The facts

The focus of this case summary is on the international trade aspects. The applicant, Wina Njalo (RF) Proprietary [Wina Njalo] sought relief on an urgent basis against the Minister of Trade, Industry and Competition, to declare unconstitutional, unlawful and invalid, and to review and set aside the failure of the Minister to decide to announce the successful applicant of the National Lottery. Furthermore, the court was asked to declare unconstitutional, unlawful, and invalid, and review and set aside the Minister’s decisions to extend the bid validity period for a further 12 months and to issue a Request for Proposal [RFP] to operate the National Lottery on a temporary licence for 12 months. The Minister was also required to announce the successful applicant by 9 May 2025, negotiate and conclude a License Agreement with the successful Applicant, and issue the Fourth National Lottery Licence to the successful Applicant by no later than 31 May 2025.

It was undisputed that Ithuba Holdings was the current licence holder with its licence to expire on 31 May 2025. A new licence [the Fourth Licence] needed to be issued, and to speed up the process, the previous Minister, in two newspapers in early August, called on interested parties to apply in writing for a copy of the RFP and invitation to a briefing session. The RFP was made available for purchase on 31 August 2023. 

The bid evaluation, adjudication, and independent auditing had to be concluded by 31 August 2024. The Minister would then announce the successful bidder by 2 September 2024. The licence agreement was to be signed by 13 December 2024, and the handover period from Ithuba Holdings would run from 1 June 2025.

On 3 February 2024, the NLC received eight applications in response to the RFP. On 18 September 2024, the Evaluation Committee’s report was submitted to the NLC. The NLC Board completed its adjudication and reported to the Minister only on 11 October 2024. On the same day, the Minister appointed a Quality Assessment Committee [QAC]. On 22 and 25 November 2024, the Minister consulted with the NLC Board in respect of the Fourth License process.  On 20 December 2024, the Minister consulted with the Board of the NLC and stated that he had not made up his mind in respect of the successful applicant. He also asked for wisdom on the best mechanism to ensure the continued provisional running of the National Lottery and the plan to complete the licensing process.

On 21 December 2024, the Minister issued a media statement that stated he was aware that the country and the applicants for the licence were keenly awaiting his decision, but “he was mindful of the complexity and gravity of the issues that must be considered”. On 10 February 2025, the NLC addressed a letter to the Minister, explaining that its advisors had concluded that the period remaining between January 2025 and June 2025 was inadequate to allow for the proper selection of a successful applicant, the negotiation and finalisation of a license agreement, and the necessary transitional arrangements for the new operator to assume responsibility for the National Lottery by 1 June 2025. Thus, the NLC advised the Minister of numerous avenues available to him, identifying the issuance of a temporary license as the best option and inevitable under the circumstances. The NLC also needed direction from the Minister in respect of the anticipated timing of his decision on the award of the Fourth Lottery License and recommended an extension of the bid validity period for the Fourth License by one year, until 31 May 2026, to allow for the proper finalisation of the licensing process.

On 19 February 2025, the Minister notified the parties that he intended to extend the bid validity period and wanted Wina Njalo’s consent to the extension. On 24 February 2025, Wina Njalo informed the Minister to make an informed decision; it needed clarity on the Minister’s reasons for the proposed extension. The Minister responded on 4 March 2024 that he had several issues of concern and that it would be “inappropriate to disclose these issues now as disclosure would prejudice the proper adjudication of the bids.” On the same day, 4 March 2024, the temporary licence RFP was published.

On 5 March 2025, Wina Njalo again wrote to the Minister, taking note of his failure to provide reasons, and argued that the temporary licence RFP’s terms afforded only the current licence holder, Ithuba Holdings, the opportunity to be a successful bidder. The Minister responded to this letter on 11 March 2025, explaining that the reasons for his decision were those written in the earlier letter of 4 March 2025, and these constituted his full reasons for seeking an extension of 12 months. The Minister stated that he would consider Wina Njalo’s concerns before any decision is made regarding the temporary licence RFP.

On 27 March 2025, the Minister indicated that he would announce a successful applicant by “a target date” of 25 May 2025, subject to successful negotiations on the terms of the agreement. On 30 March 2025, Wina Njalo proposed a consent order to formalise the Minister’s new target date to avoid the urgent hearing. On 1 April 2025, the Minister responded to Wina Njalo, stating that he could not provide an unequivocal undertaking. On 24 March 2025, Wina Njalo launched the urgent application. 

Findings of the court

The court found that in terms of section 1 of PAJA, declining to issue a licence, or to make an award, or refusing to decide, all constitute administrative action. In terms of the empowering Act and the Constitution, the Minister must award the Fourth Lottery; if he fails to do so within the time frames of the RFP, he would be violating his constitutional duty and, at the very least, he is required to provide reasons for this delay. He did not. The reason for this was that such information was confidential. 

The court then explained that the Minister did not explain that if confidentiality were crucial, why a confidentiality regime could not be adopted. This practice has become commonplace as shown by the Supreme Court of Appeal in Caxton and CTP Publishers and Printers Limited v Novus Holdings Limited [2022] 2 All SA 299 (SCA). Allowing the production of confidential documents subject to proper limits is now an established principle in our law. As held by the court   in Tetra Mobile Radio (Pty) Ltd v Member of the Executive Council of the Department of Works, a ‘fair balance could be achieved between the appellant’s right of access to documentation necessary for prosecuting its appeal, on the one hand, and the third respondent’s right to confidentiality, on the other.'  In the international trade context, the decision of this court in Bridon International Gmbh v International Trade Administration Commission endorsed the adoption of the confidentiality regime. The Minister did not avail justifiable reasons for the delay in awarding the licence and the Minister was required to set out “full and frank explanations” that would enable a court to review their adequacy as a facet of reasonableness.

The court explained that the Minister has a constitutional mandate to exercise his powers rationally and with a proper legal basis. The lack of reasons violates the Constitution’s requirements of arbitrary action and established arbitrariness. The Minister is also bound by the values set out in section 195 of the Constitution of transparency and accountability. The Minister also contravened section 237 of the Constitution in that he has not diligently and without delay performed his constitutional obligations.

Thus, the court held that the delay in the non-award decision and the failure to provide reasons meant that the Minister violated the PAJA. The same facts lead to the conclusion that the Minister did not comply with his constitutional duty. On either basis, the failure to decide must under s172(1)(a) of the Constitution, must be declared to be invalid. On this finding, Wina Njalo has rights that are affected, and it could bring this review.

This summary focuses on the trade aspects of the decision. It does not speak to the administrative law aspects of the court’s decision. 

Factually, before 1 August 2021, diplomats were entitled to a full rebate on the duty ordinarily payable in respect of products bought by them from any of the retailers, provided that such goods were either for the official use of their mission or for personal use.  Before the impugned amendments, diplomats could buy limitless amounts of alcohol and tobacco products duty-free.

In 2019, the Minister of Finance and the Commissioner saw abuse in the system where certain diplomats were buying duty-free tobacco and alcohol in South Africa and then proceeding to sell them in the domestic market.  Consequently, the Minister set up a review of the treatment of duty-free shops, including the regulatory framework governing duty-free shops, in a Budget Review dated 20 February 2019.  It was found that the fiscus was losing substantial income in respect of the duties on those products.  

After a public comment process, acting under section 75(15)(a)(i)(bb) of the Customs Act and section 74(3)(a) of the VAT Act, the Minister published in the Government Gazette amendments to certain Schedules to the Customs Act and the VAT Act that essentially introduced a quota system. In this regard, the main issue before the court was that, first, the Minister’s decision to amend the Schedules and the Commissioner’s decision to amend the Rules constituted administrative action which was reviewable under the Promotion of Administrative Justice Act  3 of 2000 (PAJA). Second, it was argued that the challenged amendments, as well as the decision to make the amendments, must be reviewed and set aside based on the principle of legality. 

The Minister responded by contending that section 75(15)(a)(i)(bb) of the Customs Act allowed him to amend Schedules 3, 4, 5 and 6 whenever he found it expedient in the public interest.  The Minister explained that section 48(6) of the Customs Act allows ‘parliamentary oversight or supervision’ and thus the Minister’s discretion is not unfettered.  Finally, the Minister argued Parliament had not delegated its plenary legislative power to amend the Schedules to the Minister but had simply empowered him to take certain action that is valid until Parliament approves or rejects it, acting in terms of section 48(6) of the Customs Act.

The court explained that this case was not about the label of these powers, but rather, this case was about the separation of powers, and, in that regard, what is constitutionally permissible.  The court then explained that we do not have an absolute separation of powers between the three arms of the state. If the delegated power is ‘plenary,’ it would probably be constitutionally impermissible than if it is merely ‘regulatory’.

The court explained that sections 43 and 44 of the Constitution bestow national legislative authority on Parliament. Parliament is allowed to delegate subordinate regulatory authority to other bodies to make “secondary legislation” or “delegated legislation” such as regulations. The key consideration here is in the substance of what is being delegated. Delegating power to make subordinate legislation within the framework of a statute that permits delegation is constitutional. However, it is unlawful to assign plenary legislative powers to another body, as it violates the separation of powers.

The court then explained that section 75(15) of the Customs Act empowers the Minister to amend Schedules to the Customs Act whenever he finds it to be expedient in the public interest, rational, lawful, and in line with the purpose of the legislation. When the Minister amends Schedules to the Act, he is not exercising primary or original legislative powers.  Parliament’s entitlement to delegate does not only depend on the pure form of the amendments to the Schedule but also the nature and extent of the delegation. Therefore, the answer lies in the substance, nature, and extent of the delegation instead of the form. Thus, the delegation must not be ‘overbroad or vague, and the authority to whom the power is delegated must be able to determine the nature and scope of the powers conferred.’  

To establish whether a delegation violates the Constitution, the enquiry must be context-specific, and one must consider the scope and degree of the delegation, the subject matter, and the strength of the constraints therein.  The claim that the Executive can never amend a Schedule to an Act is an absolutist rule.  It would mean that the Minister would have to seek parliamentary intervention before addressing wanton abuse.  Fiscal policy requires that fiscal measures be used as soon as a loophole has been found to prevent people from taking advantage of the situation.  That would be in the fiscal and public interest. Our idea of separation of powers allows for such necessary interventions by one arm of government on another in the interests of efficient and effective fiscal regulation.  Parliament’s involvement under 48(6) of the Customs Act ensures that the measures can either be long-term or permanent. 

Thus, the court held that the legislative delegation for the Minister to amend the Schedules was constitutionally permissible.  This is also because the Executive is better placed than Parliament to understand the day-to-day needs and demands of administering the matters contained within the Schedules to the Customs and the VAT Act, and thus promotes co-operative governance and enhances efficient governance, both of which are constitutionally required.  Parliament made this choice with its eyes wide open and trusted the expertise of the Executive in this regard, and this works well because Parliament retains sufficient oversight. Therefore, the court held that, considering the aforementioned factors, Parliament’s delegation in respect of the Customs Act and the VAT Act was constitutionally permissible.

In this matter, ITAC had initiated the original investigation into the alleged dumping of Portland cement originating from the Islamic Republic of Pakistan following an application lodged on behalf of the SACU industry during 2014. This original investigation led to a recommendation to the Minister of Trade to impose an anti-dumping duty of 14,29% on the imported cement from Pakistan. 

Before the lapse of the 5 years set for the initial anti-dumping duty, an application for a sunset review was lodged. ITAC initiated a sunset review on 11 December 2020. Interested parties were required to comment by 19 January 2021.

Against this backdrop, Lucky Cement sought to:

1. Review and set aside the final determination by the First Respondent and recommendation that the anti-dumping duty of 25% imposed on cement manufactured or produced by the applicant as contained in the final investigation report No 673 of 30 November 2021;
2. to review and set aside and declare invalid the decision of the second respondent to implement the final determination by the first respondent, and subsequent request to the third respondent to amend Part 1 of Schedule 2 to the Customs and Excise Act, and
3. reviewing, setting aside, and declaring invalid the decision by the third respondent to impose the 25% anti-dumping duty on cement manufactured or produced by the applicant.

The court held that the decisions taken by ITAC, the Minister of Trade, and the Minister of Finance constitute ‘administrative actions’ capable of review in terms of the Promotion of Administrative Justice Act 3 of 2000 (PAJA). Thus, the court was of the view that it was unnecessary to assess whether the actions of the Ministers complied with the principle of legality.

The court explained that if the decision and recommendations of ITAC are reviewable, so too must the Minister’s decision be reviewable. This was because the legality of the Minister’s decision hinges on the legality of the decision of ITAC. The corollary proposition holds. Should the decision and recommendations of ITAC not be reviewable under PAJA, the decision of the Minister is equally not reviewable. The Minister’s decision would stand or fall based on the outcome of the review of the decision and recommendations of ITAC.

In the main, Lucky Cement’s case was about how ITAC calculated the margin of dumping. It was argued that ITAC ‘misdirected itself’ by refusing to allow or incorrectly calculating certain adjustments to the normal value and export price. In the alternative, it was argued that ITAC made material mistakes of fact and failed to consider adjustments requested by Lucky Cement to the normal value of its cement namely sales tax; Federal excise duty; cost of payment terms, sales commission; general sales and administrative expenses; corporate tax; coal transport; power cost; packaging and level of trade. These irregularities, if proven, would render the ITAC’s recommendations reviewable.

Lucky Cement further argued that ITAC committed further irregularities when refusing to allow certain adjustments to the export price of the cement, namely, cost of payment terms, general selling and administrative expenses, coal transport, power cost, and levels of trade. It further contended that ITAC failed to take relevant considerations into account. 

In response, the court held that ITAC had considered all proposed adjustments made by Lucky Cement but did not approve all of them. This was ruled not to constitute an irregularity or material mistake by ITAC. There was no proof that ITAC’s assessment amounted to irregular action or to be procedurally unfair or materially influenced by error of law or consideration of irrelevant considerations or ignoring relevant considerations or was made arbitrarily or capriciously. ITAC was found to have considered all relevant claims for adjustments and allowed Lucky Cement to further make oral submissions. 

ITAC also argued that if the crux of the matter turned on the three largest adjustments sought by Lucky Cement, these adjustments would have a significant impact on the margin of dumping and would reduce the calculated margin of dumping from 93,62% to 10,99%. The court explained that the calculation of anti-dumping duties is an ‘inherently technical exercise involving the appraisal of facts’ and requires ‘specialised expertise, and for this reason, the task is entrusted to a specialised institution’ as was done with ITAC. And thus, the court would be reticent to interfere with ITAC’s discretion.

The court confirmed that for Lucky Cement to succeed on a mistake of fact as a ground of review, it had to adduce an ‘established verifiable and uncontested fact that ITAC got wrong’. Lucky was unable to do this. It is not enough to prove that ITAC made a wrong finding. 

ITAC further argued that there was no mistake of law in its consideration of the calculations as required by the regulations. The court rejected Lucky Cement’s argument that an adjustment can be made implicitly, as contended by Lucky Cement.

Lucky Cement also claimed an adjustment for packaging costs, which ITAC had allowed. The adjustment was initially calculated to be PKR0,07/ ton. This was later found to be a calculation in error. ITAC was not notified of this error during the public comments process. The error was found to be immaterial, but ITAC revisited the calculation and corrected the packaging costs to be PKR558.07/ton, and this was the precise adjustment Lucky Cement said was claimed in the founding affidavit. In the replying affidavit, Lucky Cement attempted to change its argument to say that the packaging adjustment should have been calculated at PKR609.79/ton rather than the admitted calculation at PKR558.07/ton as in the founding affidavit. It was ruled that Lucky Cement must stand with the case as formulated in its founding affidavit. The mistake made with the calculation was held to be immaterial and did not impact the imposed anti-dumping duty and thus did not merit reviewing ITAC’s recommendation to the Minister of Trade and the subsequent amendment of the Schedule. 

The court then held that after considering all the evidence and arguments presented, the applicant had not made out a case for review, and the application was dismissed with costs

ITAC conducts its investigations based on International Trade Administration Act 71 od 2002 (ITAA). ITAC conducts trade remedies i.e., anti-dumping, safeguards and countervailing measures and tariffs. The approach to these investigations is guided by the Constitution of the Republic of South Africa, 1996, legislation and policy directives and notices of the Minister. The overriding rights governing the investigations conducted by ITAC is the right to just administrative action. It is common cause that ITAC investigations are administrative in nature and thus subject to judicial review based on section 33 of the Constitution, Promotion of Administrative Justice Act 3 of 2000 (PAJA) and section 46 of the ITAA.

In general, ITAC conducts its investigation based on sections 16 and 26 of the ITAA on tariffs, dumping, safeguards and subsidies. The specific procedures for investigations by ITAC are explained by the ITAA regulations comprising the Amended Tariff Investigations Regulations, Anti-Dumping Regulations, Amended Safeguard Regulations and the Countervailing Regulations respectively.

All ITAC investigations typically commence through the submission of with a ‘properly documented’ compliant and application. A ‘properly documented’ application is one which must contain information that is ‘reasonably available’ to the applicant. The domestic industry making the application must be representative of the Southern African Customs Union (SACU) industry. Usually, this means that the applicant(s) must represent 25 per cent and 50 per cent in terms of market value. When the application is filed, ITAC must verify the accuracy and adequacy of the information provided by the applicants through a verification process, which culminates in a verification report.  The same goes for submissions by interested parties. ITAC has the power to reject an incomplete application and thus, deem it materially deficient. Thereafter, a merit assessment is conducted to assess whether the investigation elicits a prima facie case. ITAC must then notify the countries of origin and export of the product in question that it has received a properly documented application after verification but before initiation.

Thereafter, ITAC must publish an Initiation Notice in the Government Gazette notifying interested parties that an investigation has commenced on a trade remedy or tariff and request interested parties to make submissions on the application. This commences the preliminary investigation phase. Broadly speaking, these investigations will investigate if there has been injury or threat of injury to the domestic industry, a casual link and the alleged infraction. It must be borne in mind here that the conduct complained of can either due to lawful trade i.e., tariffs and safeguard measures or unlawful trade i.e., dumping and countervailing measures. This application can then be requested from the investigating team. A public file will be prepared which will contain all the non-confidential submissions of all the parties.  Interested parties are then usually given 30 days to comment on the application. This period can be extended upon good cause shown by the party in question. At the end of the preliminary investigation, ITAC makes a preliminary determination and publishes an investigation report to that effect. At this stage, a provisional measure can be imposed to address current injury during the investigation.

Subsequently, the final investigation phase begins with interested parties being given an opportunity to comment on the preliminary investigation report. ITAC will then compile the essential facts letter. This letter elicits the essential facts which will form the basis of its final determination. Interested parties must then be given an opportunity to comments on the essential facts letter. ITAC must then take into consideration these submissions in its final determination. The investigation concludes with the final investigation report. This report is usually not published on the ITAC website until the decision in question is implemented by SARS and thus, the interested parties will not be aware at what stage the investigation is upon making an inquiry.  Regardless, the typical investigation usually takes 6 to 18 months.

ITAC must then send its recommendation in the form of the final investigation report and Ministerial Minute or Report explaining the basis of its decision to the Minister. The Minister has the discretion to either accept or reject this recommendation by section 4 of the BTTA. If the Minister accepts this recommendation, then a ‘request’ to the Minister of Finance to give effect to this request under sections 55 to 57 of the CEA. Based on the decisions in Pioneer and SASA, it is the law in South Africa that the Minister of Finance has the discretion to accede or reject this ‘request’ of the Minister of Trade. The question is does this require a consideration of the public interest. This is not a new inquiry as this case has already been made by Brink and Sibanda.¹ Vinti argues that ‘public interest’ can only be considered through the constitutional duty to approve the request of the Minister of Trade and Industry only if it is in the "public interest".²

This discussion is in light of two recent decisions of the Minister on tariffs and dumping have been decided on public interest grounds. First in “Notice of conclusion of an investigation into the alleged dumping of frozen bone-in portions of fowls of the species gallus domesticus originating in or imported from Brazil, Denmark, Ireland, Poland and Spain”. ITAC initiated an anti-dumping investigation on frozen bone-in portions of fowls of the species gallus domesticus (“the subject product”) originating in or imported from Brazil, Denmark, Ireland, Poland and Spain (“subject countries”) through Notice No. 54 of 2021 in Government Gazette No. 44173 dated 05 February 2021. The investigation was initiated after the Commission considered that there was prima facie evidence to show that the subject product was being imported at dumped prices, causing material injury to the SACU industry.

On initiation of the investigation, the known producers and exporters of the subject product in the subject countries were sent foreign manufacturers/exporters questionnaires to complete. Diplomatic representatives of the subject countries were also sent questionnaires to inform unknown producers in those countries. Importers of the subject product were also sent questionnaires to complete. The Commission at its meeting of 09 November 2021, made a preliminary determination, contained in its preliminary report No. 678, to impose provisional payments published through Notice No. 1631 of 2021 in Government Gazette No. 45668 dated 17 December 2021. After considering comments from interested parties, the Commission issued essential facts letters that it was considering making a final determination that the subject product originating in or imported from the subject countries was being dumped into the SACU market, thereby causing material injury to the SACU industry. After considering comments to the essential facts letters, the Commission made a final determination that the subject product originating in or imported from the subject countries was being dumped into the SACU market, causing material injury to the SACU industry. The Commission, therefore, made a recommendation to the Minister of Trade, Industry and Competition (“the Minister”) to impose definitive anti-dumping duties on the subject product originating in or imported from Brazil, Denmark, Ireland, Poland and Spain.

The Minister approved the Commission’s recommendation. However, in making the decision, the Minister considered the current rapid rise in food prices in the SACU market and globally and the significant impact this has, especially on the poor, as well as the impact that the imposition of the anti-dumping duties may have on the price of chicken as one of the more affordable protein sources. The Minister, therefore, decided to suspend the imposition of the anti-dumping duties for a period of twelve (12) months. In my view, this decision was made based on public interest considerations yet is a dumping case in which there is no explicit requirement to do so, at least in the anti-dumping framework.

Secondly, in the “Outcome of tariff amendment investigation: re: application for an increase in the rate of customs duty on frozen mixed vegetables classifiable under tariff subheading 0710.90 lodged by nature’s garden (“The Natures Garden Application”)”. ³The Commission considered an application by Nature’s Garden (Pty) Ltd (“Nature’s Garden”) for an increase in the rate of customs duty on frozen mixed vegetables classifiable under tariff subheading 0710.90 from 10% ad valorem to the WTO bound rate of 37% ad valorem. The investigation was initiated on 22 February 2019 as per Government Gazette Notice No. 42240. A full-scale investigation culminated in the Commission’s final recommendation on Nature’s Garden’s Application, which recommendation was subsequently forwarded to the Honourable Minister of Trade, Industry and Competition (the “Minister”), for his consideration. The Minister referred the matter back to the Commission subsequent to which the Commission provided clarification and expanded on certain aspects relating to the proposed increase in the rate of customs duty on frozen mixed vegetables.

The Minister raised concerns with regard to the matter of pricing. In particular, the Minister remained concerned that an increase in the rate of customs duty on frozen mixed vegetables may have a detrimental impact on South African consumers. Given the negative impact that food price inflation can have on the South African economy and on financially hard-pressed consumers, the Minister requested the Commission to investigate his concerns relating to the impact of any potential increase in the duty on the Lower Segment Market and the possible impact on food inflation. ITAC’s findings were submitted to the Minister, for his consideration.

The Minister subsequently communicated to ITAC that he took into account a number of issues, such as the current context of high food prices that affects both poor and middle-class consumers, continuing pressures on household incomes from external shocks to the economy, the decline in the level of imports of frozen vegetables from 2020 onwards, the likely impact on aggregate jobs and industrial output in the economy, in deciding whether to impose or decline a tariff increase weighed against other policy objectives.

The Minister also took into account the fact that food prices in South Africa, and globally, are currently rising rapidly and that the impact of the rise in inflation on not only the poor but also the middle class is well documented. Taking into account all information at his disposal, the Minister also considered various options that may mitigate the impact of a tariff increase on consumers but, weighing up all the circumstances, decided to reject the application for an increase in the duty on frozen mixed vegetables classifiable under tariff subheading 0710.90.

However, the Minister acknowledged that circumstances may change in the future, in particular if current geo-political tensions subside and food prices stabilise as the global economy recovers from the impact of COVID-19. In light of the aforementioned, the Minister directed ITAC, in terms of section 16(1)(d)(ii) of the ITAA to review the custom duty on frozen mixed vegetables classifiable under tariff subheading 0710.90 in nine (9) months and submit a report with recommendations for his consideration. This decision also clearly turned on public interest considerations in tariff decisions.

It seems therefore, public interest considerations are emerging as a consideration by both Ministers when deciding whether to impose a trade remedy. This requires that ITAC and the Ministers provide an opportunity for submissions on whether the imposition of a trade remedy is in the public interest. This is a constitutional requirement that requires explicit consideration in the ITAC investigation and the Ministerial determinations.

1. O Sibanda ‘Public Interest Considerations In The South African Anti-Dumping And Competition Law, Policy, And Practice’ Public Interest Considerations In The South African Anti-Dumping And Competition Law, Policy, And Practice’ International Business & Economics Research Journal – September/October (2015) 14  736-740; Brink ‘Anti-dumping in South Africa’ Tralac Working Paper (2012) 25. Brink ‘National Interest in Anti-Dumping Investigations’ (2009) 126 S. African L.J. 317.
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2. Vinti "The Scope of the Powers of the Minister of Finance in Terms of Section 48(1)(b) of the Customs and Excise Act 91 of 1964: An Appraisal of Recent Developments in Case Law" PER / PELJ 2018(21) 15.
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3. General Notice 1881 in GG No. 48865 of 30 June 2023. ↩︎

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. ¹¹There 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. ¹³In 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. ¹⁴To 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. ¹⁹Furthermore, 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. ²⁰This 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.⁴⁴Its 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. ⁵¹This was found to be a contravention of the doctrine of separation of powers. ⁵²To interpret section 100(2) as a delegation of subordinate legislative power, would lead to the further difficulty of unbridled law-making⁵³. This would also violate the doctrine of separation of powers as it contains no parameters, no guidance, and no constraints. ⁵⁴By 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 them⁸⁷. 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 inETV 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 inBato 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.
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2. Hoexter 32. L Baxter ‘Rule-making and policy formulation in South African administrative law Reform’ in Bennet et al 177.
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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.
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4. Sasol Oil para 19; SCAW para 95 and 98.
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5. Baxter 177; Hoexter 32.
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6. Baxter 177
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7. Baxter 177
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8. GNR.746 in GG 43501 of 3 July 2020 (“the 2020 Trade Policy Directive”).
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9. GN 476 in GG 39945 of 21 April 2016 at para 1.
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10. Minerals Council para 1.
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11. Minerals Council para 7.
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12. Minerals Council para 7.
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13. Minerals Council para 8.
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14. Minerals Council para 9.
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15. Minerals Council para 9.
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16. Minerals Council para 16.
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17. Minerals Council para 17.
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18. Minerals Council para 17.
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19. Minerals Council paras 17-18.
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20. Minerals Council para 19.
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21. Minerals Council para 19.
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22. Minerals Council para 20.
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23. Minerals Council para 21.
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24. Minerals Council para 21.
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25. Minerals Council para 22.
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26. Minerals Council para 23.
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27. Minerals council paras 24-25.
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28. Minerals Council para 26.
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29. Minerals Council para 26.
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30. Minerals Council para 26.
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31. Minerals Council para 27.
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32. Minerals Council para 27.
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33. Minerals Council paras 27-28.
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34. Minerals Council para 28-29.
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35. Minerals Council para 30.
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36. Minerals Council para 30.
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37. Minerals Council para 30.
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38. Minerals Council para 32.
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39. Minerals Council para 32.
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40. Minerals Council para 32.
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41. Minerals Council para 33.
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42. Minerals Council para 33.
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43. Minerals Council para 34.
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44. Minerals Council para 34.
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45. Minerals Council para 34.
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46. Minerals Council para 34.
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47. Minerals Council para 34.
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48. Minerals Council para 34.
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49. Minerals Council para 34.
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50. Minerals Council para 35.
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51. Minerals Council para 35.
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52. Minerals Council para 35.
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53. Minerals Council para 36.
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54. Minerals Council para 36.
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55. Minerals Council para 36.
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56. Minerals Council para 36.
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57. Minerals Council para 36.
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58. Minerals Council para 36.
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59. Minerals Council para 36.
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60. Minerals Council para 36.
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61. Minerals Council para 36.
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62. Minerals Council para 39.
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63. Minerals Council para 39.
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64. Minerals Council para 40.
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65. Minerals Council para 41.
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66. Minerals Council para 41.
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67. Minerals Council para 41.
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68. Minerals Council para 42.
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69. Minerals Council para 42.
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70. Minerals Council para 42.
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71. Minerals Council para 43.
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72. Minerals Council para 43.
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73. Minerals Council para 48.
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74. Minerals Council para 48.
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75. Minerals Council para 48.
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76. Minerals Council para 48.
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77. Minerals Council para 48.
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78. Minerals Council para 49.
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79. Minerals Council para 49.
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80. Minerals Council para 49.
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81. Minerals Council para 55.
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82. Minerals Council para 55.
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83. Minerals Council para 55.
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84. Minerals Council para 57.
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85. Minerals Council para 57.
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86. Minerals Council para 57.
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87. Minerals Council para 57.
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88. Minerals Council para 57.
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89. Minerals Council para 58.
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90. Minerals Council para 58.
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91. Minerals Council para 58.
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92. Minerals Council para 58.
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93. Minerals Council para 59.
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94. Minerals Council para 59.
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95. Minerals Council para 59.
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96. Minerals Council para 59.
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97. Akani para 7.
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98. Akani para 7.
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99. Akani para 7.
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100. Akani para 7.
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101. Akani para 7.
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102. Arun para 47.
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103. Arun para 47.
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104. ETV para 2.
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105. ETV para 26.
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106. ETV para 26.
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107. ETV para 27.
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108. ETV para 27.
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109. ETV para 30.
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110. ETV para 30.
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111. ETV para 30.
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112. ETV para 30.
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113. ETV para 33.
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114. ETV paras 27-33.
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115. ETV para 35.
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116. ETV para 110.
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117. ETV para 110.
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118. ETV para 111.
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119. ETV paras 1112-113.
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120. ETV para 115.
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121. ETV para 117.
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122. ETV para 111.
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123. Harris para 11.
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124. Harris para 11.
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125. SCAW para 32.
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126. SCAW para 32. See Trade Policy Directive 2020.
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127. SCAW para 42.
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128. SCAW para 44.
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129. SCAW para 44.
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130. SCAW para 81.
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131. SCAW para 99.
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132. Sasol Oil para 19.
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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. ↩︎

The issue in this appeal is whether s 75(10)(a) of the Customs and Excise Act 91 of 1964 (the Act) authorises the respondent, the Commissioner for the South African Revenue Service (the Commissioner), ex post facto to exempt the appellant, JT International Manufacturing South Africa (Pty) Ltd, from compliance with the conditions prescribed by rule 19A.09(c). The appellant contends that the proviso to s  75(10)(a) does empower the Commissioner to exempt non-compliance with the rule. The Commissioner disagrees. He contends that the exemption powers granted to him by the proviso do not extend to condoning such non-compliance.

According to the SCA, section 75(10)(a), properly interpreted, affords the Commissioner powers to exempt an importer/manufacturer, who has failed to comply with the requirements of rule 19A.09(c), from complying with its provisions.  The non-compliance relates to the consignments of tobacco that were already entered under rebate of duty. The imported tobacco was entered on the SAD 500 form under rebate of duty. What was omitted was their entry into the RWZ within the period prescribed by rule 19A.09(c). ‘Entry’ is not an event. It is a process happening in various stages of the import duty and excise duty ecosystem. There is no indication in s 75 that non-compliance with rule 19A.09 was intended to be excluded from its operation. If that was the case, it would result in an importer/manufacturer being deprived of a right to claim a rebate. That this is not the intention of s 75 is not surprising, because the purpose of introducing rebate item 460.24 as stated in the Explanatory Memorandum was to avoid double taxation. Section 75(10)(a) provides a mechanism through which double taxation may be avoided. To interpret s 75(10)(a) as contended by the Commissioner runs counter to the purpose for which rebate provision was enacted.

 The ambit of the subsection is much wider, and the Commissioner is not restricted to granting exemptions only in instances where the intended use of duly imported goods has changed after importation. Instances of non-compliance referred to in s 75(10)(a) may include failures to furnish security that may be required by the Commissioner, and to comply with other conditions as may be prescribed by the rule or in the notes to Schedule 3, 4 or 6 in respect of any goods specified in any item of such Schedule. The subsection covers the nature of the appellant’s non-compliance, namely, its failure to have complied with the requirements of a rebate item 460.24 in so far as it relates to rule 19A.09(c) appearing in Schedule 4 Part 2.

 The proviso to s 75(10)(a) permits the Commissioner to decide that any one or more of the requirements that are set out in the main provisions of s 75(10)(a) need not be complied with, with or without depriving the appellant of its right to claim a rebate. The Commissioner may do so before the entry in question, or after it has already occurred. The determination that the Commissioner has a discretion under the proviso to s 75(10)(a) to exempt non-compliance does not mean that he is compelled to grant exemption. He may exercise his discretion in favour of, or against, granting exemption. Consequently, the court found that it is declared that s 75(10)(a) of the Customs and Excise Act 91 of 1964 authorises the Commissioner of the South African Revenue Service (the respondent) to ex post facto exempt the applicant from compliance with the conditions prescribed by rule 19A.09(c) .

This was an application for leave to appeal against the judgment and order of the Supreme Court of Appeal, which dismissed an appeal by the applicants against a judgment of the High Court of South Africa, KwaZulu-Natal Division, Durban (High Court).

This application arose in a challenge against a tariff determination in terms of the Customs and Excise Act[1] (CEA).  In an interlocutory application under rule 30A[2] of the Uniform Rules of Court (Uniform Rules), the respondent, Richards Bay Coal Terminal (Pty) Limited (RBCT), sought to have the applicants, the Commissioner of the South African Revenue Service (Commissioner) and the Chairperson of the Excise Appeal Committee, comply with a rule 30A notice to furnish a record in terms of rule 53[3] or alternatively documents[4] constituting the record pursuant to rule 35(11).  RBCT is a coal export terminal owned by South Africa’s major coal exporters.

SARS refused to comply on the basis that they did not consider RBCT’s challenge to the tariff determination a review, but rather, an appeal under section 47(9)(e) of the CEA.  Section 47(9)(e) states:

“An appeal against any such determination shall lie to the division of the High Court of South Africa having jurisdiction to hear appeals in the area wherein the determination was made, or the goods in question were entered for home consumption.”[6]

The dispute at the heart of this matter was whether SARS must be compelled to produce the rule 53 record.  To resolve that dispute, this Court had to determine whether, in a challenge to a tariff determination in terms of the CEA, a taxpayer is limited to a so called “wide appeal” under section 47(9)(e) of the CEA; and, if not, whether the taxpayer can, in the alternative or separately, challenge the tariff determination by way of a judicial review.  If a taxpayer can challenge the tariff determination by way of a judicial review in these circumstances, this Court must determine how a court deals with these different modalities of relief that a taxpayer may invoke.

The court found that, in the specific context where a taxpayer seeks to prosecute a review when a section 47(9)(e) appeal is available, a court must first determine the threshold question whether it will exercise its jurisdiction to entertain the review.  The threshold enquiry obviously only applies if a litigant in this context seeks to prosecute a review or seeks to prosecute both a wide appeal and review concurrently or in the alternative.  If a party seeks only to prosecute an appeal under section 47(9)(e), none of what I say here applies, since rule 53 would not be implicated in that scenario.  This is a natural consequence of the distinction between wide appeal proceedings and review proceedings discussed extensively earlier in this judgment.

When a party brings an application for proceedings which are subject to the threshold determination, the timelines contained in rule 53 will only apply once the court decides to exercise its review jurisdiction and the taxpayer has been granted leave to pursue the review application.  This also means that, upon delivery of the rule 53 notice, the respondent would be placed on terms to produce the record, but those terms will only become effective once the court has made the threshold determination.  Therefore, the timelines in rule 53 will become operative only once the threshold determination is made.

This appeal concerned a dispute about the correct classification of a liqueur product for purposes of excise duty payable under the Customs and Excise Act 91 of 1964 (the Act).

The classification of the product by the appellant, the Commissioner for the South African Revenue Service (the Commissioner), was taken on appeal by the respondent, Diageo SA (Pty) Ltd (Diageo) to the Gauteng Division of the High Court, Pretoria (the high court) in terms of section 47(9)(e) of the Act. On 18 March 2021, the high court dismissed Diageo’s appeal and upheld the Commissioner’s classification of the product. That decision then was taken on appeal by Diageo to the full court of the Gauteng Division of the High Court, Pretoria (the full court). On 5 July 2023, the full court reversed the decision of the high court. It set aside the Commissioner’s determination and effectively found in favour of a classification contended for by Diageo. Special leave to appeal to this Court against that order was granted to the Commissioner on petition.

In terms of s 47(1) of the Act, duties are payable in respect of all excisable goods in accordance with the provisions of Schedule 1 to the Act. Part 1 of Schedule 1 to the Act contains the Headings and Subheadings which describe the goods. This part of the Schedule is based on the Harmonized System for the classification of goods. Part 2 of the Schedule to the Act also contains Item Headings, which basically mirrors the Tariff Headings in Part 1, and they serve to identify the excisable goods.

 ‘The legal sources applicable to tariff classification are-

(a) Schedule 1 to the Act, Part 1 of which deals with custom duties, and Part 2 with excise duties. Part 1 contains the wording of the tariff headings, section notes and chapter notes. The tariff headings in Part 1 are used in Part 2 for purposes of imposing excise duty. Schedule 1 also contains, in section A of the General Notes, the General Rules for the interpretation of the Harmonized system. . .

(b) The Explanatory notes to the Harmonized system (sometimes called ‘Brussels Notes’) issued from time to time by the World Customs Organization. In terms of s 47(8)(a) of the Act, the interpretation of any tariff heading or sub-heading in Part 1 of Schedule 1, the general rules for the interpretation of Schedule 1, and every section note and chapter note in that Part, is ‘subject to’ the Explanatory Notes.’

And case law.

In terms of General Rule 1 of the General Rules for the Interpretation of Schedule 1 to the Act: ‘The titles of Section, Chapters and sub-Chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the Headings and any relative Section or Chapter Notes and, provided such Headings or Notes do not otherwise require according to’ the other provisions of the other General Rules. There are five other General Rules. Rule 6 provides as follows:

‘For legal purposes, the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related subheading Notes and, mutatis mutandis, to the above Rules, on the understanding that only subheadings at the same level are comparable. For the purposes of this Rule the relative Section and Chapter Notes also apply, unless the context otherwise requires.’

It is now well established that the classification of products in terms of the Act, for purposes of the payment of excise duties consists of three stages. In International Business Machines SA (Pty) Ltd v Commissioner for Customs and Excise,[4]  they are described as follows:

‘…[F]irst, interpretation - the ascertainment of the meaning of the words used in the headings (and relative section and chapter notes) which may be relevant to the classification of the goods concerned; second, consideration of the nature and characteristics of those goods; and third, the selection of the heading which is most appropriate to such goods.’

In Distell it was stated that ‘[t]here is no reason to regard the order of the first two stages as immutable’. The reason given there, with reference to the classification of the goods under consideration there (namely, wine coolers), was that it was convenient ‘…to consider first, the nature and characteristics of the wine coolers, as without such an understanding the importance of the words used in the Headings may be lost or undervalued’.[5] However, in Commissioner: SARS v Toneleria Nacional RSA (Pty) Ltd (Toneleria), this Court cautioned against the danger of conflating the first and second stages of the inquiry in the process of classification. In that case, which involved the classification of wooden barrels, it was stated as follows:

‘Maintaining a clear distinction between the first and second stages of the determination process was vitally important in this case, because “other coopers” products’ constitutes a category of material items of a specific type, in the same way that other items in the tariff heading, such as casks, barrels, vats and tubs, are material items capable of definition and description as a class of objects. . .

The court found the use of the de minimis principle irrelevant and inappropriate in this matter. The wording of Additional Note 4, including 4(b) is plain and unambiguous and its purpose is to provide further clarity in respect of the appropriateness of certain Subheadings for certain products. In ordinary language, it means that the Tariff Headings specified in Additional Note 4 shall only be applicable to a liqueur consisting of a wine spirit base to which the other of its parts, components, or elements, have been added, which do not contain any alcohol. It was not disputed that once the ingredients of the flavouring are mixed, the flavouring has an ABV of approximately 0.002%. The flavouring itself contributes 0.00004% to the ABV of the final product, whereas the wine spirit base contributes 15.99999% to the ABV off the final product.

On a proper construction of that note, both the flavouring and the vanilla are components of the product and, therefore, are ingredients that are added to the wine base of the product. That is so even though the vanilla is technically a secondary component of the product and is a primary component of the flavouring. It is not disputed that the vanilla itself is alcoholic. But, in any event, the flavouring itself is also not free of alcohol and is alcoholic. Therefore, the classification contended for by Diageo was not appropriate, and the correct classification of the product is under Tariff Subheading 2208.70.22 (and Item Heading 104.23.22), as contended for by the SARS, and confirmed by the high court. Consequently, the appeal to this Court succeeded and the full court's order must be set aside and replaced with one dismissing Diageo's appeal to that court.

This is the latest in the cases that delve into the decision making power of the Minister of Trade, Industry and Commerce and the Minister of Finance. In trade remedy investigations, ITAC conducts the investigation. The ITAC recommendation is then sent to the Minister of Trade. If the Minister of Trade accepts this recommendation, they then forward it to the Minister of Finance. The Minister of Finance can either accept or reject this request. In effect, the Minister of Finance is the final decision maker in the imposition of trade remedies. This is a consequence of the fact that the power to amend the Schedules to the Customs and Excise Act 91 of 1964 (CEA) is exclusively conferred on the Minister of Finance. This is the way that the duty is imposed under Schedule 2.

The High Court has confirmed that this power sits with the Minister of Finance and that this decision must be made in the public interest as a Constitutional obligation. However, as Vinti has noted, the Ministerial decisions have been mainly couched as executive powers and thus, there is no general duty to consult.¹ Vinti has made the argument that there is a right to be heard at this level on the ground of rationality.² The case of AMIE v ITAC offered more clarity in this regard.

This was a judicial review emanating from a decision taken by the Minister of Finance to, subsequent upon accepting a final report by  ITAC to effect a ministerial amendment to the tariffs in Schedule 2 of the CEA. The ministerial amendment gives effect to the continuation of the imposition of anti-dumping duties imposed on frozen bone-in portions of fowl of the species “Gallus domesticus” (chicken) [the product] originating in or imported from Germany, the Netherlands, and the United Kingdom.  The original imposition on the product was effected on 25 February 2015 [initial imposition]. The recommendation to continue such imposition emanated from a review process [sunset review], which process was duly initiated and finalised by ITAC. ITAC has the mandate to conduct trade remedies and tariff investigations as required by the International Trade Administration Act 71 of 2002.

This court accepted that the nature of this power is executive in nature, that is, it is an instance of making policy. The court also clarified that the duty on the Minister is to ‘”satisfy himself (own emphasis) that amending the tariff will not have detrimental consequences for the country”’. The court then explained that AMIE’s point is that the Deputy Minister, by not listening to adverse views did not do his statutory duty. His final decision affects industry participants and diverse and conflicting views must be considered. The Finance Minister was silent and thus the court agreed that in the absence of evidence to the contrary and viewing the Court’s obligation to assess rationality, it found that the Deputy Minister failed in this regard. Therefore, the Minister has a duty to consider the views of affected parties. Vinti has argued that this duty means that there is an obligation to elicit the views of affected parties at Ministerial level.  The court was of the view that this is because of the principle of rationality. It remains to be seen what would have happened if there were no opposing views and thus, if the Minister would be required to nevertheless elicit those views. But on the basis of the principle of rationality, the Minister must as a rule, consult affected parties.

1. Vinti C "The Scope of the Powers of the Minister of Finance in Terms of Section 48(1)(b) of the Customs and Excise Act 91 of 1964: An Appraisal of Recent Developments in Case Law"  2018(21) PER / PELJ 1-25. Vinti C ‘Association of Meat Importers and Exporters v International Trade Administration Commission (9233/2022) [2023] ZAGPPHC 1790 (12 October 2023): More clarity offered on the decision-making process of the Minister of Finance in the imposition of anti-dumping duties (and other trade remedies) in South Africa. (2025) 58 De Jure Law Journal 32-42. ↩︎
2. Vinti C ‘The right of ‘interested parties’ to be heard during an anti-dumping investigation conducted by the National Treasury on behalf of the Minister of Finance’. (2020) 137 SALJ 713-732. ↩︎