Why the court ordered that race and gender should be taken into account when allocating Covid-19 relief funds

Late last week the Gauteng High Court confirmed that it was constitutionally permitted (or perhaps constitutionally required) for a Covid-19 financial aid programme to rely on race, gender, youth and disability as some of the criteria to decide on the allocation of the aid. In doing so, the court confirmed what anybody familiar with South Africa’s Constitutional Court jurisprudence already knows, namely that the South African Constitution is neither libertarian nor “race-neutral”. The judgment also once again confirmed the Constitution’s strong commitment to the Rule of Law.

As the Covid-19 pandemic spread across the world over the past 4 months, the clichés that “we are all in this together” and that coronavirus was the “great equalizer” became increasingly popular. The problem with applying these phrases to the Covid-19 pandemic is not merely that they are clichés. It is that the claims are false.

The fact that the crisis is having a different impact on different people, that we are therefore not all in this together in equal measure, is at the heart of the High Court’s reasoning in Democratic Alliance v President of the Republic of South Africa and Others. The DA had challenged a decision of the Minister of Small Business Development to use gender, youth and disability (and perhaps race) as some of the many factors to be taken into account when deciding how to allocate financial aid to small, medium and micro enterprises.

It must be said that the Minister had made a complete hash of implementing this programme. The qualifying criteria to benefit from this Covid-19 related aid included that the business had to be 100% owned by South African citizens and that 70% of the employees had to be South African citizens. The Constitutional Court already held (back in 2004 in Khosa and Others v Minister of Social Development and Others) that legislation that excluded non-citizens who were permanent residents from receiving social grants constituted unfair discrimination, which means the provisions listed here are almost certainly unconstitutional. (The DA did not raise this question before the court and the court did not invalidate the programme based on this unfair discrimination.)

One of the problems with the programme was that the criteria for deciding on the allocation of funds was impermissibly vague. Answering questions in Parliament, the Minister claimed that when allocating aid under this programme the Department considered “demographic representation” which “does not only include race” but also gender; geographic location; age, youth; and disabilities”. In court papers the minister claimed that she had only given limited preference to SMME’s owned by “women, the youth and the disabled”. She did not say what this limited preference entailed. In fact it was impossible to know exactly what the criteria were, how much the requirements would weigh, and thus how they would be applied.

The court thus reviewed and set aside the criteria used on the basis that they are void for vagueness. In terms of the Rule of Law the exercise of a public power must be certain, even if discretion to allocate funds is permissible. But the criteria in terms of which the public power to allocate aid was based was so vague that it could never be certain. As the court held:

There was no calibration provided to a decision maker to the relationship between the question of the priority given to women, youth and the disabled and the balance of the criteria set out. No guidance was given to any decision maker as to how to make such a decision nor does an applicant know what criteria are to be adopted… [and] in the case of women it was not clear as to whether black women would receive the same scoring as white women nor was it clear as to which age group fell within the scope of youth. In short, the criteria which the Minister in the present dispute claims to pass legal muster simple fall drastically short of such a threshold.

But this was not the end of the matter. The court then proceeded to consider the DA’s substantive complaint about the employment of race, gender, youth or disability as part of the criteria used to decide on the provision of financial aid. The applicants pointed out that the Disaster Management Act did not explicitly provide for redress factors to be taken into account when dealing with the consequences of national disasters. In this view, the need “for economic transformation” and the desire to achieve a more equitable income distribution, are not matters related to disaster management.

The court rejected this argument, relying on section 39(2) of the Constitution which enjoins courts when interpreting legislation to promote the “spirit, purport and objects of the Bill of rights.” (Section 39(2) is the friend of any lawyer who  wants to  make use of the powerful values contained in the Bill of Rights.) Using section 39(2), the court interpreted section 27(2)(n) of the Disaster Management Act (allowing the Minister to make regulations that specify other steps that may be necessary “to prevent and escalation of the disaster or to alleviate, contain and minimise the effects of the disaster”) as mandating redress measures. This it could do by explicitly embracing the egalitarian (as opposed to libertarian) view of the Constitution.

Competing visions of the meaning of the animating normative framework of the Bill of Rights may create a level of uncertainty but what is not uncertain is that this Constitution read as a whole cannot be construed as a libertarian constitution as some would have it or as a race neutral constitution eliding over an egregious history in which race overlaid by class and gender was the central determinants of the distribution of resources in our society for more than 300 years of its existence.... what is certain is that our history and in particular the pattern of disadvantage in which race, class and gender are overlaid have to be taken into account in any process mandated by section 39(2) of the Constitution.

As the court held, the effects of the covid-19 disaster are not evenly spread, which means to minimise these effects would require not identical treatment but different treatment. The court notes that the outbreak of Covid-19 in South Africa “has brought sharply into focus the fissures in our society caused by race, gender and other forms of egregious discrimination”. The focus of the Disaster Management Act on the socio-economic status of individuals and communities rendered vulnerable by the disaster must therefore include race as this overlaps with socio-economic status in South Africa.

If we need any persuasion about the importance of our past and the seated racial divide in contemporary South Africa and how the need for scarce resources fall overwhelmingly on those who are poor and therefore black, look no further than on whom the brunt of the effect Covid-19 falls.

It was therefore permissible, held the court, for such a financial aid programme to include race, gender and other forms of egregious discrimination as some of the criteria to be used in deciding on the allocation of aid. (In late April, in another redress case, the High Court held in Solidarity v The Minister of Small Business Development that it was constitutionally permitted for the Tourism Relief Fund to take account of race in allocating funds, especially given that race represented only between 2% and 8% of the total scoring criteria to be used.)

However, the order of the court went further than accepting that redress measures were permitted. Instead, the order seems to assume that redress measures are constitutionally required. This is because the court ordered the Minister, when reformulating the criteria to be employed in the distribution of funds, to take into account race, gender, youth and disability. Unfortunately the court did not, in fact, make any finding that there is a constitutional obligation on the state to implement redress measures, which means there is a disjuncture between the ratio of the judgment and the remedy it imposed.

This does not mean the court could not have developed an argument that the state was required  to impose redress measures when implementing disaster relief in terms of the Disaster Management Act. In Minister of Finance and Other v Van Heerden former Deputy Chief Justice Dikgang Moseneke held that section 9(2) of the Constitution “imposes a positive duty on all organs of state to protect and promote the achievement of equality — a duty which binds the judiciary too”.

Given that the court held that the achievement of equality would often require the implementation of redress measures, this passage could be read as imposing positive obligations on the state, in specific circumstances, to implement race, gender and other redress measures. The court could therefore have argued that there was indeed a positive obligation on the state to include redress measures in its response to Covid-19. This would be so because Covid-19 and the lockdown disproportionately impacted on those who are economically vulnerable, a disproportionate number of such vulnerable people being black, but particularly being black women.

Unfortunately the court failed to develop this argument, which means it  imposed a remedy not justified by the reasoning in the judgment.

 

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