Acsa can't make up its own black empowerment rules for car-rental companies, the Supreme Court says

Business Insider SA
Car-rental kiosks at Cape Town International Airpo
Car-rental kiosks at Cape Town International Airport. (Google Street View)
  • The Airports Company of SA (Acsa) invited bids from car rental companies to rent kiosks at is airports – as long as they were 30% black-owned, and half that by black women, for large companies.
  • It also planned to weigh bids half on the rental price offered, and half on empowerment credentials.
  • The owner of Europcar and Tempest successfully challenged that plan in court – and now the Supreme Court of Appeal too has sent Acsa packing.
  • State entities can't design their own, private, empowerment codes, the SCA said.
  • For more stories go to the Business Insider South Africa homepage.

The Airports Company of South Africa (Acsa) can not make up its own black empowerment rules, the Supreme Court of Appeal (SCA) says, and so override decisions made after broad consultation.

In a ruling on Friday the SCA dismissed Acsa's appeal against an earlier high court decision that struck down its plan to decide which car-rental companies could rent kiosks at its airports.

Acsa owns SA's major airports, and had asked for bids for more than 70 kiosks on its properties on 10-year leases.

Airport presence is critical for car rental companies, and all existing players were required to re-apply – under rules that the SCA now also says were unlawful.

Acsa had planned a pre-qualification check that would exclude big car-rental companies from further adjudication unless they were at least 30% black-owned, and 15% owned by women.

After a technical evaluation, bids would then be considered in a fashion that would make empowerment credentials as important as the price a rental company offered, with each component weighted at 50% of the final score.

That is more onerous than empowerment rules for the tourism industry or as broadly determined, the SCA said in one of two judgments on the matter.

An organ of state such as Acsa may not "design its own custom-made set of qualification criteria that deviate from the provisions of the applicable B-BBEE code", the court said, not without the consent of the minister of trade and industry, who oversees the implementation of empowerment rules.

While it is rational to set targets to promote transformation, Acsa seems to have set its targets arbitrarily, the court held. Nor did it approach the trade and industry minister for permission to set tougher rules than prescribed – in a process that would have allowed stakeholders to have a say.

The Imperial Group, which rents cars under the Europcar and Tempest brands, successfully challenged the rental rules in the high court. The SCA dismissed Acsa's appeal against that decision with costs.

In a prominent example of state entities enforcing tough empowerment rules, Eskom previously held that it would buy coal only from mines with a black ownership of at least 50%. That policy led to a change in ownership at some mines. After the National Treasury took on oversight of Eskom's coal purchases, that requirement disappeared, and was later said to never have formally existed at all.

(Compiled by Phillip de Wet)

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