Badly written laws end up in court
Three badly written laws are now before the courts for adjudication. One of these has been referred by the National Credit Regulator, seeking to establish whether repossessed assets sold at auction can be sold far below market price. The solution suggested is to set a reserve price. Business Day reports.
It is common cause that Parliament has become increasingly dysfunctional in recent years, but the media focus has tended to be on high-profile events such as the disruptive activities of the Economic Freedom Fighters, censorship of media coverage, railroading by the African National Congress (ANC) and walkouts by the Democratic Alliance.
Not enough attention has been paid to the practical effect of parliamentary dysfunction, especially the institution’s reduced capacity to interrogate and refine draft legislation produced by state departments and to ensure robust laws are passed. However, the effect is now becoming evident through the number of successful constitutional challenges to laws that have been promulgated without due care, over the objections of opposition parties; and through proposed laws such as those concerning immigration and land reform, which have caused outcries from affected parties who fear the economic and social consequences of ill-considered legislation.
Three court processes are in progress where such parties are seeking declaratory orders from the courts with the aim of either gaining relief or clarifying disputed interpretations of the law. The most widely publicised example has been the black ownership requirement of the decade-old Mining Charter, which has been interpreted differently by the government and the Chamber of Mines.
The government insists that if black shareholders sell their stakes, new black investors must be found to comply with the charter, whereas the chamber believes that can’t possibly have been the original intention and the "once empowered, always empowered" principle should apply. The two parties have agreed to approach the courts for an interpretation and declaratory order, which is undoubtedly better than a prolonged dispute. However, in the meantime, uncertainty reigns and uncertainty is the biggest enemy of investment.
Similarly, umbrella bodies representing temporary employment service firms, known as labour brokers, intend approaching the courts in coming weeks for relief against the recently amended Labour Relations Act, which they say has been interpreted in a manner that has resulted in large-scale job losses and the closure of companies.
In addition, the National Credit Regulator (NCR) has indicated it will apply to the High Court in Gauteng for a declaratory order on the principles credit providers should apply when disposing of repossessed assets, and whether a mandatory reserve price should not be required, since goods are frequently sold at well below their market value.
In the past, a court order was handed down concerning the in duplum rule on the accumulation of arrear interest, which had the force of law pending the adoption of legislative amendments.
It is clear from the above that the question is not whether SA’s law-making is up to scratch, but why it is so poor, and what can be done to change that.
One of the primary causes of poor legislation is the process that is followed, which invariably starts with a political resolution by the governing party, which may or may not be properly considered.
It is then taken up by officials in the appropriate government department, who are likely to be political deployees, before progressing to the National Economic Development and Labour Council and the legislature, where committees are dominated by the ANC with one eye on Luthuli House and the opinion of the state law adviser is routinely overridden.
Only then is the proposed law opened for public comment and political debate, by which time it is all but cast in stone. Affected industries, in particular, do not have enough opportunity to intervene; and when they are able to, the horse has frequently already bolted.