My Daily Reading List

I try not to follow the daily news cycle, which I find more distracting than informative. I also shy away from social media, so I don’t have a constant stream of click bait news headlines competing for my attention.

To keep up to date with current affairs I try follow websites that I find interesting using their RSS feeds. I have set up a server running a self hosted instance of FreshRSS to aggregate the feeds so I can read them from my office, home or phone. The list might look long, but each source isn’t updated on a daily basis so I find it somewhat manageable.

My current list of daily reads includes a mix of general international news, technology news, African focused articles, anarchist news and perspectives, and Stoic Philosophy:

General News

  • Comic Book Legal Defense Fund: “Comic Book Legal Defense Fund is a non-profit organization dedicated to protecting the First Amendment rights of the comics medium.”
  • Constitutionally Speaking: “This blog deals with political and social issues in South Africa, mostly from the perspective of Constitutional Law. Written by Pierre de Vos”
  • Conversation: Africa
  • Gates Notes: Updates from Bill Gates
  • Deeplinks: “EFF’s Deeplinks Blog: Noteworthy news from around the internet”
  • GroundUp: “News, analysis and opinion”
  • Intercept: “The Intercept is an award-winning news organization that covers national security, politics, civil liberties, the environment, international affairs, technology, criminal justice, the media, and more”
  • Media Lens: “News analysis and media criticism”
  • TorrentFreak: “Breaking File-sharing, Copyright and Privacy News”
  • Popehat: “A Group Complaint about Law, Liberty, and Leisure”

Specialty News and Commentary:

  • Anti-Fascist News: “Taking on Fascism and Racism from the Ground Up”
  • BDS South Africa: “Boycott – Divestment – Sanctions”
  • Carne Ross: “I am a former British diplomat who resigned over the Iraq war. I now run the world’s first non-profit diplomatic advisory group, Independent Diplomat”
  • CrimethInc: “CrimethInc. ex-Workers’ Collective: Your ticket to a world free of charge”
  • Freedom News: “Anarchist News and Views”
  • It’s Going Down: “Anarchist News and Counter-Information”
  • libcom.org: “News, archives and discussion on the class struggle. For human beings, not human resources”
  • Lucien van der Walt: “Articles, talks, books and texts: red/black and anarchist/ syndicalist/ left history, analysis, theory, struggles”
  • The Youth Rights Blog: “The online home of radical youth rights theory”
  • Unicorn Riot: “Your Alternative Media”
  • Zabalaza: News from the Zabalaza Anarchist Communist Front, “a specific anarchist political organisation based in Johannesburg, South Africa”

Stoic Philosophy

News Aggregation Websites:


This work by Clinton Pavlovic is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Removing the Court’s Power to Decide for the Minister of Mineral Resources

Public officials’ decisions aren’t always flawless when applying the Mineral and Petroleum Resources Development Act, No 28 of 2002 (MPRDA), and there are often situations where the Minister of Mineral Resources makes an incorrect decision. In these circumstances a person is not without any legal remedies. It is possible to bring a court application to set aside the incorrect decision, and refer the matter back to the minister for reconsideration.

As a more expedient alternative to referring a matter back to the minister, it became common to ask the court to take the decision directly, and grant the application. The court is asked to step into the shoes of the minister and make the decision itself. This is known as “substitutionary relief”.

The recent decision of the Supreme Court of Appeal in the case of Pan African Mineral Development Company (Pty) Ltd and others v Aquila Steel (S Africa) (Pty) Ltd may, however, put an end to substitutionary relief when it comes to the grant of applications for prospecting and mining rights.

The Courts General Power to Grant Substitutionary Relief

Any state decision must be lawful, reasonable, and procedurally fair. If not a court may be approached to “review” the infringing action in terms of the Promotion of Administrative Justice Act 3 of 2000 (PAJA).

Courts are rightly hesitant to grant substitutionary relief, being careful not to overstep its role and perform acts that fall into the realm the state. Generally, there are four situations where a court will be prepared to grant substitutionary relief without referring the matter back for reconsideration, namely when:

  • the end result is a forgone conclusion;
  • the court is as well qualified as the original authority to make the decision;
  • any further delay will cause unjustifiable prejudice; or
  • the original decision maker has exhibited bias or incompetence.

The Re-Examination of Substitutionary Relief for Certain Decision in terms of the MPRDA

It became common to ask for substitutionary relief when challenging a decision on the grant of prospecting or mining rights. Without substitutionary relief, the court sets aside the incorrect decision, and then refers the matter back to the minister for fresh determination. This increases the time that it takes to resolve the matter and be granted the application.

It has been argued that a court is entitled to grant substitutionary relief and grant a prospecting or mining right because the minister is compelled to grant these applications if they meet the set requirements. If the application “ticks all the boxes”, then the result is a foregone conclusion because the minister must grant the application, and the court is as well placed as the minister to determine if the application is compliant.

The Supreme Court of Appeal’s recent decision challenges this argument. Here there were two overlapping applications. Aquila Steel brought a High Court application to set aside both the minister’s decision to accept Ziza’s prospecting application and the decision to grant Ziza a prospecting right.

The High Court accepted the argument that Ziza’s application was defective, and that Aquila Steel’s application was the sole application that could be considered and granted. The High Court granted substitutionary relief:

  • setting aside the minister’s decisions regarding the various applications; and
  • substituting the minister’s decision with the court’s decision to grant Aquila Steel a mining right, on terms to be decided by the minister within 3 months.

On appeal this decision to grant of substitutionary relief was criticised, and it was held that the court didn’t have the power to grant substitutionary relief in respect of the decision to grant Aquila Steel a mining right for two reasons.

First, the minister’s power to grant a mining right, and the minister’s power to impose conditions on the mining right, are inextricably linked. It is impossible to separate these two decisions – a grant of the mining right without considering what conditions should be imposed is an invalid exercise of power. The High Court, however, attempted to separate these decisions when it left the imposition of any conditions up to the minister. This meant that the High Court’s order was misconceived and susceptible to attack on this basis.

Secondly, the information in the mining right application was 7 years old, and possibly outdated. This meant that the grant of the mining right was not a foregone conclusion.

The End of Substitutionary Relief

The courts argument in respect of substitutionary relief for the grant of a mining right would apply equally to the grant of a prospecting right.

The Supreme Court of Appeal has held that the decision to grant a right in terms of the MPRDA is inextricably linked to the conditions that the minister may impose on the right. A court can’t make a decision to grant the right, and then order the minister to impose conditions as the minister deems fit.

A person would be hard pressed to think of a set of facts where it could be confidently argued that the conditions that should be imposed on a prospecting or mining right is a foregone conclusion, and that the court is as well placed as the minister to impose a set of conditions.

It may well be that the Aquila Steel case has put an end to the grant of substitutionary relief when it comes to the grant of prospecting and mining rights in terms of the MPRDA. If not, the Aquila Steel case has drastically limited the cases where the granting of this relief by a court would be appropriate.

Related Reading:


This work by Clinton Pavlovic is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Remembering Stephen Hawking

You will be missed.

“If machines produce everything we need, the outcome will depend on how things are distributed. Everyone can enjoy a life of luxurious leisure if the machine-produced wealth is shared, or most people can end up miserably poor if the machine-owners successfully lobby against wealth redistribution. So far, the trend seems to be toward the second option, with technology driving ever-increasing inequality.”

Professor Stephen Hawking, in response to a Reddit AMA


This work by Clinton Pavlovic is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
The unedited featured photograph by Matt Nelson was published under a Creative Commons Zero Licence.

2018 Budget: The Regulation of Crypto Currency

Last Wednesday the South African Minister of Finance, Mr Malusi Gigaba, gave his first and possibly last budget speech for the 2018/2019 year.

The headline grabbing announcement was  the 1% increase in the value added tax rate that will be used to fund free tertiary education for poor and working class families. Towards the end of his speech though my attention was caught by his remarks on an anticipated strengthening of the regulations governing the South African FinTech market. His full comment, courtesy of the published transcript of the budget 2018 speech:

“Work will continue on reforming the legislation for financial markets and the payment system, to ensure that our infrastructure remains globally competitive. The Treasury is working with the Reserve Bank, Financial Services Board and other government entities towards a regulatory framework for all types of FinTech.

For instance, the emergence of cryptocurrencies is a major development to which our regulatory regime must respond.”

So, is there some Bitcoin crypto currency regulation on the way for South Africa? Unfortunately the National Treasury’s Budget Review doesn’t give any more clarity despite being almost 300 pages long.

Budget Review, on page 136:

“Tax treatment of cryptocurrency transactions: Cryptocurrencies are addressed by existing provisions in South African tax law. Cryptocurrencies pose risks to the income tax system as they are extremely volatile and their sustainability is uncertain. At the same time, the supply of cryptocurrency can cause administrative difficulties in the VAT system. To address these issues, it is proposed that the income tax and VAT legislation be amended.”

Budget Review, on page 160:

“In 2018, the Reserve Bank, together with the other domestic financial sector regulators, will publish a position paper on the evolving uses of private cryptocurrencies. A cryptocurrency is a digital asset that is used as a medium of exchange. It uses cryptography to secure transactions, both to control the creation of additional units and to verify the transfer of assets.”

There might not be anything concrete yet, but it does seem like additional regulation of the FinTech industry and crypto currencies is planned.


This work by Clinton Pavlovic is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
The unedited featured photograph by Thought Catalog was published under a Creative Commons Zero Licence.

Reading List: 2018

May 2018

April 2018

March 2018

February 2018

January 2018

More Lists


This work by Clinton Pavlovic is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
The unedited featured photograph by Thought Catalog was published under a Creative Commons Zero Licence.

Strict Compliance isn’t Strictly Required by the MPRDA

In South Africa only one person can hold a valid prospecting or mining right for a particular mineral on land in terms of the governing Mineral and Petroleum Resources Development Act, No 28 of 2002 (MPRDA).

To ensure that no conflicting rights are granted, an application system akin to queuing is used. The first person to lodge a prospecting right application for a particular mineral is first in queue, and no prospecting right applications submitted afterwards can be considered or granted until the first application has been rejected (section 16(2)). In addition, a person that is granted a prospecting right over land for a particular mineral has the sole and exclusive right to apply for, and be granted, the relevant mining right (section 19(1)).

Unfortunately, it’s possible for the system not to work as intended, and for the Department of Mineral Resources (DMR) to issue overlapping prospecting and mining rights for the same mineral. In these circumstances an aggrieved person can use the MPRDA’s internal appeal process to review the DMR’s administrative decision to issue the conflicting right, and have the conflicting right set aside (section 96(1)). The after the initial internal appeal an unsuccessful party may have the option to approach the High Court for relief in terms of the Promotion of Administrative Justice Act 3 of 2000 (PAJA).

This is where complex legal arguments often start, with both parties contending to convince the court that their application was the first valid application that was submitted to the DMR, and that the other parties prospecting or mining right is the right that should be set aside as being invalidly granted. The importance of being the first valid application that was submitted to the DMR was demonstrated in the case of Pan African Mineral Development Company (Pty) Ltd and others v Aquila Steel (S Africa) (Pty) Ltd .

In this case the Supreme Court of Appeal’s decision hinged on whether the first prospecting right application in the queue was fatally defective because it didn’t strictly comply with the requirements of the MPRDA, and whether the DMR was entitled to consider the next conflicting application in the queue because of the first applications non-compliance.

It was not disputed that the first application was non-compliant with the MPRDA, but the Supreme Court ultimately found that even though there was non-compliance, the non-compliance did not render the first application fatally defective. Because the first application in queue was not fatally defective and had not been refused by the DMR, the Supreme Court held that the DMR’s decision to grant the second conflicting right was the invalid decision, and that the second conflicting right was the right that should be set aside.

The Original Decision of the High Court

This case was first heard in the Gauteng High Court as Aquila Steel (South Africa) Limited v the Minister of Mineral Resources and others, which I discussed here previously. The timeline relating to the two overlapping applications is as follows:

  • On 19 April 2005 Ziza Limited (Ziza) submitted a prospecting right application.
  • A year later, on 18 April 2006, Aquila Steel (South Africa) Limited (Aquila) submitted prospecting right application. Aquila’s application was granted on 11 October 2006.
  • On 26 February 2008 Ziza’s prospecting right application was granted. There were now two prospecting rights granted over the same land for the same mineral.
  • On 14 December 2010 Aquila applied for a mining right. This application was, however, now refused by the DMR because the DMR alleged that of Ziza’s prior application was in queue before Aquila’s, and that Aquila’s right shouldn’t have been granted originally

It was common cause that Ziza’s application didn’t strictly comply with the requirements of the MPRDA because it didn’t include the prescribed coordinated map showing the land that the application extended over.

The wording of the section 16(3) of the MPRDA when the applications were submitted and decided was the following:

If the application does not comply with the requirements of this section, the Regional Manager must notify the applicant in writing of the fact within 14 days of receipt of the application and return the application to the applicant.” (own emphasis).

Aquila argued that because Ziza’s application was not complete, the application could not be accepted by the regional manager and it would have to have been “returned” to Ziza. It argued that because the act required return of the application, when Aquila submitted its application there would have been no prior pending application for a prospecting right. Aquila’s application would have been the only valid application, and consequentially the only valid prospecting right, over the contested area.

Ziza counter argued that the defect in its application didn’t mean that its application automatically failed and had to be rejected by the DMR. It argued that a defective application can be amended after submission to remedy defects.

The High Court accepted that the application was defective, and turned its analysis to what the required notifying and “returning the application to the applicant” meant in terms of the then section 16(3) of the MPRDA. Did this mean the application was rejected, or did it mean that the process was merely suspended to allow the applicant to amend its application?

The court considered the objective of the MPRDA to prevent sterilisation of mineral resources. This would be hindered if the return of the application allowed the applicant to amend a defective application. The act didn’t specify any timelines that the amendment must be done, meaning that an applicant could delay the entire procedure by not amending the application (or taking years to amend as in the present case), effectively sterilising the minerals by preventing other companies from applying for prospecting rights over the land.

The court also considered the practicalities of “returning the application”. This means the DMR has no record of the application other than the day that it was received and returned. Crucially the DMR wouldn’t have records of the minerals or land that the application related to.

The court concluded that a “return” of a non-compliant application to allow an applicant to remedy defects amounts to a rejection of the application.

The high court held that:

  • Ziza’s prospecting right application was fatally defective because it failed to strictly comply with the requirements of the MPRDA – Ziza had failed to include the prescribed coordinated map showing the land that the application extended over;
  • the DMR was required to “return” a non-compliant application in terms of section 16(3) of the MPRDA;
  • the “return” of Ziza’s application would mean that the application had been rejected;
  • if Ziza subsequently amended its application, then the amended application would have to be treated as a new application; and
  • it was therefore not competent for the DMR to accept and grant Ziza’s application for a prospecting right.

The court accordingly set aside both the DMR’s decision to accept Ziza’s prospecting application and the decision to grant Ziza a prospecting right.

The Reversal of the High Court’s Decision on Appeal

Ziza appealed the decision to the Supreme Court of Appeal, which reversed the High Court’s decision and found in Ziza’s favour.

The Supreme Court first considered a question overlooked by the High Court – was Ziza’s application fatally defective because it didn’t strictly comply with the requirements of the MPRDA by not including the prescribed coordinated map? (See the courts full discussion in paragraph 19 to 22.)

Statutory requirements, such as the requirements that a prospecting application must comply with, are generally either:

  • mandatory (peremptory) requirements, which needs exact compliance and where purported compliance that falls short of the requirements is a nullity; or
  • directory requirements, which although desirable to comply with will have no legal consequences if not complied with (footnote 22).

The requirements of the MPRDA in relation to applications for prospecting rights are framed as mandatory requirements that require strict compliance. The applicable section states that “[a]ny person who wishes to apply to the Minister for a prospecting right … must lodge the application … in the prescribed manner” (section 16(1)(b)). Aquila argued that because Ziza didn’t comply with the mandatory requirements set out in the regulations, its application was a nullity.

The Supreme Court, however, recognised that a third category of statutory requirements had been developed that lay between mandatory and directory requirements. These are statutory requirements that are framed as mandatory requirements but that only require substantial compliance in order to be legally effective.

The Supreme Court endorsed its previously held view that not every deviation from the literal prescription of an act should be fatal. The question that should be asked is “whether, in spite of the defects, the objective of the statutory provision had been achieved” (paragraph 20).

The Supreme Court held that even though Ziza’s application did not strictly comply with the requirements of the MPRDA by including the prescribed coordinated map showing the land that the application extended over, Ziza had substantially complied and had given the DMR sufficient information in order for the DMR to identify the relevant properties and log them onto the application system. The additional information included in Ziza’s application included:

  • hand drawn plans that identified the co-ordinates;
  • the registered descriptions of the farms;
  • the co-ordinates of the total area; and
  • the description of the old order rights in respect of which the application was made, which included the farm details, area size and grid reference.

The Supreme Court held that Ziza had substantially complied with the requirements of the MPRDA and that it could not be suggested that the DMR was unaware of the properties that formed part of Ziza’s application.

On the question of whether a return of the application, as required by the MPRDA at the time, constituted a refusal by the DMR, the Supreme Court held that there is an important distinction between the “return” and the “refusal” of an application – a return is exercised by the regional manager of the DMR and gives the applicant with an opportunity to supplement its application, while a refusal is exercised by the Minister, not the regional manager.

Conclusion

The Aquila judgement doesn’t eliminate the need for applicants to comply with the requirements of the MPRDA in order to ensure that the DMR can’t reject their application.

The judgement does, however, clarify that the statutory requirements in the MPRDA should not be viewed as mandatory (peremptory) requirements that need to be strictly complied with in order to ensure that an application is valid.

This may ensure that an application for a prospecting right will not fail merely if a single statutory requirement was not met, or if a single document was omitted from the application.

The important consideration is if there was sufficient compliance with the requirements in order for the objectives of the MPRDA to be achieved. An application may still be rejected by the DMR, or a prospecting right or mining right may still be set aside, if it can be shown that the level of compliance was insufficient.

Related Reading:


This work by Clinton Pavlovic is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
The unedited featured photograph by Paul Dufour was published under a Creative Commons Zero Licence.

The Future of Bitcoin Regulation in Africa

The launch of the first Bitcoin future for trade in the United States of America during December 2017 has brought significant public attention to both the Bitcoin crypto currency, and the underlying bitcoin network (blockchain technology protocol that the crypto currency is built on).

When looking at the future of Bitcoin and blockchains, and the potential impact that these can have in the various African markets, an area to keep an eye on is various governments’ possible approaches to the regulation of crypto currencies. Various attempts at regulation have already been seen in other parts of the world, and it is still to be seen what the reaction of some African governments, and regulators, will be.

From a government regulatory perspective, the desire to regulate crypto currencies like Bitcoin arises primarily from their ability to be used as an untraceable digital cash system.

Even though Bitcoin transactions happen publicly on the blockchain, and it’s possible to view all transactions that happen and see the exact details of all amounts transferred between addresses on the blockchain, it’s not possible to easily link these transactions with a person’s real identity. The Bitcoin crypto currency offers pseudonymity when transacting, meaning that it is an almost-untraceable digital cash.

Untraceable digital cash poses various problems to governments.

One problem is the enforcement of capital controls. Bitcoin makes it trivial to bypass laws restricting to limit of the flow of capital into or out of a country. This is done by liquidating assets in one country, buying Bitcoin, and then transferring those Bitcoins into or out of a country.

This “problem” is, however, also the source of one of Bitcoins advantages to people adopting it. In this context Bitcoin makes remittances of money by migrant workers back to their family in their home country quick, cheap, and easy.

Another problem is difficulties surrounding money-laundering. This is because it may not be possible to identify or authenticate the real identity behind each transfer of Bitcoin.

The difficulties with, and sometimes dangers of, untraceable digital cash can be illustrated by the “Silk Road” website that was operated over the internet as a TOR hidden service. The Silk Road was an anonymous marketplace that offered various goods, including illegal drugs, in exchange for Bitcoin. The untraceable Bitcoin system allowed people to exchange value in the form of untraceable digital cash (Bitcoin) without ever having to reveal their real identities. This website was able to operate from February 2011 to October 2013, before being shut down. When shut down law enforcement was able to seize 170,000 Bitcoins (which would have a value of more than $2,550,000,000.00 at the peak December 2017 prices).

Governments could use to try to address these problems is by strictly regulating Bitcoin exchanges, making it difficult for a person to turn large amounts of local currency into Bitcoin, or to buy large amounts of Bitcoin with local currency.

Existing, and potentially new, anti money-laundering laws could also be applied businesses and to Bitcoin transactions. These could include “know your customer” requirements, and mandatory reporting requirements that require businesses to identify and authenticate their customers, and to report transactions over a certain monetary threshold.

Another, more draconian, method to address these problems is the outright banning of the use of Bitcoins by businesses.

It is impossible to predict what steps countries in Africa will take in the future to regulate Bitcoin and other crypto currencies. Each country will no doubt adopt the approach that they think best given the particular countries unique economic and cultural circumstances.

What is important, however, is to understand to what extent existing laws in each market could extend to Bitcoin transactions, and properly adapt to any new laws that are adopted in the future.


This work by Clinton Pavlovic is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
The unedited featured photograph by Fabian Blank was published under a Creative Commons Zero Licence.

December Comic Pull List

In the year since my last comic book pull list, I haven’t added any new ongoing comic book titles because I have a lot of unread comic books that I’ve bought but haven’t got around to reading.

Right now I am buying these ongoing titles on a monthly basis:


This work by Clinton Pavlovic is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
The unedited featured photograph by Mitch Rosen was published under a Creative Commons Zero Licence.

Reduced Profits is not Expropriation

The South African Constitutional Court has held that property owner doesn’t have a legal right to value property using a particular method, or to get a specific value when selling the property. In South African Diamond Producers Organisation v Minister of Minerals and Energy the court found that a change to the way a market is regulated isn’t unlawful deprivation of property by the state, and isn’t unconstitutional.

The court was asked to consider the changes to the market practice commonly used by diamond producers when selling diamonds, which is regulated in terms of the Diamonds Act (No 56 of 1986). Previously, diamond producers could use so-called “tender houses”, where non-licenced foreign experts, representing foreign buyers, would assist licenced purchasers with their purchase of parcels of unpolished diamonds.

The Diamond Act was amended to prohibit unlicensed experts from assisting licenced purchasers, effectively outlawing the common business practice used in tender houses. Two constitutional questions were raised against the legal amendments. First, does the prohibition of the market practice result in an unlawful deprivation of property? Secondly, does the prohibition of the market practice infringe on a person’s right to choose a trade?

The court held that the amendments to the Diamonds Act were constitutional; confirming government’s right to regulate markets and change regulations, even when changes decrease the market value that could be realised when selling goods.

*****

On the first constitutional question – unlawful deprivation of property – the South African Diamond Producers Organisation (SADPO) argued that outlawing of the tender house practice deprived diamond producers of the right to receive full market value for their property when selling diamonds because they could now only market to local licence holders. They argued that a key part of the markets price-forming mechanism was being prohibited, leading to a 30% reduction in the market value that diamond producers could realise. This, they argued, was an interference with the right to alienate property at the highest possible price.

The test the Constitutional Court applies a three stage test to determine if there has been an unconstitutional deprivation of property by the state, (i) is the thing being considered “property”; (ii) is there a “deprivation” of that property; and (iii) is the deprivation arbitrary. If all three questions are answered affirmatively, then the deprivation of the property by the state is unlawful.

The Constitutional Court has held in previous cases that property doesn’t need to be physically taken in order for there to be deprivation. To be classified as a deprivation of property there must, however, be some form of substantial interference going beyond normal restrictions that an open and democratic society would place on property.

The court recognised that a diamond producer has a clear constitutional property right in the physical diamonds themselves, but it was not convinced that these property rights were deprived by merely changing the regulations governing the methods that may be used to sell the property.

The producers still had a right to sell their property, albeit now using different methods. Even if a 30% loss in market value could be proved, this isn’t depravation of the producer’s property rights because they could still sell their diamonds and receive full market value. The only effect was in the methods that could be used to sell the diamonds and the market conditions that determine the highest price – the right to sell was not impacted by the legal amendments.

The court held that markets are inherently regulated, and that an owner of property doesn’t have a legal right to value his goods using a particular method, or to obtain a specific value for his goods – there is no protectable interest to conduct a sale using a particular practice.

On the first constitutional question, the court accordingly held that there was no deprivation of property by the state through the amendments to the Diamonds Act that outlawed the business practice used in tender houses.

*****

On the second constitutional question – the infringement of the right to trade – SADPO alleged that that outlawing the tender house practice infringed its members right to conduct their business as they deemed fit, breaching their freedom of trade, and their right to conduct an occupation or profession.

The court held that this constitutional right had two distinct elements.

The first element was if the right to choose a trade, occupation or profession was limited. The court held that the amendments didn’t place any hard legal barrier to choosing a trade. It also considered if the amendments placed an effective limit on the trade by effectively barring the entry to the trade by making the practice of the trade so undesirable or unprofitable. The court held that there was no effective limit either – the producer was still able to get assistance through either a licenced person outside of a diamond exchange and export centre (DEEC), or by an unlicensed person at a DEEC.

The second element was if the regulation of the trade was rational and related to a legitimate governmental purpose. The test for rationality is important; it is not a test of whether the regulation reasonable or effective, or whether the objectives can be achieved in better ways. The court ultimately held that the amendments to the Diamonds Act were rationally connected to the promotion of local beneficiations and the monitoring of the movement of unpolished diamonds.

*****

The court rejected all suggestions that the outlawing the tender houses were unconstitutional, holding that the reduction of a producers profits resulting from a change in the regulation of a market is not unlawful deprivation of property because no property was in fact deprived, and doesn’t infringe the right to conduct a trade if the regulation has a rational purpose.


This work by Clinton Pavlovic is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
The unedited featured photograph by Wu Yi  was published under a Creative Commons Zero Licence.