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[2004] ZACC 15
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Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs and Tourism and Others (CCT 27/03) [2004] ZACC 15; 2004 (4) SA 490 (CC); 2004 (7) BCLR 687 (CC) (12 March 2004)

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CONSTITUTIONAL COURT OF
SOUTH AFRICA
Case CCT 27/03
BATO STAR FISHING (PTY)
LTD

Applicant
versus
THE MINISTER OF ENVIRONMENTAL AFFAIRS
AND
TOURISM

First Respondent
THE CHIEF DIRECTOR: MARINE AND COASTAL
MANAGEMENT, DEPARTMENT OF ENVIRONMENTAL
AFFAIRS AND
TOURISM

Second Respondent
CERTAIN RIGHTS
HOLDERS

Third to Eighteenth Respondents
Heard on
:           11
September 2003
Decided on    :
12 March 2004
JUDGMENT
O’REGAN J:
[1] This
application for special leave to appeal to this Court against a
judgment of the Supreme Court of Appeal (the SCA)
[1]
concerns the allocation of fishing quotas.  The applicant, Bato
Star Fishing (Pty) Ltd, is dissatisfied with the allocation
it
received in the 2001 allocation process for the 2002 – 2005
fishing seasons and it seeks to review that allocation decision.

The review succeeded in the Cape High Court (the High Court), but, on
appeal, that judgment was overturned by the SCA.  The
case
raises the question of the extent to which such a decision is
susceptible to review under our new constitutional order.
[2] The first respondent is the Minister
of Environmental Affairs and Tourism (the Minister) who is the member
of Cabinet responsible
for the administration of the relevant
legislation.  The second respondent is the Chief Director in the
Department of Environmental
Affairs and Tourism (the Chief Director),
responsible for marine and coastal management who took the allocation
decision under
challenge in this case.
[2]
The third to eighteenth respondents are other rights holders in the
deep-sea hake fishing industry (the other respondents)
who oppose the
relief sought by the applicant.
[3] The applicant has held fishing
rights in the deep-sea trawl sector of the hake fishing industry
since 1999.  The industry
is more than a hundred years old and
is one of the most lucrative sectors of the South African fishing
industry.  It generates
sales of more than R1,45 billion per
annum, is the largest exporter of perishable frozen products in the
country and has an international
reputation for being a well-managed
fishery producing a quality product.  The deep-sea trawl sector
is both capital- and labour-intensive,
with a current fixed capital
investment of some R5,4 billion and a labour force, directly involved
in the industry, of about 8
000 workers.
[4] Hake is caught in four ways –
by deep-sea trawling, by in-shore trawling, by long-lines and by
hand-lines.  For the
purpose of the allocation of quotas, the
industry is divided into four sectors based on these four methods.
Of these sectors,
the deep-sea trawl industry is the largest, the
most technologically sophisticated and the most capital- and
labour-intensive.
Of a total allowable catch of 165 000 tonnes
of hake in 2002, the deep-sea trawl sector was allocated 138 495
tonnes, while the
in-shore trawl sector was allocated 10 165 tonnes,
the long-line sector 10 840 tonnes and the hand-line sector 5 500
tonnes.
These last two sectors have been introduced only in
recent years and, because of their relatively simple technology that
eschews
the need for high levels of investment, have been earmarked
by the Department of Environmental Affairs and Tourism (the
Department)
as key areas for transformation in the hake fishing
industry.
[3]
[5] According to industry estimates,
each 1 000 tonnes of hake caught in the deep-sea trawl sector
represents a turnover of approximately
R13 million and a profit of
approximately R5 million.  Deep-sea trawling for hake was
pioneered in South Africa by a handful
of companies who remain
dominant in the sector.  Like most of the South African economy,
the sector is dominated by companies
that historically were
established, owned and managed by white people.  Accordingly one
of the ten objectives identified in
section 2 of the Marine Living
Resources Act, 18 of 1998 (the Act) is:
“(j) the need
to restructure the fishing industry to address historical imbalances
and to achieve equity within all branches
of the fishing industry.”
[6] This objective as well as all the
other objectives set out in section 2 of the Act are, by their
nature, incapable of immediate
or short-term fulfilment.  The
objectives require action by the executive to facilitate their
fulfilment in the medium- and
long-term.  Measures aimed at the
achievement of the goal identified in section 2(j) of the Act need to
be taken side by side
with the steps designed to fulfil the other
objectives identified in the Act.  In particular, the Act
recognises that the
industry exploits a scarce marine resource that
may be destroyed if not carefully managed and monitored. Most of the
other objectives
flow from this realisation.  The other
objectives identified in section 2 are the following:
“(a)
The need to achieve optimum utilisation and ecologically sustainable
development of marine living resources;
(b)
the need to conserve marine living resources for both present and
future generations;
(c)
the need to apply precautionary approaches in respect of the
management and development
of marine living resources;
(d)
the need to utilise marine living resources to achieve economic
growth, human resource
development, capacity building within
fisheries and mariculture branches, employment creation and a sound
ecological balance consistent
with the development objectives of the
national government;
(e)
the need to protect the ecosystem as a whole, including species which
are not targeted
for exploitation;
(f)
the need to preserve marine biodiversity;
(g)
the need to minimise marine pollution;
(h)
the need to achieve to the extent practicable a broad and accountable
participation
in the decision-making processes provided for in this
Act;
(i)
any relevant obligation of the national government or the Republic in
terms
of any international agreement or applicable rule of
international law . . . .”
The sensitivity of the resource is
real.  In the 1960s and 1970s, a large number of foreign fishing
vessels took to fishing
in the hake fisheries off the South African
coast and threatened the long-term sustainability of fish stocks.
In 1977, South
Africa accordingly introduced a 200-mile economic zone
and excluded foreign fishing vessels from its waters.  In order
to
protect the fishery, a total allowable catch was introduced for
the first time in 1978, followed by a quota system for individual

companies.  The maintenance of the hake fish population as a
sustainable living resource is thus appropriately a central tenet
of
the legislative scheme.  This consideration clearly renders the
achievement of a more equitable distribution of fishing
rights more
challenging for the Department, as the total allowable catch cannot
simply be increased to accommodate more participants.
Applicant’s history in the
fishing industry
[7] The applicant was formed in 1996
when it acquired the controlling share in three small fishing
companies operating in the abalone
sector of the industry.
Seventy percent of the applicant is owned by a holding company, SA
Amalgamated Union Fishing (Pty)
Ltd (SAAUF), and the other thirty
percent is owned by the applicant’s management.  In turn,
SAAUF has two major shareholders
both of which are trade union
investment companies.  According to the applicant, the main
purpose behind its formation was
the establishment of a medium-sized
black empowerment fishing company.  In its first few years of
operation, the applicant
was only engaged in the abalone sector of
the fishing industry.  It built a processing factory and
marketed abalone under
its own brand names.  Since 1996,
however, the applicant has had its quotas of abalone reduced
significantly.  From the
date of its establishment, the
applicant sought to enter the hake deep-sea trawl sector.  It
applied for, but was refused,
quotas in 1996, 1997 and 1998.  In
1999, for the first time, it was allocated a quota of 750 tonnes.
It received the
same allocation in 2000, and in 2001 the allocation
was increased to 803 tonnes.
The application process for rights
for 2002 – 2005
[8] A development identified by the
Department as desirable for the stabilisation of the industry was a
move to longer term quota
allocations, instead of quota allocations
for one year only.
[4]
One of the advantages of a longer term quota allocation is that it
permits industry players to make capital and human resource

investments in the industry.  The Department accordingly decided
that it would be appropriate to issue rights for the deep-sea
hake
sector for a four year period, the initial period to cover the 2002 –
2005 fishing seasons.  On 27 July 2001, the
Department published
in the Government Gazette an invitation to submit applications for a
broad range of fishing rights, including
the deep-sea hake
sector.
[5]
At the same time, the Department issued the policy guidelines in
terms of which the allocations would be made.
[6]
The allocations were to be made in terms of section 18 of the Act.
[9] The policy guidelines stipulated
that applications would be evaluated in terms of the objectives and
principles set out in section
2 of the Act.  The guidelines also
identified a range of more specific policy considerations, in no
order of preference.
These included the importance of
historical involvement in the industry, proof of investment and past
performance in the industry,
and demonstrated ability to create
employment.  While acknowledging the fact that transformation of
the industry could not
take place overnight, the guidelines
nevertheless affirmed the objective of building a fishing industry
whose “ownership
and management, broadly reflects the
demographics of South Africa”.
[10] In order to assess the degree of
transformation of any particular applicant, the guidelines adopted a
nuanced approach, recognising
that transformation involves more than
simply a change in ownership.  So three relevant factors were
listed.  The first
factor made it plain that equity within an
applicant could be an acceptable alternative to the requirement of
ownership.
The other two factors were the distribution of
wealth created through access to marine living resources and the
extent to which
an applicant employs people from historically
disadvantaged sectors of the community.  In respect of these
three factors,
the guidelines noted that “[i]n the more
capital-intensive sectors of the fishing industry, a higher level of
internal transformation
of current rights holders rather than the
introduction of new entrants is encouraged.”  Moreover, in
addressing the
injustices of the past, the guidelines stipulated that
“it is the intention to allocate a notable proportion” of
the
total allowable catch to deserving applicants in order to
encourage transformation either through internal restructuring or
through
new entrants.  In the hake sector, the guidelines
emphasised that the long-line and hand-line sectors had been
identified
as suitable sectors for promoting small and medium
enterprises owned and managed by people from historically
disadvantaged communities.
The guidelines also emphasised the
importance of the sustainable utilisation of marine resources and the
dangers of over-fishing.
[11] In its application, the applicant
sought a substantial increase of its fishing rights.  It sought
an allocation of 12
000 tonnes (more than twelve times its allocation
for 2001).  The applicant stated that it could catch this
quantity of fish
by purchasing a new vessel and by making agreements
with existing rights holders to purchase the balance.  The
applicant was
not the only company to seek a considerable increase in
the number of tonnes allocated to it.  Overall, applications
were
made for 1,1 million tonnes of hake per annum – more than
nine times the total allowable catch.
[12] All applications were initially
screened by an Advisory Committee appointed by the Department.
The screening process
applied criteria drawn up by the Department
based on the policy guidelines referred to above.  The document
listing the criteria
commenced as follows:
“These
criteria are based on the key aspects of the policies published by
the Department in Government Gazette 22517 of 27
July 2001.  It
is the Department’s policy to endeavour to create stability in
the industry in order to retain existing
levels of investment and to
attract further investment in the industry while at the same time
seeking to transform the industry
in line with the purposes of the
Act.  The policy on transformation is broadly to reward those
ex-rights holders who have
performed and taken steps to transform and
to admit suitable new HDP [historically disadvantaged person]
entrants that demonstrate
both a capacity to catch, process and
harvest the right applied for and a willingness to invest in the
industry.”
Six factors were identified: involvement
and investment in the industry; past performance; strategies for
by-catch and offal utilisation;
compliance; transformation and the
extent to which the applicant has used or will use its allocation
merely as a “paper quota”
– i.e. will sell or
transfer the quota to another company or individual.  In
relation to transformation the following
criteria were identified:
ownership (a specific points chart was provided in order to determine
the percentage of the company owned
by people from a historically
disadvantaged sector of the community); management structure (a
similar points chart was provided);
workforce (percentage of the
workforce from historically disadvantaged communities);
transformation plan; and compliance with the
Employment Equity Act,
55 of 1998
.  Criteria were set out in relation to each factor
with an indication of how the factor concerned was to be scored.
[13] There were one hundred and ten
applications for the hake deep-sea trawl sector of which fifty four
(including the applicant)
were existing rights holders.  Points
were awarded to each applicant in terms of the pre-determined scoring
system, described
above.  The scores then formed the basis of
the Chief Director’s evaluation of the applications.  The
applicant
was a below average applicant, scoring 4.9 overall out of a
possible total of 10.  Seventy two of the one hundred and ten
applicants scored better than this.  On the transformation
aspect, the applicant scored only 1.7 points out of a possible total

of 4.  It had a high score in respect of ownership, but its
score was low in relation to the other aspects of transformation.

Seventy seven of the other applicants outscored the applicant on
transformation, including four of the five pioneer companies.
[14] Although the Advisory Committee did
the initial scoring, it was not responsible for the allocation of
quantum to each applicant.
This was done by the Chief Director.
The starting point for the allocation was that made in 2001.
Five percent of the quota
granted to each applicant in 2001 was
deducted from their new quota and put into a redistribution pool.
The redistribution
pool was then distributed amongst rights holders
in direct proportion to their scores.  At the end of the
process, rights
were awarded to fifty one applicants, all of whom
were existing rights holders.  No new applicants were granted
fishing rights.
[15] As a result of the allocation
process, the applicant received a quota of 856 tonnes.  On 24
December 2001 the Department
announced the decision and released
general reasons for the allocations made.  The general reasons
briefly described the decision-making
process and its outcome, and
annexed a list of the allocations and the manner in which their
quantum had been calculated.
The Department reserved an amount
of 1 487 tonnes for appeals.
Institution of legal proceedings by
the applicant
[16] The applicant, dissatisfied with
this allocation, sought two different remedies.  On the one
hand, it appealed as it was
entitled to do, in terms of section 80 of
the Act to the Minister against the Chief Director’s decision.
In this appeal,
the applicant sought an allocation of 2 500 tonnes.
The Department announced in early January 2003 that as a result of
the
appeal process, the applicant would receive an additional
allocation which resulted in a total allocation of 873 tonnes.
Secondly, it initiated review proceedings in the High Court to set
aside the allocation decision.  These proceedings were initiated

on 27 February 2002.  The Minister and Chief Director were cited
as were all the remaining successful applicants in the allocation

process.  Sixteen of these fifty respondents opposed the relief
sought by the applicant.
[17] At about the same time, another
disgruntled applicant, Phambili Fisheries (Pty) Ltd (Phambili), also
launched an application
to review the decision of the Chief
Director.  Because of the identity of the issues and parties in
both cases, the applications
were heard together by the High Court.
One of the first issues raised in the High Court was that the
applicant had failed
to exhaust its internal remedies under the Act
as required by section 7(2) of the Promotion of Administrative
Justice Act, 3 of
2000 (PAJA).
[7]
After considering the matter, however, the High Court held that it
was an appropriate case to permit the applicant to seek
a review of
the decision before exhausting its internal remedies.
[8]
This decision of the High Court was challenged by the respondents in
the SCA on appeal.  In the light of its other findings,
the SCA
did not find it necessary to deal with the issue and the decision of
the High Court in this regard has not been directly
challenged on
appeal in this Court.  It is thus not necessary for this Court
to consider whether the decision of the High
Court in this regard was
correct.  Suffice it to say that a court minded to grant
permission to a litigant to pursue the review
of a decision before
exhausting internal remedies should consider whether the litigant
should be permitted simultaneously to pursue
those internal
remedies.  In considering this question, a court needs to ensure
that the possibility of duplicate or contradictory
relief is avoided.
[18] One judgment in respect of both
matters was handed down by the High Court holding in favour of both
the applicant and Phambili.
The High Court granted the
applications on a number of grounds including a finding that there
was no direct evidence as to how
the Chief Director arrived at the
allocation decision under challenge; a conclusion that the Chief
Director acted arbitrarily,
capriciously, irrationally and without
reason; and a holding that the Chief Director ignored relevant
considerations and took account
of extraneous ones such as the need
for stability in the relevant sector of the fishing industry.
[19] The respondents in both matters
successfully sought leave to appeal to the SCA, where once again both
matters were heard simultaneously
and only one judgment was handed
down.  Both appeals were upheld.  It should be noted that
the SCA expressly, and correctly,
rejected the High Court’s
conclusion that there was no evidence as to how the allocation
decision was reached.  The
applicant thereafter sought special
leave to appeal to this Court, but Phambili did not.  Because of
the inter-relatedness
of the two matters, and in particular because
the respondents in this matter relied on their affidavits filed in
the Phambili matter,
large parts of the record in the Phambili matter
were, by agreement between the parties, also filed with the record in
this Court.
The grounds of appeal raised in this
Court
[20] The applicant relies on three
grounds in its application for special leave to appeal to this Court:
(a) that the SCA misconstrued
the nature of the objectives in section
2 of the Act; (b) that the SCA incorrectly concluded that the Chief
Director’s decision
should not be set aside on the ground that
he failed to apply his mind to the quantum of hake applied for by the
applicant and
its ability to catch such quantum; and (c) that the SCA
erred in finding that the alleged “undisclosed policy change”

by the Department did not infringe the applicant’s right to
procedural fairness.
[21] The applicant did not mention PAJA
either in its notice of motion and founding affidavit in the High
Court, or in its application
for special leave to appeal to this
Court.  At the hearing, applicant’s counsel were asked why
their application was
not founded on the provisions of PAJA and after
the hearing, the Chief Justice issued directions calling upon the
parties to lodge
further written argument on the following questions:
(a) whether the applicant’s cause of action is founded on the
common
law, PAJA and/or section 33 of the Constitution; (b) if the
proper cause of action is PAJA, what effect if any that had on the
grounds of appeal as argued by the applicant; and (c) what effect, if
any, the partially successful appeal to the Minister in terms
of
section 80 of the Act had on the applicant’s grounds of review
in this Court.  Supplementary written argument was
lodged by all
the parties as requested.
[22] In
Pharmaceutical Manufacturers
Association of SA and Another: In Re Ex Parte President of the
Republic of South Africa and Others
,
[9]
the question of the relationship between the common law grounds of
review and the Constitution was considered by this Court.
A
unanimous Court held that under our new constitutional order the
control of public power is always a constitutional matter.

There are not two systems of law regulating administrative action —
the common law and the Constitution — but only
one system of
law grounded in the Constitution.
[10]
The courts’ power to review administrative action no longer
flows directly from the common law but from PAJA and the
Constitution
itself.  The grundnorm of administrative law is now to be found
in the first place not in the doctrine of ultra
vires,
[11]
nor in the doctrine of parliamentary sovereignty, nor in the common
law itself,
[12]
but in the principles of our Constitution.  The common law
informs the provisions of PAJA and the Constitution, and derives
its
force from the latter.
[13]
The extent to which the common law remains relevant to administrative
review will have to be developed on a case-by-case
basis as the
courts interpret and apply the provisions of PAJA and the
Constitution.
[23] Section 33 of the Constitution
provides that:
“(1)
Everyone has the right to administrative action that is lawful,
reasonable and procedurally fair.
(2)  Everyone
whose rights have been adversely affected by administrative action
has the right to be given written reasons.
(3)  National
legislation must be enacted to give effect to these rights, and must
–
(a)  provide
for the review of administrative action by a court or, where
appropriate, an independent and impartial tribunal;
(b)  impose a
duty on the state to give effect to the rights in subsections (1) and
(2); and
(c)  promote
an efficient administration.”
The transitional provisions of the
Constitution in schedule 6 required that the legislation referred to
in section 33(3) be passed
within three years of the Constitution
coming into force.
[14]
PAJA was assented to on 3 February 2000.  The long title to PAJA
states that it is –
“[t]o give
effect to the right to administrative action that is lawful,
reasonable and procedurally fair and to the right
to written reasons
for administrative action as contemplated in section 33 of the
Constitution of the Republic of South Africa,
1996   . .
.”.
[24] Section 6 of PAJA identifies the
circumstances in which the review of administrative action may take
place.  PAJA itself
provides a definition of “administrative
action” in section 1, but the scope of that definition does not
concern us
in this case as it is, quite rightly, common cause that
the decision of the Chief Director at issue constitutes
administrative
action as contemplated by PAJA.  Section 6
provides that:
“(1)
Any person may institute proceedings in a court or a tribunal for the
judicial review of
an administrative action.
(2)
A court or tribunal has the power to judicially review an
administrative action if
–
(a)
the administrator who took it –
(i)  was not
authorised to do so by the empowering provision;
(ii)  acted
under a delegation of power which was not authorised by the
empowering provision; or
(iii)  was
biased or reasonably suspected of bias;
(b)
a mandatory and material procedure or condition prescribed by an
empowering provision
was not complied with;
(c)
the action was procedurally unfair;
(
d
)
the action was materially influenced by an error of law;
(
e
)
the action was taken –
(i)  for a
reason not authorised by the empowering provision;
(ii)  for an
ulterior purpose or motive;
(iii)  because
irrelevant considerations were taken into account or relevant
considerations were not considered;
(iv)  because
of the unauthorised or unwarranted dictates of another person or
body;
(v)  in bad
faith; or
(vi)
arbitrarily or capriciously;
(
f
)
the action itself –
(i)
contravenes a law or is not authorised by the empowering provision;
or
(ii)  is not rationally connected to –
(
aa
)  the purpose for which it was taken;
(
bb
)  the purpose of the empowering provision;
(
cc
)  the information before the administrator; or
(
dd
)  the reasons given for it by the administrator;
(g
)
the action concerned consists of a failure to take a decision;
(
h
)
the exercise of the power or the performance of the function
authorised by the empowering
provision, in pursuance of which the
administrative action was purportedly taken, is so unreasonable that
no reasonable person
could have so exercised the power or performed
the function; or
(
i
)
the action is otherwise unconstitutional or unlawful.
(3)
If any person relies on the ground of review referred in subsection 2
(
g
), he or she may in respect of a failure to take a decision,
where –
(
a
)
(i)  an
administrator has a duty to take a decision;
(ii)  there is
no law that prescribes a period within which the administrator is
required to take that decision; and
(iii)  the
administrator has failed to take that decision,
institute
proceedings in a court or tribunal for judicial review of the failure
to take the decision on the ground that there has
been unreasonable
delay in taking the decision; or
(
b
)
(i)  an
administrator has a duty to take a decision;
(ii)  a law
prescribes a period within which the administrator is required to
take that decision; and
(iii)  the
administrator has failed to take that decision before the expiration
of that period,
institute
proceedings in a court or tribunal for judicial review of the failure
to take the decision within that period on the ground
that the
administrator has a duty to take the decision notwithstanding the
expiration of that period.”
[25] The provisions of section 6 divulge
a clear purpose to codify the grounds of judicial review of
administrative action as defined
in PAJA.  The cause of action
for the judicial review of administrative action now ordinarily
arises from PAJA, not from the
common law as in the past.  And
the authority of PAJA to ground such causes of action rests squarely
on the Constitution.
It is not necessary to consider here
causes of action for judicial review of administrative action that do
not fall within the
scope of PAJA.  As PAJA gives effect to
section 33 of the Constitution, matters relating to the
interpretation and application
of PAJA will of course be
constitutional matters.
[15]
[26] In these circumstances, it is clear
that PAJA is of application to this case and the case cannot be
decided without reference
to it.  To the extent, therefore, that
neither the High Court nor the SCA considered the claims made by the
applicant in the
context of PAJA, they erred.  Although the
applicant did not directly rely on the provisions of PAJA in its
notice of motion
or founding affidavit, it has in its further written
argument identified the provisions of PAJA upon which it now relies.
[27] The Minister and the Chief Director
argue that the applicant did not disclose its causes of action
sufficiently clearly or
precisely for the respondents to be able to
respond to them.  Where a litigant relies upon a statutory
provision, it is not
necessary to specify it, but it must be clear
from the facts alleged by the litigant that the section is relevant
and operative.
[16]
I am prepared to assume, in favour of the applicant, for the purposes
of this case, that its failure to identify with any
precision the
provisions of PAJA upon which it relied is not fatal to its cause of
action.  However, it must be emphasised
that it is desirable for
litigants who seek to review administrative action to identify
clearly both the facts upon which they
base their cause of action,
and the legal basis of their cause of action.  I turn now to
deal separately with the three grounds
upon which the applicant
sought leave to appeal.
SCA’s application of section 2
of the Act
[28] The first ground of appeal raised
by the applicant is that the “SCA misconstrued the nature of
the objectives and principles
in section 2 of the Act with the result
that it failed to consider one of the applicant’s principal
grounds of review.”
As described above, section 2 of the
Act identifies ten objectives and principles
[17]
to which “[t]he Minister and any organ of state shall in
exercising any power under this Act, have regard . . . .”

The applicant’s argument is that the Chief Director failed to
give due consideration to section 2(j) which requires that
regard be
had to “the need to restructure the fishing industry to address
historical imbalances and to achieve equity within
all branches of
the fishing industry.”  In making this argument, the
applicant also relies upon section 18(5) of the
Act which provides
that:
“In granting
any right referred to in subsection (1), the Minister shall, in order
to achieve the objectives contemplated
in section 2, have particular
regard to the need to permit new entrants, particularly those from
historically disadvantaged sectors
of society.”
[29] The High Court concluded that the
peremptory provisions of section 2 had been ignored by the Chief
Director, and that as a
result, the decision was fatally flawed. The
SCA did not agree with this conclusion.  It held that, properly
construed, the
purpose of the two provisions was “to guide and
not to fetter”
[18]
the decision-maker and on the facts held that it was clear that the
Chief Director had taken the provisions of section 2 into account.
[30] In its supplementary written
argument in this Court, the applicant identifies subsections 6(2)(b),
(d), (e)(iii), (f)(i) and
(ii), (h) and (i) as the provisions of PAJA
upon which it relies.  Its argument is thus that the Chief
Director failed to
comply with “a mandatory and material
procedure or condition prescribed by” the empowering provision
(section 6(2)(b));
that the decision was influenced by an error of
law (section 6(2)(d)); that irrelevant considerations were taken into
account and
relevant ones not (section 6(2)(e)(iii)); that the
decision was not empowered or authorised by the empowering provision
(section
6(2)(f)(i)); that the decision was not rationally connected
to the purpose of the empowering provisions (section
6(2)(f)(ii)(bb));
and that the exercise of the power was not
reasonable as contemplated by section 6(2)(h).  Although the
applicant relies on
section 6(2)(i) (that the decision was otherwise
“unconstitutional or unlawful”), it points to no specific
ground of
review not otherwise covered by section 6(2).  This
argument need not be considered further.
[31] Of the grounds relied upon by the
applicant, subsections 6 (2)(b), (d), (e)(iii) (at least in part),
(f)(i) and (f)(ii)(bb)
relate to the question of whether in making
the decision, the Chief Director misdirected himself as to the legal
obligations imposed
upon him by the empowering legislation.  The
other grounds relied upon by the applicant, that is section
6(2)(e)(iii) (in
part) and section 6(2)(h), relate to the question of
whether the decision itself was “reasonable”.  I
shall address
these two arguments separately.
Misconstruction of the empowering
provisions
[32] The gravamen of the applicant’s
complaint under this head is that the Chief Director paid
insufficient attention to the
requirements of section 2(j), as
repeated in section 18(5) of the Act.  The question to be
considered is the proper interpretation
of section 2(j) taking into
account section 18(5) and, in particular, the nature of the
obligations imposed upon the Chief Director
by these provisions.
In this regard, it should be noted that section 2 contains a wide
number of objectives and principles,
[19]
for example, the conservation of the marine ecosystem, the
sustainable use of marine living resources, and the need to utilise

marine living resources to achieve economic growth, to build capacity
in the industry and to create employment.  Not all the

objectives and principles will be relevant to every decision taken
under the Act.  In determining the amount of the total
allowable
catch, for example, the provision relating to the sustainable use of
marine resources and the need to conserve the marine
ecosystem will
clearly be relevant, although once that decision has been taken and
the process of allocation of fishing rights
commences, those factors
will be of less relevance.  In relation to some decisions, the
objectives and principles listed in
section 2 may to some extent be
in conflict with one another as they cannot all be fully achieved
simultaneously.  Moreover,
there may be many different ways of
achieving each of the objectives individually.  The section does
not give clear guidance
on which method should be selected or how an
equilibrium is to be reached.
[33] The applicant argues that the
accommodation reached by the Chief Director is improper because it
misinterprets section 2(j).
The applicant argues in effect that
the Chief Director “must give effect to” section 2(j) and
that the effect
of section 18(5) is to render section 2(j) of
pre-eminent importance in relation to the other principles of section
2.
[34] The provisions of section 2 and
section 18 make it plain that the obligation imposed upon the
decision-maker is an obligation
to “have regard to” the
factors mentioned in section 2, and to “have particular regard
to” the factor mentioned
in the case of section 18(5).
[20]
The repetition of the requirement of the factor of transformation
indicates its importance and the need for special attention
to be
given to the questions of restructuring and redress in the fishing
industry.  The historical imbalances which continue
to disfigure
the South African economy are felt acutely in the fishing industry.
By underlining the importance of restructuring
so as to redress
imbalances, the Act emphasises that the unjust status quo cannot be
maintained simply in the interest of stability.
The thrust of
the Act in this respect is in keeping with the Constitution, which
opens its Preamble by recognising the injustices
of the past, and
then declares in section 1 that equality is a foundational value.
When making his determination on quotas
the Chief Director was
accordingly obliged to give special attention to the importance of
redressing imbalances in the industry
with the goal of achieving
transformation in the industry.
[35] However, what is also clear, as
indicated above, is that the broad goals of transformation can be
achieved in a myriad of ways.
There is not one simple formula
for transformation.  To the extent that the Act emphasises the
need for decisions to facilitate
the process of transformation, it
suggests no particular preference for the manner in which this should
be achieved.  The
manner in which transformation is to be
achieved is, to a significant extent, left to the discretion of the
decision-maker.
[36] Section 18(5) is of great
importance at the stage when fishing rights are allocated.  This
section requires the Minister
to make allocations that will achieve
the objective contemplated in section 2, and in doing so, he is
enjoined to “have particular
regard to the need to permit new
entrants, particularly those from historically disadvantaged sectors
of society”.
[37] Various objectives are set out in
section 2.  Sections 2(d) and 2 (j) are directed to
transformation and capacity building.
They provide that regard
must be had to:
“(d) the need
to utilise marine living resources to achieve economic growth, human
resource development, capacity building
within fisheries and
mariculture brances, employment creation and a sound ecological
balance consistent with the development objectives
of the national
government;
…
(j) the need to
restructure the fishing industry to address historical imbalances and
to achieve equity within all branches of the
fishing industry.”
Section 24(b) of the Constitution
states that everyone has the right −
“to have the
environment protected, for the benefit of present and future
generations, through reasonable legislative and
other measures that —
(i) prevent
pollution and ecological degradation;
(ii) promote
conservation; and
(iii) secure
ecologically sustainable development and use of natural resources
while promoting justifiable social and economic development.”
[39] When allocations are made the
obligation imposed by section 18(5) must be observed.  This does
not mean, however, that
regardless of other considerations all new
entrants must be catered for at every allocation, nor that new
entrants must be admitted
at every allocation in every sector of the
fishing industry. The objectives in section 2 must be taken into
account as well as
they are of considerable importance to the
consistent and sound development of the fishing industry as a whole.
[40] There can be no doubt that the
development objectives of the national government include
transformation of the economy.
On an overall reading of the
provisions of the Act, decision-makers, in allocating fishing rights,
must seek to give effect to
the objectives of the Act and, in
particular, must ensure that a process of transformation takes
place.  To meet the obligations
imposed in this regard by
subsections 2(d), (j) and 18(5), there must, in the first place, be a
recognition of the fact that Parliament
required these needs to be
fulfilled and that steps must be taken to ensure their fulfilment in
time.  At the very least,
some practical steps must be taken in
the process of the fulfilment of these needs each time allocations
are made if possible.
If no step is taken during a particular
round of allocation, the decision-maker cannot be said to have paid
due regard to these
needs unless there is a reasonable explanation
for the absence of such practical steps.  A court will require
such explanation
and will evaluate it to determine whether or not it
meets the obligations imposed on the Minister. But so long as the
importance
of the practical fulfilment of these needs is recognised
and a court is satisfied that the importance of the practical
fulfilment
of sections 2(j) and 18(5) has been heeded, the decision
will not be reviewable.
[41] The papers before us show that the
importance of the practical fulfilment of sections 2(j) and 18(5) was
recognised by the
Department.  The policy guidelines published
at the same time as the invitation for applications on 27 July 2001
indicate
that the transformation of the industry was a consideration
central to the allocation process.  So does the evaluation
process
of applicants for quotas.  The actual allocation as well
as the general reasons issued after the allocation process indicate

that some steps were taken in relation to the section 2(j) objective
but that no new entrants were admitted into the hake deep-sea
trawl
sector.  The evidence shows however that new entrants, including
the applicant, had been admitted in previous years.
It is also
clear that in relation to the deep-sea hake sector of the fishery and
its own particular context, particularly its capital-
and
labour-intensive character, transformation was to be sought, not so
much in admitting new entrants to the industry, as in concentrating

on the transformation of those companies already in the
industry.
[21]
There is therefore no question of a misapplication or misdirection by
the Chief Director.
The ‘reasonableness’ of
the Chief Director’s decision
[42] The second aspect of this argument
raises the question, not of whether the Chief Director erred in law
in failing to take the
consideration identified in section 2(j) and
18(5) sufficiently into account, but whether the Chief Director’s
decision was
a decision within the terms of section 6(2)(h) of PAJA
which provides that a decision must not be “so unreasonable
that no
reasonable person” could have reached it.
[43] In its original heads, the
applicant based its argument on the judgment of Corbett JA in
Johannesburg
Stock Exchange and Another v Witwatersrand
Nigel Ltd and Another
[22]
where it was held that:
“Broadly, in
order to establish review grounds it must be shown that the president
failed to apply his mind to the relevant
issues in accordance with
the ‘behests of the statute and the tenets of natural justice.’
[citations omitted]
Such failure may be shown by proof,
inter
alia
, that the decision was arrived at arbitrarily or
capriciously or
mala fide
or as a result of unwarranted
adherence to a fixed principle or in order to further an ulterior or
improper purpose; or that the
president misconceived the nature of
the discretion conferred upon him and took into account irrelevant
considerations or ignored
relevant ones; or that the decision of the
president was so grossly unreasonable as to warrant the inference
that he had failed
to apply his mind to the matter in the manner
aforestated.”
It is well known that the
pre-constitutional jurisprudence failed to establish reasonableness
or rationality as a free-standing
ground of review.
[23]
Simply put, unreasonableness was only considered to be a ground
of review to the extent that it could be shown that a decision
was so
unreasonable as to lead to a conclusion that the official failed to
apply his or her mind to the decision.
[44] There was some debate in the
supplementary heads filed by the parties as to the precise meaning of
section 6(2)(h) of PAJA
which provides that if a decision “is
so unreasonable that no reasonable person could have so exercised the
power”,
it will be reviewable.  This test draws directly
on the language of the well-known decision of the English Court of
Appeal
in
Associated Provincial Picture Houses, Limited v
Wednesbury Corporation
.
[24]
The repetitiousness of the test there established has been found to
be unfortunate and confusing.  As Lord Cooke commented
in
R v
Chief Constable of Sussex, ex parte International Trader’s
Ferry Ltd
:
[25]
“It seems to
me unfortunate that Wednesbury and some Wednesbury phrases have
become established incantations in the courts
of the United Kingdom
and beyond.  Associated Provincial Picture Houses Ltd v
Wednesbury Corp
[1947] EWCA Civ 1
;
[1947] 2 All ER 680
, [1948]
1 KB 223
, an apparently
briefly-considered case, might well not be decided the same way
today; and the judgment of Lord Greene MR ([1947]
2 All ER 680
at 683
and 685,
[1948] 1 KB 223
at 230 and 234) twice uses the tautologous
formula ‘so unreasonable that no reasonable authority could
ever have come to
it’.  Yet judges are entirely accustomed
to respecting the proper scope of administrative discretions.
In my respectful
opinion they do not need to be warned off the course
by admonitory circumlocutions.  When, in Secretary of State for
Education
and Science v Tameside Metropolitan Borough
[1976] UKHL 6
;
[1976] 3 All ER
665
,
[1977] AC 1014
the precise meaning of ‘unreasonably’
in an administrative context was crucial to the decision, the five
speeches in
the House of Lords, the three judgments in the Court of
Appeal and the two judgments in the Divisional Court, all succeeded
in
avoiding needless complexity.  The simple test used
throughout was whether the decision in question was one which a
reasonable
authority could reach.  The converse was described by
Lord Diplock ([1976]
3 All ER 665
at 697,
[1977] AC 1014
at 1064) as
‘conduct which no sensible authority acting with due
appreciation of its responsibilities would have decided
to adopt’.
These unexaggerated criteria give the administrator ample and
rightful rein, consistently with the constitutional
separation of
powers. . . . Whatever the rubric under which the case is placed, the
question here reduces, as I see it, to whether
the chief constable
has struck a balance fairly and reasonably open to him.”
In determining the proper meaning of
section 6(2)(h) of PAJA in the light of the overall constitutional
obligation upon administrative
decision-makers to act “reasonably”,
the approach of Lord Cooke provides sound guidance.  Even if it
may be thought
that the language of section 6(2)(h), if taken
literally, might set a standard such that a decision would rarely if
ever be found
unreasonable,
[26]
that is not the proper constitutional meaning which should be
attached to the subsection.  The subsection must be construed

consistently with the Constitution
[27]
and in particular section 33 which requires administrative action to
be “reasonable”.  Section 6(2)(h) should
then be
understood to require a simple test, namely, that an administrative
decision will be reviewable if, in Lord Cooke’s
words, it is
one that a reasonable decision-maker could not reach.
[45] What will constitute a reasonable
decision will depend on the circumstances of each case, much as what
will constitute a fair
procedure will depend on the circumstances of
each case.
[28]
Factors relevant to determining whether a decision is reasonable or
not will include the nature of the decision, the identity
and
expertise of the decision-maker, the range of factors relevant to the
decision, the reasons given for the decision, the nature
of the
competing interests involved and the impact of the decision on the
lives and well-being of those affected.  Although
the review
functions of the court now have a substantive as well as a procedural
ingredient, the distinction between appeals and
reviews continues to
be significant.  The court should take care not to usurp the
functions of administrative agencies.
Its task is to ensure
that the decisions taken by administrative agencies fall within the
bounds of reasonableness as required
by the Constitution.
[46] In the SCA, Schutz JA held that
this was a case which calls for judicial deference.
[29]
In explaining deference, he cited with approval Professor Hoexter’s
account as follows:
“[A] judicial
willingness to appreciate the legitimate and
constitutionally-ordained province of administrative agencies;
to
admit the expertise of those agencies in policy-laden or polycentric
issues; to accord their interpretations of fact and law
due respect;
and to be sensitive in general to the interests legitimately pursued
by administrative bodies and the practical and
financial constraints
under which they operate.  This type of deference is perfectly
consistent with a concern for individual
rights and a refusal to
tolerate corruption and maladministration.  It ought to be
shaped not by an unwillingness to scrutinize
administration action,
but by a careful weighing up of the need for  and the
consequences of  judicial intervention.
Above all, it
ought to be shaped by a conscious determination not to usurp the
functions of administrative agencies; not to cross
over from review
to appeal.”
[30]
(footnote omitted)
Schutz JA continues to say that
“[j]udicial deference does not imply judicial timidity or an
unreadiness to perform the judicial
function”.
[31]
I agree.  The use of the word “deference” may give
rise to misunderstanding as to the true function of a
review court.
This can be avoided if it is realised that the need for courts to
treat decision-makers with appropriate deference
or respect
[32]
flows not from judicial courtesy or etiquette but from the
fundamental constitutional principle of the separation of powers
itself.
[47] This was also recognised in a
recent House of Lords judgment,
R (on the application of ProLife
Alliance) v British Broadcasting Corporation
.
[33]
In his speech, Lord Hoffmann commented:
“My Lords,
although the word ‘deference’ is now very popular in
describing the relationship between the judicial
and the other
branches of government, I do not think that its overtones of
servility, or perhaps gracious concession, are appropriate
to
describe what is happening.  In a society based upon the rule of
law and the separation of powers, it is necessary to decide
which
branch of government has in any particular instance the
decision-making power and what the limits of that power are.

That is a question of law and must therefore be decided by the
courts.
[76]  This
means that the courts themselves often have to decide the limits of
their own decision-making power.  That
is inevitable.  But
it does not mean that their allocation of decision-making power to
the other branches of government is
a matter of courtesy or
deference.  The principles upon which decision-making powers are
allocated are principles of law.
The courts are the independent
branch of government and the legislature and executive are, directly
and indirectly respectively,
the elected branches of government.
Independence makes the courts more suited to deciding some kinds of
questions and being
elected makes the legislature or executive more
suited to deciding others.  The allocation of these
decision-making responsibilities
is based upon recognised
principles.  . . . [W]hen a court decides that a decision is
within the proper competence of the
legislature or executive, it is
not showing deference.  It is deciding the law.”
[34]
[48] In treating the decisions of
administrative agencies with the appropriate respect, a court is
recognising the proper role of
the executive within the
Constitution.  In doing so 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.  The extent to
which a court should give
weight to these considerations will depend
upon the character of the decision itself, as well as on the identity
of the decision-maker.
A decision that requires an equilibrium
to be struck between a range of competing interests or considerations
and which is to be
taken by a person or institution with specific
expertise in that area must be shown respect by the courts.
Often a power
will identify a goal to be achieved, but will not
dictate which route should be followed to achieve that goal.  In
such circumstances
a court should pay due respect to the route
selected by the decision-maker.  This does not mean however that
where the decision
is one which will not reasonably result in the
achievement of the goal, or which is not reasonably supported on the
facts or not
reasonable in the light of the reasons given for it, a
court may not review that decision.  A court should not
rubber-stamp
an unreasonable decision simply because of the
complexity of the decision or the identity of the decision-maker.
[49] Section 2 of the Act requires the
decision-maker to
have regard to
a range of factors which are
to some extent in tension.  It is clear from this that
Parliament intended to confer a discretion
upon the relevant
decision-maker to make a decision in the light of all the relevant
factors.  That decision must strike a
reasonable equilibrium
between the different factors but the factors themselves are not
determinative of any particular equilibrium.
Which equilibrium
is the best in the circumstances is left to the decision-maker.
The court’s task is merely to determine
whether the decision
made is one which achieves a reasonable equilibrium in the
circumstances.
[50] If we are satisfied that the Chief
Director did take into account all the factors, struck a reasonable
equilibrium between
them and selected reasonable means to pursue the
identified legislative goal in the light of the facts before him, the
applicant
cannot succeed.  The task of allocation of fishing
quotas is a difficult one, intimately connected with complex policy
decisions
and requires ongoing supervision and management of that
process by the departmental decision-makers who are experts in the
field.
[51] The main basis for the applicant’s
claim is the fact that the 2002 allocation took as its starting point
the 2001 allocation
and then only took a five percent “equity
pool” from existing rights holders for re-allocation.
This process,
they argue, illustrates that insufficient weight was
given to the section 2(j) criterion.
[52] The respondents’ answer is
that the 2002 allocation, albeit for a four-year period, is near the
start of a process of
transformation in a complex, capital- and
labour-intensive sector of the fishing industry in which instability
would be detrimental
to the overall management of the fishery.
The government respondents argue that the four-year period will
permit a reshuffling
in the industry which will facilitate
transformation in the medium-term.  It is true that five percent
of the overall allocation
is a small amount.  However, it cannot
be said that in opting for this amount the Chief Director acted
unreasonably.
The question is not whether a different
proportion of twenty five percent or fifty percent would have
produced a different or better
result, but whether in adopting five
percent the Chief Director acted unreasonably.  It is plain that
the process of transformation
of the fishing industry, and in
particular, the highly complex, capital- and labour-intensive
deep-sea hake fishery is no easy
task.  Parliament has
identified the relevant policy considerations and has left the
implementation of this task to the executive.
[53] In considering the Chief Director’s
decision on the record before us, it is clear that he took into
account the need
for restructuring the fishing industry throughout
the process – the policy guidelines identified transformation
as a key
consideration, as did the screening evaluation process and
the final reasons given for the decision.  The policy guidelines

also recognised that the capital intensity and labour intensity of
this sector make transformation more difficult and that given
the
need to continue to encourage investment the number of new entrants
into this fishing sector needs to be limited.  The
focus,
therefore, was always on the internal transformation of existing
participants rather than new entrants.  This focus
cannot be
said to be unreasonable in the light of the overall framework of the
empowering legislation.  It is clear from the
record that the
short-term strategy is to maintain stability in the sector, while the
medium-term strategy of the Department is
to seek a rationalisation
of new entrants which will see the emergence of one or two major new
players coupled with a continued
emphasis on the importance of the
internal transformation of pioneer companies as the route to the
required restructuring.
[54] The evidence establishes that the
Chief Director did take all the identified considerations into
account.  In particular,
the Chief Director recognised that
transformation as required by sections 2(j) and 18(5) of the Act can
be achieved in a variety
of ways and selected the way he thought
appropriate in the circumstances.  The Chief Director’s
decision may or may
not have been the best decision in the
circumstances, but that is not for this Court to consider.  The
Court must merely decide
whether the decision struck a reasonable
equilibrium between the principles and objectives set out in section
2 and section 18(5)
in the context of the specific facts of the
deep-sea hake trawl sector.  In my view, and for the reasons
given above, the
equilibrium achieved cannot be said to be
unreasonable. In the circumstances, this ground of appeal will not
succeed.
Failure to consider applicant’s
application on its merits
[55] The second ground of appeal is that
“the SCA incorrectly concluded that the Chief Director’s
decision should not
be set aside on the grounds that he did not apply
his mind to the quantum of hake applied for by the applicant and the
applicant’s
ability to catch such quantum.”  It will
be recalled that the applicant made application for 12 000 tonnes of
hake (more
than twelve times its existing tonnage).  In its
supplementary argument, the applicant identifies section
6(2)(e)(iii), (h)
and (i) as the provisions of PAJA upon which the
cause of action is based.  This is a similar complaint to the
complaints
concerning the lack of reasonableness and the failure to
take relevant factors properly into account that were dealt with in
the
previous part of this judgment.  Nevertheless, it is
appropriate to consider it briefly here.  The nub of this
complaint
is that the Chief Director did not apply his mind to the
quantum of tonnage applied for by the applicant and, in particular,
did
not take into account the change in capacity of the applicant
since 2001.  The applicant argues that the Chief Director failed

to take relevant considerations into account.  In so arguing, it
relies on
Computer Investors Group Inc and Another v Minister of
Finance
,
[35]
where the court held:
“Where a
discretion has been conferred upon a public body by a statutory
provision, such a body may lay down a general principle
for its
general guidance, but it may not treat this principle as a hard and
fast rule to be applied invariably in every case.
At most it
can be only a guiding principle, in no way decisive.  Every case
that is  presented to the public body for
its decision must be
considered on its merits.  In considering the matter the public
body may have regard to a general principle,
but only as a guide, not
as a decisive factor.  If the principle is regarded as a
decisive factor, then the public body will
not have considered the
matter, but will have prejudged the case without having regard to its
merits.  The public body will
not have applied the provisions of
the statutory enactment.”
That case was
different from this one.  It concerned the way in which sales
duty payable on certain imported computer equipment
was to be
calculated.  The decision-makers in that case had wrongly
concluded that the relevant provisions of the statute
were not
applicable to the calculation and had instead applied a different
formula.  They did not consider the merits or appropriateness
of
that formula to the calculation in issue.  That formula was
described by the court as “at most a very rough guide
or
check”.
[36]
[56] This case is quite different.
The Chief Director here has not applied a “rough guide or
check” without considering
its appropriateness in the place of
an applicable statutory formula.  Far from it.  Each
application was carefully considered
and rated according to a range
of criteria identified as relevant by the Department.  Included
in those criteria were “essential
requirements” which
related to ownership of or access to an appropriate vessel and the
use of regulation size mesh for the
bottom-trawl nets.  The
other criteria evaluated, as stated above, were the degree of
transformation of the applicant, the
degree of involvement and
investment in the industry, past performance, legislative compliance
and the degree of “paper quota”
risk.  Each
application was then evaluated and scored according to these
criteria.  Those scores were then considered
by the Chief
Director.  The scores achieved were used to calculate the
distribution of the “equity pool”.  This
entailed an
individualised approach to each application.
[57] In circumstances such as these,
moreover, where the decision-maker is seeking to evaluate a large
number of applications against
similar criteria, the dictum in the
Computer Investors Group
case
[37]
is not relevant.  In cases such as the present, it will be
permissible, and indeed will often be desirable, for administrative

decision-makers to adopt and apply general criteria evenly to each
application in order to ensure that the decision subsequently
made is
fair and consistent.
[58] Although the starting point for the
allocation was the 2001 allocation, the Chief Director did not simply
repeat the allocations
of 2001.  In at least two cases, existing
quota holder applicants were unsuccessful.  This was an
appropriate and fair
procedure to follow, and one which did involve a
consideration of the merits of each individual application.
[59] It is true that the amount of
tonnage that the applicant sought was not directly taken into
consideration in the calculation
of its final allocation.  It is
not clear why it should have been.  In total the applications
lodged sought allocations
of approximately 1,1 million tonnes of
hake, nearly ten times the total allowable catch.  The Chief
Director was entitled
to consider all the applications together in
the light of their scores on the individualised assessment and
previous quota allocations,
having considered the “essential
requirements” identified above, being the ability to ensure
that the allocation was
caught.
[60] There is therefore no indication of
unreasonableness, nor of relevant factors having been ignored nor of
irrelevant factors
having been taken into account.  For these
reasons, this ground of attack must also fail.
Undisclosed policy change
[61] The third ground of appeal raised
by the applicant was that the respondents changed the basis upon
which the allocation would
be made after the applications and policy
guidelines were published without notice to the applicant, or indeed
any of the applicants
for fishing quotas.  This ground is
apparently based on section 6(2)(c) of PAJA which requires
administrative action to be
procedurally fair.  In putting this
argument forward, the applicant relied not only on the policy
guidelines,
[38]
but also on a range of other instruments, including the White
Paper
[39]
and certain draft policy documents.  It is clear that the
relevant policy guidelines for the purposes of this argument are

those published on 27 July 2001 at the time of the invitation for
applications.  Unpublished guidelines, draft guidelines
and
policy documents subsequently overtaken by legislation or regulations
cannot be relevant to determining whether there has been
a change in
policy.  The guidelines issued on 27 July 2001, together with
the terms of the Act, are the only materials which
may be considered
to determine this complaint.
[62] The applicant relies on paragraph 2
of those guidelines to make its case.  Paragraph 2 provides in
part that:
“To
effectively address the injustices of the past in an orderly and just
manner and to achieve equity in the fishing industry,
it is the
intention to allocate a notable proportion of the TAC/TAE
[40]
to deserving applicants in order to encourage transformation, either
through the internal restructuring of current rights holders,
or
through the accommodation of new entrants.”  (emphasis
added)
The applicant argues that the proportion
of the total allowable catch allocated is not a “notable”
proportion and that
therefore the policy was changed without notice
to the applicant and to its detriment.  Paragraph 2 however must
be read in
the context of the guidelines as a whole.  Paragraph
1 states that:
“Cognisance
has been taken of the fact that substantial investments have been
made by many of the current rights holders.
This factor,
together with the need to create an environment that will promote
further long-term investment in human and material
resources are
important considerations.  Historical involvements, proof of
investment and past performance are therefore important
factors.
Applicants that are able to demonstrate the creation of employment
through the effective utilisation of their allocation
will be viewed
in a favourable light.”
[63] Moreover, it is clear from the
guidelines that transformation requirements are met not only by
permitting new entrants but
also by transformation of existing rights
holders.  So another paragraph in paragraph 2 of the guidelines
states:
“In
determining the degree of transformation, the following factors will
be taken into account:
ownership of, or
equity within the applicant;
the distribution of
wealth created gained through access to marine living resources;
the extent to which
the applicant provides employment to members of historically
disadvantaged sectors of the community.”
In this regard, the guidelines also make
plain that for the purposes of transformation the situation in the
capital-intensive sectors
was to be treated somewhat differently to
other sectors of the fishing industry.  Another paragraph in the
guidelines states
that:
“In the more
capital-intensive sectors of the fishing industry, a higher level of
internal transformation of current rights
holders rather than the
introduction of new entrants is encouraged.”
[64] The corollary was that the less
capital-intensive sectors of the industry were more appropriate for
the form of transformation
that required extensive admission of new
entrants.  The relevant guideline states:
“The hake
line sector (longline and handline) has been identified as a suitable
vehicle for the promotion of HDI’s [historically
disadvantaged
individuals] in the hake sector, more specifically small- and
medium-sized enterprises (SMME’s).  In order
to achieve
the objectives contemplated in section 2 of the Act, particular
regard will be paid to the need to grant access to new
entrants,
particularly those from historically disadvantaged sectors of
society.”
Finally it is clear from the guidelines
that the Department sees transformation in the industry as a
long-term goal:
“While it is
acknowledged that transformation or restructuring of the fishing
industry cannot be achieved overnight, it nevertheless
is a primary
objective to build a fishing industry that in its ownership and
management, broadly reflects the demographics of South
Africa today.”
[65] It is true that at the end of the
day only a small portion of the total allowable catch was allocated
to the “equity
pool”.  The question that arises is
whether the small proportion that was allocated was such as could on
an overall
reading of the guidelines be said to constitute a change
in policy of which the applicant should have been notified.  In
my
view, it could not.  The guidelines make plain that
transformation is not going to happen “overnight” and
that
in the capital-intensive sectors, emphasis is being placed on
the internal transformation of existing rights holders rather than

the introduction of new entrants.  It is also clear on the
evidence before us that the pioneer companies are in the main making

progress in the task of internal transformation.  Moreover, in
the hake industry, the long-line and hand-line sectors have
been
identified as suitable sectors for the promotion of small- and
medium-sized enterprises owned and managed by historically

disadvantaged persons.  There has been a shift in the proportion
of the total allowable catch allocated per sector in favour
of those
sectors, although it remains a small proportion of the overall total.
[66] In the circumstances, this ground
of appeal, too, must fail.
Effect of internal appeal
[67] In the light of the decision I have
reached, it is not necessary to consider the effect of the internal
appeal to the Minister.
It may be that the effect of that
appeal was to replace the Chief Director’s decision with
another decision by the Minister
which would render any challenge to
the decision of the Chief Director futile.  We also do not need
to decide whether, when
an exemption is granted in terms of section
7(2)(c) of the Act, internal remedies may not be pursued, as the
respondents argued.
This question may stand over for another
day.
The order
[68] The following order is made:
1.
The application for leave to appeal is granted.
2.
The appeal is dismissed with costs, such costs to include the costs
of the application
for leave to appeal, and those attendant upon the
employment of two counsel by both the first and second respondents
and the third
to eighteenth respondents.
Chaskalson CJ, Langa DCJ, Ackermann J,
Goldstone J, Madala J, Mokgoro J Moseneke J, Ngcobo J, Sachs J and
Yacoob J, concur in the
judgment of O’Regan J.
NGCOBO J:
Introduction
[69] I have read the main judgment.
I concur with it. However, I write separately to emphasise the
importance of transformation
in the context of the Marine Living
Resources Act
[41]
(the Act).
[70] The factual background is fully set
out in the main judgment.  I need not repeat it here.  Much
of the debate in
this Court concerned the question whether the Chief
Director had proper regard to section 2(j) of the Act.  That
subsection
sets out one of the objectives which the Minister must
“have regard to” when exercising any powers under the
Act.
[42]
It requires the Minister to “have regard to” “the
need to restructure the fishing industry to address historical

imbalances and to achieve equity within all branches of the fishing
industry.”  The applicant contended that the Supreme
Court
of Appeal misconstrued section 2(j) when it held that subsection (j)
requires no more than that the functionary concerned
should “bear
in mind” or “not overlook” its provisions.  It
contended that the Act imposes an obligation
on the decision-maker to
give effect to section 2(j).
[71] In my view, the answer to the
question whether the Act imposes an obligation to give effect to
section 2(j) depends, in the
first place, on the place of
transformation in our constitutional democracy, and, in the second
place, on how the phrases “have
regard to” or “have
particular regard to” are to be understood in the context of
the Constitution and the Act.
[43]
The exercise is essentially one of statutory interpretation.
The constitutional context
[72] The Constitution is now the supreme
law in our country.
[44]
It is therefore the starting point in interpreting any legislation.
Indeed, every court “must promote the spirit,
purport and
objects of the Bill of Rights” when interpreting any
legislation.  That is the command of section 39(2).

Implicit in this command are two propositions: first, the
interpretation that is placed upon a statute must, where possible, be

one that would advance at least an identifiable value enshrined in
the Bill of Rights; and second, the statute must be reasonably

capable of such interpretation.  This flows from the fact that
the Bill of Rights “is a cornerstone of [our constitutional]

democracy.”
[45]
It “affirms the democratic values of human dignity, equality
and freedom.”
[46]
In interpreting section 2(j), therefore, we must promote the values
of our constitutional democracy.  But what are these
values?
[73] South Africa is a country in
transition.  It is a transition from a society based on
inequality to one based on equality.
This transition was
introduced by the interim Constitution, which was designed “to
create a new order based on equality in
which there is equality
between men and women and people of all races so that all citizens
should be able to enjoy and exercise
their fundamental rights and
freedoms.”
[47]
This commitment to the transformation of our society was affirmed and
reinforced in 1997, when the Constitution came into
force.  The
Preamble to the Constitution “recognises the injustices of our
past” and makes a commitment to establishing
“a society
based on democratic values, social justice and fundamental rights”.
This society is to be built on
the foundation of the values
entrenched in the very first provision of the Constitution.
These values include human dignity,
the achievement of equality and
the advancement of human rights and freedoms.
[48]
[74] The achievement of equality is one
of the fundamental goals that we have fashioned for ourselves in the
Constitution.
Our constitutional order is committed to the
transformation of our society from a grossly unequal society to one
“in which
there is equality between men and women and people of
all races”.
[49]
In this fundamental way, our Constitution differs from other
constitutions which assume that all are equal and in so doing
simply
entrench existing inequalities.
[50]
Our Constitution recognises that decades of systematic racial
discrimination entrenched by the apartheid legal order cannot
be
eliminated without positive action being taken to achieve that
result.  We are required to do more than that.  The
effects
of discrimination may continue indefinitely unless there is a
commitment to end it.  This point was made in
National
Coalition for Gay and Lesbian Equality v Minister of Justice
[51]
where this Court observed:
“It is
insufficient for the Constitution merely to ensure, through its Bill
of Rights, that statutory provisions which have
caused such unfair
discrimination in the past are eliminated.  Past unfair
discrimination frequently has ongoing negative
consequences, the
continuation of which is not halted immediately when the initial
causes thereof are eliminated, and unless remedied,
may continue for
a substantial time and even indefinitely.  Like justice,
equality delayed is equality denied.”
[52]
[75] The commitment to achieving
equality and remedying the consequences of past discrimination is
immediately apparent in section
9(2) of the Constitution.
[53]
That provision makes it clear that under our Constitution “[e]quality
includes the full and equal enjoyment of all
rights and freedoms.”
And more importantly for present purposes, it permits “legislative
and other measures designed
to protect or advance persons, or
categories of persons, disadvantaged by unfair discrimination.”
These measures may
be taken “[t]o promote the achievement of
equality”.
[76] But transformation is a process.
There are profound difficulties that will be confronted in giving
effect to the constitutional
commitment of achieving equality.
We must not underestimate them.  The measures that bring about
transformation will
inevitably affect some members of the society
adversely, particularly those coming from the previously advantaged
communities.
It may well be that other considerations may have
to yield in favour of achieving the goal we fashioned for ourselves
in the Constitution.
What is required, though, is that the
process of transformation must be carried out in accordance with the
Constitution.
As was recognised in
Bel Porto School
Governing Body and Others v Premier of the Province, Western Cape,
and Another
:
[54]
“The
difficulties confronting us as a nation in giving effect to these
commitments are profound and must not be underestimated.
The
process of transformation must be carried out in accordance with the
provisions of the Constitution and its Bill of Rights.
Yet, in
order to achieve the goals set in the Constitution, what has to be
done in the process of transformation will at times
inevitably weigh
more heavily on some members of the community than others.”
[77] It is against this constitutional
commitment to achieving equality that the Act must be understood and
construed.
The Act
[78] A foundational principle of the Act
is the transformation of the fishing industry.  This is an
industry that has been
and continues to be dominated by a few
so-called pioneer companies.  These companies were and continue
to be controlled and
owned predominantly by members of the community
that were privileged under apartheid and had exclusive access.
[55]
There was, and still is, therefore a need to ensure that access to
this industry is opened to those newly created companies
mostly
controlled and owned by communities that were previously excluded
from this industry.  To break away from the past,
a new marine
fisheries policy was announced.  It is a “fisheries policy
[that] is founded on the belief that all natural
marine living
resources of South Africa, as well as the environment in which they
exist and in which mariculture activities may
occur, are a national
asset and the heritage of all its people, and should be managed and
developed for the benefit of present
and future generations in the
country as a whole.”
[56]
[79] This commitment to the
transformation of the industry was affirmed and reinforced in the
Act.  After stating that the
purposes of the Act are “the
conservation of the marine ecosystem, long-term sustainable
utilisation of marine living resources,”
the preamble to the
Act declares as one of its goals: “to provide for the exercise
of control over marine living resources
in a fair and equitable
manner to the benefit of
all the citizens
of South Africa”.
(My emphasis).
[80] There are a number of provisions of
the Act which are indicative of this foundational principle:
[57]
Section 2(j) enjoins those who exercise any power under the Act to
have regard to “the need to restructure the fishing
industry to
address historical imbalances and to achieve equity within all
branches of the fishing industry”; section 18(5)
provides that
in granting any rights to undertake or engage in commercial or
subsistence fishing under section 18(1), the Minister
shall “in
order to achieve the objectives contemplated in section 2, have
particular regard to the need to permit new entrants,
particularly
those from historically disadvantaged sectors of society”; part
5 of the Act provides for the establishment
of the Fisheries
Transformation Council (the Council), whose main object is “to
facilitate the achievement of fair and equitable
access to the rights
referred to in section 18”;
[58]
and under section 31(1), the fishing rights allocated to the Council
shall be leased “to persons from historically disadvantaged

sectors of society and to small and medium size enterprises.”
[81] In
Langklip See Produkte v
Minister of Environmental Affairs
, the Cape High Court found that
“[t]he principles of the . . . Act are clearly directed to the
promotion of equality.”
[59]
I agree.  The transformative objectives of the Act are congruent
with the Constitution and with section 9(2) in particular.
[82] It is against this statutory
background that section 2(j) must be construed and understood.
The construction of section 2(j)
[83]
Section 2 of the Act sets out a number of objectives and
principles to which the Minister must have regard in exercising any
powers
under the Act.  One of those objectives is “the
need to restructure the fishing industry to address historical
imbalances
and to achieve equity within all branches of the fishing
industry.”  In enacting this provision, the legislature
was
acutely aware that the fishing policy of this country must
function within and be guided by our constitutional system which
guarantees
“equal protection and benefit of the law.”
[60]
It realised too that the effects of the past inequities stemming from
racial and other forms of discrimination have not remained
in the
past but have adversely affected the present fishing industry.
It
was also aware that there may be business practices in the fishing
industry which are racially neutral on their face, but because
of
past overt social and economic discrimination, they are presently
operating, in effect, to perpetuate these past inequities.
[84] Section 2(j) was enacted “to
remove barriers to competitive access which had their roots in racial
[and other forms of]
discrimination, and which continue today, even
absent any intentional discrimination or unlawful conduct.”
[61]
It has both a remedial and prophylactic effect.  It is remedial
in that it eradicates the effects of past discrimination.
It is
prophylactic in that it prevents the Minister’s decisions,
which are non-discriminatory on their face, from reinforcing
and
perpetuating the exclusionary effects of past discrimination.
Section 2(j) is a legislative measure “designed to
protect or
advance persons or categories of persons, disadvantaged by unfair
discrimination” so as “[t]o promote the
achievement of
equality.”
[62]
[85] There can be no question therefore
that section 2(j) gives effect to the transformative policy of the
Act.  I do not understand
the judgment of the SCA to suggest
otherwise.  The SCA held that “no doubt section 2(j) was
intended to remedy the “mischief”
of past
discrimination”.
[63]
It pointed out that “it is apparent that [the Act] introduces a
mandatory requirement to have regard to the redress
of certain wrongs
of the past.”
[64]
It went on to hold that “if the Chief Director were to fail to
heed this injunction he would fail in his duty and his
decision would
be open to attack.”
[65]
I agree with these findings.
[66]
[86] It is in this context that the
words “have regard to” or “have particular regard
to” must be understood
and construed, in particular, the
question whether the Act imposes an obligation on the decision maker
to give effect to section
2(j).
Does the Act impose an obligation to
comply with section 2(j)?
[87] The SCA held that subsections (a)
to (j) need not “be given operative effect each time” a
decision is made under
the Act; all that is required is “that
the functionary shall ‘have regard to’ or ‘have
particular regard
to’ them.”
[67]
Relying upon the ordinary meaning of the phrase “have regard
to”, it also held that this simply means that the
functionary
must “bear in mind” or “not overlook them.”
[68]
It concluded that the subsections are no more than a guide to the
exercise of administrative discretion.  I respectfully
do not
agree with this conclusion.  It fails to give due weight to the
importance attached to transformation in the Act read
as a whole.
[88] I accept that the ordinary meaning
of the phrase “have regard to” has in the past been
construed by our courts
to mean “bear in mind” or “do
not overlook”.
[69]
However, the meaning of that phrase must be determined by the context
in which it occurs.  In this case that context
is the statutory
commitment to redressing the imbalances of the past, and more
importantly, the constitutional commitment to the
achievement of
equality.  And this means that the phrase as it relates to
section 2(j) must be construed purposively to “promote
the
spirit, purport and objects of the Bill of Rights”.  That
object is “the achievement of equality”, a
foundational
value that is affirmed in section 9(2) of the Constitution.
[89] It is no doubt true that it is a
primary rule of statutory construction that words in a statute must
be given their ordinary
grammatical meaning.  But it is also a
well-known rule of construction that words in a statute should be
construed in the
light of their context.  These rules were
articulated by Schreiner JA in an oft-quoted passage in his
dissenting judgment
in
Jaga v Dönges, NO and Another; Bhana v
Dönges, NO and Another
[70]
where he said that:
“Certainly no
less important than the oft repeated statement that the words and,
expressions used in a statute must be interpreted
according to their
ordinary meaning is the statement that they must be interpreted in
the light of their context.  But it
may be useful to stress two
points in relation to the application of this principle.  The
first is that “the context”,
as here used, is not limited
to the language of the rest of the statute regarded as throwing light
of a dictionary kind on the
part to be interpreted.  Often of
more importance is the matter of the statute, its apparent scope and
purpose, and, within
limits, its background.  The second point
is that the approach to the work of interpreting may be along either
of two lines.
Either one may split the inquiry into two parts
and concentrate, in the first instance, on finding out whether the
language to
be interpreted has or appears to have one clear ordinary
meaning, confining a consideration of the context only to cases where
the language appears to admit of more than one meaning; or one may
from the beginning consider the context and the language to be

interpreted together.”
[71]
He concluded that:
“. . . the
legitimate field of interpretation should not be restricted as a
result of excessive peering at the language to
be interpreted without
sufficient attention to the contextual scene.”
[72]
[90] The emerging trend in statutory
construction is to have regard to the context in which the words
occur, even where the words
to be construed are clear and
unambiguous.  Recently, in
Thoroughbred Breeders’
Association v Price Waterhouse
[73]
,
the SCA has reminded us that:
“The days are
long past when blinkered peering at an isolated provision in a
statute was thought to be the only legitimate
technique in
interpreting it if it seemed on the face of it to have a readily
discernible meaning.  As was said in
University
of
Cape Town
v Cape Bar Council and Another
1986 (4) SA 903
(A) at 914D-E:
‘I am of the
opinion that the words of s 3(2)(d) of the Act, clear and unambiguous
as they may appear to be on the face thereof,
should be read in the
light of the subject-matter with which they are concerned, and that
it is only when that is done that one
can arrive at the true
intention of the Legislature.’
The well-known passage in the dissenting
judgment of Schreiner JA in
Jaga v Donges NO and Another; Bhana v
Donges NO and Another
1950 (4) SA 653
(A) at 662G-663A was also
quoted with approval.  It is of course clear that the context to
which reference is made in the
latter case must include the long
title and chapter headings.  (Compare
Swart en ‘n Ander
v Cape Fabrix
(Pty) Ltd
1979 (1) SA 195
(A) at 202C.”
[74]
[91]
The technique of paying attention to context in statutory
construction is now required by the Constitution, in particular,

section 39(2).  As pointed out above, that provision introduces
a mandatory requirement to construe every piece of legislation
in a
manner that promotes the “spirit, purport and objects of the
Bill of Rights.”  In
Investigating Directorate: Serious
Economic Offences and Others v Hyundai Motor Distributors (Pty) Ltd
and Others: In Re Hyundai
Motor Distributors (Pty) Ltd and Others v
Smit NO and Others,
[75]
this Court explained the meaning and the interpretive role of section
39(2) in our constitutional democracy as follows:
“This means
that all statutes must be interpreted through the prism of the Bill
of Rights.  All law-making authority
must be exercised in
accordance with the Constitution.  The Constitution is located
in a history which involves a transition
from a society based on
division, injustice and exclusion from the democratic process to one
which respects the dignity of all
citizens, and includes all in the
process of governance.  As such, the process of interpreting the
Constitution must recognise
the context in which we find ourselves
and the Constitution’s goal of a society based on democratic
values, social justice
and fundamental human rights.  This
spirit of transition and transformation characterises the
constitutional enterprise as
a whole.”
[92] I am troubled therefore by an
interpretative approach that pays too much attention to the ordinary
language of the words “have
regard to”.  That
approach tends to isolate section 2(j) and determine its meaning in
the ordinary meaning of the words
“have regard to”.
It “ignores the colour given to the language by the
context.”
[76]
That context is the constitutional commitment to achieving equality,
the foundational policy of the Act to transform the
industry
consistent with the Constitution and the Act read as a whole.
The process of interpreting the Act must recognise
that its policy is
founded on the need both to preserve marine resources and to
transform the fishing industry, and the Constitution’s
goal of
creating a society based on equality in which all people have equal
access to economic opportunities.
[93] It has never been in issue that
prior to 1994 the fishing industry was grossly unrepresentative of
race and gender due to past
discrimination.  Nor is the need to
transform the industry disputed.  All of this is abundantly
clear from the foundational
policy of the Act.  It declares that
“all natural marine living resources in South Africa …
are assets and the
heritage of all its people”
[77]
and should be managed and developed for the benefit of all.
This language reflects the affirmation of the founding constitutional

value of equality.  This same commitment to equality was
affirmed in the Preamble to the Act.  Control over marine living

resources must be exercised “in a fair and equitable manner to
the benefit of all the citizens of South Africa”, declares
the
Preamble.
[94] The Act recognises that it is
insufficient merely to eliminate causes of past unfair discrimination
but also that there is
a need to redress the imbalance caused by such
discrimination.  As one reads on, therefore, one finds
provisions which plainly
show a commitment to redressing the
historical imbalance and to achieving equality.  Thus in
granting fishing rights the Minister
is required: to have regard to
the need to redress historical imbalance;
[78]
and to have particular regard to admitting new entrants from those
communities that were previously discriminated against.
[79]
In addition, provision is made for the establishment of the Fisheries
Transformation Council, whose object is to facilitate

transformation.
[80]
[95] The acute imbalance in the fishing
industry resulting from past discriminatory policies and laws and the
need to transform
the fishing industry were recently acknowledged in
the Policy Guidelines issued by the Department of Environmental
Affairs and
Tourism.  The Policy Guidelines recognise that:
[81]
“The
transformation of South Africa from an unequal society rooted in
discrimination and disparity to a constitutional democracy
founded
upon freedom, dignity and equality poses particularly profound
challenges for the fishing industry.  It is here that
there are
acute imbalances in personal wealth, infrastructure and access to
financial and other resources.  While it is acknowledged
that
transformation or restructuring of the fishing industry cannot be
achieved overnight,
it nevertheless is a primary objective to
build a fishing industry that in its ownership and management,
broadly reflects the demographics
of South Africa today
.”
(My own emphasis)
And declares its intention to redress
this historical imbalance as follows:
“To
effectively address the injustices of the past in an orderly and just
manner and to achieve equity in the fishing industry,
it is the
intention to allocate a notable proportion of the TAC/TAE to
deserving applicants in order to encourage transformation,
either
through the internal restructuring of current rights holders, or
through the accommodation of new entrants.”
[82]
[96] In my view it is important to bear
in mind the interaction between sections 2 and 18.  Section 2 is
a provision of general
application.  It applies to the exercise
of “any power under [the] Act”.  Section 18 of the
Act deals specifically
with the granting of fishing rights.
Subsection (5) defines the obligation of the Minister in granting
rights under section
18(1).  It says that “the Minister
shall, in order to achieve the objectives contemplated in section 2,
have particular
regard to the need to permit new entrants,
particularly those from historically disadvantaged sectors of
society”.
What is plain from the subsection is that, when
it comes to the granting of fishing rights, the Minister is required
to pay special
attention to transformation of the fishing industry.
Although the subsection uses the phrase “in order to achieve
the
objectives contemplated in section 2”, it is clear from the
context that at the time of the allocation the only objective
that
calls for special attention is the objective in section 2(j).
In this sense, section 18(5) reinforces section 2(j) and
makes it
plain that its provisions are the imperatives to be given effect to
when granting rights under the Act.
[97] This construction of the Act is not
only consistent with the constitutional goal to achieve equality, but
is also consistent
with the main foundational policy of the Act to
transform the industry.
[98] That the Minister gives effect to
transformation when allocating fishing rights under the Act, amply
appears from the record.
Both the Policy Guidelines and the
instructions of the Chief Director to the Advisory Committee on the
Allocation of Fishing Rights
indicate that transformation was one of
the requirements to be considered in the allocation of fishing rights
for the period 2002.
Thus the Chief Director’s
instructions state that “[i]n order to address these issues
effectively the department has
set in place a process that seeks to
further transform and restructure the South African fishing industry,
achieve equity, to create
greater stability and to grow certain
sectors through improved management regimes.”
[83]
One of the key elements of this process involves “[p]lacing a
high value on the degree of transformation and restructuring

displayed by applicants, both in their past performance and future
objectives.”
[84]
And if one has regard to the manner in which the applications were
considered, it is apparent that transformation was one of the
key
factors in the allocation of the fishing rights.  Finally, the
Policy Guidelines indicated that the intention of the government
was
“to allocate a notable proportion of the Total Allowable Catch”
to encourage transformation.
[99] All these considerations point
inexorably to the conclusion that the words “have regard to”
and “have particular
regard to” in the constitutional and
statutory context, require a decision-maker to do more than give lip
service to section
2(j).   The decision must address the
need for transformation in a meaningful way when decisions are made,
and be able
to demonstrate that this has been done.  A failure
to do so is unlawful, and the ensuing decision is open to attack.
[100] It is true that the Minister has a
discretion in the granting of fishing rights under the Act.  But
how is the Minister
to exercise that discretion?  In particular,
the question is does the Act read as a whole and in the context of
our commitment
to equality, indicate any policy which the Minister is
to follow?  If there is such a policy, then the Minister must
exercise
his discretion in accordance with such policy.
[85]
The Minister has a duty to give effect to that policy.  Here,
the main foundational policy of the Act is to redress
the imbalance
of the past.  The Minister is bound to give effect to that
policy in the exercise of the discretion.
[101] Having regard to the provisions of
section 2, the Minister had to deal with the issues in two stages.
Though the two
stages cannot be kept strictly apart and there may
well be an overlap at both stages of the decision making process, the
emphasis
in stage one is different to the emphasis in stage two.
Stage one is to determine the total allowable catch.  At this

stage, subsection 2(a) to (i) would be of particular importance.
But the Minister must also keep in mind that at the end
of the
process he must meet the transformative objectives of the Act.
This he can do if in stage one he has been able to
set aside
sufficient quota to enable him to meet that objective.  At stage
one, no doubt all the other objectives are relevant
and must be taken
into consideration.  But it is important that due regard also be
had to the need to meet the transformative
objective of the Act.
However, the overriding consideration at this stage is “ the
need to conserve marine living resources
for both the present and
future generations”
[86]
and ensure that fishing is ecologically sustainable.
[102] Having determined the total
allowable catch, the second stage is to make the allocation.  At
this stage, the other objectives
have less relevance.  Here the
objective to transform the industry assumes prominence.  It is
here where section 18(5)
enjoins the Minister to “have
particular regard to the need to permit new entrants, particularly
those from historically
disadvantaged sectors of society” in
granting rights under the Act.  Section 18(5) reinforces section
2(j) and gives
it more weight.
[103] It follows that if the Minister
were to fail to heed this injunction, he would be acting unlawfully
and his decision would
be open to attack.  It is incumbent upon
the Minister to put forward facts from which it will appear that he
has indeed paid
due regard to the need to promote transformation.
A court reviewing the decision of the Minister has an obligation to
ensure
that the section has been complied with.  Where there is
a dispute as to whether the Minister has complied with section 2(j),

the court considering the matter must examine the facts relied upon
by the Minister as establishing compliance with section 2(j),
and
satisfy itself that there has been compliance with this provision.
[104] The duty of the courts in this
regard, however, does not extend to telling the functionaries how to
implement transformation.
That must be left to the
functionaries concerned.  The transformation can take place in
various ways: by allocating quotas
to new companies controlled by
historically disadvantaged groups, by insisting on internal
transformation of existing companies,
by insisting upon employment
policies that bring historically disadvantaged groups into senior
administrative positions, possibly
by schemes designed to build
capacity in other fishing activities until the new entrants have the
financial and operational stability
necessary for the deep-sea hake
industry, to mention some.  Exactly how this is to be done is
complex and difficult and ultimately
a matter of policy.  What
is essential as far as fishing rights are concerned is that the
policy should meet the requirement
of section 2(j), that is, it must
in a meaningful way address the need to restructure the fishing
industry to address historical
imbalances and to achieve equity
within “all the branches of the fishing industry”.
[105] Much was made of the need to
stabilize the industry.  Transformation initiatives had caused
instability, it was said,
which manifested itself in decreased
investment.  This has resulted in the trawler fleet aging and
has led to the risk that
the industry will become less
internationally competitive.  This argument is familiar when
transformation is in issue.
Transformation may bury the
industry, so it was argued by the so-called pioneer companies.
In his main affidavit Mr Kleinschmidt
says that:
“. . . the
restructuring and transformation of the hake deep sea trawl industry
has to accommodate the need for stability−a
prerequisite for
investor confidence.  The instability of the past few years has
had a significant adverse effect on investment,
with the result that
South Africa’s deep sea trawl fishing fleet is ageing.
The industry runs the risk of becoming
less and less internationally
competitive in the long-term.”
[87]
[106] No one would dispute the need to
maintain stability in the industry.  Otherwise there would be
nothing to transform.
But transformation is required by both
the Constitution and the Act.  And that change sometimes comes
at a cost.  I have
pointed out earlier that there are profound
challenges facing our nation in meeting our constitutional commitment
to transformation.
The transformation process will inevitably
have an adverse impact on some individuals, particularly those that
have always been
advantaged and, at times, on the industry.
These are some of the challenges we will have to confront as a nation
in transition.
But transformation cannot be sacrificed at the
altar of stability.  It must be carried out responsibly and its
adverse impact
must be minimized.
[107] It is difficult to see the
connection between transformation, investor confidence and the aging
of the deep-sea trawl fishing
fleet.  No facts have been put
forward to support this argument.  It is highly speculative.
It can only mean that
investors have no confidence in the new
entrants in the industry because of their lack of experience, which
is a result of past
discriminatory laws and policies.  It would
be ironical indeed if the effects of past unfair discrimination, a
condition over
which the previously discriminated group had no
control, were now to be used to exclude them from the very industry
under the new
legal order.  Were this to be the case, our
constitutional commitment to transformation would remain an empty
promise.
The applicant’s complaint
[108] The applicant says where the
government went wrong is in promising to allocate up to 25% or “a
notable proportion of
the Total Allowable Catch” for
transformation and thereafter only allocating a mere 2%.
[88]
These promises were made in a confidential document containing
instructions to the advisory committee on allocation of hake
deep-sea
commercial fishing rights for 2001 and in the Policy Guidelines
published in the Government Gazette of 27 July 2001 where
the
government promised to reserve “up to 25%” or “a
notable proportion” respectively for transformation.
As
it turns out “no more than” 2% was allocated to encourage
transformation.  This is where the government went
wrong,
maintains the applicant.
[109] But that is the percentage that
was shared by all the companies that complied with the transformation
criteria determined
by the Chief Director.  The applicant does
not deny that transformation was given effect to in the allocation of
fishing rights.
They could hardly do so on the record.
The essence of their complaint is that more should have been
allocated for transformation.
[110] It is true the allocation of 2%
already made to encourage transformation as compared to “up to
25%” or “a
notable proportion” that was promised,
may appear to be paying lip service to the scheme of the Act and the
imperatives of
transformation.  However, on the record, I am
unable to say, that what was allocated to encourage transformation,
was in the
context of the available Total Allowable Catch and the
other elements of transformation promoted by the existing operators,
so
insignificant so as to amount to failure to give effect to
transformation.  That case has not been made out.
[111] It is not immediately clear why if
the proposal says up to twenty five percent would be set aside the
applicant should complain
when two percent was set aside.
Obviously, two percent is within the range of “up to”.
In any event, the
amount reserved was to be determined by a number of
factors, one of which would be the Total Allowable Catch and the
procedure
for allocation.  In my view, it is not within the
province of the courts to tell the government how much should be
allocated
for transformation.  This is a matter to be determined
by the Minister.  What is important is that a percentage was
actually
set aside for transformation.
[112] Accordingly, the argument based on
failure to reserve more than 2% of the Total Allowable Catch for
transformation must fail.
[113] I agree that on the record, the
government has put up sufficient facts from which it is apparent that
it accorded transformation
prominence.  I cannot therefore say
that the Minister acted unlawfully in that he disregarded the
mandatory obligation to
give effect to transformation.
[114] The contention by the applicant
that its application was not considered on its merits was based on
the statement by the Deputy
Director-General that the method of
allocation used avoided the impossible task of considering the
applications on the merits.
Had officials separately reviewed
each submission, the applicant contended, they would have considered
issues of transformation.
Properly understood, the statement
relied upon says no more than that 2001 allocations were taken as a
starting point.  Then,
based on the transformation criteria, an
allocation was made.  Not one company got everything they had
asked for.  This
method made it unnecessary for the Chief
Director to consider whether an applicant should get what it had
asked for because there
was simply not enough to allocate on that
basis.  It is in this context that the statement must be
understood.  I cannot
say that the government acted unlawfully
in doing so.
[115] For these additional reasons, I
concur in the main judgment.
Chaskalson CJ, Langa DCJ, Ackermann J,
Goldstone J, Madala J, Mokgoro J Moseneke J, O’Regan J, Sachs J
and Yacoob J, concur
in the judgment of Ngcobo J.
For the
applicant:

I Jamie SC and PR Hathorn instructed by Marais Muller Inc.
For the first and second
respondents:        W Trengove SC,
A Schippers and AM Breitenbach instructed
by the State Attorney.
For the third to eighteenth
respondents:   LA Rose-Innes SC and PBJ Farlam instructed
by Mallinicks Inc.
[1]
The SCA judgment is reported as
Minister of Environmental Affairs
and Tourism and others v Phambili Fisheries (Pty) Ltd and another
[2003] 2 All SA 616 (SCA).
[2]
The decision was taken in terms of
section 18
of the
Marine Living
Resources Act, 18 of 1998
, a power conferred upon the Minister,
subject to his right to delegate that authority in terms of section
79 of the Act.
That authority was duly delegated to the Chief
Director by the Minister on 5 November 2001.
[3]
See
Policy Guidelines with regard to applications for the
granting of rights in terms of the
Marine Living Resources Act 18 of
1998
, published as Annexure B to GN 1771, Government Gazette
22517, 27 July 2001, at page 38.
[4]
A Marine Fisheries Policy for South Africa
White Paper 5 May
1997 para 4.6.2.2; see also section 18(6) of the Act; see also
Policy Guidelines with regard to applications for the granting of
rights in terms of the
Marine Living Resources Act 18 of 1998
above n 3, at page 36.
[5]
Government
Gazette 22517, GN 1771, 27 July 2001.
[6]
Id at Annexure B.
[7]
Section 7(2)
provides as follows:
“(
a
)  Subject to
paragraph (c), no court or tribunal shall review an administrative
action in terms of this Act unless any internal
remedy provided for
in any other law has first been exhausted.
(
b
)  Subject to paragraph
(c), a court or tribunal must, if it is not satisfied that any
internal remedy referred to in paragraph
(a) has been exhausted,
direct that the person concerned must first exhaust such remedy
before instituting proceedings in a court
or tribunal for judicial
review in terms of the Act.
(
c
)  A court or tribunal
may, in exceptional circumstances and on application by the person
concerned, exempt such person from
the obligation to exhaust any
internal remedy if the court or tribunal deems it in the interest of
justice.”
[8]
Phambili Fisheries (Pty) Ltd and Another v Minister of
Environmental Affairs and Tourism and Others
, Case 1171/2002, 27
November 2002, as yet unreported.
[9]
2000 (2) SA 674 (CC); 2000 (3) BCLR 241 (CC).
[10]
Id at paras 33-45.
[11]
Cf The discussion of the constitutional basis of judicial review of
administrative action in
Staatspresident en Andere v United
Democratic Front en
'
n
Ander
1988 (4) SA 830
(A).  For a discussion by academic
writers, see A Breitenbach “The Justifications for Judicial
Review” (1992)
8
SA Journal on Human Rights
512; M
Wiechers
Administratiefreg
2 ed (Butterworth, Durban/Pretoria
1984) and E Mureinik “Pursuing Principle: the Appellate
Division and Review under the
State of Emergency” (1989) 5
SA
Journal on Human Rights
60 at 70. And also the discussion by the
SA Law Commission in
Report on the Investigation into the Courts’
Powers of Review of Administrative Acts
Project 24, November
1992 at paras 4.1.2.
[12]
The question of the constitutional basis of judicial review has been
the subject of vigorous debate in the United Kingdom.
Most of
the key articles have been collected in Forsyth (ed)
Judicial
Review & the Constitution
(Hart Publishing, Oxford and
Portland, Oregon 2000).  See also TRS Allan “The
Constitutional Foundations of Judicial
Review: Conceptual Conundrum
or Interpretative Inquiry?” (2002) 61(1)
Cambridge
Law
Journal
87; P Craig “Constitutional Foundations, the Rule
of Law and Supremacy” 2003
Public Law
92.
[13]
Pharmaceutical Manufacturers
, above n 9 at para 45.
[14]
Item 23 to schedule 6 of the Constitution.
[15]
National Education Health and Allied Workers Union v University
of Cape Town and Others
2003 (3) SA 1
(CC);
2003 (2) BCLR 154
(CC) at paras 14 - 15;
National Union of Metalworkers of South
Africa and Others v Bader Bop (Pty) Ltd and Another
[2002] ZACC 30
;
2003 (3) SA
513
(CC);
2003 (2) BCLR 182
(CC) at para 15;
Alexkor Limited and
Another v The Richtersveld Community and Others
, CCT 19/03, 14
October 2003, as yet unreported, at para 23.
[16]
Ketteringham v City of Cape Town
1934 AD 80
at 90;
Yannakou
v Apollo Club
1974 (1) SA 614
(A) at 623F - H;
Fundstrust
(Pty) Ltd (in liquidation) v Van Deventer
1997 (1) SA 710
(A);
[1997] 1 All SA 644
(A) at 725H - 726A;
Ben-Tovim v Ben-Tovim and
Others
2001 (3) SA 1074
(C) at 1090A - B.
[17]
See paras 5 and 6 above.
[18]
Above n 1 at para 30.
[19]
Section 2 is cited at paras 5 and 6 above.
[20]
Section 18(5) speaks of the need to permit “new entrants”.
It is not necessary for the purposes of this case
to determine
precisely the ambit of that class.  We assume in favour of the
applicant that it falls within it.
[21]
See para 10 above.
[22]
1988 (3) SA 132
(A) at 152A - D.
[23]
Union Government (Minister of Mines and Industries) v Union Steel
Corporation (South Africa) Ltd
1928 AD 220
at 236;
National
Transport Commission and Another v Chetty’s Motor Transport
(Pty) Ltd
1972 (3) SA 726
(A) at 735;
The
Administrator,
Transvaal and The Firs Investments (Pty) Ltd v Johannesburg City
Council
1971 (1) SA 56
(A) at 79 - 80;
Johannesburg City
Council v The Administrator, Transvaal and Mayofis
1971 (1) SA
87
(A) at 96A - D.  See, however, the minority judgment of
Jansen JA in
Theron en Andere v Ring van Wellington van die NG
Sendingkerk in Suid-Afrika en Andere
1976 (2) SA 1
(A) at 14–21.
[24]
[1948] 1 KB 223
(CA) at 233-4.
[25]
[1998] UKHL 40
;
[1999] 1 All ER 129
(HL) at 157.
[26]
See, for example, the discussion in P Cane
An Introduction to
Administrative Law
3 ed (Clarendon Press, Oxford 1996) at 209;
and also C Hoexter
The New Constitutional & Administrative
Law,
Volume II Administrative Law
(Juta, Cape Town 2002)
at 187.
[27]
Investigating Directorate: Serious Economic Offences and Others v
Hyundai Motor Distributors (Pty) Ltd and Others: In Re Hyundai
Motor
Distributors (Pty) Ltd and Others v Smit NO and Others
[2000] ZACC 12
;
2001 (1)
SA 545
(CC);
2000 (10) BCLR 1079
(CC) at paras 21-26.
[28]
See
Administrator, Transvaal, and Others v Traub and Others
[1989] ZASCA 90
;
1989 (4) SA 731
(A) at 758H - I;
Premier, Province of Mpumalanga
and Another v Executive Committee of the Association of Governing
Bodies of State-Aided Schools:
Eastern Transvaal
[1998] ZACC 20
;
1999 (2) SA 91
(CC);
1999 (2) BCLR 151
(CC) at para 39;
Minister of Public Works
and Others v Kyalami Ridge Environmental Association and Another
(Mukhwevho Intervening)
[2001] ZACC 19
;
2001 (3) SA 1151
(CC);
2001 (7) BCLR 652
(CC) at paras 100-1.
[29]
Above n 1 at para 47.
[30]
C Hoexter “The Future of Judicial Review in South African
Administrative Law” (2000) 117
SA Law Journal
484 at
501-2.  Also cited by Cameron JA in
Logbro Properties CC v
Bedderson NO and Others
2003 (2) SA 460
(SCA) at para 21.
[31]
Above n 1 at para 50.
[32]
Professor Dyzenhaus has suggested that deference is best understood
not as submission but as respect, see Dyzenhaus “The
Politics
of Deference: Judicial Review and Democracy” in M Taggart (ed)
The Province of Administrative Law
(Hart Publishing, Oxford
1997) 279 at 303.  See also
Baker v Canada (Minister of
Citizenship and Immigration)
174 DLR (4
th
) 193 at
para 65.
[33]
[2003] 2 All ER 977 (HL).
[34]
Id at paras 75-76.
[35]
1979 (1) SA 879
(T) at 898C-E.
[36]
Id at 897H.
[37]
Id
[38]
Above n 5 Annexure B.
[39]
Above n 4.
[40]
The total allowable catch/total applied effort.
[41]
Act 18 of 1998.
[42]
Section 2 of the Act provides:
“
Objectives
and principles
The Minister and any
organ of state shall in exercising any power under this Act, have
regard to the following objectives and
principles:
(a) the need to
achieve optimum utilisation and ecologically sustainable development
of marine living resources;
(b) the need to
conserve marine living resources for both present and future
generations;
(c) the need to
apply precautionary approaches in respect of the management and
development of marine living resources;
(d) the need to
utilise marine living resources to achieve economic growth, human
resource development, capacity building within
fisheries and
mariculture branches, employment creation and a sound ecological
balance consistent with the development objectives
of the national
government;
(e) the need to
protect the ecosystem as a whole, including species which are not
targeted for exploitation;
(f) the need to
preserve marine biodiversity;
(g) the need to
minimise marine pollution;
(h) the need to
achieve to the extent practicable a broad and accountable
participation in the decision-making processes provided
for in this
Act;
(i) any relevant
obligation of the national government or the Republic in terms of
any international agreement or applicable rule
of international law;
and
(j) the need to
restructure the fishing industry to address historical imbalances
and to achieve equity within all branches of
the fishing industry.”
[43]
I use the term “transformation” to refer broadly to
redressing the historical imbalance caused by past unfair
discrimination.
[44]
Section 2 of the Constitution provides:
“This Constitution is the supreme
law of the Republic; law or conduct inconsistent with it is invalid,
and the obligations
imposed by it must be fulfilled.”
[45]
Section 7(1) of the Constitution.
[46]
Id
[47]
Preamble to the interim Constitution.
[48]
Section 1(a) of the Constitution.
[49]
Preamble of the interim Constitution.
[50]
The United States Constitution, which contains an equal protection
clause, has limited application where government seeks to
enact a
programme to remedy societal discrimination based on race.
Fullilove et al v Klutznick Secretary of Commerce, et al
[1980] USSC 150
;
448
US 448
(1980);
Richmond
v JA Croson Co
[1989] USSC 14
;
488 US 469
(1989).
[51]
1999 (1) SA 6 (CC); 1998 (12) BCLR 1517 (CC).
[52]
Id at para 60.
[53]
Section 9(2) provides:
“Equality includes the full and
equal enjoyment of all rights and freedoms.  To promote the
achievement of equality,
legislative and other measures designed to
protect or advance persons, or categories of persons, disadvantaged
by unfair discrimination
may be taken.”
[54]
[2002] ZACC 2
;
2002 (3) SA 265
(CC);
2002 (9) BCLR 891
(CC) at para 7.
[55]
The ownership scores of these companies are
telling in this regard.  Scores are given in numbers which
represent a percentage.
0 represents 0-4%; 1 represents 5-29%;
2 represents 30-49%; 3 represents 50-65%; and 4 represents
66%-100%.  Under the Black
Economic Empowerment Column which
reflects the percentage of ownership on asset value by previously
discriminated groups in the
companies they scored as follows: Irvin
& Johnson Limited scored 1 point which represents 5-29%; Sea
Harvest Corporation
Limited scored 2 points which represents 30-49%;
Atlantic Trawling (Pty) Limited score 1 point which represents
5-29%; and Foodcorp
(Pty) Limited scored 4 which represents
66-100%.  This judgment recognizes the fact that the majority
of workforce in the
companies come from previously disadvantaged
groups.  But a primary objective must be ‘to build a
fishing industry
that in its ownership and management, broadly
reflects the demographics of South Africa today.” See Policy
Guidelines for
the allocation of fishing rights for the period of
2002 – published in Government Notice No. 1771 published in
Government
Gazette No. 22917 of 27 July 2001.
[56]
White Paper 5 May 1997
A Marine Fisheries Policy for South Africa
at para 1.
[57]
Langklip See Produkte (Pty) Ltd and Others v Minister of
Environmental Affairs and Tourism and Others
1999 (4) SA 734
(C)
at 743H–744B.
[58]
Section 30.
[59]
Langklip See Produkte
above n 17 at 744F.
[60]
Section 9(1) of the Constitution.
[61]
Croson
above n 10 at 536, Marshall J dissenting.
[62]
Section 9(2) of the Constitution.
[63]
Minister of Environmental Affairs and Tourism and others v
Phambili Fisheries (Pty) Ltd and another
[2003] 2 All SA 616
(SCA) at para 26.
[64]
Id at para 28.
[65]
Id
[66]
However, the SCA went on to hold that this “does not mean that
[section 2(j)] overmasters the other subsections merely
because they
lacked novelty” or that “the subsection swamps the rest
of the Act.” Id at para 28.
[67]
Id at para 29.
[68]
Id at para 29.  It cited with approval passages from
Joffin
and Another v Commissioner of Child Welfare, Springs and Another
1964 (2) SA 506
(T) at 508F- H;
Illingworth v Walmsey
[1900]
2 QB 142
; and
Perry v Wright
[1908] 1 KB 441.
[69]
Joffin
above n 28;
Illingworth
above n 28;
Perry
above n 28.
[70]
1950 (4) SA 653 (A).
[71]
Id at 662G–663A.
[72]
Id at 664H.
[73]
2001 (4) SA 551 (SCA).
[74]
Id at para 12 of the concurring judgment by Marais JA and Brand AJA.
[75]
[2000] ZACC 12
;
2001 (1) SA 545
(CC);
2000 (10) BCLR 1079
(CC) at para 21.
[76]
Thoroughbred
above n 33 at para 12 of the concurring judgment
by Marais JA and Brand AJA.
[77]
See above n 16.
[78]
Section 2(j).
[79]
Section 18(5).
[80]
Section 30.
[81]
General Notice No. 1771 published in Government
Gazette No. 22517 of 27 July 2001.
[82]
The TAC is the Total Allowable Catch.
[83]
See the instructions of the Chief Director
to the Advisory Committee on the Allocation of Fishing Rights.
[84]
Id
[85]
British Oxygen v Minister of Technology
[1970] 3 All ER 165
(HL) at 169.
[86]
Section 2(b) of the Act.
[87]
Kleinschmidt record 19:1614:103.1.
[88]
It is correct that 5% of the total allowable catch was
set aside for allocation on the basis of the points scored in the
individual
assessment exercise.  However, only 40% of those
points related to transformation. In effect, then, only 2% of the
equity
pool was allocated on the basis of transformation.