Minister tarnishes state’s good work
It is regrettable that the tourism department has racialised its response to the Covid-19 pandemic, undermining what should be a united front against a common enemy which will ravage the economy and leave many dead in its wake. The virus strikes indiscriminately, regardless of race, age or gender, and should be tackled without preference to any one group.
The tourism department has been condemned and faces court action — which it is opposing — for its stance that only companies that comply with the broad-based BEE (B-BBEE) code of good conduct for the tourism sector will qualify for its grants.
It justifies this policy on the grounds that the B-BBEE Act makes the application of the B-BBEE codes of good practice mandatory in the awarding of state incentives, grants and investment schemes. Minister Mmamoloko Kubayi-Ngubane insists that invoking the Disaster Management Act does not mean a suspension of the act and the application of the B-BBEE codes.
AfriForum and trade union Solidarity have launched urgent applications in the high court against the policy, and the DA is likely to either be a party to this action or launch its own.
AfriForum wants the court to interdict the minister and the department from disbursing funds on the basis of any criteria unrelated to the needs of the particular business and to set aside the policy. It argues that the policy discriminates not only on the basis of race but also on the basis of age and sex as it aims to prioritise the youth and women. AfriForum argues that the constitutional provision allowing for measures to address past discrimination does not apply to relief funding provided by the government during a national state of disaster.
In terms of the R200m Covid-19 Tourism Relief Fund, the government will give grants to small, micro and medium-sized enterprises to help them survive the lockdown prompted by the pandemic.
With a travel ban in place for foreign and domestic tourists, the tourism sector, an important driver of the economy, has been hard hit by the lockdown.
Thousands of businesses will not survive, throwing even more thousands out of work. Businesses covered by the tourism relief scheme will include hotels and B&Bs, restaurants, conference venues, professional caterers, travel agents, tour guides, car rental companies and coach operators.
Capped at R50,000 per entity, the grant funding can be used to subsidise expenses incurred in the costs of doing business. Preference will be given to enterprises with the highest score in terms of the criteria which include compliance with B-BBEE. This means that at least 70% of beneficiaries will be black-owned, at least 50% women-owned, at least 30% youth-owned and at least 4% owned by people with disabilities.
The relief schemes announced by small business development minister Khumbudzo Ntshavheni and agriculture, land reform & rural development minister Thoko Didiza will also prioritise businesses and small-scale farms owned by women, youth and people with disabilities but these schemes are not racially profiled. Apart from people with disabilities, who face an obvious disadvantage, it is also questionable whether women and youth should be prioritised in this way.
Opposing the tourism department’s criteria for qualification for its relief scheme is not the same thing as saying that there is no role for affirmative action and BEE to address the legacies of the past. The minister incorrectly conflates the two, pointing out in an opinion piece in Business Day that those opposed to the use of B-BBEE criteria for the administration of the tourism relief fund are also opposed to BEE in general.
The point is rather that while the B-BBEE policy is laudable, it should not be used as a tool to distribute aid in a situation of natural disaster. Hopefully, the high court will rule against the minister’s ill-judged scheme, which tarnishes what has been a widely acclaimed response by the government to the pandemic.
B-BBEE POLICY SHOULD NOT BE USED AS A TOOL TO DISTRIBUTE AID IN A SITUATION OF NATURAL DISASTER