The Cape Town metro said on Sunday it had declared an intergovernmental dispute with the Minister of Tourism on the application of racial criteria to the tourism industry’s financial aid applications.
Mayor Dan Plato said in a statement that the metro has exhausted all the resources available to him to make sure all small and medium businesses (SMMEs) in the city “get the relief they need.”
The metro requested a meeting with the national department in accordance with the Intergovernmental Framework Act between 26 May and 1 June.
This comes after several attempts by Plato and James Vos, mayoral committee member for economic opportunities and asset management, to approach Mmamoloko Kubayi-Ngubane, tourism minister, on the issue, according to the statement.
Plato points out that the tourism sector has come to a complete halt with the borders closed and travel curtailed to curb the Covid-19 pandemic.
In response, the national government has made emergency funds available to the industry, including R200 million from the Department of Tourism to small, micro and medium-sized tourism and hospitality businesses.
This includes a one-off grant of R50 000 to help these businesses stay afloat.
The tourism industry fund has received more than 11 000 applications, of which 5 400 have been completed.
“Due to legal action against the national department by other organizations, it remains to be confirmed whether any of the money has already been made available.”
The Tourism Relief Fund website indicates that it is led by the Black Economic Empowerment (BEE) Code of Good Practices approved by the Minister of Trade and Industry in 2015 and administered by the Fund in line with the objectives of economic transformation, the statement.
“This means that SMMEs in the tourism sector are not going to qualify for funding that they need to keep their businesses running, only on the basis of whether they comply with BEE,” says Plato. “We are in crisis and now is not the time to apply ineffective transformational goals to relief that all business owners and their employees need.”
According to the metro council, Vos and Plato in March and April
letters to Kubayi-Ngubane and Pres. Cyril Ramahosa addressed the criteria for emergency funds and meetings requested.
Among other things, Vos wrote to the minister on March 25 asking for clarity after it became known that at least 70% of beneficiaries would be black-owned enterprises.
Then, on April 3, he requested that she expand the criteria for assistance and make it easier for the industry to apply.
According to Vos, on April 3, Kubayi-Ngubane “categorically” confirmed that the race criteria will remain unchanged.
He then wrote to Ramaphosa asking that the criteria for the tourism industry be broadened.
Plato also wrote to Kubayi-Ngubane on April 24 requesting a meeting to negotiate that all small and medium businesses be allowed to qualify.
According to the metro council, he has not yet received a response to the two letters mentioned above.
AfriForum and Solidarity meanwhile applied for leave to appeal in the Pretoria High Court on Thursday in their respective cases against the Department of Tourism on this issue.
The court had earlier ruled in favor of the department that it was fair to grant Covid-19 emergency funds to businesses based on compliance with BEE requirements.
Thereafter, the two groups applied for leave to appeal to the Court of Appeal after the Constitutional Court earlier dismissed their appeal directly to him.
On May 15, Kubayi-Ngubane welcomed a statement that the Constitutional Court Solidarity and AfriForum rejected applications for the use of BEE requirements.
“Last week, the Department for AfriForum and Solidarity prevailed in the Supreme Court, which reaffirmed the unequal playing field between white and black-owned companies, created by the country’s historical imbalances and confirmed that the criteria did meet the law.”
According to Kubayi-Ngubane, the Supreme Court agreed with the department that the economic impact of the Covid-19 pandemic would lead to the closure of black businesses and “hamper and restore transformation”.
“We have always maintained that the design of our programs was guided by the principles of fairness, equality and justice. It is therefore inconceivable that this program discriminates on the basis of race. “