Tobacco industry calls Dlamini-Zuma’s bid to appeal ban a costly folly

South Africa’s two tobacco industry rivals, who challenged the country’s tobacco ban in court, on Tuesday termed the government’s pursuit of an appeal in the matter a “costly vanity” and called on it to use the money to fight the Covid-19 pandemic and illicit cigarette trade instead.

The Western Cape high court on Monday granted co-operative governance minister Nkosazana Dlamini-Zuma leave to appeal its adverse December declaring the prohibition unconstitutional and invalid.

That court ruling, in favour of British American Tobacco South Africa (Batsa), was handed down four months after the 143-day ban was lifted in August last year and further litigation is, therefore, largely academic. It is also viewed as unlikely to succeed.

Batsa stressed that the court found the ban did not withstand constitutional scrutiny, because the minister failed to justify the intrusion on the rights to dignity, privacy and physical integrity of smokers and of those in the tobacco industry to choose their trade. 

In granting leave to appeal, the court considered that there was little prospect that the supreme court would come to a different view.

But like the minister’s approach to the court, its decision to allow the appeal did not come as a surprise.

The reason lies in a conflicting judgment in June by the Pretoria high court, in which it dismissed a separate challenge by the Fair Trade Independent Tobacco Association (Fita). Unlike Batsa’s challenge, Fita’s was argued purely on administrative law.

It failed because the court favoured Dlamini-Zuma with a wide reading of the necessity test in the Disaster Management Act (DMA) and held that the ban passed as a “rational and reasonably necessary” step taken to alleviate the potential burden smokers severely ill with Covid-19 may place on the health system.

The Cape court took a different view on the necessity threshold in the Act, and on the scientific merits of the measure, but the minister maintains that the Pretoria ruling was right.

On Monday, Judge Thandawza Ndita said case law dictated an appeal could still be allowed, despite limited chances of success, when it concerned an important question of law or a “discrete issue of public importance” that could have an effect on future disputes.

Here the public interest lies in the extent of the minister’s powers to impose restrictions on sectors of the economy and society while the pandemic and the state of disaster continues.

“As seen in both this case and the Fita judgment, regulations made in terms of the DMA have the potential to, and does [sic], impact on a number of constitutional rights of multiple sectors of the community.

“Therefore, the interpretation accorded to the word ‘necessary’ as used in sections 27(2)(n) and (3) of the DMA are of great public interest,” the Monday judgment read.

Batsa said it believed that much of the argument before the Supreme Court of Appeal in Bloemfontein will still revolve around constitutionality; hence, even if Dlamini-Zuma succeeded on a point of administrative law, the ban would still not pass muster. 

Johnny Moloto, Batsa’s head of external affairs, noted that the minister argued in court that the cost of the ban to the economy was mitigated by the fact that most smokers bought cigarettes on the black market.

“This is an extraordinary contention and illustrates how acutely aware the government is of the actual effect and consequences of the ban,” he said.

It was, in effect, a concession that the ban increased illicit trade, he said, and this has endured in that smuggling has become entrenched and smokers became accustomed to buying untaxed cigarettes.

“We think the government would be wiser allocating its resources to combating the illicit trade in cigarettes, which was fortified by the ban and is now running rampant across South Africa.”

On Fita’s estimation, the ban cost the country R35-million a day in lost excise taxes. The association was last year granted direct leave by the Supreme Court of Appeal to appeal the Pretoria ruling but withdrew its bid after the ban was lifted. With the matter now on its way back to the Bloemfontein court, it believed it would be vindicated on the salient points raised in its challenge.

“Notwithstanding the above … we are of the view that this matter has now run its course and that this step by the government is regrettable,” Fita chairman Sinenhlanhla Mnguni said.

“More taxpayer monies are being utilised to fund further unnecessary litigation wherein a substantial amount of funds and other resources have already been spent to fight what has now in essence become an unnecessary legal battle, instead of using these resources to combat the spread of the coronavirus and its impact on the citizens of this country, and procuring more vaccines.”

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