Comprehensive Overview of the Standard Draft By-Law for Township Economies

Introduction

In light of the food safety incidents that have affected South African townships and results in young children losing their lives, on 7 November 2024, Mr Velenkosini Hlabisa, the Minister for Cooperative Governance and Traditional Affairs, published the Standard Draft By-Law for Township Economies in the Government Gazette. This by-law represents a significant step towards fostering economic growth in South African townships, which have historically faced challenges such as poverty and unemployment. The by-law aims to create a framework that supports both formal and informal business activities while ensuring compliance with relevant regulations.

Summary of the Draft By-Law

Objectives The by-law has several key objectives:

1. Facilitate Inclusive Economic Development: To promote social and economic growth within townships.
2. Harmonise Business Operations: To establish norms and standards for managing township enterprises.
3. Raise Awareness: To educate township businesses about applicable laws and regulations.
4. Support Small Businesses: To encourage small enterprises to engage in mainstream economic activities.

Key Provisions

• Freedom to Engage in Business Activities: Individuals with a valid business licence can operate within municipal jurisdictions. Municipalities may set quotas for foreign ownership in specific business categories.
• Designated Business Areas: Municipalities are required to promote commercial activities and designate specific areas for business operations, subject to public consultation.
• Issuing of Permits: Municipalities must issue permits unless the applicant fails to comply with the by-law or if the business activities are illegal. They must ensure that applicants are effectively in control of their businesses.
• Proactive Municipal Steps: Municipalities are tasked with building the capacity of entrepreneurs through training and support, facilitating access to markets and infrastructure.
• Registration and Compliance: Municipal managers will handle the registration and permitting processes and maintain a database of registered businesses.
• Permit Transferability: Permits can be transferred under specific conditions, such as the death or temporary incapacity of the permit holder.
• Prohibitions and Restrictions: Business activities are restricted in certain areas without prior approval. Businesses must maintain hygiene standards and ensure proper waste disposal.
• Offences and Penalties: Non-compliance can lead to warnings, fines, or the revocation of business licences, with different penalties based on the nature of the transgression.
• Appeals Process: Individuals can appeal municipal decisions within 21 days.
• Enforcement: Authorised officials will monitor compliance, and municipalities may impound illegal goods or equipment.

Concerns Regarding Enforcement

While the by-law presents a framework aimed at revitalising township economies, and hopefully prevent the crisis of food poisoning and food safety related incidents, several concerns arise regarding its enforcement:

Holistic Approach There is concern about the government's knee-jerk reactions to food safety issues, despite their clear intentions to act. While it is essential for the government to respond, these actions must be part of a holistic approach that considers existing regulations, such as Regulation R638 of 2018, which relates to hygiene requirements for food premises, transport, and related matters. We must avoid reactively creating multiple pieces of legislation; any new regulations should be well thought out and comprehensive.

Thorough stakeholder engagement is crucial, involving industry representatives, food safety specialists, regulators, and other government departments responsible for overseeing businesses, particularly in the food sector. It is imperative that this new legislation aligns with current regulations and does not create additional bureaucratic burdens for businesses. A coordinated and thoughtful approach will ensure that the bill is practical and manageable for all stakeholders.

Shortage of Environmental Health Practitioners (EHPs) South Africa is currently facing a dire shortage of Environmental Health Practitioners. EHPs are crucial in ensuring compliance with health and safety regulations, particularly in food-related businesses. The lack of sufficient EHPs may hinder effective monitoring and enforcement of the hygiene and waste removal provisions outlined in the by-law.

Dysfunction of Municipalities Many South African municipalities are characterised by dysfunction, inadequate infrastructure, poor service delivery, and corruption. This dysfunction raises questions about their ability to implement and enforce the new by-law effectively. Without a functional municipal system, the objectives of promoting township economies may not be realised.

Lack of Skills

There is a notable lack of skills among municipal officials. Effective enforcement of the by-law requires trained personnel who understand the complexities of food safety regulations and compliance requirements. The current skills gap may lead to inconsistent enforcement and oversight.

Potential Loopholes for Abuse

While the by-law is comprehensive, it may still contain loopholes that could be exploited. For instance, the provisions concerning the transferability of permits could be manipulated, enabling individuals to bypass the law's intended purpose. Corruption, which is prevalent in South Africa, further complicates this issue. Without rigorous monitoring, businesses may continue to operate illegally or unethically, undermining the objectives of the by-law. It is essential to recognise that granting extensive powers to municipal officials in such legislation could exacerbate the risks associated with corruption.

Conclusion

The Standard Draft By-Law for Township Economies is a promising initiative to foster economic growth and inclusivity in South African townships. However, its success hinges on effective enforcement and the capacity of municipalities to implement its provisions. Addressing the shortage of EHPs, enhancing municipal functionality, bridging the skills gap, and closing potential loopholes are critical steps that must be taken to ensure the by-law achieves its intended goals. Without these measures, the aspirations for township economies may remain unfulfilled.

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