Traders vs Transnet: court case has consequences for informal businesses

The Mahikeng High Court will soon hear an application brought by Transnet to evict more than 40 informal traders from land which it claims to own in Mogwase, North West Province. The informal traders are represented by the Socio-Economic Rights Institute (SERI), who have raised a novel defence that could radically alter the circumstances in which the state may evict informal traders.

Mogwase has a railway line running through it, but also has a shopping centre and an area with informal traders. The ownership of the land and the exact location of the informal traders’ stalls however is in dispute.

Transnet’s application tries to prohibit the informal traders from continuing to operate their businesses on this land. It also wants the traders evicted. SERI represents 30 of the affected informal traders. (The other traders who have been cited have not yet defended the case.) There are five points of disagreement. The fifth and last one discussed below is the most interesting and important for future cases dealing with informal traders.

Is Transnet the owner of the property?

Transnet argues that it is the owner of the property by virtue of legislation which transferred the assets of the former South African Railway Services to Transnet in 1989. While Transnet concedes that the property is yet to be formally registered in its name, it argues that the property already technically belongs to it. (Most of Transnet’s shares are owned by the state.) However, the market traders argue that the property was not transferred to Transnet because it formed part of the former Bantustan Republic of Bophuthatswana and was subsequently transferred to the government of the Republic of South Africa. In their view, the property was never transferred to Transnet.

Where are the market traders’ stalls located?

Transnet contends that the market traders are trading from an area that is in close proximity to the railway tracks. It argues that the market traders pose a danger to the public. This is so because prospective customers including young children will be enticed to visit their stalls and cross the railway line in the process. The market traders argue however, that they are in a different location. Essentially, they argue that their stalls are behind a row of houses which are quite some distance from the railway line. In addition, they point out that there is a shopping complex and road nearby which already attracts a considerable number of people. For this reason, the market traders reject the argument that their activities pose any danger to the public.

Are the market traders trading illegally?

Transnet argues that the market traders’ activities are unlawful because they are trading from its property without its permission. The market traders argue however that the legislation governing informal trading does not prohibit their activities. This is because the municipality has not established a licensing authority in the area. This means the traders neither need a license nor Transnet’s permission in order to trade. Also, the relevant legislation prohibits a municipality from outlawing informal trading. It only allows the municipality to put in place certain restrictions on informal trading, a process which the market traders argue, the municipality is yet to follow. For all these reasons, the market traders argue that their activities are not unlawful.

Has Transnet engaged with the market traders?

Transnet says that it has engaged with the market traders and informed them that their activities are dangerous and that they should relocate. Also, Transnet argues that it has consulted with the relevant municipality. Transnet says the municipality has undertaken to construct a pedestrian bridge, relocate the market traders to a nearby piece of vacant land, and engage the provincial government for further assistance. Transnet argues that the municipality has failed to honour these agreements. It says it has taken all reasonable measures to engage with both the municipality and the market traders prior to seeking their eviction.

But the traders deny that Transnet has engaged directly with them. They argue that they are only aware of Transnet having engaged with the municipality. They contend that they were never invited to any of these engagements. They point out that the municipality is yet to show any concrete signs that it will indeed relocate the market traders to a nearby piece of land if they are evicted.

Would it be unfair to evict the market traders?

Having established that they own the property, that it should be used for the purpose of providing railway transport services, and that the activities of the market traders pose a danger to the public, Transnet concludes that it would be fair to evict the market traders.

The market traders raise a novel legal defence in response to this. They argue that they have a constitutional right to freedom of trade. Also, they argue that their constitutional right to dignity would also be infringed if they are evicted. This is because, they argue that the right to dignity includes the right to earn a living and take care of oneself and one’s family so as not to be left destitute. The market traders go on to say that because Transnet is an organ of state it has a duty to respect, protect, promote and fulfil the rights in the Bill of Rights. The market traders argue that Transnet may not evict them until they find a solution which ensures that their fundamental rights will be protected.

To bolster this argument, the market traders also highlight their circumstances. First, they point out that some of them have been trading in Mogwase for more than 20 years. Second, many of them have dependents and are the breadwinners in their homes. Third, many of them are particularly vulnerable such as refugees or single women who head households. Also, they point out that there are no jobs in Mogwase and without their businesses they will be dependent on the state for support.

Why this case is important

The novel defence being raised by the market traders is that Transnet has a duty to protect their rights to dignity and freedom of trade and may only evict them when it can do so in a way that protects these rights. If this particular defence is accepted, it would be a huge win for informal traders who are often vulnerable to sudden eviction and the end of their businesses. But this defence is confined to cases in which an organ of state is the owner of the land.

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