SPEECH DELIVERED TO SADPO MEMBERS ON 22 MARCH 2017 By the senior partner of CRANKO KARP & ASSOCIATES INC REGARDING THE CASE OF SADPO versus THE MINISTER AND OTHERS
Meneer die Voorsitter, Mr Mosa Mabusa,
President van SADPO Mnr Gert van Neikerk
Members of the DMR
Members of the Regulator
Dames en here
1 Die oorwinning wat ons gehad het in die SADPO saak is nie slegs ‘n oorwining vir SADPO self nie, maar ‘n oorwining vir een en elke van die lede van SADPO wat hier sit vandag met julle familie, julle vrouens, julle kinders en die hele diamante bedryf van Suid Afrika.
- Een van die groot dryfvere om die saak to beveg was die insluiting van Artikel 20 A in die Nieuwe Diamant Wet.
- Ons moet almal mooi verstaan dat die artikel ernstig gevolge dra vir ieder en elke delwer in die kort en lang termein.
This Section 20 A effectively forbids any foreigner to view any rough diamonds at a Tender House even if he is in the presence of a South African Licensed Diamond Dealer. The only place where he is permitted to view and purchase rough diamonds is at a State Diamond Tender, but only after he has paid a levy and obtained the necessary certificate which is valid for a short period of time. This procedure in itself is very inconvenient and impractical.
Credit must initially go to the late Les Meyer who before the Act was passed and after the first draft was circulated, picked up that Section 20 A would have devastating effects for each and every digger.
He insisted that I, together with him, after representations were made to the authorities, attend the Parliamentary Portfolio Committee Meeting where the Act was discussed and debated. Both Les and I spoke on the devastating effects that could result from the Act but our appeals for caution were not accepted by the Legislature.
As soon as the Act was passed, the erstwhile president of SADPO initiated the Court Application for the striking out of numerous provisions of the New Act which included Section 20 A.
The late Les Meyer spearheaded this case until his death and the day after his death, the judgment was announced in our favour. It is a pity that he did not live to see the success of this judgment.
The current President, Gert van Niekerk, from the time he took over, has added a very solid and responsible influence with regard to instructions which are required by the legal team from time to time.
When the case finally came to Court in the Pretoria High Court, we were successful in obtaining an order in terms of which Section 20 A is to be struck out of the Legislation but only subject to the Constitutional Court confirming this.
Soon after the judgment, the Regulator appealed against the decision and as of now both parties have put in their Heads of Argument for the Application for Leave to Appeal. This Application for Leave to Appeal will be heard on 11 May 2017.
If the Constitutional Court rejects the Regulator’s Application for Leave to Appeal, this will put an end to the entire matter.
If on the otherhand, the Constitutional Court grants the Regulator Leave to Appeal then the matter will be heard at some time in the future. It is hard to make an assessment in this regard, even though I have tried to obtain some kind of estimation from the Constitutional Court’s Registrars.
It must be understood at this stage that what is being asked for is permission to appeal the decision of the Pretoria Court. This hearing will be on 11 May 2017.
However, the interesting point, is that when the Court in Pretoria found in our favour, the Court granted an interdict against the Regulator and the Minister from interfering in any way with the current conduct of foreigners attending at the Tender. In other words, for as long as this case is pending, foreigners are allowed to attend the Tenders together with South African Licensed Dealers. This interdict in itself was a major win for SADPO and all the diggers in this Country.
In other words, even if the Constitutional Court takes another 2 to 3 years to hear this matter, the foreigners can continue to view the diamonds and ultimately purchase them from the South African Diamond Dealers.
It could be asked by an innocent bystander or someone who does not understand the diamond workings in South Africa why this matter is being pursued with such vigour and at such expense not to include all the aggravation which those involved have had to endure.
This is the next interesting point which I want to bring to your attention. During the preparation of this case, the late Les Meyer advised the legal team that he had analysed the results of the tenders over a period of time, I cannot recall exactly how long. He advised us that there could be a discrepancy of up to 30% on the selling price of diamonds, depending on whether or not foreigners were the ultimate purchasers of the diamonds. In other words, if a South African Diamond Dealer or Manufacturer was purchasing the diamonds, his bid could be 30% lower than that of the overseas ultimate purchaser. For any industry, this is a massive difference which cannot be ignored. It is also very important to note and our entire legal team was astonished when this statistic was not challenged by the opposition. In other words, whichever way this “cookie crumbles” the Court has, as an undisputed issue before it that the price in the foreign market could be, 30% more than what the South African market is prepared to pay. This fact cannot, in fairness, be ignored by any Court.
It would be most unfair for the South African digger to be deprived of the opportunity of obtaining “top Dollar”” for his goods. In essence, this is what the fight is all about and the legal team is satisfied that there are definitely reasonable prospects of success on appeal.
Tenslotte al wat ek kan se is dat julle President Gert van Niekerk en julle Regspan hulle beste lewe in julle belang en ek vertrou dat die lede van SADPO shal aanhou om julle President en julle Regspan te ondersteen.
Michael is the Senior Partner at Cranko Karp and Associates Inc and practices mainly in the fields of Corporate and Commercial Law.