Author: Gary Moore

Date: 18 November 2016

The International Trade Administration Act, 2002[1] applies to all economic activity in the Republic or having an effect in it.[2] It provides that the Minister[3] may by notice in the Gazette prescribe that no goods of a specified class or kind, or no goods other than those of a specified class or kind, may be—

Imported; or

imported except under authority of and in accordance with conditions stated in a permit issued by the Commission;[4] or

exported; or

exported except under authority of and in accordance with conditions stated in such a permit.[5]

A person may apply to the Commission for a permit.[6]

The Constitutional Court has observed[7] that the Act clothes the Minister with far-reaching authority in relation to trade policy, including this power to prohibit imports and exports[8] (and power to issue trade policy statements or directives[9]). The Commission exercises its functions subject to all these ministerial powers.[10]

These provisions conferring on the Minister the power to prohibit imports and exports are broad and unfettered, and lay down no criteria governing the exercise of the power. The provisions arguably fall to be struck down as violating the principle of the Rule of Law. A statute should not confer discretionary powers so broad that they could lead to arbitrary exercise of power. The Rule of Law includes the right not to be subject to arbitrary discretionary powers.[11]

However, the courts might decline to strike down these provisions of the Act authorising the Minister to prohibit imports or exports:[12] In the case cited above,[13] which concerned the Act’s anti-dumping provisions,[14] the Constitutional Court favoured a deferential approach to executive powers conferred in statutes regulating the administration of international trade, and declined to intervene, finding that the setting, changing or removal of an anti-dumping duty was a policy-laden executive decision that flowed from the power to formulate and implement domestic and international trade policy.[15] While the case concerned the exercise of executive powers under the Act, similar reasoning might arguably also be applied to uphold these provisions of the Act itself conferring on the Minister the unfettered power to prohibit imports and exports.[16]

[1] International Trade Administration Act 71 of 2002.

[2] International Trade Administration Act s 3(1).

[3] The Minister responsible for Trade and Industry. International Trade Administration Act s 1(2) sv “Minister.”

[4] The International Trade Administration Commission established by the Act: s 1(2) sv “Commission” read with s 7. To hold office as a member of the Commission, a person must have suitable qualifications and experience in economics, accounting, law, commerce, agriculture, industry or public affairs: s 9(1)(b).

[5] International Trade Administration Act s 6(1)(a)–(d). For this purpose goods may be classified according to their source or origin; their intermediate or final destination; the channels along which they are transported; the manner in which they are imported or exported; the purposes for which they are intended to be used; the methods or processes by which they are produced; the use of nonrenewable natural resources in their production, and their lifecycle impact on the natural environment; or any other classification methods determined by the Minister: s 6(2)(a)–(h).

Such a ministerial notice (prohibiting the import or export of goods) applies to any person who, at the time of the import or export of the goods concerned— Owns them; carries the risk of them; takes or attempts to bring them into or takes or attempts to take those goods from the Republic; has a beneficial interest in those goods in any manner; acts on behalf of any such person; or pretends to be any of the foregoing persons: s 6(3)(a)–(f).

[6] A so-called import or export control permit. International Trade Administration Act s 26(1)(a).

A permit may prescribe: The quantity or value of goods which may be imported or exported; the price at which they may be imported or exported; the period during which the goods may be imported or exported; the port through or from which they may be imported or exported; the country or territory from or to which they may be imported or exported; the way the goods may be imported or exported; conditions relating to their possession, ownership or disposal after import or the use to which they may be put; or any other related conditions: s 27(2)(a)–(h).

[7] International Trade Administration Commission v SCAW South Africa (Pty) Ltd and Others 2010 (5) BCLR 457 (CC) para [32].

[8] International Trade Administration Act s 6(1)–(3).

[9] International Trade Administration Act s 5.

[10] International Trade Administration Act s 7(2)(a)(ii) and (iii).

[11] Discretion plays a crucial role in a legal system, in permitting abstract general rules to be applied to specific circumstances fairly. Discretionary powers may legitimately be broad in scope where factors relevant to a decision are so numerous and varied they are inappropriate or impossible to identify in advance, or where factors relevant to exercise of the discretionary power are clear, or where the decision-maker has expertise relevant to the decisions to be made. But a discretionary power must not be so broad that the authority on whom it is conferred is unable to determine its scope. For this may lead to arbitrary exercise of the power. Affordable Medicines Trust and Others v Minister of Health of RSA and Another 2005 (6) BCLR 529 (CC) paras [33], [34].

[12] International Trade Administration Act s 6(1)(a)–(d), (2)(a)–(h) and (3)(a)–(f).

[13] See fn 7 above.

[14] Read, in terms of the Act’s transitional provisions, with the repealed Board on Tariffs and Trade Act 107 of 1986. International Trade Administration Act s 26(1)(c)(i) and (2)(b) and s 63(1) and (2) read with Sched 2 item 2(2)(a) and (b) and s 32.

[15] The Constitutional Court set aside the lower court’s granting of a temporary interdict restraining the Commission from forwarding to the Minister a recommendation to terminate an existing anti-dumping duty. International Trade Administration Commission v SCAW South Africa (Pty) Ltd and Others supra, paras [4](a), [44], [102], [115](d).

[16] The Constitutional Court observed (International Trade Administration Commission v SCAW South Africa (Pty) Ltd and Others supra):

[98] The statutory discretion the Minister commands is indeed wide. Barring the predictable requirement that he must wield the power subject to the Constitution and the law, he or she may accept, or reject the recommendation or remit it to ITAC [(the International Trade Administration Commission)]. Nothing obliges the Minister to follow slavishly the reasoning and findings of ITAC. It is open to the Minister, in making a decision, to weigh in polycentric considerations such as diplomatic relationships, the country’s balance of payments, the regional or global trading conditions, goods needed to foster economic growth and so forth. Thus, the recommendation of ITAC may be important but it is not the sole predictor of what the Minister is likely to decide.

[99] … There is no indication in the judgment that the High Court had properly considered the role of executive power and policy formulation in matters of national and international trade and industry. Equally so, the judgment is silent on South Africa’s international trade obligations in relation to anti-dumping duties. …

[100] ITAC accordingly urged us to decide that the order of the High Court breaches the doctrine of separation of powers. In particular, it sought us to find that a court may not interfere with the discretionary and polycentric discretion conferred on ITAC and on both Ministers under the BTT [(Board on Tariffs and Trade)] Act. They argued that courts are not well suited to judge international trade policy and related polycentric decisions properly suited to specialist bodies such as ITAC and the executive government.

[101] That submission is well made. When a court is invited to intrude into the terrain of the executive, especially when the executive decision-making process is still uncompleted, it must do so only in the clearest of cases and only when irreparable harm is likely to ensue if interdictory relief is not granted. This is particularly true when the decision entails multiple considerations of national policy choices and specialist knowledge, in regard to which courts are ill-suited to judge. … In Bato Star [Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs and Others 2004 (4) SA 490 (2004 (7) BCLR 687) (CC) at para [48]] this Court made the point that a “court should be careful not to attribute to itself superior wisdom in relation to matters entrusted to other branches of government. A court should thus give due weight to findings of fact and policy decisions made by those with special expertise and experience in the field”.

[104] … Courts may not without justification trench upon the polycentric policy terrain of international trade and its concomitant foreign relations or diplomatic considerations reserved by the Constitution for the national executive.

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Gary Moore

Gary Moore BA LL.B. (Witwatersrand) LL.M. (UC London) is a South African lawyer and Senior Researcher at the Free Market Foundation.

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