Gary Moore is a Senior Consultant at the Free Market Foundation. He was a practising attorney in Johannesburg for 30 years. He is the author of published articles and monographs about the rule of law, the legality of state action, the meaning of statutes, and laws affecting small business.
The views expressed in the article are the author's and not necessarily shared by the members of the Foundation.
This article may be republished without prior consent but with acknowledgement to the author.
The FMF is an independent, non-profit, public benefit organisation, created in 1975 by pro-free market business and civil society national bodies to work for
a non-racial, free and prosperous South Africa.
As a policy organisation it promotes sound economic policies and the principles
of good law. As a think tank it seeks and puts forward solutions to some of the country's most pressing problems: unemployment, poverty, growth, education, health care, electricity supply, and more. The FMF was instrumental in the post-apartheid negotiations and directly influenced the Constitutional Commission to include the property
rights clause: a critical cornerstone of economic freedom.
+27 11 884 0270
PO Box 4056, Cramerview 2060
This article was first published on BBrief magazine
on 7 April 2022
Government’s impact assessments of laws are worthless
Traditionally, a socio-economic impact assessment (SEIA) should, at the least, assess a proposed law’s adverse impacts on economic growth and on the economy. Regrettably, the government’s current SEIAs of proposed bills fail to do that and are quite worthless. Look elsewhere for the real impact of new laws.
The government requires draft bills submitted to the Cabinet for approval to be accompanied by an SEIA countersigned by the SEIA Unit of the Department of Planning, Monitoring, and Evaluation (the Planning Department).
The Planning Department’s 2015 SEIA Guidelines say that SEIAs should assess a proposed law’s potential costs, benefits and risks, without dictating remedies.
The Planning Department outlined the procedure to develop SEIAs. If a state department decides to sponsor draft legislation to address a perceived problem, it should identify legislative options, roughly evaluate the costs and benefits of each, select one option, frame a draft law, develop a draft SEIA evaluating the draft law’s likely costs, benefits and risks, and publish the drafts for public comment and consultation with stakeholders most affected and knowledgeable about the likely impact of the proposed law.
Next, the sponsoring department should revise the draft law and finalise its SEIA in light of stakeholders’ and public comments. The Planning Department emphasises that a sponsoring department, when finalising the SEIA, must manage biases which affect stakeholders whom they consult. Stakeholders know more than officials about prevailing conditions and likely impact of a draft law but, says the Planning Department, while stakeholders’ information is critical for sound decisions, it will be shaped by their interests and should be evaluated against research and other stakeholders’ views.
The sponsoring department then submits its draft law for approval to the Cabinet, together with its final SEIA.
The Planning Department’s Guidelines do not require the sponsoring department of a draft law that has been approved by the Cabinet to publicise the final SEIA. Instead, the Guidelines assert that sponsoring departments are responsible for attaching final SEIAs to bills tabled in Parliament. That stipulation is not complied with, no doubt because it violates the separation of powers implicit in the Constitution.
The Joint Rules of Parliament require merely that ministers intending to introduce a bill in Parliament must, after the draft bill has been approved by the Cabinet, submit it, with a memorandum explaining the objects of the proposed bill, to the Speaker of the National Assembly and Chairman of the National Council of Provinces, for distribution to members of the responsible parliamentary committees to enable them to acquaint themselves with the draft bill and develop their positions. The Joint Rules are silent about SEIAs.
Each House of Parliament’s separate rules take the same approach. They require only that, if the houses’ presiding officers receive a draft bill approved by Cabinet with the memorandum explaining its objects, then notice must be given in the Government Gazette of the intended introduction of the bill in Parliament, and either the bill as it is to be introduced or an explanatory summary of the bill must be published in the Gazette. The Minister introducing the bill must submit to the presiding officers a memorandum explaining the objects of the bill and giving an account of its financial implications for the State. The formal bill, when introduced, must be certified by the State Law Advisers as being properly drafted in the style which conforms to legislative practice.
The Rules of Parliament do not require that SEIAs be given to Parliament’s presiding officers, or be published in the Gazette, or be annexed to bills introduced in Parliament, or be tabled with bills. Parliament’s rules don’t mention SEIAs.
According to the Bill of Rights, everyone has a right of access to information held by the State, subject to reasonable and justifiable limitations. Legislation had to be enacted to give effect to the right.
That legislation, the Promotion of Access to Information Act 2000, states that a person must on request be given access to any record of information in the possession of any public body. The Act, however, does not apply to records in the Cabinet’s possession.
Therefore, government departments that sponsor draft laws that have been submitted for Cabinet approval might, not without reason, treat the associated final SEIAs presented to the Cabinet as being records in the Cabinet’s possession and thus excluded from the public’s right of access.
It is nevertheless possible, with some digging, to access sponsoring departments’ final SEIAs of draft laws that have been approved by the Cabinet.
But are departments’ final SEIAs worth reading? Do they assess the impact of a bill on the economy or on economic growth? They do not.
The Planning Department’s 2015 SEIA Guidelines say that SEIAs should assess a proposed law’s potential impacts on each “national priority”. At that time there were four national priorities, one of them being economic growth.
In 2019, the government replaced those four national priorities with seven new ones. Economic growth is not among them. One of them is “economic transformation and job creation”. This could imply redistributive measures and increased “cadre deployment” in Eskom and other state-owned “enterprises”. That does not add up to economic growth.
The government’s 2020 templates for SEIAs, and its 2021 guide about the use of evidence when developing SEIAs, make clear that SEIAs should assess proposed laws’ potential impacts on the seven new national priorities.
It is a misnomer to label such impact assessments as “socio-economic” assessments. They should more appropriately be called “national priority” impact assessments.
For assessments which focus on the economic impacts of proposed laws, recourse should be had to assessments by civil-society bodies such as the Free Market Foundation, and the business community.