The municipality cannot refuse granting a licence to an adult store on the grounds of objections from the community (including Parliament), says Jaap de Visser.
Cape Town - The Sunday Times reported with some glee that African Christian Democratic Party (ACDP) leader the Rev Kenneth Meshoe refused to join the ANC in condemning the location of an adult store opening up in front of Parliament.
Apparently, the ACDP stated that it had no sympathy with the ANC because “they set the laws for business licences allowing such business to trade in any premises zoned for business use in the first place”.
Of course, the ACDP would not miss an opportunity to deliver a sting to the ruling party. But actually, a closer look at the national law on business licensing, and particularly how this law uses municipalities to grant licences, does suggest that there is a problem in our law for business licensing.
More fundamentally, in a strange way, this incident should make Parliament know what it feels like when government takes decisions without considering the views of surrounding communities.
Media reports suggest that the City of Cape Town had granted a licence for the operation of the adult store in 2004 and that it is now investigating that decision and whether it indeed still allows the opening of the store.
The city grants business licences to entertainment facilities such as adult stores in terms of the Businesses Act 71 of 1991. Municipalities are designated as licensing authorities in terms of this act. Business activity in the municipal area is subject to the licensing regime of the act and the municipality receives business licence applications and decides them in terms of the act.
What is critical about the act and how it uses municipalities to deal with business licences is that the act limits the municipality’s discretion to decide on the applications for the licences. The municipality must grant a business licence if certain conditions are met.
In the case of an adult store, the licence may only be refused if the business premises do not comply with a requirement relating to town planning, with the safety or health of the public or with any law which applies to those premises.
The municipality may refuse a licence when it is satisfied that the applicant is not a suitable person to carry on the business. The act does not allow the municipality to refuse business licences for any other reason. The municipality may thus not take the views of neighbours or the suitability of the location into account when considering the licence. In fact, if the municipality refuses a licence based on such considerations, it violates the act and can be taken to court.
In other words, if the area where the adult store is located was zoned for “business” (which the CBD undoubtedly is), if the building met all the safety and health requirements and if the applicant was a suitable person to carry on this type of business, the city would have been compelled in 2004 to grant the licence.
It is thus a fairly safe assumption that the licence was granted by the city, not necessarily because the location of the adult store was such a great idea but simply because the applicant complied with the requirements of the Businesses Act and the city was forced to grant the licence.
Of course, the city must still complete its investigation into this saga, including whether the premises are still compliant with the Businesses Act and whether the owner has changed since 2004 (which would necessitate a new licence application). However, in the original licence application in 2004, the act would probably not have allowed the city to consider the views of the surrounding community.
Ironically, in this case the “community” includes Parliament. So strictly speaking, Parliament’s views on the suitability of the location would not have come into play, as strange as that may sound. Of course, there may still be other permits necessary to operate the adult shop. The Films and Publications Act of 1996, for example, requires that people who wish to distribute or exhibit adult material in public must apply for permission from the board. However, that process does not place a high premium on community views either.
Parliamentarians may be confounded with a sex shop opening in front of its doors and they are fully entitled to raise their concern. Parliament, like anyone else living or working in the area, is a critical stakeholder when the city makes decisions with respect to the precinct in which it operates.
However, many communities are faced with similar stories and theirs do not necessary make it into the media.
They do not even relate to the sensitivities of our public representatives but to the well-being of children and with the establishment of adult shops offending religious communities.
Imagine the scenario where an entrepreneur applies to the municipality to operate an adult shop in a business area. The applicant has an impeccable business record and operates a number of other adult stores without ever breaking any law or causing any difficulty.
However, right opposite the proposed location for the adult shop is a mosque. Furthermore, the shop will be located right between a secondary school and the local train station, thereby forcing pupils to pass the shop on their way to the train station.
The municipality, as the designated authority to decide on the business licence, is concerned about the impact of this type of business on the broader school environment.
Both the school and the mosque are vehemently opposed to the operation of an adult shop in their area. Shouldn’t the municipality refuse the licence?
In terms of the current Businesses Act, the municipality cannot do that and is instructed to ignore the views of the community and to grant the licence.
Municipalities have complained about this to the national government and have argued that the legislative framework should change.
Last year, Minister Rob Davies published a new Licensing of Businesses Bill for comment. This bill created an opportunity to deal with the problem.
However, the bill faced stiff opposition for creating too much red tape and is being reconsidered by the Department of Trade and Industry.
It will probably be submitted to Parliament some time during its current term.
One very good thing may come of this incident: when the bill is resubmitted to Parliament, there is no doubt that our parliamentarians will sit up straight and pay particular attention to it.
* Professor Jaap de Visser is director of the Community Law Centre at the University of the Western Cape.
** The views expressed here are not necessarily those of Independent Newspapers.
Cape Times