Destroying SA’s economy, one law at a time: Vegter

There seems to be no avoiding government’s insistence on putting the equivalent of burning tyre legal and regulatory roadblocks in the way of anyone trying to reach an economically viable destination. My morning was spent writing up the court invalidation of a dogged 20-year-long government legal attempt to tell doctors where and how they can practise. It would have achieved the opposite of what it was meant to, mostly because a bunch of State lawyers drew up grossly unconstitutional laws. Now, I hear from the Brothers’ Vegter that our government is immobilising the tourism industry using red tape, ensuring that those that didn’t succumb to Covid are in danger of closing shop. Getting an ‘operating licence’ for a new tourism vehicle is nigh impossible When the South African Tourism Services Association approached President Cyril Ramaphosa’s dedicated red tape cutting team, they got zilch response. In other countries governments bend over backwards to help their tourism sectors. Here they put you out of business. Read on to see how. Story courtesy of the Daily Friend. – Chris Bateman

Dead hand of the state throttles tourism

By Ivo Vegter*

Ivo Vegter

Minister Fix Fokol has done nothing to resolve the inability of the National Public Transport Regulator to issue tour vehicle operating licences. Now he plans to extend the failure to the freight sector.

The National Public Transport Regulator (NPTR) is in total chaos. When it did function, it imposed ludicrous rules and restrictions on tourism operators, and it hasn’t functioned at all since 2019.

The upshot is that hundreds, and perhaps thousands, of tour vehicles are either operating illegally, at great risk to their operators, or standing idle while operators pay vehicle finance instalments on a non-productive asset.

The South African Tourism Services Association (SATSA), a private membership group, has had to face down several outrageous laws and rules in recent years, ranging from absurdly onerous visa requirements, to draconian lockdown restrictions, to having to spearhead the campaign to get South Africa removed from the UK’s unscientific ‘red list’.

Now, just as the devastated tourism industry finally looks forward to rebuilding from the calamitous last few years, it faces a new enemy: the National Public Transport Regulator.

Dysfunctional

By law, it is required to issue new operating licences within 60 days, and process renewals in one day. In practice, it is so dysfunctional that new licences and licence renewals are not being processed at all. Many tour operators have been waiting years for licences that would permit them to legally convey tourists to where they want to go.

This has a knock-on effect on all parts of the tourism industry, from hotels and restaurants to national parks.

Prior to the pandemic, tourism accounted for 10% of GDP. It employs lots of people, including in rural areas. It also sustains very many small-scale entrepreneurs, many of them from disadvantaged backgrounds. It has all the potential to be a transformative economic sector.

It is being held down by a simple lack of permission slips from government officials.

Tour operators as well as SATSA have approached the ministers of both tourism and transport, as well as their deputies and director-generals, in addition to a range of provincial officials, none of whom have been able to resolve the crisis at the NPTR.

SATSA also tried to approach the red tape task team president Cyril Ramaphosa created in the Presidency, but according to SATSA CEO David Frost, that task team is so mired in its own red tape it didn’t even respond.

Road freight

Instead of acting to remove the red tape that for five years or more has been choking the tourism sector, the Minister of Transport, Fikile Mbalula, instead proposes to extend the same model to the road freight sector, saying the sector requires monitoring and regulation.

The road freight industry was deregulated in the 1980s. There is no need for ‘a system for monitoring the performance of commercial road freight operations in South Africa’.

Needless to say, the Road Freight Association is having none of it, describing such operating licences as archaic. Given the history of trucker protests in South Africa, the minister is playing with fire.

Likewise, there is no need for operating licences for tour vehicles. If a person or company is an accredited tour operator, its driver has an appropriate professional driver’s permit, and its vehicle is appropriately licenced and roadworthy, there should be nothing stopping them from transporting tourists.

Absurd demands

Yet not only are additional operating licences required, but the NPTR board, when it existed, acted in apparent violation of the National Land Transport Act, which says: ‘Where the applicant has been accredited as a tourist operator under section 81 and the vehicle in question complies with section 84, the operator is entitled to an operating licence automatically, to be applied for and issued in the prescribed manner.’

In practice, it has abused a clause in section 84, which states: ‘The National Public Transport Regulator may impose conditions.’

This open-ended clause has been abused, says Onne Vegter, who chairs the SATSA Board Transport Committee (and happens to be my brother), to demand reams of additional information, such as recent itineraries or invoices, five references to establish demand, black empowerment information, and more.

‘They demand more than 30 supporting documents, all certified, with only one office in Pretoria to deal with this.’

In some cases, the documents the NPTR demands cannot logically exist. If you’re a new operator, with a new vehicle, you do not have references or previous invoices, and you cannot get them until you can legally operate your tour vehicle.

Vegter adds: ‘The NPTR also demands route descriptions. Route descriptions do not apply to tourist operators. Every route is different. But they have a public transport mindset, as if tour vehicles are taxis or scheduled bus services. They often unilaterally limit operators to their own province, for no reason at all.’

Again, one wonders what business it is of the government to assess demand. Private operators take private risks on market demand. Whether or not they succeed has nothing to do with the government.

The same goes for regulating routes. It is none of the government’s business where tour operators wish to take tourists, and limiting them to their own provinces is patently absurd. That would prevent an Mpumalanga operator from fetching customers at the airport in Johannesburg, or prevent a Western Cape operator from sending clients to the Kruger, or to game lodges in the Eastern Cape and KwaZulu-Natal.

Inappropriate regulation

On top of all this, they unlawfully insist that issuing tourist vehicle operating licences and permits requires an NPTR board meeting, which it doesn’t, and which it couldn’t even convene during the three years in which no board existed.

The problem isn’t just that there was no board for so long. The problem is that the previous board, and the new interim board, has no members with tourism experience, as the law requires, and imposes an entirely inappropriate regulation regime upon tour operators.

While new vehicles are not allowed to be used at all, vehicles whose operating licences have expired, but for which renewal applications are pending, actually are allowed to operate on their expired licences.

The problem is that traffic police officers don’t know this, and routinely target tour vehicles for inspection, either fining the operator they wrongly believe to be non-compliant, or even dumping tourists at the side of the road in the middle of nowhere while they impound the vehicle.

Arguing the law against police officers at the side of the road is futile, of course. These stops can, and have, been challenged, but even if the vehicle is returned and the fine cancelled, the damage has been done.

The operator now has stranded tourists whom they have had to refund, who write negative reviews on booking sites, and give both the operator and South African tourism a sullied name.

Far better to go on holiday in Kenya, or Tanzania, or Australia, where the police do not target tour operators with unlawful harassment.

Vegter also notes another problem: his tour company has acquired several new vehicles, but since they cannot be used, he has to rely on his older vehicles, which are less reliable and less safe due to their age. This not only threatens the financial viability of the business, but could also endanger the safety of tourists.

Killing startups

Khotso Micha owns SouthernXplorer, which provides adventure, cultural and historical travel packages to communities, townships and tourism attractions in the Western Cape, Eastern Cape and the Wild Coast.

He started his business with a single vehicle in 2018, but has been unable to get an operating licence for the vehicle, four years later.

His story is heartbreaking: ‘I started in 2018, and spent a year just gathering documents. After gathering everything, I started the process in 2019.

‘Then I was told I have to go to Pretoria to have everything filed. The online system doesn’t work, the files are too big, documents get lost… so I went to Pretoria out of my own pocket and spent a week up there.

‘I’m right at the beginning of starting a business, and it already involved so many hurdles. When I realised all of these hurdles were ahead, I thought at least I can talk to someone personally and get it sorted out.

‘It was scary to see how many documents were just lying around, piled shoulder-high. They said most of these applications had outstanding documents. It took another three days, while they asked for more supporting letters from potential clients to show that I would be getting business.

‘My wife and I had bought a small luxury SUV to run small tours, but to this day, we haven’t been able to use it. I have a receipt, but that doesn’t permit you to operate.

‘I kept checking up, and discovered in 2020 that there was no longer a board to deal with the applications. I asked what that means for us, because we have to keep paying for the vehicle with no income, but they said there was nothing they could do, since there was no board.

‘This is a tragedy. All I want to do is grow my business, and create jobs, but it seems that at every turn we take, you are disheartened and discouraged by all the red tape, even if you do everything by the book.’

Urgent intervention

According to Frost, this story is repeated hundreds of times. In its own survey of members, it received 131 responses, and discovered that 913 applications were outstanding, with 391 vehicles that cannot be used legally.

With every other avenue of relief, short of legal action, being closed off, SATSA wants President Cyril Ramaphosa to personally step in and declare an immediate amnesty and moratorium on licensing tourist transport vehicles.

‘There is a precedent for this,’ he says. ‘In 2015, there was a big systemic failure with the Gauteng regulator, when this was still a provincial competency. Provincial transport MEC Ismail Vadi declared an 18 month moratorium, and the regulator was given 12 months to resolve the issue.’

SATSA also wants the president to establish a task team to resolve the matter, in partnership with SATSA and other tourist companies. Someone like Vadi, who is retired, should head up this task team, Frost suggests.

Finally, SATSA expects that the NPTR board follows the law and does what is required of it.

‘We are gatvol,’ says Frost. ‘We don’t want to be polite about it anymore. This is intransigence and state failure.’

Mr Fix Fokol

The deputy chairperson of SATSA, Oupa Pilane, says: ‘While government should be playing a pivotal role in creating an environment that enables growth, the reality is that government red tape is impeding the sector and the entire system is paralysed, with dire consequences for both existing and new tour operators. The NPTR licensing debacle is endangering the overall sustainability of the sector, the creation of new businesses and jobs, the lives of tourists, and it is threatening the jobs that the sector currently sustains. It is also hampering growth, and the country’s reputation as an efficient, welcoming tourism destination.’

Minister Mbalula once described himself as ‘Mr Fear Fokol’, and more recently tags himself on social media as ‘Mr Fix’. In reality, he is Mr Fix Fokol.

This saga has been dragging on since 2017, and absolutely nothing has been done. SATSA is asking the president to intervene, because it doesn’t want to have to go to court.

Says Vegter: ‘Yes, we could go to court, but that is always a last resort. It is unlikely to get on the urgent roll. Litigation will take years. We have hundreds of vehicles not on the road right now. A previous director-general once said: “Bring it on. Government has lots of money.”

‘The solutions are there, it should not take going to court to solve it. We have no doubt that a judge will have strong words for the NPTR, but we’re hoping that we can resolve this matter much faster.’

In other countries, governments bend over backwards to help their tourism industries. It would be ironic if South Africa’s tourism sector, which survived pandemic restrictions battered and fighting for its life, finally gets strangled by government failure and Mr Fix Fokol’s abject lack of interest in resolving it.

Full disclosure: Although Onne Vegter is my brother, this article is based on a media briefing hosted by SATSA CEO David Frost.

  • Ivo Vegter is a freelance journalist, columnist and speaker who loves debunking myths and misconceptions, and addresses topics from the perspective of individual liberty and free markets. Follow him on Twitter, @IvoVegter.
  • The views of the writer are not necessarily the views of the Daily Friend or the IRRIf you like what you have just read, support the Daily Friend.

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