The Codification of Xenophobia: South Africa Seeks To Ban Foreign Nationals From Doing Business in Townships

The South African government is calling for public comment on the draft Gauteng Township Economic Development Bill (Bill). The Bill proposes to ban foreign nationals who do not have permanent residency status from operating certain businesses, which are yet to be decided, in townships. If the Bill is adopted, foreign nationals who contravene the legislation could face up to six months in jail. 

THE BILL AND XENOPHOBIA

The Bill has emerged against a backdrop of xenophobic attacks, where foreign nationals are often accused of taking jobs from South African citizens by accepting underpaying jobs and setting up spaza shops in townships.[1] The government has since denied that the Bill constitutes protectionism; however, last year Justice and Correctional Services Minister, Ronald Lamola, disclosed that the government was in the process of developing strict legislation to block foreign nationals from operating in certain sectors of the economy. Civil society organisations have stated that the Bill will stoke xenophobic violence, as it reinforces the notion that foreign nationals are taking jobs from South Africans, and that they are the reason why most Black South Africans are economically excluded in the country.

Xenophobia has been a thorny issue in South Africa since the dawn of democracy in 1994. A report by the United Nations Refugee Agency states that one of the triggers for xenophobic violence in South Africa includes “leadership vacuums and competition for community leadership that allow for the emergence of parallel and self-serving leadership structures.” This means that authority figures are often instigators of, or complicit in, violence against foreigners, or are judged ineffective in protecting foreigners. Spaza shops owned by foreign nationals in townships have often been looted and set on fire during xenophobic attacks. Latest available data shows that last year, at least 70 foreigners were either threatened, attacked or murdered in South Africa. In May 2008, a series of xenophobic attacks left 60 people dead

South African politicians have also fanned the flames of xenophobia. In 2015, former Minister of Small Business Development, Lindiwe Zulu, said that foreign business owners could not expect to co-exist peacefully with local business owners unless they shared their trade secrets. In 2017, South Africa’s Deputy Police Minister claimed that the city of Johannesburg was taken over by foreigners, with 80 per cent of the city controlled by them. Former Minister of Home Affairs, Hlengiwe Mkhize, also indicated that the country must tighten its immigration policies, stating that poor and unskilled immigrants will be prevented from coming to and staying in South Africa by any means, “even if this is labelled anti-African behaviour”. 

Alana Potter, director of research and advocacy at the Socio-Economic Rights Institute of South Africa stated that “the bill feeds into an incendiary rhetoric that foreigners prevent nationals from accessing economic opportunities. The opposite is in fact true.” Abudallahi Ali Hassan, who holds a master’s degree in urban studies from the University of Cape Town, stated that spaza shops actually invest in the economy and do not take away jobs from South Africans.

THE CONSTITUTIONALITY OF THE BILL

Section 155(6)(a) of the South African Constitution empowers provincial governments to ensure effective performance of municipalities with regard to by-laws, municipal services, and other functions. Gauteng premier, David Makhura, has said that the bill falls within the legislative competency of the province as provided by the Constitution, and that the bill would be within the confines of the Constitution. However, University of the Western Cape law lecturer, Yvette Basson, said the Bill may be considered “unfair discrimination on the basis of nationality” when considering section 9 of the Bill of Rights. 

In the case of Larbi-Odam and others v MEC for Education (North-West Province) and Another, the Constitutional Court ruled that Regulation 2(2) (issued under the Educators’ Employment Act 138 of 1994) - which provided that, subject to certain exceptions, only South African citizens may be appointed to permanent teaching posts in state schools - was invalid on the grounds that it constituted unfair discrimination inconsistent with section 8(2) of the interim Constitution.[2] The Court went on to state that distinctions on the basis of citizenship could be discriminatory, but such discrimination needs to be unfair without any justification in terms of section 33(1) of the interim Constitution to be considered unconstitutional.

Although the Larbi-Odam case was decided in terms of the interim Constitution, the same principles could be applied to the Bill, given that the relevant sections of the Constitution have not been fundamentally altered. The term “nationality” or “citizenship” are not specifically used in the Constitution (nor were they used under the interim Constitution), however, the grounds listed in section 9 are not exhaustive, and the concept is captured broadly under the prohibition of discrimination on the grounds of social origin, ethnicity, or birth. The Bill can be said to discriminate against people on the ground of nationality, as it precludes persons who are not citizens or permanent residents from operating certain businesses in designated areas in a manner which may “have the potential to impair the fundamental human dignity of persons as human beings or to affect them adversely in a comparably serious manner.”

In the Larbi-Odam case, the court held that to determine whether the discrimination is unfair, we must look at “the impact of the discrimination on those affected, which in turn requires a consideration of the nature of the group affected, the nature of the power exercised, and the nature of the interests involved.” The court stated the nature of the group affected was a vulnerable group, the nature of the power exercised was general power, and the nature of the interests involved (being employment) was vital. This reasoning is applicable in relation to the Bill. The nature of the group which will be affected is a vulnerable group, as is evidenced by frequent xenophobic attacks, among other things. The nature of the power exercised is general power derived from the Constitution to ensure effective performance of municipalities. The nature of the interests involved here are equally vital, as they relate to the livelihood of foreign nationals. 

It is therefore clear that the Bill unfairly discriminates against foreign nationals. The final inquiry is whether the unfair discrimination is nonetheless justified under section 36 of the Constitution. Section 36 provides that: “the rights in the Bill of Rights may be limited only in terms of law of general application to the extent that the limitation is reasonable and justifiable in an open and democratic society based on human dignity, equality and freedom…”. A court is compelled to consider all relevant factors in determining the constitutionality of the limitation, including “the nature of the right that is limited and its importance to an open and democratic society based on freedom and equality; the purpose for which the right is limited and the importance of that purpose to such a society; the extent of the limitation, its efficacy and, particularly where the limitation has to be necessary, whether the desired ends could reasonably be achieved through other means less damaging to the right in question.”

The right to equal protection and benefit of the law, as enshrined in section 9 of the Constitution, has been limited and the state is purporting to unfairly discriminate against persons on the grounds of nationality. The right to equality is a cornerstone of any open and democratic society. Given its import, any limitation thereof would need to have a solid justification. The alleged rationale for the limitation is to promote the operation of South African businesses in townships. Although fostering the economic participation of Black South Africans is a laudable goal, the Bill is not an effective means to achieve this end - as abovementioned, foreign nationals are not the reason why most Black South Africans are economically excluded. It is also doubtful that there are no other, less damaging, means available to the provincial government to achieve the Bill’s stated aims. Thus, the Bill is unlikely to pass constitutional muster, as it impairs foreign nationals’ fundamental human dignity without reasonable justification. 

Under international law, discrimination on the basis of nationality is proscribed. Article 5 of the Convention on the Elimination of All Forms of Racial Discrimination requires states to “prohibit and to eliminate racial discrimination in all its forms and to guarantee the right of everyone, without distinction as to national or ethnic origin…” . In the United States, the Civil Rights Act of 1964 makes it illegal to discriminate on the basis of national origin. Under European Union law, the Treaty on the Functioning of the European Union prohibits discrimination on the grounds of nationality.

SIMILAR LAWS

This type of legislative action is not unique to South Africa. Cambodia also banned foreigners from running ten types of small businesses. In a directive issued in August 2019, Minister of Labour and Vocational Training, Ith Samheng, stated that self-employed foreigners are banned from being taxi drivers, barbers, street vendors, massage therapists at public places, tailors, and car repairmen, among other things. However, the directive was later reversed. Similarly in Malaysia, the supposed “flood” of foreign migrants participating in small and medium-sized enterprises resulted in authorities strongly enforcing existing by-laws to prevent foreigners from setting up shops in Kuala Lumpur.

The Ghanaian government also enacted a law which banned foreign nationals from operating in the retail industry. This has since caused tensions with Nigerian nationals who are operating shops in the country. Throughout 2019, shops owned by Nigerians and other foreign nationals were forcibly closed by the Ghana Union for Trade Associations (GUTA).

Like South Africa, Nigeria introduced an executive order in 2018 which prohibits the Ministry of Interior from giving visas to foreign workers whose skills are readily available in Nigeria. The order directed ministries, departments, and agencies to engage indigenous professionals in the planning, design, and execution of national security projects, and to only engage foreign nationals where it is certified by the appropriate authority that such expertise is not available in Nigeria.

Although the Bill seeks to discriminate based on nationality - and by its very nature, it reinforces xenophobic sentiments in South Africa - such legislation is not unique to South Africa. There are numerous examples of employment laws around the world that curtail the rights of foreigners, and many of these laws have been enacted recently. In an increasingly globalised and interconnected world, these laws must be scrutinised and opposed where appropriate. 

ENDNOTES

[1] A spaza shop, also known as a tuck shop, is an informal convenience shop in South Africa, usually run from home. The International Encyclopedia of the Social Sciences (2nd ed) states that a township “…is the land formally allocated to hosting the site of a town; the word township legally refers to both residential and industrial sites. Possibly the most famous townships are in South Africa and were a creation of the apartheid system and its predecessor regimes of white rule.” 

[2] Larbi-Odam and others v MEC for Education (North-West Province) and Another 1998 (1) SA 745 (26 November 1997).

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Nigel has an LLB in International Law from Near East University (Cyprus). Currently, he is a member of an NGO called VOIS Cyprus which advocates for the rights of international students in Cyprus.

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