law.'

Whatever the case, policy makers in DA run provinces (such as the Western Cape) should start devising their own provincial Bill which would conceivably conflict with and prevail over Davies' national legislation, should it ever be enacted into law. This ‘Western Cape Licensing of Business Bill' would naturally do the exact opposite of the national Bill by deregulating the environment in which businesses and entrepreneurs operate. Whatever policy proposals might emerge should be incorporated into the 2014 Gauteng campaign.

We have been down this road once before, when the national Legal Practice Bill was introduced into Parliament as a ‘section 75 Bill' denoting that it dealt with matters exclusive to the national sphere of government. I understand that this Bill was withdrawn and subsequently re-introduced as a ‘section 76 Bill' after Parliamentary advisors realised that the legal profession (which the Bill seeks to regulate) may constitute a ‘trade' and therefore implicate the provincial sphere.

There are probably many other national statutes which regulate ‘trade' - indeed ‘trade' is probably the most important concurrent function available to the provinces. The Western Cape would do well to conduct a comprehensive review of all such national legislation in order to prepare provincial legislation which fundamentally deregulates and simplifies the legislative environment in which business operates so that enterprise can occur and jobs can be created.

This article first appeared on the PolicyXChange weblog.

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