Business organisation Sakeliga has written to President Cyril Ramaphosa, requesting his urgent assistance to allow SMME’s to continue delivering essential goods and services.
Sakeliga’s letter to the President follows unanswered urgent letters to the Department of Trade, Industry and Competition (DTIC). In its letters to the DTIC, Sakeliga requested the urgent revocation of the DTIC’s unlawful and impossible instruction that all business wishing to provide essential goods and services should obtain a certificate from the CIPC.
“An unhelpful, unnecessary and ultra vires instruction by the DTIC is currently preventing thousands of micro, small, and medium-sized businesses from providing essential goods and services to the public. Across the country, law-enforcement officers are shutting down businesses that provide essential services, and threatening proprietors and staff – all because they are under the mistaken impression that businesses require CIPC certification before continuing essential operations” says Piet le Roux, CEO of Sakeliga.
Goodwill and widespread impact
Most businesses in South Africa operate as sole proprietors, family businesses, partnerships or even trusts and therefore have no CIPC registration number. The CIPC system only recognises entities registered in terms of either the Companies Act or the Close Corporations Act. Without a CIPC registration number it is impossible to apply for the Department of Trade, Industry and Competition’s essential service certificate.
“The CIPC requirement threatens the ability of SMMEs to do their part in providing essential goods and services and unnecessarily undermines the goodwill of businesses and the public toward the President’s measures,” says Le Roux.
“Both formal and informal businesses, and all their clients and customers are affected. They are spread across townships, suburbs, rural areas, and city centres. They draw from all race groups and communities in South Africa. The matter is critical because this obstruction to the provision of essential goods and services is causing fast-escalating harm to public health, social stability and the very prospect of eventual economic recovery,” says Le Roux.
Clear health risks
“Shutting down SMMEs also come with clear health risks. It forces young and old, healthy and ill, to risk contamination by queuing at and converging in large numbers on the relatively small number of shops tied to big retail chains,” Le Roux points out.
Advice by senior counsel
Senior counsel has advised Sakeliga that the DTIC’s requirement of CIPC certification is ultra vires and in conflict with the regulations promulgated by the Minister of Co-operative Governance and Traditional Affairs. Senior counsel has further advised Sakeliga that the DTIC’s instructions are susceptible to urgent review in a court of law. Sakeliga’s letter to the President, as well as those to the relevant Ministers (see links at end) details the problems with the regulations.
A spirit of co-operation
“Sakeliga’s letter to the President is written in a spirit of co-operation to solve an acute and escalating problem that threatens the provision of essential goods and services across South Africa. It is a matter that can be quickly resolved, thereby also avoiding possible urgent legal proceedings and/or damages claims by SMMEs against the state once the State of Disaster is lifted,” says Le Roux.
Click here for Sakeliga’s letter to the President
Click here for Sakeliga’s letter to Minister Ebrahim Patel, dated 31 March 2020
Click here for Sakeliga’s letter to Dr Nkosazana Dlamini-Zuma, dated 31 March 2020