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Trading Rights: The formal and informal regulation of Somali migrant traders in Cape Town Vanya Gastrow African Centre for Migration & Society University.

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Presentation on theme: "Trading Rights: The formal and informal regulation of Somali migrant traders in Cape Town Vanya Gastrow African Centre for Migration & Society University."— Presentation transcript:

1 Trading Rights: The formal and informal regulation of Somali migrant traders in Cape Town Vanya Gastrow African Centre for Migration & Society University of the Witwatersrand

2 Aim Focus on regulatory experiences of foreign traders in Cape Town, to inform current debates around informal trade regulation.


4 Grievances against ‘Asiatics’ (Transvaal, 1921) They send their money out of the country instead of spending it where they earn it. They are a source of danger to the public health owing to their unclean habits, and require constant supervision to make them conform to sanitary and other bye-laws. Their standard of trading and methods of business are different to those of Europeans in the following respects: –the owner of the business and his shop assistants all usually reside on the premises, –They evade the laws regulating hours of trading. –They habitually give short weight and adulterate foodstuffs. –They thus succeed in underselling European traders. They carry on businesses which should be carried on by Europeans, and close avenues of employment which should be open to Europeans. They produce nothing in the Transvaal, and do not consume the produce of the country, but import their requirements from India. They form “rings" to keep out European competitors. Their religion, language, colour, mode of thought, ideals, manners and customs are entirely different to those of Europeans; they cannot be assimilated and their presence is a menace to European supremacy.

5 Claims of the ‘Asiatics’ in Transvaal Entitled to the same rights as aliens from Eastern and South Eastern Europe, who are regarded by many South Africans as less desirable citizens than Asiatics. They have benefitted the European community: by penetrating outlying districts where European traders are unwilling to go. by saving Europeans from being impoverished through the methods of business adopted by certain alien traders. by catering for the poorer class of whites, and selling the necessaries of life in small quantities and at low prices. by habitually rendering financial and other assistance to these poorer classes when that has been refused by European traders. by giving their customers better terms for payment than the alien traders who are their chief rivals by keeping down the cost of living through their keen competition.

6 Recommendations of the Commission (Transvaal) Segregation into ‘Indian bazaars’. New business licenses only awarded in demarcated Indian bazaars.

7 Regulation of Somali trade in Cape Town: 2006 - 2014

8 Laws regulating Spaza trade Until recently townships zoned in terms of the Black Communities Development Act BCDA permits house shops (therefore no zoning requirements) Business Act license: must comply with by-laws, and health and safety laws.

9 2006 – 2012: Era of informal trade agreements

10 SA traders grievances Low prices = ‘unfair competition’ Location of shop in close vicinity to South African shops Number of shops (too many)

11 Agreements: Masiphumelele 2006 Khayelitsha 2008 Gugulethu and Philippi 2009 Philippi East 2011 Kraaifontein 2012

12 Elsewhere in Province and country Western Cape: Mfuleni (Paarl) Saldanha Bay Eastern Cape: Bishu Motherwell (Port Elizabeth)

13 Threats of violence: Police were not always attending meetings – ‘they were coming one day, but not the next, we were risking our lives’. ‘If any Somali traders did sign the agreement ‘they signed out of pressure’.

14 Sibongile Mbotwe, Advisor to Minister of Police: –The beauty of Khayelitsha post 2008 is this agreement. We must ask the Somalis to give an audit of shops in 2008 and we start from there. Then we go to the community and speak to them. We say we want to avoid 2008 and we therefore reached an agreement. The police will come and make sure the agreement is enforced in each and every community. State officials and the law:

15 Questions to Advisor to Minister (Sibongile Mbotwe): Somali shopkeeper: Is it legal for an agreement to limit the shops of one minority group of people and not apply to other people? Chair of meeting: He is trying to side step the agreement so we are not going to entertain his question.

16 Response of Competition Commission Told media it would intervene if there was reason to suspect law was being breached – but never intervened

17 Effect of agreements Neo-apartheid solution South African traders temporarily pacified. Ineffective (not legally enforceable) Regular flare ups Unlawful Anticompetitive Discriminatory Undermine freedom of movement and right to seek employment Allegations of corruption Interests of consumers and other parties

18 2012 – Decline of agreements

19 2011 - 2014: Formal state responses

20 2011 to 2012: Fining of Somali traders

21 Local Authorities Act 19 of 1974

22 Reasons for fining Address business robberies (see 2011/2012 SAPS police crime overview) Enforce informal curfews (linked to business robberies) Enforcement of informal agreements?

23 Accessing licenses Sent to Gugulethu Municipal offices Issued informal trading permits at a cost of R150 per month Informal trading permits are for trading in public bays, not on private property.

24 Accessing licenses: Information Many city offices fail to issue licenses: –Issued permits instead –Told traders they did not require licenses –Issued health certificates of acceptability The City of Cape Town’s website Municipal offices and capacity

25 Fining: Abuse during search & seizure Assault Arrest Incarceration Reporting crime Tear gassing Robberies (weapon searches)

26 2013: City of Cape Town by-laws ‘The area used for a house shop may not open directly onto a bedroom or toilet, and no goods which will be sold from the house shop may be stored in a bedroom or toilet’. ‘The house shop shall not operate outside the hours of 07:00 to 21:00 on Mondays to Saturdays and 08:00 to 13:00 on public holidays or Sundays’

27 Licensing of Businesses Bill concerns: Delegation of powers to municipalities Wide discretion Wide search and seizure Cost on businesses Business insecurity due to the need to continually renew licenses Effect on entrepreneurialism

28 Conclusion: when practice diverges from theory Assist South African traders, yet in manners which are not discriminatory, unlawful and ignore the interests of wider parties. Not only debate the content of laws, but also how laws can be abused and misapplied in practice, whether against foreigners or other vulnerable groups.

29 Thank You! Vanya Gastrow African Centre for Migration & Society University of the Witwatersrand

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