The law on the registration of vehicle testing sites contains an example of this, and was the subject of a recent court case. Vehicle licensing is not a municipal function. It is a concurrent national and provincial function (Schedule 4A Constitution). However, Clause 6.2.2 of Schedule 3 to the National Road Traffic Act Regulations (GNR. 225 of 17 March 2000) makes local government part of the procedure to apply for the registration of a vehicle testing station. While the registration is done by the MEC responsible for transport, the Regulations provide that “[t]he testing station proprietor shall provide a copy of the written resolution from the Municipal Council of the municipality in which the Testing Station is located, supporting the application of the Testing Station".

The municipality’s decision

In Bela Bela VTS (Pty) Ltd v Bela Bela Municipality [2024] ZALMPPHC 107, the municipality refused to support such an application for vehicle testing station for two reasons. First, the municipality was concerned about oversaturation of testing stations in the municipal area. Second, the municipality was concerned about the potential impact on the municipality's own testing station revenue.

The arguments and the Court’s decision

Bela Belva VTS took the matter to court and argued that the Regulations merely expect the municipality to confirm that the proposed testing station will be in its jurisdiction. The municipality disagreed, and argued that it should actually apply its mind to the application and decide whether or not to support it.

The High Court held that the municipality’s role is not merely to rubber stamp the application or just confirm the location. Municipalities ought to “play a meaningful role in the process, likely due to their local knowledge and planning responsibilities”, so the Court held. However, because vehicle licensing is not a municipal function, municipalities cannot “arrogate to themselves powers that properly belong to the provincial sphere”. Because the Regulations don’t provide criteria for the municipality to consider, the Court then ‘read in’ (i.e. created) the following factors for the municipality to consider, namely -

1. compliance with local zoning and land use regulations;
2. alignment with integrated development plans and local economic development strategies;
3. local traffic management considerations; and
4. any other factors directly related to municipal planning and local government matters (at para 15.5).

When reviewing the municipality’s decision in terms of these criteria, the Court ruled that the reasons cited by the municipality (market saturation and impact on existing testing stations) fall outside the municipality's remit: they should rather be considered by the MEC in deciding whether to grant the licence. The Court thus set aside the municipality’s decision.

Is this an unfunded mandate?

This judgment prompts a number of questions. First, do the Regulations enlist the municipality in a national/provincial function? Or does the responsibility to consider applications for the registration of vehicle testing stations flow from the municipality’s constitutional functions, such as “municipal planning” (Schedule 4B Constitution) and “traffic and parking” (Schedule 5B Constitution)? It is suggested that the regulation indeed charges the municipality with an additional function. “Traffic and parking” deal with the behaviour of road users, and not with the roadworthiness of vehicles. Also, the consideration of vehicle testing sites as per the regulation does not fall under “municipal planning”. If the site in question, and the testing activities planned on it, do not comply with the municipal zoning or other municipal planning requirements, the vehicle testing site may in any event not operate. The council’s decision to support or not support the application for a vehicle testing site does nothing to change that. Therefore, the municipality’s process to support or not support a vehicle testing site is a separate process that properly falls under vehicle licensing. The Regulations thus enlist the municipality in vehicle licensing. This means that the promulgation of this provision constitutes an assignment of (a part of) a Schedule 4A function to local government. It needed to comply with the constitutional and statutory requirements for such assignments. These include a proclamation by the President, an agreement with local government, approval by the National Treasury, the consideration of views of the Finance and Fiscal Commission, consultation in the Budget Forum, funding and capacity building etc. It is doubtful whether this process was followed, which casts a shadow over the validity of this Regulation.

It will be argued that following the abovementioned process for charging municipalities with such a ‘minor’ task is far too onerous. However, it would have prevented the situation in this judgment, in which the Court was forced to come up with criteria for municipalities to consider, because the law is unclear about their role. Furthermore, the criteria that the Court came up with (and consequently its decision) are flawed, arguably because the Court did not have the benefit of a thorough consideration of the impact of the assignment on local government, which is precisely the essence of the assignment procedures. For example, instructing the municipality to consider alignment of the proposed testing site with Local Economic Development, yet concluding that the municipality may not consider market saturation is contradictory. Furthermore, it is meaningless to instruct the municipal council to consider compliance with zoning and land use regulation requirements. (Non-) compliance with those requirements can be considered by anyone with access to the zoning scheme, the deeds registry etc. The latter have their own legal effect, independent of any council resolution. Lastly, from the judgment, it seems clear that the municipality floundered in dealing with this responsibility: it took too long to respond and used its decision making power to protect its own revenue at the cost of private initiative.

If the assignment had been done properly, the process would have ensured capacity in local government for this, instead of enlisting municipalities in a provincial function with the stroke of a pen. This could have gone a long way in ensuring a more efficient and thoughtful exercise of this responsibility.

In summary, this is but one small example of the fact that the law contains many provisions that enlist municipalities in national and provincial functions. These provisions have not always been passed or proclaimed, in compliance with the constitutional and statutory framework for assignments. The framework for assignments is there for a good reason, namely to avoid unfunded mandates and ensure the adequate exercise of these additional responsibilities by municipalities.

By Jaap de Visser