DA to challenge legality of BBBEE requirement for Covid-19 relief

The DA wants to legally challenge the government's decision to follow BBBEE codes in allocating emergency relief for businesses affected by Covid-19.

DA interim leader John Steenhuisen said the party was consulting its lawyers on Wednesday to seek advice on the legality and constitutionality of what he calls the racialisation of the government’s Covid-19 financial relief measures.

This follows an announcement by tourism minister Mmamoloko Kubayi-Ngubane last week that the tourism relief fund to provide one-off capped grant assistance to small,  micro and medium-sized enterprises (SMMEs) in the tourism value chain will be administered in line with the objective of “economic transformation”.

Steenhuisen also cited a letter sent out by the department of agriculture, forestry & fisheries encouraging only black, coloured and Indian farmers to apply for assistance.

“It is not only unconscionable that critical financial relief in this time of distress for thousands of businesses and commercial entities is racialised, it is most likely illegal too,” said Steenhuisen.

“The DA will not allow the ANC to use this crisis to further divide our nation, and we will use every avenue available to us to fight for the right of all South Africans, black and white, to benefit from emergency assistance.”

Steenhuisen warned that the measures by the two departments would create division at a time when everyone should be fostering a spirit of togetherness. He said “the ANC’s shambolic handling” of this matter has undone much of the goodwill that existed in SA around standing united in this challenge.

When it was first revealed — via a leaked document — that race would be a deciding criteria for financial assistance, the government quickly denied this and tried to backtrack from the leaked document.

Steenhuisen noted this was at a time when the government was fundraising for the relief fund, when South Africans were assured that the government’s emergency financial help through the fund would be for all.

“But less than two weeks later — and with the relief fund now several billion rand strong — it has become clear that this was never the case, and that race and BBBEE codes were always going to be used to determine who government would help and who it wouldn’t,” he said.

“This makes a mockery of the president’s televised pleas for South Africans to unite in fighting this common enemy.”

Steenhuisen said the skin colour of an employer does not determine the true victims of the crisis, adding that most of the businesses and farms that will be excluded from government assistance on the basis of race employ an overwhelming majority of black employees.

“It is these people who will lose their jobs and their ability to look after their families if government gets away with its race-based relief effort,” he said.

Steenhuisen said the DA has been inundated over the past two weeks with pleas for help from business owners who say they have been shut out from applying for assistance by race requirements. He said some of them had already had to close their doors, and for many more this is now imminent.

Two weeks ago, small business development minister Khumbudzo Ntshavheni dismissed as “fake news” reports that only companies with 51% black ownership would be considered for SMME assistance. She said at the time that companies had to be 100% SA-owned and should have 70% SA workers.