The “Made in Botswana” label which is riding on the back of the newly enacted Economic Inclusion Act and has potential to create thousands of jobs, is caught up in a diplomatic row between Botswana and her biggest import partner – South Africa.
The Act which came into effect in March this year seeks to protect the nascent “ Made in Botswana” label by enforcing existing economic empowerment laws and the effective participation of “targeted citizens” in the economic growth and development of Botswana.
As part of the new Act, Botswana has placed trade restrictions on the importation of school uniforms. Botswana’s biggest suppliers of school uniform PEP stores and Ackerman’s import their products from South Africa – thus killing the “Made in Botswana” label and exporting thousands of Botswana jobs to South Africa.
PEP stores and Ackermans are part of the Pepkor Group, South African-based investment and holding company with business interests in Africa, Australia and Eastern Europe. The group manages a portfolio of retail chains focused on the value market selling predominantly clothing, footwear and textiles.
The two retail stores, which are the biggest suppliers of school uniform in Botswana have gone to court for an order to continue importing school uniform from South Africa and exporting thousands of Botswana jobs. Botswana’s unemployment rate is at an all time high of 25%.
Sunday Standard can reveal that initially PEP and Ackermans approached the South African High Commission for intervention. However, before the South African High Commission could take up the matter with Botswana government officials, lawyers acting for the South African headquartered retailers rushed to the High Court.
The lawyer representing the two retailers, Advocate Johan de Waal who was instructed by Bookbinder Business Law firm submitted that the “present matter is an important one for defining and enforcing the rule of law in Botswana.”
“What is called into question is whether the law allows a Department (the Department of Industrial Affairs and its Acting Director) to decide whether to accede or refuse applications for permits when no role is envisaged in the Regulations (or the Control of Goods Act) for this Department and the functionary identified in the Regulations to make the decisions (The Director of International Trade) plays no role in the process other than the mechanical task of issuing the permits,” said Waal.
He said the question is whether the government in the form of the Minister and officials in the Ministry and department may confer onto themselves unbridled powers to ban the importation of products without a permit (in casu school uniform items of clothing) without prior consultation with the public or those affected by the ban and without guidance or policy on how those affected by the ban and without guidance or policy on how discretion to grant permits should be exercised.
He also said another question is whether the government; “May refuse permits without giving reasons or at least an indication of where an applicant retailer and its customers would be able to obtain the product from local suppliers.”
Wall also said the other question is whether the government; “May simply fail to decide internal appeals lodged against refusal and then that its decision (s) are not reviewable because internal remedies have not been exhausted.”
The question is also whether the government; “May experiment with the livelihoods of works, the dignity of parents and children and then profitably of businesses by adopting an approach of banning imports first and seeing whether local manufactures can supply, what is really essential goods, later.”
Waal submitted that the above-mentioned kind of behaviour cannot be countenanced in a society committed to the rule of law.
“It opens door for authoritarian behaviour. Administrative decision making should take place within defined parameters and generate timeous and predictable results,” said Waal. Against this background, Wall argued, the present matter raises the following legal issues, not all of which have yet been considered by the Botswana courts; Is there a duty to consult the public or affect persons before the adoption of legislative administrative acts, such as regulations.
They also raise legal issues of whether a regulation is susceptible to challenge on the basis that it is vague and on the basis that it confers open-ended powers to prohibit or restrict the freedom to trade.
Legal issues also raised by the issue is; “Can the courts authorize, as relief pendente lite, that the importation of goods, such a school uniform may continue on the same basis (permit) as before, pending the determination of the challenge to the regulatory regime, i.e, the Regulations themselves?”
Waal said the decision on the internal appeal (after the application for permit to import school uniforms was rejected), dated 7th November 2022 was never a decision taken by the Minister who is the functionary appointed to decide appeals but by an Acting Permanent Secretary a certain “Mr. Mmolawa, acting on a frolic of his own.” The Court also heard that the Acting Permanent Secretary rejected an appeal filed by PEP and in the process usurped the mandate of the Minister who is bestowed with such powers.
“The Permanent Secretary has no power whatsoever to decide such an internal appeal. The Acting PS’s decision accordingly fall to be set aside. This means that the Minister is yet to take a decision on the internal appeal,” said Waal.
He said PEP and Ackermans currently import all school uniform which they sell in Botswana. “All but one of these products are currently being manufactured in the Republic of South Africa. The reason for importing school uniforms from South Africa is their significantly reduced cost,” said Waal.
Representing the Ministry of Trade and Industry Dineo Makati Mpho of Makati Law Consultancy did not take the accusations by the two retailers lying down. She argued that while the Ministry acknowledged that the officer who rejected PEP’s application’s permit to import uniforms was the Director of Industrial Affairs instead of the Director of International Trade, retailers had not been questioning that arrangement when their applications were granted in the past. She said the best that the Court could do was to direct that the matter be referred back to the Ministry so that the relevant officer could preside over the applications for permit to import uniforms.
“We accept that the director of International Trade could have assessed the applications for permit in relation to the statutory instrument issued on 24 September in terms of the Control of Goods, prices and other charges (restriction of the importation of school unform) instead of the Director for Industrial Affairs,” said Makati-Mpho. Dismissing the argument by the retailers that the matter was urgent, Makati-Mpho argued that it has been more than a year since the importation regulations came into effect and the retailers sought to challenge them now. She said even the retailers were being granted permits or waiver partially, they could and ought to have challenged them.
She said while the retailers allege that they were not attempting to usurp the powers of the executive branch of the government, they were doing exactly that.
“It is well established that the doctrine of separation of powers dictates that the legislature makes law, the judiciary interprets and implements and the executive implements government programmes and policies. The latter has exercised responsibility as such as it issued the regulations under question, which regulations the Applicant(s) seek the court, as the Judiciary to reverse without due cause and arbitrariness,” said Makati Mpho.
In her affidavit, the Ministry’s Permanent Secretary Malebogo Morakaladi revealed that; “As matter of fact Ackermans had, prior to serving these court papers, sought to have the South African High Commissioner engage with the Ministry.” She added that; “… but when the High Commissioner came to meet, the court application had been served in the case relating to PEP Botswana Holdings Limited which is in the same Pepkor Group as the current Applicant and we were unable to start the intended amicable engagements.”
“They have noted an appeal dated 5 December 2022, which they have addressed to me, as the Permanent Secretary and the appeal has not been considered. The appeal to be made by the Minister,” said Morakaladi.
In the final analysis, Morakaladi said, while the applicant(s) say that they are necessarily opposed to the stated purpose of the Regulations and the efforts by the government of Botswana to stimulate an increase in local manufacturing capacity, they will never be ready to participate in such a market as they consider that the only option is that the government of Botswana must exempt them permanently from the prohibition of school uniform imports. “According to them, both their company and their customers will never survive in this new Botswana market,” said Morakaladi.
She further indicated that; “For a whole period 15 months since the regulations came into effect, the applicant has been pursuing Botswana government to give them waivers because that is their only option and they are demonstrating through these applicant(s) that they still believe import permits are the only option that they have.”
