Brief Summary

Asylum Seekers and Refugees — Right to Self-Employment — Refugees and asylum seekers in South Africa entitled to apply for business licenses — No blanket prohibition against self-employment under the Constitution or applicable legislation — Right to dignity implicated in preventing self-employment. The Somali Association of South Africa and Ethiopian Community of South Africa, representing refugees and asylum seekers, challenged the legality of actions taken by various government respondents that effectively barred them from operating businesses, particularly spaza and tuck-shops, in Limpopo. The appellants argued that such prohibitions violated their constitutional rights, including the right to dignity. The court held that asylum seekers and refugees are entitled to apply for new and renewed business licenses and that the closure of their businesses under valid permits is unlawful. The appeal was upheld, and the previous court's order was set aside, affirming the rights of refugees and asylum seekers to self-employment.

Comprehensive Summary

Summary of Judgment

1. Introduction

This matter concerned an appeal to the Supreme Court of Appeal against the dismissal of an application for final declaratory relief. The litigation arose from police and municipal enforcement actions in Limpopo Province directed at small retail businesses (commonly described as spaza shops or tuck-shops) operated by refugees and asylum seekers.

The appellants were the Somali Association of South Africa and the Ethiopian Community of South Africa (both registered non-profit organisations), together with four individuals of Somali or Ethiopian nationality who were lawfully present in South Africa on different bases, including asylum seeker permits (s 22 of the Refugees Act 130 of 1998), formal refugee status (s 24(3)(a) of the Refugees Act 130 of 1998), and permanent residence under the Immigration Act 13 of 2002. The respondents included the Limpopo Department of Economic Development, Environment and Tourism (LEDET), the Minister of Police, the Minister of Home Affairs, the MEC for Safety, Security and Liaison (Limpopo), the National Commissioner of Police, the Provincial Commissioner of Police (Limpopo), the Standing Committee for Refugee Affairs, and certain municipalities (some of whom did not participate).

In the North Gauteng High Court, Pretoria (Ranchod J), the applicants initially sought interim relief but, by agreement with the opposing respondents, ultimately proceeded for final declarations concerning (i) entitlement of asylum seekers and refugees to apply for and renew trading licences and municipal consents, (ii) invalidity of “Operation Hardstick”, (iii) unlawfulness of closures of licensed businesses, and (iv) unlawfulness of confiscations during closures. The High Court dismissed the application and ordered each party to pay its own costs. The appeal to the SCA concerned, in substance, whether refugees and asylum seekers enjoy legal entitlement to pursue self-employment through trading and to be considered for the relevant licences and consents, and whether the closure of businesses operating under valid permits was lawful.

The general subject matter of the dispute was the intersection between refugee/asylum seeker status and the ability to earn a livelihood, including the respondents’ reliance on s 22 of the Constitution (freedom of trade, occupation and profession reserved to citizens) and the appellants’ reliance on dignity and statutory/international protections relating to refugees.

2. Material Facts

A central factual backdrop was the South African Police Service’s enforcement campaign described as “Operation Hardstick”, undertaken in Limpopo to shut down businesses said to be operating without the requisite business permits. It was alleged and not disputed that the SAPS conducted the operation with the stated aim of closing non-compliant businesses and that a substantial number of traders’ businesses were closed (the High Court recorded that at least 600 businesses had been closed). It was also recorded that SAPS confiscated stock and equipment, and arrested traders and employees.

The appellants’ case, accepted by the SCA as materially uncontested in several respects, was that refugees and asylum seekers often face barriers to formal employment (including language difficulties, limited skills attributable to circumstances in their countries of origin, competition for jobs, and xenophobic prejudice). As a result, many pursue self-employment, including operating spaza/tuck-shops that provide local access to basic goods and support traders and their families. The SCA noted that assertions of xenophobic hostility and threats were uncontested.

A key strand of the factual narrative concerned attempts by Somali and Ethiopian traders (asylum seekers and refugees) to regularise their trading status in Musina by obtaining municipal/business permissions. During June and July 2012 they were informed by municipal officials and SAPS members that a municipal permit was required and that enforcement would commence immediately. However, when they attempted to apply, they were not given application forms for written consent required under the Musina Land Use Management Scheme of 2010. The appellants further described being repeatedly told that, because they were not South African citizens, they did not qualify for what were referred to as LEDET permits. The SCA treated the repeated refusals to entertain applications on the basis of foreign status as part of the court’s factual platform, noting that specific allegations were largely met with bare denials rather than engagement.

The appellants described a “catch-22” situation. In some instances officials suggested that landlords apply for permits on behalf of foreign trader lessees. After landlords obtained permits, SAPS allegedly closed businesses on the basis that the permit had to be in the trader’s own name. When traders attempted again to apply in their own names, officials allegedly refused to entertain applications from foreign nationals. The SCA recorded that some traders obtained temporary permits in their own names yet, on the appellants’ version, businesses were still closed notwithstanding those permits; the respondents did not substantively counter the specific allegations beyond general denials.

The record also contained uncontested minutes reflecting an attitude attributed to the Department of Home Affairs to the effect that persons with temporary asylum permits were not allowed to run a business and that asylum seekers were in South Africa to study or work, not to engage in business activities, whereas refugees were allowed to operate and run a business.

In the High Court, LEDET’s answering affidavit stated that it had previously considered applications by asylum seekers (whose permits were valid and without restriction) and continued to do so, granting licences in deserving cases. The High Court relied on this to find it was not satisfied that LEDET denied the right to apply. The SCA, however, regarded it as disconcerting that LEDET expressed willingness to consider applications while opposing declaratory relief, and that LEDET did not participate on appeal.

While the appellants also alleged serious police misconduct (including extortion and confiscation), and detailed destitution and deprivation of food and income, the SCA ultimately did not grant relief directed at the return of confiscated goods, noting practical obstacles such as the absence of inventories and the mootness of interdictory relief relating to “Operation Hardstick”, which was no longer in place.

3. Legal Issues

The central questions were legal and concerned the interpretation and application of constitutional, statutory, and international-law-aligned provisions to the factual position of refugees and asylum seekers seeking to trade. The dispute was predominantly one of law and the application of law to largely uncontested facts, with an important evaluative component concerning the constitutional implications for human dignity.

The principal legal issues included whether, in South African law, asylum seekers and refugees lawfully present in South Africa are entitled to seek self-employment through trading, and specifically whether they are entitled to apply for and renew licences and consents under the Lebowa Business and Trading Undertakings Act 6 of 1977, the Businesses Act 71 of 1991, and the Musina Land Use Management Scheme of 2010.

A further issue was whether the respondents’ position—that s 22 of the Constitution reserves the right to trade to citizens and thereby creates a blanket prohibition on self-employment by asylum seekers and refugees—was correct, and whether s 27(f) of the Refugees Act 130 of 1998 (refugees’ entitlement to “seek employment”) should be interpreted as limiting refugees to wage-earning employment only.

The court also had to consider whether the relevant licensing legislation implicitly excluded foreign nationals by requiring identity numbers, and whether the closure of businesses operated under valid permits was lawful.

4. Court’s Reasoning

The SCA approached the matter through the lens that, under the Constitution, foreigners within South Africa are generally entitled to fundamental rights in the Bill of Rights, except those expressly reserved for citizens. It treated the respondents’ reliance on s 22 of the Constitution and on Union of Refugee Women v Director: Private Security Industry Regulatory Authority as resting on an unjustifiably narrow view of both constitutional structure and precedent.

In analysing Union of Refugee Women v Director: Private Security Industry Regulatory Authority 2007 (4) SA 395 (CC), the SCA emphasised that the Constitutional Court had upheld a sector-specific statutory restriction in a sensitive industry (private security), not a general prohibition on refugees working or sustaining themselves. The Constitutional Court’s reasoning, as understood by the SCA, distinguished between the choice of vocation (reserved to citizens and permanent residents) and the ability to seek employment more broadly, noting that the Refugees Act guarantees refugees the right to seek employment and that the restriction in that case did not prevent work outside the security industry. The SCA read that decision as not supporting a blanket ban on employment or self-employment for refugees and asylum seekers.

Turning to Minister of Home Affairs & others v Watchenuka & another 2004 (4) SA 326 (SCA), the SCA highlighted the central constitutional insight from Watchenuka: while it may be permissible for the state to impose limitations on work for asylum seekers in general, a total exclusion from work, in circumstances where no state support exists, may threaten positive humiliation and degradation and thereby implicate the constitutional right to dignity (s 10). The SCA noted that, unlike the situation in Watchenuka (where restrictive conditions had been endorsed on asylum permits), there were no restrictive conditions in the present case determined by the Standing Committee that prohibited trading.

The SCA rejected the High Court’s approach that treated s 22 as decisive and as a “trump card” over dignity. It stressed that constitutional rights are mutually reinforcing and interdependent, and that constitutional adjudication does not proceed by ranking rights in a simplistic hierarchy. In its view, s 22 protects a citizen’s right to choose a trade, occupation, or profession freely, but it does not itself create a general legal disability preventing non-citizens from working or trading. The SCA also read s 27(f) of the Refugees Act (“seek employment”) as not confined, by its language, to wage-earning employment only, and therefore not as excluding self-employment.

The SCA considered South Africa’s international obligations as reflected in the Refugees Act’s long title and preamble, and it referred to the 1951 Convention Relating to the Status of Refugees, specifically Article 18 dealing with self-employment, which contemplates that contracting states accord refugees lawfully in their territory treatment as favourable as possible, and in any event not less favourable than that accorded to aliens generally, regarding the right to engage on their own account in commerce and establish commercial and industrial companies. The SCA used this framework to reinforce that a blanket prohibition on refugees and asylum seekers trading was inconsistent with the scheme of rights and obligations informing South African refugee law.

On the licensing statutes, the SCA addressed the respondents’ contention that identity-number requirements implied citizenship-only eligibility. It held this was misguided because there was no express or implied prohibition in the relevant legislation against foreign nationals applying, and because both asylum seeker permits and refugee recognition documentation contain unique identification numbers enabling compliance with administrative requirements. Thus, on the SCA’s interpretation, the licensing schemes did not lawfully justify refusing even to accept or process applications solely due to foreign status.

The court’s reasoning included a value-laden assessment of the practical consequences of the respondents’ stance. It accepted that asylum seekers and refugees may remain in South Africa for lengthy periods while awaiting status determination and that the state generally provides no financial support. Even if the state had legitimate regulatory concerns (including tracking and screening), the SCA regarded it as constitutionally unacceptable to adopt an approach that left destitute persons without lawful means of survival. It also expressed concern that the stance adopted risked fuelling xenophobia and conveyed an uneasy impression that restrictive licensing attitudes might be aimed at inducing destitute foreign nationals to leave.

As to the broader relief originally sought (including invalidating “Operation Hardstick” and compelling return of goods), the SCA noted that portions were too broad or unenforceable, that “Operation Hardstick” was no longer in place (rendering interdictory relief moot), and that the absence of inventories and uncertainty of whereabouts undermined the viability of a return order. Nonetheless, it regarded the respondents’ failure to engage with serious allegations of police abuse as troubling. Ultimately, because the respondents made common cause on the legal issues and were unsuccessful, the SCA considered a joint-and-several costs order appropriate against the relevant organs of state.

5. Outcome and Relief

The SCA upheld the appeal and set aside the High Court’s order, substituting it with declarations that asylum seekers and refugees are entitled to apply for new trading licences, renew existing licences, and apply for and renew written consent to operate tuck-shops or spaza shops under the relevant provincial and municipal schemes.

The SCA further declared that the closure of businesses operated by refugees and asylum seekers in terms of valid permits is unlawful and invalid.

The substituted High Court order required the first, second, third, fifth, sixth, seventh and eighth respondents to pay the applicants’ costs in the High Court jointly and severally, including the costs of two counsel where employed. In addition, the SCA ordered the second, third, fifth, sixth, seventh and eighth respondents to pay the appellants’ costs of appeal jointly and severally, also including the costs of two counsel where employed.

Cases Cited

Minister of Home Affairs & others v Watchenuka & another 2004 (4) SA 326 (SCA).

Union of Refugee Women v Director: Private Security Industry Regulatory Authority 2007 (4) SA 395 (CC).

Government of the Republic of South Africa & others v Grootboom & others 2001 (1) SA 46 (CC) (also reported as 2000 (11) BCLR 1169 (CC)).

Khosa & others v Minister of Social Development & others; Mahlaule v Minister of Social Development & others [2004] ZACC 11; 2004 (6) SA 505 (CC) (also reported as 2004 (6) BCLR 569 (CC)).

Kaunda & others v President of the Republic of South Africa & others 2005 (4) SA 235 (CC) (also reported as 2004 (10) BCLR 1009 (CC)).

Ex parte Chairperson of the Constitutional Assembly: In re Certification of the Constitution of the Republic of South Africa, 1996 1996 (4) SA 744 (CC).

Legislation Cited

Constitution of the Republic of South Africa, 1996 (in particular ss 10 and 22).

Refugees Act 130 of 1998 (in particular ss 2, 3, 8, 9, 11(h), 22, 24(3)(a), and 27).

Immigration Act 13 of 2002.

Aliens Control Act 96 of 1991.

Lebowa Business and Trading Undertakings Act 6 of 1977.

Businesses Act 71 of 1991.

Private Security Industry Regulation Act 56 of 2001.

Rules of Court Cited

No rules of court were cited in the judgment.

Held

The court held that there is no blanket prohibition in the Constitution or applicable legislation preventing asylum seekers and refugees lawfully present in South Africa from pursuing self-employment through trading, including operating spaza shops or tuck-shops. It held that s 22 of the Constitution reserves to citizens the right to choose a trade, occupation, or profession freely, but does not operate as a general constitutional bar preventing non-citizens from trading where legislation permits regulation and licensing.

The court further held that s 27(f) of the Refugees Act 130 of 1998, which states that a refugee is entitled to “seek employment”, does not confine refugees to wage-earning employment and does not exclude self-employment. The court held that the relevant licensing legislation did not expressly or impliedly exclude foreign nationals, and that the identity-number requirements could be satisfied through the identification numbers reflected on asylum seeker and refugee documentation.

On the facts and the relief ultimately granted, the court held that the closure of businesses operated by refugees and asylum seekers in terms of valid permits was unlawful and invalid, and it granted declaratory relief confirming entitlement to apply for and renew the relevant licences and consents, together with costs orders against the relevant respondents.

LEGAL PRINCIPLES

The judgment applied the principle that, under the Constitution, foreign nationals within South Africa are entitled to the protections of the Bill of Rights except where a right is expressly limited to citizens, and that differentiation between citizens and non-citizens must be understood within the structure and purpose of specific constitutional and statutory provisions.

It reaffirmed that s 22 of the Constitution is concerned with a citizen’s right to choose a trade, occupation, or profession freely, and that regulation of the practice of a trade is permitted by law; s 22 does not, without more, establish a general exclusion of refugees and asylum seekers from work or trading.

The judgment applied the constitutional principle, drawn from precedent, that rights in the Bill of Rights are interdependent and mutually reinforcing, and that adjudication does not proceed by treating one right (such as s 22) as mechanically overriding another (such as dignity under s 10). Where the inability to work or sustain oneself threatens destitution, humiliation, and degradation, the right to dignity is materially implicated.

In interpreting refugee protections, the judgment applied a purposive approach aligned to the Refugees Act’s express objective of giving effect to international obligations, and it treated the 1951 Refugee Convention (including Article 18 on self-employment) as part of the interpretive context supporting the conclusion that lawful refugees should not be subject to an unjustified blanket prohibition on self-employment through commerce.

Finally, the judgment applied a principle of legality to administrative licensing frameworks: absent express statutory prohibition, administrative bodies may not refuse to accept or process applications on a categorical basis (such as foreign nationality), particularly where the statutory requirements (including identification particulars) are capable of being met through lawful documentation issued under the refugee and asylum framework.

Somali Association of South Africa and Others v Limpopo Department of Economic Development Environment and Tourism and Others (48/2014) [2014] ZASCA 143; 2015 (1) SA 151 (SCA); [2014] 4 All SA 600 (SCA) (26 September 2014)