THE SA Human Rights Commission (SAHRC) is pushing for legislation to address the illegal garnishees or emolument attachment orders (EAOs).
These illegal garnishees are estimated to have cost vulnerable people money in the region of between R5 billion and R15bn. SAHRC commissioner Mohamed Shafie Ameermia said this was the first gathering of legal minds which would draw up a roadmap to lobby Parliament and government.
He was speaking on the sidelines of the SAHRC discussion on business, human rights and the implications of microlending on access to justice.
Ameermia said that there was a need for a review of the Magistrate Act as loopholes in this piece of law was being used illegally to put vulnerable workers under pressure with garnishee orders.
He said the SAHRC would use available engagement options with litigation as a last resort.
“That roadmap is going to say to us we must knock on Parliament’s doors very seriously to say the house is on fire out there. We need to advocate and champion proper legislation, close the loopholes and gaps in the existing legislation so that at least poor people have the right to live decent lives. I don’t think that is asking for too much,” he said.
The SAHRC has been joined as a friend of the court in a class-action case that farmworkers in the Western Cape have taken up together with the University of Stellenbosch Law Clinic against Flemix and Associated Incorporated and other respondents for unprocedurally and illegally effecting EAOs. “All of us have been talking separately and not as a collective. I think today is that day when we should sit together as a collective and say, this government, is what the problem is, not that they don’t know what the problem is.”
He said yesterday’s think-tank would put a position to Parliament, the financial ombudsman, the Financial Services Board and the National Credit Regulator for a need to put legislation in place to address EAOs. “Unfortunately it seems that the business sector is not reading from the same page.”
SAHRC Western Cape provincial manager Karam Singh told the roundtable that
over half of South Africa’s credit-active consumers are over-indebted, and microlending negatively affected many in poorer communities. “Of 19 million credit-active consumers in South Africa, 50 percent had impaired credit records, three months plus in arrears.
“Fifteen percent are described as debt stressed, one to two months in arrears.”
As a result, more than 11 million of South Africa’s credit-active consumers were described as over-indebted.
This high level of indebtedness was compounded by the low level of savings. Historically in South Africa, the poor had been unable to get loans since they had no assets as security.
“For persons living in poverty, loans were not available as a means of lifting oneself out of the confines of poverty,” Singh said.
Microlending had since enabled the poor to access cash.
“What we are seeing in South Africa and other parts of the world, even in the US and UK, is that these micro loans are being used for consumption. From 2007 to 2012, we saw outstanding unsecured credit increase from R41 billion to R159 billion, a growth of 60 percent.”
With a faltering economy, cash-strapped consumers were struggling to pay back loans, and getting trapped in a poverty cycle and debt trap. – Additional reporting by Sapa