Economic freedom requires people’s power to challenge trading laws
15 Apr 2017
Dear Mr Widmark Moses, you wrote to us on 24 March 2019 to ask us about our thoughts on economic freedom.
You are developing a single informal trading bylaw for Stellenbosch Municipality. The Municipality would like to get our insights around informal trading. For this reason you would like to meet us.
We think that informal trading is important for economic freedom. At Stellenbosch Transparency we strongly support economic freedom for all.
We need to debate more about informal trading. This is because little has changed in the Stellenbosch economy since 1994. We have researched and spoken with traders in the town.
You should speak with producers who had their shops bulldozed. And with current traders who complain about where they have to trade.
This is not economic freedom.
Informal traders outside the Rhenisch Church, Stellenbosch Centre, protesting their eviction in 2013
We have some insights. But we do not suffer from the municipality’s attack on our economic freedom. However, the traders do. Therefore, you should be consulting with them. Within a progressive framework you can then write your by-law.
Accordingly, we have decided to post a public blog as our reply to you rather than meet with you in your offices.
Stellenbosch Transparency has close experience with the circumstances of informal production and trading. We have researched local economic freedom in the Stellenbosch municipal area since 1994. Therefore we know what we are talking about.
Stellenbosch Municipality has a history of undermining the freedom of the informal sector.
To illustrate our insights we refer to the cases below.
Destroying economic freedom: the informal producers market
About 16 years ago there was a successful jewelry production business. Producers worked in the premises of Business Partners on the border of Kayamandi.
They produced novel and attractive jewelry. Two successful entrepreneurs (Sandile and Monika Eland) led them. We have conducted extensive interviews with the Elands – see the YouTube video below. They had found overseas customers. As a result about 40 informal producers took home regular income.
They were able to put bread on their families’ tables. Multiply 40 by an average of four people per household. As a result 160 people benefitted from relative economic freedom.
But, South Africa secured the 2010 World Cup. Somebody thought to build a stadium in Kayamandi. And also a ‘Tourism Corridor’ on the site of the Business Partners building.
Dennis Moss and Associates (town planners) planned the Corridor. They said this would benefit the community. However, the stadium and corridor was not required by the producers. Instead a few individuals benefitted from corrupt practices. Therefore we have to look at how corruption destroys economic freedom.
Corruption and economic freedom
To build the Corridor the municipality first had to destroy Business Partners building. Therefore, the municipality demolished this building. In doing so it broke the law.
They destroyed most of the producers’ goods, and confiscated the rest. Then they built the Tourism Corridor and the Stadium. The ANC and Kayamandi Civic Alliance-led Stellenbosch Council facilitated this corrupt process.
They destroyed people’s livelihoods and economic freedom. The corridor replaced a thriving production centre. It became a white elephant. The Sandiles are still struggling for justice and recompense. They have taken their case to the Public Protector. But to date the Stellenbosch Municipality has neither apologised nor made reparations.
Making a White Elephant out of the Tourism Corridor
The Municipality and Dennis Moss made the Corridor idea. It did not come from the community. Therefore the community did not support it. As a result, few people from Kayamandi went to the Corridor.
In 2013 a group of tenants in the Corridor made a request to the municipality. Through the NGO Vuya Endaweni, one of us (Paul Hendler) was part of this process. Thus we have direct knowledge of what we are speaking about here. They wanted to open up the corridor and get more passing people into what had become ‘dead space’. This would strengthen their economic freedom.
Inner courtyard of the Stellenbosch Tourism Corridor. The lack of activity in this picture is true reflection of the utility of the place
These tenants met in two workshops. They analysed the Corridor’s problems and suggested a way forward. The tenants grouping put this in writing. They sent this to the municipality. You are aware of this submission.
In response, Councillor Jindela agreed to meet the tenants to discuss their proposals. However, at the last minute he postponed the meeting.
You never gave a new date for the meeting. And so we conclude that your priority was not to consult with the tenants.
At the time we heard that the Municipality wanted to contract the management of the Corridor to a private company.
The tenant group discussed this with the NGO CENCE. CENCE were considering bidding for this. There was talk that Solms Delta would help in a strategy for making the Corridor popular. But, nothing transpired with regard to real economic freedom. Therefore we conclude that the Municipality has no ideas for the Corridor. This means that it will stay a White Elephant.
If this wasn’t bad enough, the Municipality then destroyed a thriving informal market in the centre of town.
Destroying the economic freedom of the ‘foreign’ African informal traders
Protest poster in support of the Informal Traders struggle, Stellenbosch 2013
In 1996 the Municipality gave permission to informal traders. They could trade from a spot on a pavement in the vicinity of the Rhensich Church.
These Informal traders occupied this spot for 17 years. The municipality evicted them in 2013. The Rhenish Church displayed a disgraceful show of xenophobia. It claimed that the traders’ drumbeats interfered with the church services. It also claimed that these traders urinated and defecated on the church property. The Church threatened the municipality with legal action if it did not evict the traders.
Because the Municipality lacked a vision and courage they capitulated.
They issued an eviction order. They threatened to confiscate traders’ goods if they were not gone at a certain time. As a result, municipal security showed up in force to make sure the traders moved.
We were there on the day filming the shocking events taking place. We completed more video and audio recordings relevant to this event – see below. The previous agreement was within the law. But the eviction itself did not follow proper procedures.
Ideally the municipality should be enabling traders to trade. But Stellenbosch’s by-laws prevent favourable spaces for people to trade. Therefore, Stellenbosch municipality destroyed economic freedom on that day.
One size fits all trading laws
Municipal actions are based on a ‘single informal trading bylaw’ (your words). There are lessons from elsewhere. The City of Cape Town also implemented a single bylaw covering informal trading. The result in Cape Town was to punish informal traders.
This one-size fits all approach polices the informal trading environment. It says what you cannot do, instead of encouraging what you can do.
Let’s go back to the eviction of the informal traders.
We concluded that the Stellenbosch municipality manipulated the law. These traders had been making a good living. In fact they had become a popular tourist attraction. However, the Municipality’s actions destroyed livelihoods overnight.
Still they used their savings to challenge the eviction’s legality. Unfortunately an incompetent legal representative took R25 000 from them. But he failed to help them. The result was they they were outraged and took to protest. This was because the system destroyed their economic freedom. We joined them because we were also outraged.
To channel our anger we decided to expose this injustice. In order to do this effectively, we first researched the situation. Based on our commitment to transparency we made our findings public.
At a meeting Mayor Sidego (DA) admitted that the municipality had wronged these people – see video below.
As a compromise he allowed them to trade from Die Braak. This is within eye-sight (and earshot) of their original spot. If these people are a problem then why has the church not raised further objections?
But our research showed that the town has a problem with all informal trading and not just with the ‘foreigners’.
Relegating informal traders to the “dungeon”
We recorded the eviction of the traders through video and documentary research. At the same time we spoke with traders further down in Bird Street. We recorded these interviews on video – see below.
They criticised the place they have to trade from because people with money (i.e. tourists) don’t go there. This is because the municipality restricts them to a building. We have referred to this building as the ‘dungeon’.
If you look at our video walk-through of these premises, you can see why we used this name. These traders wanted to be in places frequented by tourists. This is because they wanted to enjoy the advantages of a good location for this trade. In other words they wanted economic freedom.
They also told us that the municipality rarely if ever consulted them. Our impression is that the established business community segregates itself from the informal business community.
This segregation is a fundamental obstacle to the development of the latter. Therefore we have to ask whether you are serious about facilitating the development of the informal sector in Stellenbosch?
Do you want to promote economic freedom? If so you will need to address this segregation.
However, the track record of the Municipality when dealing with informality is not good. Now we turn to the travesty of justice which is the Kreefgat forced removal.
Manipulating the law against the vulnerable
The final tale in this sorry saga is the destruction of the informal settlement of Kreefgat (2016).
Demolition of Kreefgat Informal Settlement, December 2016
Kreefgat is a story about forced relocation of people from Blaauwklippen Farm to Jamestown housing project and transitional camp. Still, the issue of trading and gainful employment is relevant here too. As is the Municipality’s shameful connivance with a private landowner to subvert the law.
Many of the residents of Kreefgat did not have work. Significant numbers of households earned less than R3 500 per month. In other words they lacked economic freedom. The municipality did not include economic activities when it designed Jamestown housing project.
Activities like production and trading are not part of this plan. So you have a concentration camp (wendy houses). And then 165 formal units. Many are either unemployed or earn precious little per month.
How are they to sustain monthly service charges?
Sustainable human settlements and economic freedom
We also found that crime is rife in the camp. People who live there are resentful, angry, poor and unemployed. This can only lead to crime, violence and murder. (The Sunday Times reported that the tik used by Henri Van Breda, who axed his parents and brother in the elite De Salze Estate, was provided through a runner residing in Kreefgat ….)
The marginalised majority in Stellenbosch need a holistic human settlement strategy. They need employment (production and trading ) opportunities.
These opportunities must be consistent with economic freedom. Otherwise we are planting the seeds of future problems. The strategy needs to start with respect for human dignity. This means negotiating with different interest groups to achieve a positive outcome. Not imposing a solution on the weakest and most vulnerable citizens. Which the municipality did in complicity with Blaauwklippen.
Undermining economic freedom through the “free market system”
We also note an inconsistency in approaches to informal trading.
Ouder Libertas’s Saturday market and the Root 44 Market are on private land. These traders have security. People with spending power flock to these places. There is effective demand for the goods and services. These traders have economic freedom.
Markets on municipal land are not growing and developing. Here we see survival activities. Informal traders cannot afford overheads in Ouder Libertas and Root 44. They rely on the municipality for access to business opportunities. This is a constitutional right to economic freedom.
But your municipality punishes them for their efforts. This is our major insight. Stellenbosch is not alone in doing this. Cape Town, Johannesburg and eThekwini municipalities are also guilty.
Clarifying the Municipality’s objectives
Stellenbosch municipality needs to clarify its real goal. Is it to keep the poor and marginalised out of town? Or is it to restructure the town space and shape new opportunities?
The Stellenbosch Municipality has to choose. Does it have a pro-poor policy for economic freedom? Or is it there for the elites?
We suggest that you start consulting with existing traders and producers. And with the unemployed and working poor. You need to hear Mr and Mrs Eland. Hear the traders in the ‘dungeon’. Listen to the people now trading from Die Braak. They are the ones who need a progressive trading policy. If you listen you should start hearing what the solutions are.
We are also very concerned by your term ‘single informal trading bylaw’. You will be imposing a single law on different contexts and situations.
We also investigated how the City of Cape Town imposed a single law on informal trading. This meant opposing informal trading. It is the opposite of what informal traders need. They need enablement of informal trading under basic conditions of health. In other words economic freedom.
The question is how will the municipality manage use of a particular space. Each space is unique and requires a flexible management approach not a one-size-fits-all.
Negotiating compromises with established businesses
The biggest challenge will be to negotiate compromises from established businesses and elites. To integrate informal trading into the Central Business District is the central issue.
There’s no reason why the two types of businesses cannot co-exist. But you must drop the intention to segregate the formal from the informal.
This segregation has a long history in Stellenbosch. Established business is largely white and informal business largely black. Bangkok is an example of integrated business districts that work well for all.
Can Stellenbosch adopt the Vision of being the Bangkok of the Western Cape?
Instead of calling itself South Africa’s ‘Innovation Capital’………. Does this municipality have the will to act for economic freedom?
Heading for social conflict?
If the Municipality continues business as usual, it will be complicit in undermining economic freedom. Then Stellenbosch is heading for social conflict.
The informal sector needs political power to make required changes happen. We need another liberation struggle for economic freedom. South Africans need to democratise our economy and public institutions. Signs of this are emerging with the current struggles against the President.
Therefore we need a movement of the people to influence municipal bylaws. Then we will be making progress towards greater economic freedom.
If we have a sympathetic municipality we can demonstrate formal/informal coexistence.
The Municipality funds Stellenbosch 360 with R2,5 million per year. Their function is to support established businesses.
However, a peoples municipality should funding negotiations to advance economic freedom. The aim should be to bring the informal sector into the town centre.
Paul Hendler and Mike Hyland,