Movement of goods during the Covid-19 pandemic - Maritime and Transport Law Committee newsletter article, July 2020

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Andre October
Webber Wentzel, Cape Town, South Africa
andre.october@webberwentzel.com

Sheena Dias
Webber Wentzel, Cape Town, South Africa
sheena.dias@webberwentzel.com

Jesse Prinsloo
Webber Wentzel, Cape Town, South Africa
jesse.prinsloo@webberwentzel.com

Lesiba Legodi
Webber Wentzel, Cape Town, South Africa
lesiba.legodi@webberwentzel.com

Since the global outbreak of Covid-19, governments have had to balance the health and safety of their citizens with the rendering of essential services for the efficient functioning of their economies.^[1] South Africa was placed under an initial 21 day lockdown with effect from 27 March 2020. Regulations (‘the Regulations’) were promulgated to govern all economic sectors in South Africa. This dynamic state of affairs, coupled with various authorities issuing different directions in respect of the movement of goods, has often required the Regulations to be interpreted in light of the empowering primary legislation, namely, the Disaster Management Act.

The Transnet National Ports Authority (‘TNPA’) issued proactive directives to ensure throughput of essential services (‘essential services’) for the duration of the lockdown. One of TNPA's key decisions was to prioritise essential goods over non-essential goods by scaling down all of its transportation services and operations for non-essential cargo for the duration of the lockdown, and to prioritise essential services as defined by amendments to the Regulations.

In terms of the amended Regulations, one of the essential services was described as ‘Cargo Shipping and dockyard services’.^[2] This provided for the working of both essential and non-essential cargo within the port and provided for the transportation of essential goods from port terminals to depots outside the port of entry. The amended Regulations did not make provision for the movement of non-essential goods beyond designated areas within the port.^[3]

This situation resulted in significant congestion at the ports. Transnet Port Terminals (TPT) advised the shipping lines that they were responsible for the removal of non-essential goods from the ports in order to alleviate this congestion.

On 26 March 2020 further amendments to the directions were published allowing for the loading and off-loading of cargo in and out of commercial ports, which effectively made no distinction between essential and non-essential cargo.^[4]

To further ease the pressure on port congestion, the South African Maritime Safety Authority (SAMSA) issued a Marine Notice on 31 March 2020, declaring that ‘Government has now decided that in the interest of ensuring a functional supply chain across all ports, that all cargoes will be accepted for loading and off-loading. Where possible, essential goods should receive preferential treatment over non-essential goods’.This notice reiterated that:

• the loading and off-loading of cargo in and out of commercial ports is permitted;
• all types of cargo will be allowed to be loaded and off-loaded; and
• stevedore operations will continue in all ports.

New regulations were published on 2 April 2020 that no longer prohibited the movement of goods between provinces. The Regulation allowed for the transportation of cargo from ports of entry to their intended destination, on condition that necessary precautions had been taken to sanitise and disinfect such cargo.

On 6 April 2020, a Southern Africa Development Corporation (SADC) Covid-19 Protocol^[5] was published detailing guidelines for harmonising and facilitating movement of critical goods and services across the southern African region during the pandemic. The protocol, among other things, listed cargo and goods (which were included into the South Africa Regulations) that may be transported across land borders.

The South African Revenue Service (SARS) also issued a Practice Note on 6 April 2020 on transportation of cargo during the Covid-19 lockdown, which permitted essential goods to be delivered to consignees performing an essential service, subject to the usual customs clearance procedures and any required approval from relevant authorities. It further provided that non-essential goods have to be stored at approved temporary storage facilities and may not be delivered to consignees until after the lockdown has ended.

After it was announced that the lockdown would be extended for a further two weeks, further regulations were published on 16 April 2020 allowing for the transportation of (a) Essential goods; (b) Cargo from ports of entry to their ‘intended destination’; and (c) Cargo currently at ports of entry, for export of goods to decongest the ports of entry. The regulations did not, however, define ‘intended destination’, nor did they list that transport of non-essential goods would be an essential service, which presented practical problems. For example, the consignee of non-essential goods could not receive their goods, as the regulations only allowed for the transportation of essential goods between provinces, metropolitan and district areas.

An update to the SARS Practice Note was published on 19 April 2020 which provides that customs inspections would take place in respect of all cargo, not just essential cargo, and that inspections of essential cargo would be prioritised. Furthermore, it provides that customs capacity at ports of entry would be increased, subject to compliance with safety and hygiene protocols.

Further amendments such as those published on the 23 April 2020 also did not offer clarity on ‘intended destinations’. This amendment permitted the movement of persons and goods between provinces and between metropolitan and district areas including the ‘transportation of cargo from ports of entry, to their intended destination’.

Following the President's announcement that restrictions would be relaxed, amended regulations were published on 29 April 2020, which made provision for clearance at ports of entry and transportation of cargo for ‘essential services’ and ‘permitted services’ to the consignee by allowing transport and logistics in respect of the specified cargo (specified in the regulations) and permitted retail goods to neighbouring countries, which include all goods imported via South African ports, for re-export to neighbouring countries.^[6]

In terms of these regulations, rail, ocean, air and road transport is permitted for the movement of cargo to other countries and within the Republic of South Africa, subject to national legislation. The goods allowed to be transported include ‘essential goods for import’ as defined; the import of materials and components required for manufacturing activities allowed under Alert Level 4 of the lockdown; cargo at ports of entry; ‘permitted goods for export’ as defined; and transport of goods within the Republic of South Africa.^[7]

In a media statement^[8] the Minister conveyed that the movement of cargo from our sea-ports to either warehouses or final destinations will be allowed as provided for in the current rules and only essential cargo will be allowed to move across South Africa's land borders as per the SADC Covid-19 Protocol.^[9]

In a speech on 13 May 2020, the President advised that there would be further easing of restrictions on the movement of goods as the country looks to move from Alert Level 4 to Alert Level 3. He noted, however, that lowering the alert level will not be uniformly implemented throughout South Africa, although it is hoped that it would provide greater freedom for movement and goods, and for the people employed in the value chains to handle those goods. Following the President's speech, regulations were published on 14 May 2020 which provide that all products, with the exception of alcohol and tobacco products, may be sold vie e-commerce platforms and delivered via courier services.^[10]

The dynamic and uncertain circumstances following the outbreak of Covid-19 has required a formalised legal response unlike any other in our history. This is evidenced by the various authorities such as the TNPA, SARS, and SAMSA constantly issuing and implementing different measures and directions in respect of the movement of goods, which have normally enjoyed uninterrupted passage through our various transportation networks. Despite this uncertainty, the shipping legal fraternity has done its best to provide clarity to all stakeholders involved, including ship owners, charterers, insurers, and P&I Clubs. Whilst we acknowledge that there is still a lot of work that needs to be done in the trade industry in response to the pandemic, we are confident that all stakeholders involved are getting better at managing the situation. As a result, we can expect to see greater clarity in our law over time.

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