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Govt appeals against wool and mohair ruling

Mohalenyane Phakela

THE Ministry of Small Businesses, Cooperatives and Marketing will today launch a High Court application to prevent wool and mohair farmers from selling their produce from South Africa or anywhere else outside Lesotho until the Court of Appeal decides on its appeal against the outlawing of the wool and mohair regulations of 2018.

Last Thursday the government was dealt a massive blow in its quest to have wool and mohair sold from Lesotho when the High Court ruled that the Agricultural Marketing (Wool and Mohair Licensing) (Amendment) Regulations which prohibit farmers from selling their wool and mohair from South Africa were illegal.

Acting Judge, Justice Moroke Mokhesi, delivered the verdict in the long-drawn-out case which was brought to the High Court by the Lesotho National Wool and Mohair Growers Association (LNWMGA).

Justice Mokhesi dismissed as “null and void and of no force and no effect” the regulations which came into effect last year and made it illegal for the farmers to sell their produce in South Africa through their preferred brokers, BKB.

Justice Mokhesi ruled that the May 2018 regulations were in contravention of the Agricultural Marketing Act of 1967 which allowed framers to sell their wool and mohair from wherever they chose and through the brokers of their choice. The Ministry of Small Businesses, Cooperatives and Marketing were the respondents in the case and they were ordered to pay the costs of the lawsuit.

“It is declared that the Agricultural Marketing (Wool and Mohair Licensing) (Amendment) Regulations No. 65 of 2018 are null and void and of no force and effect to the extent that they are ultra vires (in contravention of or outside the powers stated in the) Agricultural Marketing Act of 1967,” Justice Mokhesi ruled.

The High Court decision was immediately welcomed by the LNWMGA who however, said their joy would only be complete if the government obeyed the court decision.

However, the government is not taking the High Court ruling lying down and it has already indicated that it will be appealing against Justice Mokhesi’s decision in the Court of Appeal whose sessions were expected to begin on 15 April 2019.

Before then, the government will approach the High Court seeking a stay on Justice Mokhesi’s ruling until the Court of Appeal has heard and delivered judgement on the government’s appeal against the 3 April ruling outlawing of the wool and mohair regulations.

The LNWMGA are the respondents in the Ministry of Small Businesses, Cooperatives and Marketing’s court application.

“Kindly take notice that an urgent application shall be made on 11 April 2019 (today) seeking that the judgment of this honourable (High) Court in this matter be stayed pending the outcome of an appeal lodged by the applicants in the Court of Appeal,” the ministry states in its notice of motion filed by its lawyer, Advocate Taeke Thejane.

“The matter is extremely urgent as the declaration of the said regulations as null and void leaves the wool and mohair market unregulated.

“The honourable court misdirected itself on numerous material respects which led to the declaration of the regulations as null and void. The respondent stands to suffer no prejudice since the order for the stay (of the execution of Justice Mokhesi’s 3 April ruling) shall only be operative for a fairly short period pending the outcome of the appeal which has already been lodged (in the Court of Appeal) and is to proceed in this April session.”

The notice to appeal was accompanied by an affidavit of the Minister of Small Businesses, Cooperatives and Marketing, Chalane Phori, who says there are strong prospects of the government’s appeal succeeding.

“The honourable court did not consider the applicants’ argument that the regulations would still stand without the penalties set out under in the regulations.

“Furthermore, a proper reading of the regulations will reveal that it does not require farmers or persons interested in trading wool and mohair to test their wool and mohair in Lesotho before it can cross the borders. On the contrary, the regulation requires that any person who wishes to engage in a business of wool and mohair testing should obtain a licence to do so from the minister responsible for small business development,” Mr Phori states in his affidavit.

For more than 40 years up to last year, Basotho farmers sold their wool and mohair from South Africa through Port Elizabeth-based brokers, BKB.

But on 4 May 2018, the Agriculture Minister, Mahala Molapo, torched a storm when he gazetted the Agricultural Marketing (Wool and Mohair Licensing) Regulations of 2018. The Minister of Small Businesses, Cooperatives and Marketing, Chalane Phori, amended the regulations on 30 August to accommodate associations and cooperatives in the legal instrument.

The regulations forbid anyone to trade in wool and mohair without a licence obtained from the Ministry of Small Businesses, Cooperatives and Marketing.

The regulations further state that “the holder of an export licence shall not export wool and mohair unless it is prepared, brokered, traded and auctioned in Lesotho”.

Any person found guilty of brokering, testing, processing, trading and auctioning wool and mohair without a licence would be liable to a fine of M50 000 or a maximum of five years imprisonment.

Anyone found to be in the business of shearing wool and mohair or exporting without a licence will be fined M20 000 or be imprisoned for two years.

Wool and mohair is currently auctioned locally by the Lesotho Wool Centre (LWC), a joint venture between the Lesotho National Wool and Mohair Growers Association (LNWMGA) and Mr Shi’s Maseru Dawning Trading Company.

The LNWMGA holds 75 percent shares while Maseru Dawning holds the remaining 25 percent in the LWC.

The regulations sparked strong protests from the wool and mohair farmers and this led to LNWMGA filing a High Court application in September 2018 seeking the nullification of the regulations on the grounds that they violated the farmers’ rights to sell their product to whoever they wished and from wherever they chose.

When delivering his verdict on 4 April 2019, Justice Mokhesi said the 2018 regulations could not stand the test of legality and the regulations were not clear.

“It is uncontroverted (undeniable) that the applicant has been exporting wool and mohair for its members for over 40 years and has in the process established relationships with the broking company, BKB, to the extent of owning shares in the latter company. In my opinion, this clearly establishes that their right to export wool and mohair had indeed vested.

“The Minister (of Small Business) may only make regulations prohibiting any person from dealing in the course of trade with a product in Lesotho unless such a person has been licenced. It simply cannot be reasonably justified why a facility which if found outside the country can be regulated as the minister sought to do.

“It needs no elaboration that in prescribing punishments under regulation 11, the Minister (Phori) exceeded the powers conferred on him by the act. It follows therefore that regulation 11 is beyond powers of the act and has to be struck down.

“The question is whether without regulation 11, Regulations N0. 65 of 2018 can stand on their own. My considered view is that they cannot stand on their own as without penal provisions the prohibitions contained in the regulations would merely be directory and not peremptory,” Justice Mokhesi said.

The regulations state that, “a person who contravenes regulations of shearing and exporting commits an offence and is liable, on conviction, to a fine of M50 000 or to be imprisoned for a period not exceeding two years or both”.

The regulations further states that, “a person who brokers, tests, auctions or processes without a licence commits an offence and liable to a fine of M50 000 or to imprisonment for a period not exceeding five years or both”.

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