• as High Court strikes down wool and mohair regulations

Mohalenyane Phakela

THE High Court on Thursday delivered a crushing blow to the government when it ruled as illegal the Agricultural Marketing (Wool and Mohair Licensing) (Amendment) Regulations No. 65 of 2018, which prohibits farmers from selling their wool and mohair from South Africa.

Acting Judge, Justice Moroke Mokhesi, delivered the verdict in the long-drawn-out case which was brought to the High Court by the Lesotho National Wool and Mohair Growers Association (LNWMGA).

Justice Mokhesi dismissed as “null and void and of no force and no effect” the regulations which came into effect last year and made it illegal for the farmers to sell their produce in South Africa through their preferred brokers, BKB.

The High Court decision was immediately welcomed by the LNWMGA who however, said their joy would only be complete if the government obeyed the court decision.

Justice Mokhesi ruled that the May 2018 regulations were in contravention of the Agricultural Marketing Act of 1967 which allowed framers to sell their wool and mohair from wherever they chose and through brokers of their choice. The Ministry of Small Businesses, Cooperatives and Marketing were the respondents in the case and they were ordered to pay the costs of the lawsuit.

“It is declared that the Agricultural Marketing (Wool and Mohair Licensing) (Amendment) Regulations No. 65 of 2018 are null and void and of no force and effect to the extent that they are ultra vires (in contravention of or outside the powers stated in the) Agricultural Marketing Act of 1967,” Justice Mokhesi ruled.

For more than 40 years up to last year, Basotho farmers sold their wool and mohair from South Africa through Port Elizabeth-based brokers, BKB.

But on 4 May 2018, the Agriculture Minister, Mahala Molapo, torched a storm when he gazetted the Agricultural Marketing (Wool and Mohair Licensing) Regulations of 2018. The Minister of Small Businesses, Cooperatives and Marketing, Chalane Phori, amended the regulations on 30 August to accommodate associations and cooperatives in the legal instrument.

The regulations forbid anyone to trade in wool and mohair without a licence obtained from the Ministry of Small Businesses, Cooperatives and Marketing.

The regulations further state that “the holder of an export licence shall not export wool and mohair unless it is prepared, brokered, traded and auctioned in Lesotho”.

Any person found guilty of brokering, testing, processing, trading and auctioning wool and mohair without a licence would be liable to a fine of M50 000 or a maximum of five years imprisonment.

Anyone found to be in the business of shearing wool and mohair or exporting without a licence will be fined M20 000 or be imprisoned for two years.

The fabric is currently auctioned locally by the Lesotho Wool Centre (LWC), a joint venture between the Lesotho National Wool and Mohair Growers Association (LNWMGA) and Mr Shi’s Maseru Dawning Trading Company.

The LNWMGA holds 75 percent shares while Maseru Dawning holds the remaining 25 percent in the LWC.

The regulations attracted strong protests from the wool and mohair farmers and this led to LNWMGA filing a High Court application seeking the nullification of the regulations on the grounds that they violated the farmers’ rights to sell their product to whoever they wished and from wherever they chose.

On 27 February 2019, Justice Mokhesi heard arguments from the applicants’ lawyer, Advocate Qhalehang Letsika, and the defendants’ lawyer, Advocate Dyke Thejane, but reserved judgement to 4 April 2019.

Adv Letsika argued that the regulations violated the wool and mohair farmers’ rights in that they prohibited the farmers from continuing with their practice of selling their produce as they had done for more than 40 years.

“The respondent (Ministry of Small Businesses, Cooperatives and Marketing) has no authority to enact the Agricultural Marketing Regulations as that is solely the duty of the Minister of Agriculture. Therefore, lack of authority nullifies the regulations. Each minister is given a portfolio by the legislation and therefore the Minister of Agriculture has such powers vested in him because he has a team of agricultural experts.

“The applicant has been exporting wool and mohair to South Africa on behalf of local farmers for over 40 years without being required to have a licence. The regulations are unreasonable in that they deprive farmers their right to export freely. They interfere with the farmers’ rights without justification in that applicants are not given the freedom to choose whether they want to sell locally or export.

“Furthermore, the regulations order that testing (of the produce) be done in the country whereas there is no testing facility and the nearest is in Port Elizabeth (South Africa). This means the applicants are being forced to use facilities which do not exist. The intention of the ministry to sell locally was good but the criteria used was wrong as it deprived farmers their right to sell wherever they want,” argued Adv Letsika.

Adv Thejane countered by arguing that the mere fact that farmers had been exporting without a licence for several decades did not mean they were acting lawfully. He further argued that the Minister of Small Businesses was vested with the powers to market agricultural products.

“Before the enactment of these regulations, one was required to have a conglomerate licence to do all activities but these new regulations seek to categorise the operations so that a person can have a licence for a specific purpose.

“The fact that the farmers had been acting against the law does not mean they do not stand to be corrected. All the farmers have to do is comply with the regulations. They fail to show how they are being prejudiced by the regulations other than being deprived a right which is against the law.

“The Ministry of Small Businesses is a new government portfolio which has three divisions. One of them is for marketing national products which is why it has powers to market agricultural products,” Adv Thejane argued.

However, in delivering his verdict, Justice Mokhesi said the 2018 regulations could not stand the test of legality and the regulations were not clear.

“It is uncontroverted (undeniable) that the applicant has been exporting wool and mohair for its members for over 40 years and has in the process established relationships with the broking company, BKB, to the extent of owning shares in the latter company. In my opinion, this clearly establishes that their right to export wool and mohair had indeed vested.

“The Minister (of Small Business) may only make regulations prohibiting any person from dealing in the course of trade with a product in Lesotho unless such a person has been licenced. It simply cannot be reasonably justified why a facility which if found outside the country can be regulated as the minister sought to do.

“It needs no elaboration that in prescribing punishments under regulation 11, the Minister (Phori) exceeded the powers conferred on him by the act. It follows therefore that regulation 11 is beyond powers of the act and has to be struck out.

“The question is whether without regulation 11, Regulations N0. 65 of 2018 can stand on their own. My considered view is that they cannot stand on their own as without penal provisions the prohibitions contained in the regulations would merely be directory and not peremptory,” Justice Mokhesi said.

Regulation 11 states that, “a person who contravenes regulations of shearing and exporting commits an offence and is liable, on conviction, to a fine of M50 000 or to be imprisoned for a period not exceeding two years or both”.

The regulations further states that, “a person who brokers, tests, auctions or processes without a licence commits an offence and liable to a fine of M50 000 or to imprisonment for a period not exceeding five years or both”.

Yesterday, the LNWMGA chairperson, Mokoinihi Thinyane, welcomed the court decision saying it had set the farmers free.

Mr Thinyane however, said they were still worried that the government could choose to ignore the court order.

“The nullification of the regulations means the emancipation of the farmers as they will now have the freedom to sell to whoever they believe will give them more money. It is not just BKB who broker wool and mohair so the farmers will have the liberty to choose the one they prefer, even if they continue to use the broker in Thaba Bosiu (Maseru Dawning).

“We hope to start selling this month as the goats are currently being sheared. However, the government has this tendency of going against court orders. We were previously granted an interim court order which allowed us to sell to whoever we wanted but the government blocked us and impounded trucks carrying the farmers’ wool. We sincerely hope that they will obey the law this time,” Mr Thinyane said.

Mr Phori was no reachable for comment on his mobile phone yesterday.