Minister of Cooperative Governance and Traditional Affairs and Another v British American Tobacco South Africa (Pty) Ltd and Others

During the COVID-19 pandemic, the Minister of Cooperative Governance and Traditional Affairs declared a national state of disaster on 15 March 2020 under s 27(1) of the Disaster Management Act 57 of 2002. The Minister made regulations including Regulation 45 under GN R608, GG 43364, 28 May 2020, which prohibited the sale of tobacco, tobacco products, e-cigarettes and related products during Alert Level 3 of the lockdown, except for export. South Africa was one of only three countries globally to impose such a ban. The Minister's stated reasons were: (1) behavioural risks - consumers sharing lit cigarettes thereby increasing COVID-19 transmission; (2) health risks - smoking allegedly adversely impacts lungs and leads to more severe COVID-19 outcomes, placing strain on the healthcare system. The ban remained in force from March 2020 until it was rescinded on 17 August 2020 when the country moved to Alert Level 2. During this period, the Walbeek Report found that 90% of smokers continued purchasing cigarettes illegally, with cigarette prices experiencing hyperinflation. The fiscus lost approximately R35 million per day in excise duties. Tobacco farmers, manufacturers, retailers and consumers at every level of the supply chain were affected, with BATSA alone losing over R2 billion in revenue. The respondents (comprising farmers, processors, manufacturers, retailers and consumers) launched an urgent application in June 2020 challenging Regulation 45 as unconstitutional.

• Whether Regulation 45 limited the fundamental rights to dignity, privacy, bodily and psychological integrity, freedom of trade, and property
• Whether any limitation of fundamental rights was reasonable and justifiable under section 36 of the Constitution
• Whether the Minister had the power under section 27(2)(n) of the Disaster Management Act to make regulations prohibiting the sale of tobacco products
• The proper interpretation of the word 'necessary' in sections 27(2)(n) and 27(3) of the Disaster Management Act
• Whether Regulation 45 was ultra vires the Disaster Management Act for not being necessary to achieve the stated purposes
• Whether the regulation-making process was vitiated by procedural irrationality or unfairness
• The applicable costs principles in constitutional litigation between private parties and the State (Biowatch principle)

1. The appeal was dismissed with costs, including the costs of two counsel. 2. The cross-appeal was upheld with costs, including the costs of two counsel. 3. Paragraph 224.2 of the High Court order was set aside and replaced with an order that the first and second appellants pay the respondents' costs, including costs of two counsel and qualifying expenses of the respondents' expert witnesses. The High Court's declaration that Regulation 45 was inconsistent with the Constitution and invalid was confirmed.

The binding legal principles established are: (1) During a national state of disaster, all regulations made under the Disaster Management Act remain subject to the Constitution and must comply with the Bill of Rights - the executive has no free hand to act as it pleases. (2) In the s 36 limitation analysis, the party seeking to justify an impugned regulation (usually the State) must establish the factual basis for the justification through cogent evidence, not merely rational belief. Where the State fails to prove supporting data and cogent objective factors point in the opposite direction, the limitation is not reasonable and justifiable. (3) The word "necessary" in ss 27(2)(n) and 27(3) of the Disaster Management Act must be narrowly construed to mean "strictly necessary" or "essential", not merely "rationally and reasonably necessary". (4) To justify a regulation under s 27(2)(n) limiting fundamental rights for health purposes, the Minister must objectively establish: (i) the health risk exists; (ii) the temporary measure will address that risk; (iii) the measure is effective in achieving its purpose; and (iv) the purpose outweighs the limitation of rights. (5) The State cannot justify a limitation on constitutional rights by relying on illegal conduct (such as black market sales) that the limitation itself creates or facilitates. (6) Section 27(2)(n) of the Disaster Management Act authorizes regulations suspending or limiting the sale of commodities other than alcohol if strictly necessary to prevent escalation of a disaster or to alleviate, contain and minimize its effects. (7) Regulations made under s 27(2) may temporarily suspend or limit rights conferred by other Acts of Parliament during a state of disaster, provided the jurisdictional requirements are met. (8) The Biowatch principle applies in constitutional litigation where private parties successfully challenge state action - absent particularly powerful reasons, the State must pay the successful private litigant's costs.

The Court made several non-binding observations: (1) The Court noted that South Africa was one of only three countries globally (along with Botswana and India) to ban tobacco sales during COVID-19 lockdowns, while countries like Italy, France, Switzerland and Spain expressly classified tobacconists as essential businesses. (2) The Court observed that within Cabinet itself there was no unanimity on the tobacco ban, with the Minister of Finance publicly stating he opposed continuing the ban due to lost revenue. (3) The Court commented that concerns about sharing of lit cigarettes could have been addressed through targeted awareness campaigns (similar to campaigns about not sharing spoons at funerals) rather than an absolute prohibition. (4) The Court noted that the Minister could have achieved similar health outcomes through a temporary increase in excise duty on cigarettes to make legal cigarettes as expensive as black market cigarettes, which would have had the additional benefit of generating revenue for the fiscus to expand ICU capacity. (5) The Court observed that the WHO publications relied on by the Minister did not recommend prohibiting tobacco sales and acknowledged the lack of peer-reviewed studies on key questions. (6) The Court noted the devastating economic impact of the ban, including loss of R2.4 billion in tax revenue during the first eight weeks, BATSA's loss of over R2 billion in revenue, and threats to the livelihoods of tobacco farmers and their 30,000 dependants. (7) The Court commented that the Walbeek Report's conclusion that "the disadvantages of the ban outweigh the advantages" and that "it was an error to continue with the cigarette sales ban into Level 4 lockdown" was sound. (8) The Court observed that the ban fueled the illicit cigarette market and was likely to undo progress made in reducing illicit trade in 2019/2020.

This judgment is significant for several reasons: (1) It confirms that emergency regulations made during a state of disaster remain subject to constitutional scrutiny and the Bill of Rights, and that executive power during crises is not unfettered. (2) It establishes that the limitation analysis under s 36 of the Constitution requires cogent factual and scientific evidence, not mere rational belief, particularly where fundamental rights are substantially limited. (3) It clarifies the scope of regulation-making powers under s 27(2)(n) of the Disaster Management Act, holding that while the Minister has broad powers to address disasters, such powers must be exercised only to the extent "strictly necessary" for the purposes in s 27(3). (4) It reinforces that the State cannot justify limitations on constitutional rights by relying on the prevalence of illegal conduct that the limitation itself creates. (5) It demonstrates the courts' willingness to scrutinize COVID-19 regulations and strike down those that are not supported by evidence, even where the executive claims to be acting to protect public health. (6) It confirms the application of the Biowatch costs principle in constitutional litigation, ensuring that successful private litigants are not deterred from vindicating constitutional rights against the State due to adverse costs consequences. (7) The judgment provides important guidance on the interpretation of emergency powers legislation and the balance between public health imperatives and constitutional rights during a pandemic. The decision affirmed South Africa's constitutional democracy principles even during national emergencies.