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SAA billions and a stillborn section of the Constitution

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Martin van Staden is Head of Legal (Policy and Research) at the Free Market Foundation and a member of the Rule of Law Project’s Board of Advisors. He is the author of The Constitution and the Rule of Law: An Introduction (2019). The views expressed in this article are those of the author and not necessarily those of the Free Market Foundation.

South African Airways’ creditors, composed mostly of the country’s large commercial banks, have approved the business rescue plan that will effectively see the airline reconstituted and plugged back into the ostensible bottomless pit of taxpayer monies. We can kiss R16.3bn goodbye.

What has happened with SAA isn’t exactly what the Constitution envisages for an open and democratic South Africa, but the inanimate Constitution won’t come to our aid – it is up to South Africans themselves to demand change.

How should South Africans react when someone informs them that the Constitution requires the government to make “efficient, economic, and effective” use of resources? A sniggering laugh or a roll of the eyes would make the most sense. This is section 195(1)(b) of the Constitution, and is a prime example of stillborn law that the government has never recognised nor complied with.

Professor Koos Malan defines constitutional stillborn law as follows:

“There might be formulations of legal norms in the Constitution that have simply never been complied with. […] On paper there is a formulation but an actual legal norm has never been established. It (the legal norm) was simply stillborn – stillborn law.”

To be sure, section 195(1)(b) is not the only example of stillborn law in the Constitution, but in the context of South African Airways (SAA) being kept operational in one form or another, it is the most relevant example. The government will endlessly flaunt sections 9 and 36 of the Constitution – which (supposedly) give the government a free hand to pursue “empowerment policy”, reckless spending, and limit constitutional rights at will – but will and does ignore other inconvenient provisions.

Section 1(c) of the Constitution, part of the crucial founding provisions that provide the value basis of our constitutional structure, states that in South Africa, the Constitution and the Rule of Law are supreme. The Rule of Law, a much-touted but misunderstood legal doctrine, is a set of principles that are supposed to hinder the government from acting whimsically or arbitrarily. Stated otherwise, the Rule of Law is meant to ensure reasonable and fair governance that is informed by lucid thinking and evidence. No doubt the various provisions of section 195 were meant to bolster this commitment to the Rule of Law.

As of mid-April 2020, SAA has accumulated more than R26-billion in losses since 2014, becoming entirely dependent on government guarantees and bailouts. The airline’s last formal tabling of its financial statements and audit report to the National Assembly was in 2017, according to economist Jacques Jonker. The government has often feigned the courage to say “no” to further bailouts, but this commitment has always amounted to empty words. In fact, the government even defended SAA not making its finances public, out of fear that the airline would be liquidated. So much for the right to access to information in section 32 of the Constitution as well, huh?

The story of SAA makes a mockery of the requirement that the government must promote the “efficient, economic, and effective” use of resources, and makes a mockery of the Rule of Law as a barrier to arbitrariness.

I have observed in the past that the continued pouring of money into embattled state-owned enterprises like SAA is probably unconstitutional, and if we are dealing with the text of the Constitution, I stand by that. However, as Malan would argue, in actuality we appear to be living under a different constitution from the one we have all read and admire. The legal norms that often vest in South Africa are not the legal norms found in the constitutional text.

In the case of section 195(1)(b), it is exceedingly likely that if bailouts and wasting of resources on SAA is challenged in court, the court would “defer” to the government and argue that the judiciary cannot become involved in what is a legislative or executive function (that is, allocating resources). This makes of section 195(1)(b) dead-letter law; meaningless puffery that might as well have been omitted from the constitutional text. But this is not to say we shouldn’t launch a section 195(1)(b) challenge – we absolutely should, and give the courts an opportunity to get it right.

But more than that, corporate and individual South Africans ought to stop grovelling at the feet of the government for favours and assistance, as that all adds up to a reckless and irresponsible institution that feels entitled to the scarce resources we all labour for every day.

With the economic ruin caused by the Covid-19 lockdown, this is all the more urgent. As a start, we can insist on bringing an end to the idea of a state-owned airline in South Africa. It is unnecessary, unaffordable, probably unconstitutional, and increasingly unpatriotic. BM/DM

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