AfGTI Working Paper Series 2025/1 – To be or not to be: is policy binding or not? A discussion of the implications of Minerals Council of South Africa v Minister of Mineral Resources and Energy and its implications for trade policymaking
Introduction
The definition of ‘policy’ in South African law is nebulous. Yet despite the ambivalence towards the definition of policy, a more insidious and hitherto, unresolved issue is whether ‘policy’ is binding in our law. This issue is particularly problematic in international trade policy, which is recently being regulated largely through ‘policy’ rather than ‘law’. Yet, as Hoexter notes, some of these pronouncements are actually ‘standards or quasi-legislation’ and they are ‘less formal and less official than rules’.[1] These may be policy determinations, guidelines, directives, circulars or manuals which regulate the way in which the administrator conducts themselves, but they are actually published as ‘official rules or regulations.[2] In fact, it has been held that the adoption of ‘policy guidelines’ by state functionaries to help decision-makers in the ‘exercise of their discretionary powers has long been accepted as legally permissible and eminently sensible’.[3] This is apt in instances which require the balancing of conflicting interests as well as particular expertise on the part of a decision-maker as is the case in international trade matters.[4] According to Baxter, the conundrum here is when they are not readily accessible nor published and they become what is called ‘secret law’, which is not in accordance with the standards already determined by the legislature in enabling legislation.[5] Baxter cautions that while these standards are ‘desirable’, they must be accessible or be made known to the public.[6] While the formulation of regulations and policy prescribed by legislation is transparent as required by legislation and the relevant legislature, the same cannot be said in respect of standards since their discretion is unfettered.[7] Under the regime of the International Trade Administration Commission Act 71 of 2002 (ITAA), the Minister of Trade, Industry and Competition has the power to issue trade policy statements and directives. These are binding as policy instruments that arise out of section 5 of the ITAA and should be read as part of the ITAA. Unfortunately, as feared by commentators in this area, a proliferation of the standards or quasi legislation in the form ‘directives’ has created a version of ‘secret law’ in the international trade sphere. It is against this backdrop that the decision in Minerals Council of South Africa v Minister of Mineral Resources and Energy and Others proffers an outlet to explore the question of whether ‘policy is binding or not. Consequently, this paper seeks to explore the question of whether international trade ‘policy’ is binding or not through the lens of the decision in Minerals Council. Thus, this note distils the implications of the decision in Minerals Council with a specific focus on the implications for the question of whether international trade policy is binding.
To date, there have only been three trade policy directives that have been issued by the Minister: Policy Directive on the exportation of ferrous and non-ferrous waste and scrap metal (“the 2013 Trade Policy Directive”) in terms of section 5 of the ITAA, Policy Directive issued in terms of section 5 and Notice in terms of section 6 of the Act on the Exportation of Ferrous and Non-ferrous Waste and Scrap Metal,[8] and the Trade Policy Directive on matters ITAC shall consider in evaluating applications for amendment of customs duties (“2016 Trade Policy Directive”.[9] To date, there has not been a single trade policy statement under the banner of section 5 of the ITAA. Instead, the Minister (or rather, the DTIC) published in 2021 ‘policy statements’: Policy Statement on Localisation for Jobs and Industrial Growth of 18 May 2021 and what is called the ‘A Trade Policy for Industrial Development and Employment Growth’ of 20 May 2021. The question then is whether the ‘policy statement’ is the same as a ‘trade policy statement’ under section 5 of the ITAA. Since it was not published in the Government Gazette and lexically does not idyllically resemble the former, it appears that the two are not the same. The reason for the difference in terminology could be tied to the fact that the Trade Policy Statements have rigorous requirements whilst a ‘policy statement’ might not. Even this contention Is questionable since all ‘policy’ must be in line with section 195 of the Constitution which requires public participation and transparency. It goes without saying that the Trade Policy of 20 May 2021 falls into the broad group of trade policy that is formulated by the Minister under the powers conferred by section 85 of the Constitution. The problem here is that it is unclear whether this policy is actually binding. This is notwithstanding the problem of quasi legislation earlier alluded to. It is against this backdrop that the discussion of the decisions in Minerals Council will be evaluated.
- Facts
The principal contention in this matter was whether the 2018 Mining Charter is a formal policy document setting out a policy developed by the first respondent, the Minister of Mineral Resources (“the Minister”), in terms of section 100(2) of the Minerals and Petroleum Resources Development Act1 (“the MPRDA”) or a sui generis form of subordinate legislation.[10] In simple terms, the question was whether the 2018 Charter constitutes law or policy.[11] There was also an incidental inquiry into whether the development of the 2018 Charter constitutes administrative action that stands to be reviewed on the grounds set out in PAJA or whether it stands to be tested against the principle of legality.[12] In this regard, respondents argued that section 100(2) of the MPRDA empowers the Minister to make law through the development of the 2018 Charter, hence that Charter (which he developed) constitutes a sui generis form of subordinate legislation which is directly binding on holders of mining rights.[13] In response, the Minerals Council retorted that the 2018 Charter is a formal policy document developed by the Minister in terms of section 100(2) of the MPRDA.[14] To this effect, it argues that the 2018 Charter is binding on the Minister whenever he considers an application for a mining right by virtue of the provisions of section 23(1)(h) of the MPRDA – that is, the Minister can only grant a mining right if, amongst other things, the grant of such right would be is in line with the charter stipulated in section 100(2) of the MPRDA.[15] In this regard, section 100(2) entitled “Transformation of minerals industry” states:
(a) To ensure the attainment of the Government’s objectives of redressing historical, social and economic inequalities as stated in the Constitution, the Minister must within six months from the date on which this Act takes effect develop a broad-based socio-economic empowerment Charter that will set the framework for targets and time table for effecting the entry into and active participation of historically disadvantaged South Africans into the mining industry, and allow such South Africans to benefit from the exploitation of the mining and mineral resources and the beneficiation of such mineral resources.
(b) The Charter must set out, amongst others how the objects referred to in section 2(c), (d), (e), (f) and (i) can be achieved.’
The court then cited section 4(1) of the MPRDA inter alia provides that when interpreting a provision of this Act, any reasonable interpretation which is consistent with the objects of this Act must be preferred over any other interpretation which is inconsistent with such objects.[16]
- The court’s findings
3.1 Approach to interpretation
According to the court, section 100(2) enjoins the Minister to develop a charter that will set the framework for targets and a timetable for attaining the object in section 2(d) of the MPRDA which is essentially to expand opportunities for historically disadvantaged South Africans to enter into and actively participate in the mining industry, and to benefit from the exploitation of the mining and beneficiation of mineral resources.[17] Section 100(2)(b) adds that the charter must set out how the objects referred to in sections 2(c), (d), (e), (f) and (i) of the MPRDA can be achieved.[18] Using the Endumeni approach to interpretation which propagates the contextual approach to interpretation and taking into consideration section 39 of the Constitution, which requires promotion of the spirit, purport and objects of the Bill of Rights and that the courts not unduly strain the reasonable meaning of words when doing so.[19] Furthermore, the court noted that section 4(1) of the MPRDA provides that when interpreting its provisions, a court must prefer a reasonable interpretation which is consistent with its objects over any other interpretation which is inconsistent with such objects. [20]This means that a purposive or contextual approach to interpretation which gives effect to the “transformational objectives” and all the objectives of the MPRDA is required.[21] [20] The court then explained that the contextual or purposive approach requires regard to both the internal and external context of a statutory provision as well as the language in which the legislature chose to express itself in.[22]
3.2 The language factor : Use of the term “charter”
The court noted that the term ‘charter’ is not used in recent times, to describe a law, although a few of foreign jurisdictions such as Canada (Charter of Rights and Freedoms forms part of its Constitution Act, 1982) and England (Magna Carta (Great Charter of Freedoms)) also use the term “charter” to describe legislative instruments.[23] But the court did concede that it is not uncommon for the term “charter” to be used as an instrument of law but it still not dispositive of the issue.[24] The court then held that the term “charter” in section 100(2) of the MPRDA must be construed in the context of the statutory provision in which it is used, as well as the context of the legislation as a whole.[25] The court then explained that in the MPRDA, specific mention is made of subordinate legislation and regulations and yet the drafters of this Act chose to name this instrument a “charter’ and this indicated that that the use of the word “charter” in section 100(2)(b) was intentionally used by parliament to indicate that the “charter” is not law.[26] The court then had regard to the way the term was construed by the administrators since its inception and it found that the Original Charter was a ‘formal document recording a pact’ between the government and industry, cosigned by them, in which they committed themselves to a framework for progressing the empowerment of HDSAs in the mining and minerals industry with a timetable and aspirational targets.[27] To the court, a ‘pact’ of this kind is antithetical to a ‘law’ which results from the unilateral exercise of legislative or executive power.[28] As argued by the Minerals Council, the 2010 and 2018 Charters were unilaterally adopted by the Minister in a marked deviation from the expectations of the signatories of the Original Charter and the common practice of the State and private stakeholders.[29] These charters repealed the 2004 Charter and for the first time adopted a prescriptive approach by imposing sanctions for non-compliance.[30] Thus the court held that the ‘Original Charter’ was apt proof of how the Minister and industry alike would have interpreted section 100(2) of the MPRDA at the time.[31] Therefore, it found that it was clear that it was not meant to be an instrument of subordinate legislation, as put forth by the Minister.[32] According to the court, when the Minister addressed Parliament when the Bill was tabled and adopted align more with the view that the charter was meant to be a jointly developed statement of policy than subordinate legislation and that it section 100 did not confer a legislative power.[33] This construal was also by the White Paper.[34]
As further proof that the charter was policy rather than law, was the use the word “develop” in section 100(2)(a). To the court, there is no legislation that has used the term “develop” to describe the making of a law and this term is usually employed in respect of the formulation of policy as done in section 85(2)(b) of the Constitution.[35] The power to make regulations is usually expressed in legislation by a provision that a Minister “may make or enact” regulations pertaining to specific matters.[36] Thus the court rejected the argument of the Minister that there is an actual difference between the use of the word “develop” in section 100(2)(a) of the MPRDA and any of the normal phrases employed by the legislature (such as “make” or “enact”) when legislation or subordinate legislation is contemplated.[37]
The court then explained that the charter has facts of both section 85(2)(a) of the Constitution (the implementation of legislation by the Executive) and 85(2)(b) of the Constitution (the development of policy by the Executive).[38] Citing the decision in In Ed-U-College, the court reiterated that policy formulated by the Executive outside of the legislative framework involves a political decision and will generally not constitute administrative action, however, policy formulated by the Executive in the exercise of implementing legislation may often constitute administrative action.[39] Thus, the court held that the charter, sits in the latter category as it sought to facilitate the implementation of the MPRDA, as contemplated in section 85(2)(a) of the Constitution and thus, constitutes administrative action.[40] The court then held that there is no merit in the argument that the need for revision of the charter from time to time, and the use of the term develop are the same since it saw subordinate legislation such as regulations as being frequently revised but they are “made” and not “developed” [41] Yet the word “develop” is never used to describe the making of laws.[42]
3.3 Use of the word “can”
The court then explored the meaning of the word ‘can’ in section 100(2)(b) provides that the charter must set out how the objects in sections 2(c), (d), (e), (f) and (i) can be achieved.[43] On its ordinary grammatical meaning, the word “can” in section 100(2)(b) is permissive and not peremptory.[44] Its particular use indicates that the legislature did not seek to make the charter to be subordinate legislation.[45] If Parliament meant to do the opposite then it would simply have used the word “must” instead of “can” in the latter part of the subsection.[46] Interpreted correctly, the word “can” does not restrict holders of mining rights to achieve the goals of the MPRDA in the particular manner identified in the charter.[47] They are at liberty to attain them in other ways as well provided that they are achieved.[48] Thus, the ways specified in the charter would be guiding principles.[49] The court then explained that the argument of the Minister suggests, that “can” means “must” and “develop” means “make” and that the legislature intended in section 100(2) to delegate legislative powers to him, then section 100(2) would mean that the Minister must make subordinate legislation to explain how the objects in section 2(c), (d), (e), (f) and (i) of the MPRDA must be achieved.[50] This would be tantamount to a delegation of plenary legislative power to make further legislation to give effect to the objects of the Act, which is the function of the legislature.[51] This was found to be a contravention of the doctrine of separation of powers.[52] To interpret section 100(2) as a delegation of subordinate legislative power, would lead to the further difficulty of unbridled law-making.[53] This would also violate the doctrine of separation of powers as it contains no parameters, no guidance, and no constraints.[54] By way of illustration, if as contended for by the Minister, the words “amongst others” in the subsection is interpreted to mean that the function and purpose of the charter involves more than simply addressing the objects of sections 2(c), (d), (e), (f) and (i) of the MPRDA, then section 100(2)(b) must be read as placing an obligation on the Minister to address matters that are not stipulated in the charter.[55] Not only would this result in the Minister having unfettered powers to regulate matters which he is expressly not authorised to regulate, but he would never be able to know whether he has discharged his obligations or not.[56]
3.4 Purpose and Context
The court then explored the purpose and context of the provision in light of the approach in Endumeni. The objects of the identified subsections of section 2 are, for the most part, transformative in nature and thus transformation is at the core of this provision.[57] But the court did not see this goal of transformation in section 100(2) of the MPRDA suggests that the legislature contemplated the making of laws as opposed to the development of policy when enacting the provision.[58] Thus, it rejected that the argument that the goal of transformation in section 100(2) does not require that the charter take the form of subordinate legislation.[59] The court then stated that the Code of Good Practice, published in terms of section 100(1)(b), expressly states in its introduction that it is “statement of present policy”.[60] Similarly, the Housing and Living Conditions Standard, also promulgated according to section 100(1)(a) of the MPRDA, states that its object is to “develop basic guidelines aimed at fostering suitable housing and living conditions for mine workers”.[61]
The Minister also contend that the transformation objects of the MPRDA cannot be achieved unless the charter was read as binding subordinate legislation.[62] In this respect, the court stated that this argument was hobbled by the fact that it ignored the enforcement structure provided by the MPRDA, which informs the goas of transformation.[63] In my view, too much was made of the notion that the charter constitutes subordinate legislation. This route was unnecessary and obfuscated what is a simple matter: that is, the charter constitutes binding policy since it an instrument that is created to give effect to section 100(2) – in other words, it functions as an extension of the statute in the same way as subordinate legislation does but not in the form of subordinate legislation. In simple terms, the charter resembles a trade policy directive or statement promulgated under the banner of section 5 of the ITAA. Thus the charter constitutes binding policy and not subordinate legislation. Thus, policy can be binding.
The court then stated that if the Minister, however, believes that the transformational objectives of the MPRDA are not being fulfilled through the process of incorporating appropriate provisions/terms in mining rights granted by him, he retains the power to make regulations under section.[64]
Concerning the omission of the term “charter” in section 25(2)(d), the Minister also contended that the term “charter” should be read to be included in the catch-all phrase “any other law” of section 25(2)(d).[65] This argument was deemed invalid because Parliament sought to refer to the term “charter” in the MPRDA, it did so expressly as in sections 23(1)(h), 25(2)(h) and 28(2)(c).[66] Having explicitly done so in these provisions, there was no reason for the legislature not to identify the charter by name in section 25(2)(d) of the MPRDA and .the second reason is that by virtue of the power which section 25(2)(d) confers on the Minister, to include the requirements of the charter in the terms and conditions of the mining right, the enforcement of the charter’s provisions would be achieved.[67]
The court also noted that despite the fact that the term “this Act” is defined in section 1 of the MPRDA to include a number of instruments and documents, including regulations and the terms and conditions of any mining right, it does not include the charter.[68] It would have been a simple matter, had the legislature intended that charters developed under section 100(2) be legally binding, to have included them in the definition of “this Act.”[69] Had that been done, the reference in section 25(2)(d) would have included the charter.[70]
The Minister also argued that the transformational objects in section 100(2) could never be achieved unless it is construed to mean that he was conferred the power to make subordinate legislation, in the form of the charter, which is directly enforceable against holders of mining rights.[71] But the court refused to consider these assertions because they occurred after the promulgation of the statute.[72]
The Minister’s argument, that if the charter was not a directly enforceable law, the only available enforcement mechanism would be through the application of section 23(1)(h), and that once the right is granted he is rendered powerless, is also flawed because it ignores section 23(6) of the MPRDA which requires the holder of a mining right to comply not only with the terms and conditions of its right, but also the “prescribed terms and conditions”.[73] The term “prescribed” is defined in section 1 of the MPRDA to mean prescribed by regulation.[74] In terms of section 107, the Minister may make regulations regarding “any other matter the regulation of which may be necessary or expedient in order to achieve the objects of this Act”.[75] As is expected, the Minister has failed to prescribe any regulations in order to achieve the objects set out in sections 2(c), (d), (e), (f) or (i) of the MPRDA. Nor does he explain what steps he has taken to achieve these objects by requiring the incorporation of appropriate terms and conditions in the mining rights, other than the incorporation of the standard term 17.[76] That being the case, the Minister’s core argument, that the transformational objects in the MPRDA cannot be achieved unless the charter has the status of subordinate legislation, was deemed unsustainable.[77] Thus the court was of the view that despite the failure to achieve the objects of section 100(2) of the MORDA, this does impute on the Minister the power to produce binding subordinate legislation, which means that there is a gap in the MPRDA.[78] This can only be done by the relevant legislature. In fact, the court noted that the Minister’s predecessor tabled an amendment Bill in Parliament which was aimed at, amongst other things, addressing this very issue by including “the charter” in the definition of “this Act”, in section 1 of the MPRDA.[79] Although this amendment did not occur – it points to the solution to the Minister’s problem.[80] This the court did not see anything in the context in which section100(2) appears which implies that it should not be given its ordinary grammatical meaning.[81] Section 100(2) requires that the charter should be “developed” to set a framework for targets and a timetable and set out how the objects referred to in those sections can be achieved.[82] That language, in my view, is indicative of a policy, not of legislation.[83]
3.5 The Constitution
The next question was whether the interpretation that the charter is not enforceable law consistent with the values of the Constitution? The court was of the view that the Minister has failed to identify in what respect this construction of section 100(2) is inconsistent with the values of the Constitution.[84] Insofar as the Minister’s reliance on section 9(2) of the Constitution is concerned (“to promote the achievement of equality, legislative and other measures may be taken”), the very question here is whether the charter constitutes legislative measures or other measures.[85] An executive policy measure (in the style of a charter) that gives content to, and embodies, the transformational objectives of the MPRDA, in a set of guiding principles that are aimed at guiding the exercise of the Minister’s discretion in granting or refusing a mining right can hardly be described as being inconsistent with the core values of our Constitution.[86] More particularly because these guiding principles also give applicants the benefit of knowing in advance what is expected of them[87]. Accordingly, the interpretation which I ascribe to the charter does not preclude the achievement of any of the constitutional norms and values which are embodied in the transformational objects of the MPRDA.[88]
The Minister sought to locate his purported power to make law (in the form of the charter) in the values and norms of the Constitution itself.[89] This is misdirected as the doctrine of subsidiarity precludes him from doing so.[90] As is apparent from the preamble to the MPRDA and its stated objects in section 2, its purpose is, inter alia, to give effect to the stated constitutional values.[91] In the circumstances, it is impermissible for the Minister to seek to derive his purported law-making powers directly from the Constitution.[92]
Thus having considered the language of section 100(2) of the MPRDA in light of its ordinary meaning, the context in which it appears and the apparent purpose for which it is directed, the court found that section 100(2) of the MPRDA does not empower the Minister to make law.[93] In other words, the 2018 Charter is not binding subordinate legislation but an instrument of policy.[94] This interpretation is line with the objects of the MPRDA.[95] This finding is dispositive of the main grounds of review that the challenged clauses of the 2018 Charter are unconstitutional because the Minister lacked the power to publish a charter in the form of a legislative instrument binding upon all holders of mining rights, the breach of which will be visited by the consequences and penalties provided for in the MPRDA.[96] The court, therefore, granted the Minerals Council the relief they sought.
- Evaluation of the court’s findings – implications for trade policy making in South Africa
It is cogent that this discussion must be preceded by a definition of the term ‘policy’. According to Akani, the word “policy” is by its nature, ambiguous and may carry divergent meanings.[97] The court then stated that ‘laws, regulations and rules are legislative instruments whereas policy determinations are not’[98]. To bind the public, policy should be part of such instruments.[99] The court then held that policy cannot ‘override, amend or be in conflict with laws (including subordinate legislation)’.[100] This would mean that the separation of powers doctrine would ‘disappear’.[101] This approach was then endorsed in Arun. In Arun, the court explained that legislation is normally the basis for the creation of policy.[102] But the court explained that policy is not legislation and it thus, functions as a guide that offers predictability for the exercise of public power.[103] In the ETV case, the court explained that one of the main duties of the executive arm of government is national policy development based on section 85(2)(b) of the Constitution.[104] This court then clarified that the courts are reticent to intrude on the policy-making powers of the Executive unless the said policy is in conflict with the law or the Constitution.[105] This means that the courts view the ‘law’ as above ‘policy’ and it can then be used to override the latter in exceptional circumstances with due consideration of the principle of separation of powers.[106] The court then explained that the basis of any policy-making powers of a Member of the Executive such as a Minister is section 85(2)(b) of the Constitution, which allows the Minister to ‘formulate’ and ‘develop’ national policy.[107] According to the court, this is an ‘all-encompassing constitutional policy-determination authority’.[108] This court then explained that national policy is ‘consequential’ and if it was not, then the Constitution would not have provided for it.[109] It is meant to be a fundamental ‘governance and service delivery-enabling tool’ for the Executive.[110] This dictum has several implications. First, it means that the Constitutional Court is of the view that there is a difference between ‘law’ and ‘policy. This may seem trivial, but it is not because this difference, as the court explained, is tied to the implicit constitutional principle of separation of powers. In simple terms, the ‘law’ is made by the legislature as the constitutionally empowered arm of government. ‘Policy’ on the other hand is made by the Executive and is borne out of the Constitution. Based on the reasoning of the court, policy cannot override the law since only the legislature has law-making powers. Of course the courts do have secondary law making powers under the principle of modificative interpretation that arises out of section 39(2) of the Constitution, which gives the courts a limited law-making power when they have to develop customary law and common law. Regardless, strictly speaking, there appears to be a hierarchy whereby the law overrides policy and the latter cannot be in conflict with the former. It is unclear whether the ‘law’ that is ‘developed’ by the courts enjoys the same protection but this would appear to be the case since it also qualifies as law and would technically be binding by virtue of the reasoning of this court.
Yet, one must be prudent to not view the difference between law and policy as everlasting since sometimes, policy arises out of the law. For instance, under section 5 of the ITAA, the Minister can issue trade policy statements and directives. These policy instruments are part of the ITAA in that they substantiate section 5 of the ITAA. A curious aspect of this regime is that these policy instruments appear unfettered, which is different to the constraints placed on the Executive in respect of subordinate legislation. It becomes difficult then to establish whether this policy is in conflict with the ‘law’ since the ITAA does not necessarily determine the direction of trade policy. While the imposition of duties such as anti-dumping and safeguard duties is technically a trade policy decision, the decision to decide for instance, whether to ban the export of scrap metal or diamonds is not provided for in the ITAA. What the ITAA does is empower the Minister to issue trade policy, but it does not determine in which direction. Thus the Minister is at large to issue trade policy, presumably in the public interest, but without the constraints of subordinate legislation. Significantly, the content of such trade policy is not circumscribed and is determined by the Executive and yet, in my view, it is binding because it arises out of the Constitution. It is difficult to understand how the finding that law that is made by the legislature overrides policy as made by the Executive. In pragmatic terms, ITAC is not free to disregard policy that is made by the Minister. This much is clear from section 6 of the ITAA, which states that ITAC is bound by the policy made by the Minister under sections 5 and 6 of the ITAA. While this is a specific example, it does not seem plausible and pragmatic to assume that a government official would disregard policy made by a Minister on the basis of section 85 of the Constitution that is in conflict with a ‘law’ such as a statute.
In general terms, the court in ETV defined policy as a collection of ‘guidelines or principles on which decisions for the execution of an institution’s mandate or vision are to be based’.[111] It is meant to give ‘direction or point to the cause of action to be followed’ and must be taken ‘seriously’ by government functionaries.[112] This dictum is unclear as to whether policy is binding or not. The term ‘taken seriously’ is ambiguous dos it mean that one can consider but they are not bound by it? Would that be taking the policy ‘seriously’. But the court then explained that the policy at play in the ETV case was not meant to be binding but mere ‘guidelines’ or ‘policy choice’ or ‘preference’.[113] This decision the court made having due regard to the language and construction of the relevant legislative provision.[114] The court then had regard to the decision in Harris and explained that that decision made it clear that policy can either be binding or not.[115] Thus, what can be gleaned from this decision is that the question of whether policy is binding or not is a matter of fact that requires a court to construe the provision using the rules of interpretation. There is no broad rule that policy is not binding. This would mean that the finding in Minerals Council that policy is not binding because it is not law is problematic as it conveys the misconception that policy can never be binding.
Interestingly, in the ‘second judgment’ in ETV, i.e. the minority judgment, it was stated that the policy making powers under section 85(2)(b) are broad and ‘elevated’ and thus does not explain how policy is made.[116] That is a function of statutes.[117] Thus statutes serve the function of lending’ precision and content and boundaries and direction’ to policy.[118] This is function of the legislature.[119] It was then explained that the policy making power in section 85(2)(b) is the ‘joint’ type of power and the statutes serve the function of particularising the power to each Minister.[120] Therefore, the Constitution gives the values that offer a context to policy making and the prescripts of legislation.[121] Thus, the minority judgment saw policy and law as being complementary and thus, the law is seen as substantiating policy and not the other way round. By explaining that statutes ‘hem’ in policy, ‘delimit’ and give it ‘direction’, the judgment means that statute or law overrides policy made out of section 85(2)(b) of the Constitution. Crucially, this judgment offers a cogent basis for this hierarchy in that it explains that ‘delimitation’ is based on the ‘rule of law’.[122] This is the only instance when the supposed hierarchy of policy over law rests on a principle of law or reason. The majority judgment, without a cogent explanation, finds that law supersedes policy. This is the same gap in reasoning that is missing in the decision in Mineral Sands. Ultimately, the court in ETV did confirm that policy must be ‘taken seriously’ and is not ‘inconsequential’ and the question of whether it is binding or not depend on the construal of that provision. In the same vein, the court in Harris explained that policy is sometimes binding and sometimes it is not.[123] The court then explained that policy that is not binding does not create ‘obligations of law’.[124]
It is common cause that ITAC is bound by the policy directives and statements of the Minister issued in terms of section 5 of the ITAA.[125] It appears that policy can also be created in terms of section 6 of the ITAA and that too, is regarded as binding.[126]
The court in SCAW held that it is common cause that section 85(2)(a), (b) and (e) of the Constitution confers on Ministers exercise executive authority by “implementing national legislation”; by “developing and implementing national policy”; and by “performing any other executive function” provided for in national legislation.[127] The setting, changing or removal of an anti-dumping duty is a policy-laden executive decision that flows from the power to formulate and implement domestic and international trade policy.[128] That power resides in the heartland of national executive authority.[129] This court then stated that the domestic regulatory regime must not contravene policy.[130] This court then endorsed the Minister’s legislative power and discretion in respect of the imposition, alteration or removal of duties.[131]
As explained by the SCA in Sasol Oil, the decision in Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs, confirms that in specific circumstances, the courts must ‘give due weight to the policy decisions and findings of fact of such a decision-maker. Once it is established that the policy is compatible with the enabling legislation, as here, the only limitation to its application in a particular case is that it must not be applied rigidly and inflexibly, and that those affected by it should be aware of it. An affected party would then have to demonstrate that there is something exceptional in his or her case that warrants a departure from the policy. [132] This dictum means that policy is binding.[133]
- Conclusion
It seems that the question of whether policy is binding or not is a fact specific determination that cannot be subject to a general principle that policy is not binding as is found by the court in Mineral Sands. It depends on each case. It is clear that the law is always binding. That should have no bearing on whether policy is binding. This is because policy exists in various iterations as part of a stature and thereby binding as is the case with the policy instruments arising out of section 5 of the ITAA. What is unclear is the status of policy made under section 85 of the Constitution. It would seem that such policy is not legally binding but can give birth to legally binding trade policy. This would mean the bizarre trade policy statements arising out of the DTIC are non-binding such as the ones it has issued on localisation. The picture as it emerges from our jurisprudence is unclear.
[1] Hoexter ‘Administrative law in South Africa’ 32.
[2] Hoexter 32. L Baxter ‘Rule-making and policy formulation in South African administrative law Reform’ in Bennet et al 177.
[3] MEC for Agriculture, Conservation, Environment and Land Affairs, Gauteng v Sasol Oil and Another (368/2004) [2005] ZASCA 76; [2006] 2 All SA 17 (SCA) (16 September 2005) para 19.
[4] Sasol Oil para 19; SCAW para 95 and 98.
[5] Baxter 177; Hoexter 32.
[6] Baxter 177.
[7] Baxter 177.
[8] GNR.746 in GG 43501 of 3 July 2020 (“the 2020 Trade Policy Directive”).
[9] GN 476 in GG 39945 of 21 April 2016 at para 1.
[10] Minerals Council para 1.
[11] Minerals Council para 7.
[12] Minerals Council para 7.
[13] Minerals Council para 8.
[14] Minerals Council para 9.
[15] Minerals Council para 9.
[16] Minerals Council para 16.
[17] Minerals Council para 17.
[18] Minerals Council para 17.
[19] Minerals Council paras 17-18.
[20] Minerals Council para 19.
[21] Minerals Council para 19.
[22] Minerals Council para 20.
[23] Minerals Council para 21.
[24] Minerals Council para 22.
[25] Minerals Council para 22.
[26] Minerals Council para 23.
[27] Minerals council paras 24-25.
[28] Minerals Council para 26.
[29] Minerals Council para 26.
[30] Minerals Council para 26.
[31] Minerals Council para 27.
[32] Minerals Council para 27.
[33] Minerals Council paras 27-28.
[34] Minerals Council para 28-29.
[35] Minerals Council para 30.
[36] Minerals Council para 30.
[37] Minerals Council para 30.
[38] Minerals Council para 32.
[39] Minerals Council para 32.
[40] Minerals Council para 32.
[41] Minerals Council para 33.
[42] Minerals Council para 33.
[43] Minerals Council para 34.
[44] Minerals Council para 34.
[45] Minerals Council para 34.
[46] Minerals Council para 34.
[47] Minerals Council para 34.
[48] Minerals Council para 34.
[49] Minerals Council para 34.
[50] Minerals Council para 35.
[51] Minerals Council para 35.
[52] Minerals Council para 35.
[53] Minerals Council para 36.
[54] Minerals Council para 36.
[55] Minerals Council para 36.
[56] Minerals Council para 36.
[57] Minerals Council para 37.
[58] Minerals Council para 37.
[59] Minerals Council para 37.
[60] Minerals Council para 38.
[61] Minerals Council para 38.
[62] Minerals Council para 39.
[63] Minerals Council para 39.
[64] Minerals Council para 40.
[65] Minerals Council para 41.
[66] Minerals Council para 41.
[67] Minerals Council para 41.
[68] Minerals Council para 42.
[69] Minerals Council para 42.
[70] Minerals Council para 42.
[71] Minerals Council para 43.
[72] Minerals Council para 43.
[73] Minerals Council para 48.
[74] Minerals Council para 48.
[75] Minerals Council para 48.
[76] Minerals Council para 48.
[77] Minerals Council para 48.
[78] Minerals Council para 49.
[79] Minerals Council para 49.
[80] Minerals Council para 49.
[81] Minerals Council para 55.
[82] Minerals Council para 55.
[83] Minerals Council para 55.
[84] Minerals Council para 57.
[85] Minerals Council para 57.
[86] Minerals Council para 57.
[87] Minerals Council para 57.
[88] Minerals Council para 57.
[89] Minerals Council para 58.
[90] Minerals Council para 58.
[91] Minerals Council para 58.
[92] Minerals Council para 58.
[93] Minerals Council para 59.
[94] Minerals Council para 59.
[95] Minerals Council para 59.
[96] Minerals Council para 59.
[97] Akani para 7.
[98] Akani para 7.
[99] Akani para 7.
[100] Akani para 7.
[101] Akani para 7.
[102] Arun para 47.
[103] Arun para 47.
[104] ETV para 2.
[105] ETV para 26.
[106] ETV para 26.
[107] ETV para 27.
[108] ETV para 27.
[109] ETV para 30.
[110] ETV para 30.
[111] ETV para 30.
[112] ETV para 30.
[113] ETV para 33.
[114] ETV paras 27-33.
[115] ETV para 35.
[116] ETV para 110.
[117] ETV para 110.
[118] ETV para 111.
[119] ETV paras 1112-113.
[120] ETV para 115.
[121] ETV para 117.
[122] ETV para 111.
[123] Harris para 11.
[124] Harris para 11.
[125] SCAW para 32.
[126] SCAW para 32. See Trade Policy Directive 2020.
[127] SCAW para 42.
[128] SCAW para 44.
[129] SCAW para 44.
[130] SCAW para 81.
[131] SCAW para 99.
[132] Sasol Oil para 19.
[133] Sasol Oil para 19. Britten v Pope 1916 AD 150 at 158; Computer Investors Group Inc v Minister of Finance 1979 (1) SA 879 (T) 898; British Oxygen Co. v Bd. of Trade (H.L.(E.)) [1971] AC 610 at 625D-E, Baxter Administrative Law (1984) 415-419.R v Port of London Authority, Ex Parte Kynoch Ltd [1919] 1 KB 176 at 184.