The North Gauteng High Court in Pretoria has interdicted government from processing applications or paying out any money to businesses from its Tourism Equity Fund (TEF), following a challenge by trade union Solidarity and lobby group AfriForum.
The R1.2 billion TEF was announced earlier this year. It involves R606 million to be contributed by the Small Enterprise Finance Agency (SEFA) and R594 million by an unnamed "strategic bank co-funders", and aims to enhance transformation in the tourism industry.
Monday's ruling halts the Department of Tourism, Tourism Minister Mmamoloko Kubayi-Ngubane and SEFA from disbursing TEF monies to applicants, and even processing any new applications pending a review of the fund.
Solidarity and AfriForum said the fund did not comply with the Constitution and other relevant laws. They claimed they had no other choice but to turn to the court after talks with the minister were unsuccessful in convincing her to open the fund for all tourism businesses.
"The pandemic does not discriminate against anyone on the basis of race, yet this disaster is being exploited by the government and only Black Economic Empowerment businesses are provided with funds at the expense of established businesses of white owners who are forced to close their doors," said Solidarity chief executive Dirk Hermann
The department and minister had argued that the Tourism Code acknowledges that the industry "remains characterised by large disparities in access to equal opportunities and benefits, and in particular for black people".
They argued that the code also recognises the "need for transformation" so that the industry can become "truly representative and reflective of our society".
To this end, the department set up the TEF to "speed up transformation in one of the most crucial sectors of our economy".
-with Carin Smith