Introduction Schedule 5 of the 1996 Republic of South Africa constitution gives provinces
exclusive legislative competence over liquor licenses. The introduction of the Gauteng Liquor Bill marked an important milestone in the process of regulating the liquor industry in the province.
Although not explicitly stated in the Bill, some provisions in the Bill seek to encourage social responsible drinking. For instance, the Bill deems the following as offences: selling or supplying liquor to an intoxicated person or minor, being intoxicated, violent or disorderly on any premises, being intoxicated in or near any public place, including but not limited to any road, street, lane, thoroughfare, square, park, market, shop, warehouse or public garage.
The provision for the appointment of inspectors will address weaknesses of the status quo that leaves this function to the police service which is already stretched in capacity is a critical intervention. Currently, the police do inspections and report to the Board.
To deal with past problems of determining public interest, the Bill makes specific provisions related to consideration of application of licences. For instance, a licence will not be granted if premise is within five hundred metre radius of a place of worship, educational institution or public transport facility.
Purpose of the Bill The Bill seeks to provide a framework for the regulation of the sale and supply of liquor in Gauteng in a comprehensive manner. It is intended to control the sale and supply of liquor through the establishment of the Gauteng Liquor Board and local Committees of the Board which processes all applications for the liquor licenses through a process of public participation.
The Bill also provides for the establishment of a Gauteng Liquor Traders Association which will be an umbrella body to which all existing associations, applicants and licensees who are not members of existing associations must belong. This is an important process for self regulation in the industry.
Lastly, the Bill seeks to regulate the granting of licenses in respect of different kinds of licenses and addresses general matters such as the regulation of micro manufacturers, the prohibition of the sale of liquor to certain categories of persons and the enforcement of procedures.
Committee deliberations and Public Hearings The submissions from the public hearings provided a valuable source of information which informed committee deliberations and amendments to the Bill.(See Annexure 2)
The Committee deliberated on the detail of the Bill and there was agreement that there should be a transitional period with regard to shebeens. It was also agreed that at the end of the transitional period, anybody not complying with the provisions of the Act will be deemed to be operating illegally. The Committee decided that the issue of trading hours should be left to the regulations.Trading hours have an impact on the profitability and sustainability of small liquor traders. In preparing the regulations consideration has to be given to granting licenses to operators to enable them to trade on Sundays.
The Committee deliberated on the policy which stipulates that that there should be a five hundred meter (500m) radius between liquor traders, places of worship, public transport facilities and educational institutions. It was agreed that this condition shall not apply to existing licenses when the Act comes into place but new applicants will be affected by the restrictions.
In deliberating on the freedom of association as it pertains to the Gauteng Liquor Traders Association there was consensus that liquor is a dangerous substance that has to be regulated. Implicit in the freedom of choice to trade in liquor is the fact that there must be certain limitations. Persons choosing to trade in liquor have to accept the self regulating mechanism that the compulsory membership to the Gauteng Liquor Traders Association seeks to achieve.
Issues for consideration in the National Legislation
Provinces can adequately cover the aspect of socio economic and other matters related to the consumption of liquor as evidenced through the provisions that seek to nurture the responsible use of alcohol articulated in the Gauteng Liquor Bill.
The Committee was of the view that organs of the state must not be exempted from the provisions of the Bill. However, the Constitution does not allow provincial legislature to make the appropriate amendments. We recommend that the national legislation should take this on board.
(See Annexure 1 for a detailed analysis on the Gauteng Liquor Bill)
ANNEXURE 1
ANALYSIS OF THE GAUTENG LIQUOR BILL
1.Introduction and Background
The Gauteng Liquor Bill, 2002 seeks to repeal the Liquor Act, No 27 of 1989, which was a National Act. The Bill was drafted against the backdrop of a Constitutional Court ruling that micro-regulation of the Liquor industry falls under provincial competencies. This after the Department of Trade and Industry had attempted to pass a National Liquor Act. Schedule 5 of the 1996 Republic of South Africa constitution gives provinces exclusive legislative competence over liquor licences.
The Bill seeks to regulate an industry, which has been characterised by numerous problems including associated negative social outcomes. The Bill will also seek to address problems encountered with centralisation of liquor licences; fragmentation of liquor industry associations, compliance with licence criteria and lack of public participation in liquor licensing. Therefore, the main provisions of the Bill include establishment of the Gauteng Liquor Board and local committees that will process all applications for licences. Furthermore, the Bill provides for the establishment of a Liquor Trade Association, which is an umbrella body through which all existing associations, applications and licensees who are not members of the existing associations must belong to. The Bill also makes provision for the appointment of inspectorate. Through these provisions, the Bill also seeks to improve liquor-licensing criteria
2. Improving Licensing criteria
The matter of granting or refusing applications of licences is the responsibility of the Board after considering recommendations of the local committees. The Liquor Board is to be appointed by the MEC for Finance and Economic Affairs and shall not consist of not less than six and not more than nine members. The Board shall be composed of attorney with legal experience of at least five years, representative of the Department of Finance and Economic Affairs, person with knowledge or experience in the liquor industry and not actively involved or having a financial interest in the industry. A member of the Board shall be appointed for a term not exceeding five years and shall be eligible for re-appointment at the lapse of the initial term.
The Bill provides that every application for a new licence shall be made to the relevant local committee in a prescribed form with the secretary of the local committee. The application has to accompanied by a detailed written motivation, which will also include a report of the inspectors, a certificate of suitability on the person of the applicant and the application issued by the South African Police Service or any other law enforcement agency. The local committee may cause an inspection to be made of the premises to which the application relates to and any other investigation the local committees deems necessary. The licence conditions do not permit granting of a licence to persons amongst others who have been in the past ten years been convicted and sentenced for any offence to imprisonment without the option of a fine, unrehabiliated insolvent, a minor, a producer or agent of a producer, a manufacturer of the beer and a person who has financial interest in the business of a producer or a manufacturer of beer.
To deal with past problems of determining public interest, the Bill makes specific provisions related to consideration of application of licences. For instance, licence will not be granted if premise is within five hundred metre radius of a place of worship, educational institution or public transport facility.
3. Enhanced public participation processes
The Bill marks a significant departure from the current Liquor Act, of 1989, which centralised issuing of licensing to main offices of the Liquor Boards. The 1989 Act licensing procedure limited space of objections through magistrate’s offices. However, the current Gauteng Liquor Bill provides for the establishment of the Local Committees. The powers and functions of the Committee will include amongst others; considering all applications for licences, amendment of conditions within twenty days of receipt or such longer period as may be determined by the secretary of the Board in the event of objections lodged against the granting of a particular licence. Then, the Committee will make recommendations in respect of all applications and submit them to the Board immediately after consideration of the applications. The committees will be established in each of the areas of the municipalities of the Gauteng Province, known as Metropolitan Councils and District Councils. The local committee is to be comprised of persons with legal expertise, local government representatives with knowledge of town planning and local economic development; member of the community with knowledge in the field of welfare or socio-economic development or social services and a secretary seconded to the local committee.
The Bill requires the applicant to publish his application for a liquor licence as a notice in a local newspaper. Therefore members of the community will have an opportunity to lodge an objection to the granting of the licence with the local committee and the applicant within 21 days from the date of publication of such a notice. The applicant shall with a period of 7 days of receipt of objection, lodge his or her own response. Thereafter, a local committee of the Board may convene a hearing to consider any application and objections to the application in question.
Ensuring compliance The provision for the appointment of inspectors which will address weaknesses of the status quo which leaves leave this function to the police service which already stretched in capacity. Currently, the police do inspections and report to the Board. The newly appointed inspectors will have powers to conduct an inspection or monitor and enforce compliance of any liquor related matter. The will search the premises with an issued warrant from a magistrate. The Bill further empowers the inspectors to use force to overcome any resistance to entry or inspection by using the force that is reasonably required including breaking a lock, door or window of the land or premises to be entered. The inspectors may be accompanied by a member of the SAPS, SANDF, Metro Police or any other law enforcement agency.
Encouraging Social Responsible drinking Although not explicitly stated in the Bill, some provisions in the Bill seek to encourage social responsible drinking. For instance, the deems the following as offences:
Selling or supplying liquor to an intoxicated person or minor
Being intoxicated, violent or disorderly on any premises, whether licensed or not Being intoxicated in or near any public place, including but not limited to any road, street, lane, thoroughfare, square, park, market, shop, warehouse or public garage Possessing or consuming liquor on a sports ground, to which the public has access to, except on any licensed premised situated on the sports ground Supplying liquor to a person in his or her employ as wages or remuneration or as a supplement thereof Manufacturing, distributing or selling liquor if not permitted so in terms of this Act Manufacturing, distributing or selling any prohibited concoction or drink Sell or supply any illegal or counterfeit liquor
Furthermore, the Bill provides that the Liquor Board may with concurrence of the MEC establish a fund to be administered by it in addressing the negative social effects of liquor consumption in Gauteng. However, the Bill does not elaborate on the operations of this fund, this is left at Ministers discretion.
Encouraging unity within the Liquor Industry One of the major challenges in the liquor industry has been the existence of different associations representing interest groups within the industry, sometimes based on racial lines. In seeking to address this, the Bill provides for the establishment of a Liquor Trade Association as an umbrella body to which all-existing associations, applicants and licensees must belong to. The Liquor Trade Association will not replace the existing associations, but associations active in the trade including applicants and licensees will have to affiliate to it. Furthermore, the establishment of the Association, the Bill will help in ensuring self-regulation within the industry.
Concluding remarks The Liquor Affairs Bill is important milestone in regulating liquor industry in the country. Key provisions in the related to licence criterion will helpfully ensure better compliance in the industry. The creation of Local Committees is a significant step for public participation in this industry.
However, the Bill’s success will depend on capacity of the Inspectorate to ensure compliance. The Bill however is silent on crucial factors, which are important to the industry, namely trading hours and application fees. These issues will be dealt with when regulations are promulgated. Certainty on application fees for licences might be a catalyst for empowerment in the industry. Furthermore, determination of trading hours for liquor might prove to be difficult wave to ride.
ANNEXURE 2 SUMMARY OF THE SUBMISSIONS ON THE GAUTENG LIQUOR BILL Oral submissions
Concerns about the impact of liquor regulation on poverty and unemployment
Members of the community raising unreasonable (jealous) objections to licence applications
The same criteria should not be utilised in evaluating the suitability of a licensed premise in the suburbs and the townships
There should be different criteria for different applications
Clarity is needed on the role of councillors in awarding the local committee
Representativity in the Board of liquor trade associations
The impact of licence conditions related to previous convictions on rehabilitated convicts
The subsequent building of school or church near a licensed premise
Clarity regarding distinction between shebeens and taverns
The consequences of the minor definition on youth entrepreneurship and employment
Fast and efficient processing of licence applications
The need for assistance to be given to applicants in filling applications so that they can meet licence requirements
Granting of licence to shebeens clustered in one area
Tax exemption for shebeen owners
Toll-free lines for industry stakeholders to report problems
Definition of minor to be lowered to 18 years
Recusal of members of the Board
Clarity on carrying of weapons inside the licensed premises
Determination of an intoxicated person
Use of force by inspectors
Legal costs associated with meeting licensing criterion Lunga Cenge from Yeoville
Teenagers must show some sort of identification.
Sundays: no liquor sold/no bottle stores should operate.
Operating hours on Sundays 13:00 to 20:00, after that, everything must close.
Liquor Board should consult with the community properly before issuing licenses. Community must have a say on whether it is ok to have another bottle store or pub.
The community is disturbed by the noise that comes from these pubs.
All shebeens must be checked regularly whether they still follow the rules.
All the shebeens must be owned by the community or by residents of the area. There are people who live nicely in other suburbs but run pubs or visit pubs in our area and mess it up. The owners are just interested in money, not in what they are doing to our place. The drinkers from outside are just interested in a good time and making noise. They also don’t care about our place.
Like the smoking is dangerous sign, alcohol and alcohol establishments should have one as well.
The community cannot have ten shebeens/taverns in one street. That is out. The metro/police should assist people by giving them information about the law on illegal taverns and give them easy ways of reporting illegal places.
No issuing of licenses within 500 meter of other taverns or bars.
Police, metro, council and community work together to make this place a better place
Yeoville Business Improvement District
Particularly happy to see that communities and local government will be in a position to comment on whether licenses should be issued. This is a correct approach as it is communities that are most impacted on by the inappropriate awarding of licenses and local government that is faced with urban management problems if there isn’t control over the issuing of licenses
Concerned with the following sections:
Section 11(2) There is danger of such powers being abused
Section 11(3) change the wording to ‘a meeting could take place behind closed doors’ Section 19 change the wording to readestablished one local committee in each of …..". Section 21(1) the section should read "…committee shall consider all applications for licenses, transfer of licenses, amendment of conditions and any other application in terms of this Act, made within its area of jurisdiction, within twenty-one (21) days ……..". This will remove any possible ambiguity about the geographical limitations of the power of each local committee
Section 23(1)(g) We suggest the clause read "…registration number of the applicant, and residential address…" Section 24(1) This clause should include a requirement that the applicant displays prominently notice on the front of the premises for which a liquor license is sought (as occurs when a property owner is applying for rezoning etc). There should also be a requirement that the applicant distribute leaflets (containing the same information envisaged in 24(3)) to other property and business owners, as well as residents, in the vicinity of the building for which the license is being sought. Section 30(1)(b) It sets out conditions for licenses that are not for taverns, pool clubs, liquor stores, sorghum beer outlets, pubs and night clubs, but it does not say what the conditions are that do apply to them. This is quite critical as it is the latter that are the greater problem and therefore need greater control. Section 37(1)(g)(h)(i) Reference made to manufacturers of beer and to the fact that they cannot be granted liquor licenses. It is understood that this is an attempt to counter monopolistic tendencies, but does this only apply to the beer industry and not also to other manufacturers of liquor? They may not have the reach and power of an SAB at the moment, but it seems logical for the legislation to take into account that this may be the case in future. Section 47(1) This clause suggests that a license holder should not admit an intoxicated person to his or her premises and that an intoxicated person should not be served, but rather removed. This should be extended to include the removal of a customer who makes a nuisance of him/herself inside or immediately outside the premises, especially if their behaviour is an irritant or objectionable to other customers or to passers-by. Section 79(1) It is suggested that the clause read "……on the licensed premises or in the immediate vicinity of the licensed premises." It has ling been a practise for customers to purchase liquor and then sit down directly outside or near to the liquor store and begin consuming their purchase. Section 125(a-k) It is suggested that a clause be added here which requires the licensee to ensure that music played inside his/her establishment is not audible outside the premises and in general to ensure that his/her business does not increase the noise level in the neighbourhood nor cause any other disturbance or disruption to the street or neighbourhood and other business activities in the street or neighbourhood.
Submissions from the following African National Congress branches and Local government ward committees: Wards 58, 68, 69, 82 Clause 3, subclause (5), line 48 should read: "The board must…………
Page 11 under notices and summons To add a clause under this section which must read: "Copies of notices must also be sent councillors/ward committees and community police forum (CPF) for a representative to be present for their input".
Clause 20 (1) (d) line 13 should read: "Two or more appointed from the community with at least a representative from the local council/ward committee and a representative from CPF in the area of………
Clause 23 (1) (d) line 6 should read: "A minimum of four reports with at least one each from environmental health, town planning, social development
Clause 24 (1) line 28 should be added:…..than three newspapers one of which is a local newspaper……….
Clause 24 (1) line 35 should be amended:" ……within a radius of two (2) kilometres
Clause 24. Two more sub-clauses must be added i.e. sub-clause (5) which should read: "Owners/occupants of properties adjacent to and bordering on the site for which the licence has been applied must be notified by registered mail.", and (6) which should read: " A notice of application must be sent to the local authority." Clause 27 (1) should be amended to read as follows: "The local committee may convene a hearing to consider any application, but must convene a meeting if any objections to the application in question, on such date……………. Clause 30 (2) (b) line 41 should be amended to read: …………within a radius of not less than one kilometre (1 km)……………… Clause 106 (1) should be amended to read: ……………shall be conducted by a minimum of two (2) inspectors………….. Clause 110 should be amended to read:"………..National Defence Force, law enforcement agency or member of the local CPF……………
Johannesburg Community Policing Area Board
Restrictions be placed on the proximity between retail liquor outlets
Restrictions be placed on proximities to certain Institutions. These Institutions would include Schools, Recreational facilities used by school children and Places of Worship. This type of restriction should be within a radius of 500 metres, and less in cases of townships.
It should be compulsory for all liquor outlets to have breathalysers on their premises
Restrictions be placed on trading hours
Section 24 – Notice of Applications. A new paragraph between (1) and (2) insisting that a copy each application be given to both the Ward Councillor and the Station Commander of the local Police Station.
Section 25 – Objections. The period allowed for objections should be 30 days and not 21 days.
Section 104 – Sanctions by the Board.
Section 104 (2). The amount of the fine should be R1 000 000 and not R200 000.
There should also be provision for a jail sentence of up to ten (10) years for the license holder.
Section 108 – Entry without a warrant. Section 108 (b) (i) should be twelve (12) times a year and not six.
Section 125 – Offences in general. An additional point should make it an offence for the licensee to sell liquor knowingly that it is going to be consumed in a place that it is not legal to consume liquor and there must be a hefty penalty including a prison sentence for contravention of this offence.
Section 130 - Offences by licensees in general. Section 130 (f) should include "…. also within a distance of 200 metres of the licensed premises."
Section 131 – Penalties. Fine should be R1 million and not R100 000.
Blumenthal & Slothow Attorneys
The attorneys are also submitting on behalf Caesars Casino. They made the following recommendations:
The Bill be clear on how an amendment of the premise relating to the holder of special licences like that of Ceasars
Because there is a casino and hotel operating on the same licence at Ceasars, will the Bill require different liquor licences to what is in the same building
Section 53 of the Bill would result in a hotel not being able to serve liquor in its lounge or bar area
Section 55 of the Bill has practical difficulties
A situation may arise that there are similar liquor licences within 500 metres of each other
The gaming provisions authorise casinos to allow persons over the age of 18 years old to gamble. Casinos may be forced to prevent minors from entering the gaming area as a result of raising age limit to 21
No provision is made for the conversion of licence
South African Liquor Stores Association
SECTION 38) the following is recommended:
a. A constitution should be drafted.
b. A code of ethics should be drafted.
c. An applicant who applies for a licence should approach the Liquor Trade Association for a recommendation. Should the Association approve of the applicant, a recommendation ought to be sent to the Liquor Board who would determine whether or not the applicant qualified for a licence to be granted or not. If a recommendation was not forthcoming from the Association, the Board would request reasons prior to the determination of the application. In the event of the application being successful, the applicant would become a member of the Association, subject to its rules. In the event of the applicant not conforming to the Association's Code of Ethics, and/or constitution, the applicant would cease to be a member of the Association and its licence revoked by the Board, unless good cause could be shown to the Board for the behavior of the applicant.
A representative of the Association would sit on the Board, which determined the licences and would have a vote.
one is not able to restrict the use of alcohol on Sundays and Public Holidays, but at least the purchase thereof would have to take place on days other than Sundays and Public Holidays and in the ordinary course would limit the consumption on such days. It is imperative that the times not be contained in the Regulations but in the Act itself. The above would be applicable to all off-consumption licences. GROCERS’ WINE LICENCES The trading times applicable to off-consumption licences should be applicable to the Grocers' Wine Licences.The business of the entity that applies for these licences should be mainly the sale of groceries. The area containing the wine, which is to be sold, should be clearly demarcated. The area should also be locked outside of trading hours. Section 41(2) The words "fire" should be inserted immediately before the word "wall" in line 43. South African Liquor Stores Association – JHB branch
Application for licences – issuing of one off consumption licence per kilometre in heavily populated areas
Age limit for sale of liquor should remain at 18
South African Liquor Stores Association - PTA branch
It should be compulsory for all Traders (On & off consumption) to be a
Member of a Trade Association.
Trade Associations must be represented on the Liquor Board and Local
Committees
Traders should adhere to the Rules & Regulations laid down by the
Association in conjunction with the Liquor Board and Local Authorities,
Heavy penalties should be imposed on offenders.
For Off Consumption Licenses we suggest a restriction of one License
per square kilometer in all Metropolitan areas. This in turn will prevent overtrading.
With reference to Grocers Wine Licenses, we suggest:
That all Grocers Wine Licenses should be withdrawn for the following
reasons:
Records show that they trade outside legal trading hours
They DO sell liquor to minors
Wines are not kept in a lockable area after legal trading hours South African Police Services should be more involved in the policing and law enforcement of the Liquor Act & Regulations.
First offenders should receive a minimum fine of R 10 000-00 doubling for every successive offense thereafter.
Gauteng Council of Churches
The Bill will impact on the nation’s attempts to rebuild new morality
Protection of Sunday as a family day – liquor sales should be prohibited on this day
Process concerns – consultation was needed during the early drafting phase
Janneke Weidema
The procedure for giving notice of an application for a liquor license as
set out in Section 24 is inadequate. At the very least there should be a requirement that the applicant posts a prominent notice at the entrance to the premises for which a liquor license is sought. Handbills giving notice of the application should also be distributed to residents and businesses in the immediate vicinity.
Section 47 "Intoxicated persons" is focused too narrowly on intoxicated
persons. It should cover more aspects of the behaviour of customers. The
licensee should be required to remove, or have removed, any customer who
makes a nuisance of him/herself inside or immediately outside the premises.
The licensee should also ensure that any music played inside his/her
establishment is not audible outside the premises and in general ensure that
his/her business does not increase the noise level n the neighbourhood.
MAKRO
The considerable degree of discretion given the Board, or one of its members, or even an inspector, causes concern. The general tone of many regulations creates an impression that there is a need to restrain widespread delinquency in this sector of the liquor industry. We urge that the Bill should allow very little discretion to the Board, and restrict it to powers that are clearly contained only in the Act, or in the Regulations Section 16 it is good public policy to apply the principle of user charges, that the user pays for services rendered to him. In practice the funding from the Province, if any, will tend to diminish over time.
We would like to point out that there are three metros, and twelve local municipalities in the Gauteng Province. Each of these local committees will need infrastructure such as offices, staff, equipment, vehicles, and the like. There will be a lot of costly duplication if a local committee is allocated to each council. The cost will have to be recovered from the licenced establishments. We believe that there should be only one single body, the Gauteng Liquor Board, suitably staffed and equipped. This would ensure far greater efficiency, consistency, and economy.
As to the third point we recommend that Section 30 should also prohibit the sale of liquor at petrol filling stations, particularly where such liquor outlets are owned by the filling station owner.
We would urge that convictions under the old liquor laws be excluded, and that trivial fines be disregarded
aspects of industry structure and conduct should be governed by national law, as proposed in our para 5 above, and should be removed from Sections 37 and 39, in particular 39 (4) (c)
We do not agree with compulsory membership. The Constitution of the Republic of South Africa, 1996 clearly states, under the Chapter 2 Bill of Rights: Para 18. Everybody has the right to freedom of association.
Section 429(b) We would urge that in the interest of transparency and certainty, a complete list be furnished as to what exactly may be sold.
We believe that sections 45 and 46 dealing with employment of minors, and the serving of liquor to minors, defined as persons under twenty one years of age, are unnecessarily punitive, and discriminatory. Our Constitution defines a child as a person under the age of eighteen years, under Chapter 2 para 28 (3).
Section 48 (2)We urge that there should be complete certainty, and that the Board should not be given any arbitrary powers to demand any records, other than those specified in the Act.
We would suggest that Section 87 should merely say: the licensee may only sell liquor in receptacles, which are properly and securely sealed.
May we please suggest that this section be replaced in its entirety, and that you insert simply: The holder of a liquor store licence may conduct liquor tastings in the store, provided the liquor is supplied free of charge, and the tasting is conducted under supervision.
We kindly request that this para 101 (5) (b) be deleted. These are matters for the Competition Act.
We believe para. 104 (1) places a heavy burden on the owner, or organization that employs a person to manage a licenced business. Such an employee may not have disclosed his past criminal record, when he had applied for the managerial position
Section 122 - We do not believe that the regulation of such an industrial product falls within the competence of any province. Furthermore, the recent finding of the Constitutional Court, in connection with the competence of the provinces in relation to liquor licences did not dwell on this issue. This section should therefore be deleted.
There numerous institutional costs to the Legislation in addition there are direct expenses incurred by the applicant
Pick n’ Pay
Grocer’s beer and wine licence - Would like to offer customers as full a service as possible, by increasing range of products to include beer
Have reservations about creating a Liquor Trade Association
The matter of selling liquor on Sundays should be left to individual conscience
Children of Fire Trust
Cautions about the effect of alcohol on fires that lead to death and serious injury
Questions the safe haven for a squatter camp resident who complains of the danger from the shebeen next door
If liquor license is granted, the regulations must be easily available in simple vocabulary in all languages
South African Breweries
The following are there main concerns raised by the SAB with regard to the Bill: The constitutionality of the Bill and conflicts with other legislation. SAB received opinion from Senior Counsel with regard to the Constitutionality of the Bill in so far as it conflicts with existing legislation (e.g. the Liquor Act, 27 of 1989, the Competition Act, 89 of 1998) and other constitutional rights.
The lack of certainty surrounding licensing. This relates to the lack of detail regarding licensing criteria, criteria for the withdrawal of licences and the grounds for raising objections. The failure to define objective criteria gives the Board and MEC excessive discretion in the setting of licensing requirements and conditions. This will result in a lack of transparency and certainty for industry participants.
The unintended consequences of the Bill. In the drafting of certain provisions of the Bill the linkages into the national Liquor Act and/or future national legislation has the effect of precluding manufacturers from selling their products in Gauteng.
The complexity and bureaucracy contained in the Bill. The success or failure of the new legislation hinges on the achievement of normalization of the retail sector, which will require facilitation of entry. Unless a substantial number of currently unlicensed traders enter the system, effective enforcement will be impossible and the status quo will continue. The application requirements as laid out in the draft Bill are excessively burdensome on applicants.
The administration of the new licensing approach. For the Bill to achieve its objectives, it should impose as small a burden on licensees as possible. This entails keeping fees low and providing strict deadlines for the processing of applications and the handling of objections. It also entails avoiding duplication and application of issues covered in other legislation.
The implications and consequences of increasing the drinking age to 21 years. Considering that the minimum age for voting, for obtaining a drivers’ licence and for serving in the Defence Force, is 18 years one must assume that that age is regarded as an age when people can make informed and responsible decisions for themselves. A minimum age of 18 years for purchasing liquor and for employment should be retained, and is consistent with international practice. Furthermore, for purposes of national uniformity, this provision gives rise to constitutional concerns. In addition, SAB has made specific recommendations with regard to the following Sections of the Bill: The description of the Bill should clarify that the Bill refers to the sale and supply of liquor at retail level only
The description of the Bill should lay out the reasons for the legislation or the societal objectives
Definitions
That the term ‘producer’ be defined in the Bill The minor age be lowered to 18
Section 3(1) recommends that the local committees be charged with processing and issuing applications. Applications be approved unless there is some reason for them to be refused and that criteria for disqualification should be clearly set out in the Bill Section 3(2) Board’s discretion needs to be clearly defined, as well as matters that should be considered when taking certain decisions Section 3(5) The source of the monies going to the Fund should be clarified. SAB strongly cautions against imposing fees on licences to fund such activities Section 4(1)(d) Preferable to require the appointee to have knowledge of business and economics Section 8(4) The quorum should be three members, one of whom must be a member with legal qualifications Section 10(10) The grounds of objections must be specified so that applicants may know on what grounds their applications may be objected to and refused Section 20(1) Local committees should be required to include any person with knowledge of industry or of business and economics Sections 21(1)(2) Clear and specific criteria for filing applications should be determined and the local committees should be charged with applying these criteria in the granting of applications
Section 23(1) (a-h) Generally, the application requirements are unnecessarily burdensome on applicants, and will undermine efforts to normalise the sector. The motivation for a licence can only be a requirement when the statute prescribes some criteria for the granting of a licence so that the motivation can relate to those criteria. A notice posted outside the relevant premised should be sufficient to inform neighbours of an application having been made for a liquor licence
Section 25(1) Grounds for objections should be clearly stated to remove the potential for never-ending and irrelevant considerations. SAB recommends that the Board review contested applications, involving prescribed objections only Section 28 the 11 different licence categories for on-consumption are unnecessarily complex, arbitrary and counter-productive. Wholesalers should not be precluded from selling directly to the consumer. The category for grocers’ wine licences leads to unwarranted discrimination between types of liquor. The provision for a sorghum beer licence conflicts with the principle of uniform treatment of all types of liquor Section 30 (1)(b) It should be clearly stated that a licence would be granted unless a disqualifying condition exists
Clarity is needed on what constitutes a ‘good character’ or fitness to hold a licence
The concept of public interest should either be defined in terms of objective criteria or removed from the Bill
The section is unconstitutional as monopolistic condition is covered by Competition Act
Requirements for compliance should be defined Section 31(1) Criteria for the granting or refusal of such applications should be stated Section 33 Provides the Board with excessive discretion and should be narrowly circumscribed Section 37(1) Preferable to state the criteria for disqualification more narrowly and limit the Board’s discretion accordingly
Must exclude many retailers who fell afoul of overly restrictive Apartheid-era restrictions (d) Represents an undue constraint on the ability of young adults to engage in legal commercial activity
Unfair to penalize a person for the conduct or age of one’s spouse (f-j) Unconstitutional as prohibits vertical control and co-ordination in a market which are regulated by Competition Act Section 38 SAB believes that the membership of all associations should be voluntary; therefore this section is unconstitutional as its overrides right to freedom of association. It unclear by what is meant by ‘organised trade in liquor’
Section 39 (1-2) The Bill is not competent to deal with issues of national competence like vertical integration Section 46 has the effect of prohibiting minors from being in licensed restaurants or any licensed premises Section 47(1) Obligation is very broad and may introduce an impossible determination by a retailer as it is unclear what would constitute a reasonable basis for such knowledge Section 48 The record keeping burden should be specified and kept to a minimum Section 51(2) undesirable to have a fixed closing time applying to all outlets as this has been shown to create public order enforcement problems Section 81 (1) the provisions in the Bill relating to wholesalers are incompatible with the Constitution as they are overridden by appropriate national legislation under Section 146
Section 95 Licensing costs both direct and direct should be kept to a bare minimum Section 101(3) Adds bureaucracy to the process and delay the licensing process Section 105 (1) The establishment of a Provincial inspectorate appears excessive and will prove an unnecessary drain on the state’s resources. The key to achieving strict enforcement lies in the streamlining of the SAPS activities Section 109 The power of an inspector to enter any land or premises without a warrant may be unconstitutional Section 114 (1) The power of inspectors and Board members to close outlets should be more clearly delineated Section 117 There is a question of capacity of a provincial legislature to prescribe what SAPS can do Section 119 (2) Should be redrafted to reflect forfeiture only after guilt has been established, needs to be compliant with the Criminal Procedures Act and Asset forfeiture laws Section 120 Provides for an applicant to pay unlimited costs Section 122 Relates to matters of manufacturing and therefore unconstitutional Section 125 (h) unconstitutional Section 131 unnecessarily harsh and removes judicial discretion Section 135 and 136 contains reverse onus provisions, which are unconstitutional