Insights and Analysis | November 2014

Refugees and spaza shops

On 26 September, the Supreme Court of Appeal handed down judgment in favour of asylum seekers and refugees lawfully present in South Africa, allowing them to be self-employed with the consequential right to trade and earn a living in the informal sector. The decision comes from an appeal of the North Gauteng High Court, which initially held that refugees and asylums seekers, although legally present in South Africa, did not have the right to trade while awaiting permanent residence.

The problem started when the South African Police Services (SAPS) embarked on "Operation Hardstick" to shut down businesses in Limpopo that were operating without the requisite permits. A total of 600 businesses were closed down. Goods and equipment were confiscated and traders and their employees were arrested. The traders were advised by the SAPS that a permit must be in the traders name to be valid, that foreigners were not allowed to operate businesses in South Africa, and that the permits held by refugees and asylum seekers did not entitle them to operate a business in South Africa and, finally, that foreigners should leave the municipality.

In papers before the North Gauteng High Court, the Somali Association of South Africa and the Ethiopian Community of South Africa asserted that they have the right to equal treatment, that they are permitted to apply for and be granted trading licences, that they are entitled to the constitutional right to dignity and that the result of preventing them from earning a living would leave them destitute and is, therefore, tantamount to depriving them of the right to dignity.

The respondents contended that refugees and asylum seekers do not have the same rights as South African citizens, that a differentiation based on their status is allowed by the Constitution, and that the right to self-employment is reserved for South African citizens.

Both courts considered section 22 of the Constitution, which provides that "Every citizen has the right to choose their trade, occupation or profession freely. The practice of a trade, occupation or profession may be regulated by law". They further considered section 10 of the Constitution, which states that "Everyone has inherent dignity and have the right to have their dignity respected and protected".

The High Court reasoned that section 22 dealt specifically with the right to trade, and that limiting the right to trade to citizens has not only been internationally recognised, but has also been previously confirmed by the High Court and the Constitutional Court. Furthermore, the High Court was not willing to extend the principle that "refugees have the right to employment when their dignity is affected" to self-employment.

The Supreme Court of Appeal, however, criticised the High Court decision by stating that there is no blanket prohibition against asylum seekers and refugees seeking employment, as there is no restrictive legislation in force that prohibits them from being granted licences. Where a person has no other means to support him or herself the right to dignity is relevant. If an asylum seeker or refugee is unable to attain wage-earning employment, and is on the verge of starvation, which results in humiliation and degradation and can only sustain him or herself by trading, they ought to be able to rely on the right to dignity so as to advance the granting of a licence to trade.

Acting Deputy Judge President Navsa in the SCA judgement went on to say that it is the "very antithesis of the very enlightened rights culture proclaimed by our Constitution for us to resort to section 22 of that very Constitution to condemn the appellants to a life of humiliation and degradation. That I do not believe our Constitution ought to countenance".

In their adjudication, the SCA judges had regard to the Refugees Act as well as the United Nations Convention Relating to the Status of Refugees. Reference was made to section 27(f) of the Act, which categorically states that every refugee has the right to seek employment. While the High Court had limited this right to formal or informal employment and had not been prepared to extend it to self-employment, the SCA was critical of the High Court's interpretation of section 27, by stating that its attitude reflects an unjustifiably narrow approach to the Constitution and diminishes the status of asylum seekers and refugees.

The SCA further made reference to section 3 of the Act, which deals with the definition and status of a refugee. It is important to note that this section draws on the definition of "refugee" in terms of the Convention. In line with the Act and the Convention, the SCA held that "…the condition of being a refugee has thus been described as implying a special vulnerability, since refugees are by definition persons in flight from the threat of serious human rights abuse". The SCA even went as far to say that "In South Africa, the reception afforded to refugees has particular significance in the light of our history…During the liberation struggle many of those who now find themselves among our country’s leaders were refugees themselves, forced to seek protection from neighbouring States and abroad".

Article 18 of the Convention obliges contracting states to accord lawfully present refugees in their territory the right to engage in self-employment. It is important that our law is consistent with the UN Conventions and international rules and practices. Furthermore, South Africa is a contracting state to the Convention and is thus obliged to comply with Article 18. It is evident that the SCA's judgement in Somali Association of South Africa & Others v Limpopo Department of Economic Development Environment and Tourism & Others does comply with Article 18 of the Convention and brings it in line with our Constitution as well as with international law.

The spaza shop industry plays a major role in our economy, contributing approximately ZAR70 billion per annum. Of this, 50% of shop owners are foreigners. While a regulatory framework is still necessary in the industry, the SCA judgement clarifies the legal position of foreigners who wish to trade in this sector.