Media Releases

inside OUTA November 2015


In this issue
Message from the Chairman
Talks and Presentations
Sanral’s Annual Report
Sanral’s 60% discount on past e-toll debt – will it fly?
What does the City of Cape Town’s victory against SANRAL mean for you?
Are the e-Toll cameras legal?
OUTA’s Legal Strategy – Why do we not rush off to the constitutional court to challenge this matter?

Message from the Chairman

The launch of OUTA’s Defence Umbrella in October has given rise to a significant growth in our supportership numbers, which obviously highlights the impact of becoming a value-based supportership organization, and what this means for the success of civil society movements.

Having said that, while OUTA’s Defence Umbrella is real and affords comfort to those who have morally decided to be civilly disobedient against the unjust e-Toll scheme, OUTA’s benefits to society go well beyond the e-toll matter, as we prepare our team to take up broader tax-abuse and policy issues going forward. And while these may be less directly tangible to the public in the short term, the benefits of our work goes toward building a better and more efficient South Africa, through tackling tax abuse and tax enrichment, in the long run.

In October, Sanral released their annual report for 2014/15, from which we have gleaned a number of questions that require answering, in order to ensure greater transparency of this State Owned Entity toward the public. There is no doubting that SANRAL has many excellent people and it is a world class road building agency. However, there is also no doubting that it has and continues to drive strategies that are questionable in their maximization of benefits to the motorists and public at large. We will be exploring a number of these questionable practices in detail going forward and will share these as and when appropriate to do so.

OUTA’s expertise and team continues to expand, with additional research capacity being added to our resources.  We will be presenting a submission on Government’s plans to introduce the Carbon Tax in 2016.  We understand that there are various angles and opinions which come into play here, however, OUTA’s view is that new taxes introduced onto an already over-burdened society, need to be efficient, address the clear purpose of intention and not merely become another revenue stream to fill Treasury’s pot, from which the current squandering, maladministration and corruption is fed. More about this in our next edition.

In this month’s edition of InsideOUTA, we feature our opinion on the recent Metrology regulation transgressions as exposed by the Freedom Front Plus, the new 60% discounted dispensation launched (eventually) by Sanral and other pertinent issues related to the e-toll debacle.

Enjoy the read and thank you for your support.  Please also get as many of your friends and colleagues to join OUTA, as we work together in building a better South Africa.

Go well
Wayne Duvenage

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Talks and presentations

Over the past three years, our chairman, Wayne Duvenage, has given numerous talks and presentations on the changing nature and developments of Government’s e-toll blunder.  These talks and presentations are varied and tailored to suit the themes of panel discussions, conferences and the audience, be it a small team of executives or a large industry association.

The past few weeks was no exception to the variety of talks conducted, where Wayne spoke at the Pretoria Attorneys Association AGM, a dinner for a team of GIBS ‘Thought Leadership Initiative’, the Cape Chamber of Commerce and a Business Breakfast session held by a leading training institute.

Drawing on OUTA’s successful role and many years in his leadership capacity, Wayne’s talk paints the bigger picture of dynamics and relationships between business, society and government and sets the scene for of a looming pressure for Minister Nene, who must now be challenged to think hard before he announces tax increases in 2016.

Should you wish to arrange a talk at your next conference or board meeting, please feel free to contact us at this link.


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SANRAL’s Annual Report – Many Questions

SANRAL Unpacked: Visually Explained Findings from SANRAL’s latest financial statements.

Tiaan le Roux

With the release of SANRAL’s latest annual report (for the 2014/2015 financial year), quite a few concerns regarding the scheme have been uncovered.

When combined with other research, it’s becoming possible to develop a far more comprehensive picture of the conduct of the parastatal and the full picture regarding e-tolling in Gauteng.

In this issue, we will attempt to visually answer a few pertinent questions as part of an ongoing effort to educate the public about the irrational, onerous, and extractive e-toll scheme.

Today, we’ll attempt to answer a few specific questions:

  1. What is the length of the e-toll roads in relation to SANRAL’s full road portfolio?
  2. How much revenue did SANRAL attempt to extract from motorists for this 1% stretch of road in the 2014/2015 financial year?
  3. How does the new “dispensation” change the composition of this picture?
  4. How much of SANRAL’s “recognised” e-toll revenue has actually been collected?
  5. What portion of motorists have rejected the scheme?

Question: “What is the length of the e-toll roads in relation to SANRAL’s full road portfolio, and how much revenue did SANRAL attempt to extract from motorists for this 1% stretch of road in the 2014/2015 financial year?”

Answer: As you can see in the graph below, the gauteng e-tolled roads constitute only about 1% of SANRAL’S entire road network, yet the original amount SANRAL attempted to extract from motorists during the 2014/2015 financial year was over 9.9 Billion Rand – as it consisted of the standard, and punitive alternate rates.


Question: “How does the new “dispensation” change the composition of this picture?”

Answer: “The new dispensation brought in a standard tariff for both tagged and non-tagged users, and SANRAL were forced to recognise that they will not be able to declare the full 9.9 Billion Rand as revenue since it became unrealistic that they would be able to collective the punitive alternate rates. SANRAL then lowered their expected e-toll revenue to R3.8 Billion Rand.”


However, the following picture shows why SANRAL is in trouble, and illustrates the sheer scope of rejection of the e-toll scheme.

Question: “How much of SANRAL’s R3.8 Billion “recognised” e-toll revenue has actually been collected, and what portion of motorists have rejected the scheme?”

Answer: The figure below is a collection of all the released data from the start of e-tolls in December 2013 until September 2015. The figure in orange is the month-by-month e-toll revenue SANRAL has actually been able to collect, the figure in red is the amount motorists have refused to pay (at the standard discounted rates), and illustrates the level of rejection.


The above is a picture SANRAL does not wish motorists to see… Over the coming months, we will attempt to visually unpack some of the most pertinent issues we continue to discover in our research, and answer some of the following pertinent questions…

The above is a picture SANRAL does not wish motorists to see… Over the coming months, we will attempt to visually unpack some of the most pertinent issues we continue to discover in our research, and answer some of the following pertinent questions…

  • What is the true cost of e-toll collection?
  • What is the true cost of e-toll collection as a percentage of revenue?
  • How much tax money is being paid to off-shore companies?
  • Why is SANRAL’s debt such a serious issue? How are they funding their current deficits through more debt?
  • What are the compound effects of the GFIP overpayment and collusion on the debt burden on Gauteng Motorists?
  • How much are we paying for these roads: Comparative highway Construction Costs – locally and internationally – compared to costs of GFIP construction.
  • How much profit is SANRAL’s concessionaires making? Why is it being hidden?

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Sanral’s 60% discount on past e-toll debt – will it fly?

When the Deputy President announced the ‘new dispensation’ in the e-tolls in Parliament six months ago, he acknowledged that E-tolls was unpopular, but said that “sometimes Government has to make unpopular decisions” for the good of the country.

John GI Clarke

He said the roll out of the various measures of new dispensation would be gazetted in due course.  We have no doubt that the concessions on offer have left some motorists more inclined to pay up, however, the two big measures that Ramphosa was relying on to make the e-toll albatross fly, were left to last.  The fifth step in SANRAL’s original plan was a carrot – a 60% discount on unpaid e-toll bills – and the sixth, was a stick to withhold motor vehicle licence renewals, until e-toll bills were paid up.

Since Ramaphosa’s announcement and SANRAL’s marketing which spoke of these tactics, it has emerged that the ‘stick’ has now disappeared – at least from public view.  Sanral has dropped this line of ‘withholding vehicle license renewals’ from their advertising messages. Whether it will reappear remains to be seen, however, we believe it is increasingly obvious that the changes to the regulatory environment to make this stick stick, would suffer not only a constitutional challenge, but would also serve to create more chaos in the licensing system and income for the province of Gauteng.

In the teachings of “Practical Governance 101”, is never a good idea to impose a burden on one system that has a legitimate function, with another system that is highly dubious.  Doing so will harm those systems that promote good order with a strain by another system laden with baggage.  The e-toll system has already been comprehensively rejected for want of lawful, rational and long term economic merit.

The farcical effort to intimidate motorists into paying e-tolls by prosecuting Dr Stoychev two months ago showed that.  He had doctored his number plates, which was an offence to good public order.  Sanral then forced him into a plea agreement to also acknowledge an e-toll debt.  Discerning law abiding citizens immediately saw through the ploy, and the nett effect was to further delegitimise not only Sanral’s e-toll scheme, but also the State prosecutor for letting Sanral abuse the criminal justice system.

So, given that SANRAL’s new ‘stick’ is nothing more that an empty phantom, what about the ‘carrot’?  Should any law abiding motorist take up Sanral’s offer published at the beginning of the month of a 60% discount on outstand e-toll accounts?

Firstly if one accepts a discount, it implicitly means one accepts the prior legitimacy of the debt.  OUTA is adamant that the debt is not only illegitimate but odious.  Illegitimate because the decision to go for e-tolls was unlawful, and odious because the size of the R20 billion debt Sanral owes to the bond-holders was considerably inflated by collusion and price fixing by the construction cartels who got the contracts.  We also maintain there was significant maladministration and possible corruption, as the costs of this project have been estimated to be close on 70% more than it ought to have been.

Secondly, it is simply a baited hook to get motorists into signing up and getting them registered.   Once hooked, Sanral will start reeling in the fish that do bite.  The rate will start to increase each year, as it has done on all routes, well beyond the capital repayment requirements.  So OUTA advises that motorists should regard the discount as a ‘loss leader’ – an apparent bargain to get motorists ‘into the store’.

Thirdly, ask why it is that a National roads agency is taking ANY money from Gauteng motorists? If the e-toll system was serving to generate revenue for the development of safe and affordable public transport systems, and solve the traffic congestion problem caused by too many cars on the Gauteng roads, and leading to a much happier urban quality of life, it would be different.  Many enlightened well-heeled and wheeled motorists might even pay MORE than the current undiscounted tariff, for the pleasure of driving their fancy off road SUVs’ on good roads, in the knowledge that e-toll revenue would be used to fund a world-class public transport system that was beneficial to the vast majority who could never afford such luxury.  But alas, SANRAL’s  dismal public engagement process never enabled that debate or discussion to take place.

The Gauteng congestion problem is Gauteng’s problem to solve. The former mayor of London – Ken Livingstone – did not go to the European Union to solve the inner city congestion problem that was suffocating London.  He got Londoner’s on board and completely changed the quality of inner city life. So why should Gauteng residents contribute coffers to a National government agency when the National Government has shown itself so profligate and wasteful of public funds?

SANRAL’s 60% discount on outstanding e-toll debt makes no sense.

See SABC interview with Wayne Duvenage for more, here

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What does the City of Cape Town’s victory mean for you?

The City of Cape Town v SANRAL battle was always going be a battle of two titans with high stakes for both parties.

Adv. Ivan Herselman


In the one corner a DA –run Metro eager to avoid courting the same public outrage from Western Cape residents that Gauteng motorists showed against e-tolling. In the other corner a powerful State Owned Entity (SOE), the architect of one of the most controversial government projects of the past 21 years, e-tolls. The eyes of the Cities powers was to ensure the continued right of free passage for road users on those parts of the N1 and N2.  The eyes of SANRAL was on further extending tolling concessions to private sector consortia to create Build, Operate and Transfer (BOT) assets for the future, so as to relieve treasury of the burden of doing so.

The planning for this colossal project of R10 billion (initially estimated at R2.8 Billion in 2007) already started as early as 1999 with the Environmental Impact Assessments, but the house of cards temporarily tumbled on the 30th of September 2015 when Justices Binns-Ward and Boqwana ruled against SANRAL and declared the decision of the Minister of Transport to toll the N1 and N2 unlawful. SANRAL were ordered to start the entire tolling process (exclusive of the EIA’s) afresh if they wish to continue with the project.

But why a “temporary” tumble?
Because if the procedure laid out in Section 27(4) of the SANRAL Act, read together with the Promotion of Administrative Justice Act, is followed correctly, SANRAL could still be legally empowered to award the concession. Sanral has now applied for leave to appeal, and the City of Cape Town has also cross appealed on the rulings that were not favourable to them (the judge’s did not grant their application to have the Environmental Authorisation set aside, not on the substantive merits, but because the City had failed to make application for the decisions to be set aside within 180 days of them being made).

The City of Cape Town’s victory sounds a loud and welcome echo for Gauteng motorists because the judicial findings will be crucial in refining OUTA’s arguments against any attempt by Sanral to coerce motorists into payments of e-tolls, and the following are specifically worth mentioning:

Firstly, Nazir Alli’s version that the SANRAL board of directors had in fact decided to toll the roads, was so improbable, that it had to be completely rejected. There was not a shred of evidence supporting Mr. Alli’s assertion. Without saying it, the court implied he probably made the decision to toll the roads himself, and then tried to retrospectively legitimate the decision by getting the board to rubber stamp his decision.  This could have serious ramifications for Mr Alli in his personal capacity.

Secondly the public participation process in Cape Town was found to be a sham.  It was conducted in a similar fashion to the Gauteng e-toll process.

Thirdly the court found that SANRAL never approved or published (gazetted) a business and strategic plan, which is a requirement to put SANRAL’s five year plans before the affected public. There was also no evidence of the board having formally adopted the plan in a minuted resolution.

Fourthly the Minister of Transport failed to properly consider the socio-economic impacts of tolling.

So why is this relevant to Gauteng motorists, whom Sanral is still trying to persuade to pay etolls?
Because OUTA lost their application to have the e-tolling decision declared unlawful on purely technical and procedural grounds. The court effectively said that even if the decision of the Minister to declare the Gauteng freeways as payways for e-tolling, it was not with the interests of administrative justice for that decision to be set aside, because the legally permissible period for a challenge to be brought had long expired, and it was too late to “unscramble the eggs” – they had already been cooked.  The fact that the ‘omelette’ had turned out to be unpalatable, was just too bad. That means that the actual merits of the case have not finally been decided upon by a court. The court has not yet pronounced on whether the ‘recipe’ that Sanral was following was a proper, rational and lawful constitutional recipe, or as OUTA argues, a badly baked, pre-cooked meal.

The Cape Town judgement has now pronounced that Sanral followed its own illegitimate recipe and failed in the basic obligation to respond to people’s needs and to encourage public participation as stipulated in the constitution.

This means that if SANRAL tries to force feed Gauteng motorists by pressing criminal charges via the prosecuting authorities, or even coerce the public with civil summons or the withholding of licences, the SANRAL ‘cook-book’ will be again be opened for legal scrutiny.  However, it will not be another review application under administrative law, but an argument made in defence of a plea from the people that their constitutional rights have been infringed because the e-toll decision was unlawful.  The technical time-period defence used by SANRAL would not be applicable in circumstances where they attempt to coerce you into compliance. This is an instance where it is permissible to bring up the serious issues argued by OUTA in 2012.

In working themselves to a conclusion in their judgement, the justices in the City of CT vs Sanral matter noted the Gauteng e-toll controversy, and were clearly aware of how quickly an ill-conceived procedurally irregular government project, can leave a multi-billion rand project gasping for air, to the disadvantage of all sectors of society. Although OUTA did not succeed in having the e-toll scheme declared unlawful at that stage, the the OUTA vs Sanral case had beneficial ramifications for Cape Town.  Likewise the Cape Town judgement will in turn have beneficial ramifications for Gauteng residents and help stiffen our defence, should Sanral ever try to force and coerce motorists to swallow their ghastly dish.

Although the law is often an ass, as Charles Dickens famously wrote, it becomes less ass like and more just, when it is informed by experience. The question one must therefore ask is; When will Sanral learn that an autocratic “do as we say” attitude simply does not cut in a democratic society, where citizens must have a meaningful opportunity to influence decisions that have a profound impact on them?

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The Freedom Front’s Exposure – Metrology Act Transgressions by SANRAL:


Have they failed to certify some of their equipment, rendering all e-toll accounts unlawful?

Adv. Ivan Herselman

By uncovering the fact that Sanral’s gantry equipment has not been certified by the National Regulator for Compulsory Specifications (NRCS), the Freedom Front Plus has done incredible work in exposing a kink in SANRAL’s armour.

The equipment is used by SANRAL to determine the dimensions of non-registered vehicles for purposes of categorization, in that different categories pay different amounts.  The matter has now been referred to the National Consumer Commission and the FF+ have requested that a finding be made that charging for e-Tolls was illegal because of the alleged failure by SANRAL to certify its equipment.  This could have the impact of rendering all e-toll accounts rendered by SANRAL as being unlawful and consequently void. The FF+ argues that all monies paid for e-tolls must therefore be paid back to the motorists.

The purpose of this article by OUTA, is not to pass judgement on what finding the commission should make, but rather to set out some of the factors and legal considerations that will come into play during the investigation.

OUTA believes there are two different legal dispensations with differing requirements for certification of the e-toll equipment. The first legal dispensation is under the Trade Metrology Act (TMA) that was the applicable legislation at the time the e-toll scheme was turned on (3rd of December 2013), until the 18th of May 2014, which is the day before the Legal Metrology Act (LMA) commenced.  The second legal dispensation is under the LMA and  starts on the 19th of May 2014 and is the applicable legislation to date.

There are also for purposes of this conversation, two categories of users, registered and non-registered users. A critical question that would have to be answered by the commission is whether the equipment is in any way used in the billing process of registered users? I raise this question because the category of vehicle would have been determined beforehand through the registration process. The equipment used to determine the dimensions of the vehicle, may therefore not have been used by SANRAL for categorization of registered vehicles. This needs to be determined.

The Trade Metrology period
Section 26 of the TMA places a positive obligation on the State, more specifically when tolling, to have their equipment certified and re-certified “in accordance with the act” unless exempted. This obligation is almost verbatim affirmed in Section 23 and once again in section 38(2) of the TMA. Section 38(2) is qualified by the use of the words “for a prescribed purpose”. The meaning thereof will be dealt with below.

Adv. Anton Alberts managed to determine from the NRCS that SANRAL had applied for exemption, but were denied such exemption. Either way, it seems that the exemption was requested after the LMA already came into being, so it is safe to assume that no exemption was granted under the TMA either, as any such exemption under the TMA would still have been applicable under the LMA according to section 42 of the LMA.

The next question would thus be: What is “in accordance with the act?”
Section 18 of the Act carries the heading “Approval, verification and certification of measuring instruments”. It would seem that “in accordance with the act”, is thus primarily in accordance with section 18. The sections must not be read in isolation, but let’s examine closer what section 18 states.

The section starts of by qualifying the first obligation by stating section 18(1)(a) is only applicable to persons wishing to “sell or make available” the equipment.  All the other sections that follow in section 18, require section 18(1)(a) to be applicable to a person before the other sections are also applicable to a person.  On face value it seems as though section 18 does not apply to SANRAL, but could possibly apply to the manufacturer or seller of the equipment used by SANRAL.

But let’s assume that the aforementioned words do not disqualify the application of the section. There is a further qualification “of which the material, design or construction is in terms of any regulation required to be approved by the director”. “In terms of any regulation”, in this context means in terms of regulations issued by the Minister of Trade and Industry under the TMA.

The complex legal question thus arises whether the general obligation imposed in terms of Section 26 and 23 of the TMA, on SANRAL, the manufacturer or seller to register their equipment, only becomes an enforceable obligation once you “sell or make available” and do so “in terms of any regulation” or is the obligation an unqualified one that requires SANRAL, the manufacturer or seller to take initiative and produce the equipment for approval and certification, but not subject to section 18?

My judgment is reserved.

Legal Metrology period: 19th May 2014 and beyond:
Since the 19th of May 2014, we have the LMA dispensation. The LMA has almost exactly the same song and dance as the TMA and is structured in a similar fashion.

Section 24 of the LMA places a general obligation on SANRAL, the manufacturer, seller or user (of the equipment) to register their equipment. The obligation is echoed in section 34(2) that imposes an obligation to measure tolls “in terms of prescribed measuring units.”

Section 24 is qualified by the statements “for a prescribed purpose” and “in accordance with the legal metrology technical regulations” and section 34(2) is qualified by “in accordance with such measurement units as may be prescribed”.

Prescribed purpose means prescribed by regulation issued under the TMA or LMA by the Minister of Trade and Industry.
A similar complex legal question thus arises under the LMA, i.e. whether the general obligation imposed in terms of Section 24 and 34(2) of the LMA, on SANRAL , the manufacturer or seller to register their equipment, only becomes an enforceable obligation once the regulations have been published?

These might not be the only legal questions that have to be answered by the National Consumer Commission, but I believe they serve as a starting point to determine whether the accounts are in fact unlawful as a result of SANRAL’s failure to certify some of their equipment.

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OUTA’s legal strategy: Why don’t we zoom off to the constitutional court and end this thing once and for all?

To understand why OUTA have decided to rather fight for their supporters defensively and not by attacking the e-toll scheme in the constitutional court, it is first necessary to understand the history of litigation that preceded the current legal position and why doing so is an extremely risky venture that is bound to fail.

Adv. Ivan Herselman


The course of litigation played out as follows:

  • April 2012 :OUTA is granted an interdict, halting the tolling of the roads
  • August 2012 : Treasury Appeals to the Constitutional Court and the interdict is overturned. The court finds not on the merits, but that the temporary relief granted by the Supreme Court should have taken cognisance of the effects of the judgment on the execution of policy.
  • Nov/Dec 2012: The review application is heard and judgment is delivered against OUTA with costs.
  • Sept/Oct 2013: The appeal court overturns the costs and finds that the Supreme Court should never have decided the merits as the matter was on technical grounds, outside of the legally permitted time frames for the hearing of review matters (reviewing and setting aside administrative decisions, i.e. the decision to toll).

OUTA felt that justice had not been served.  So why did we not approach the constitutional court to argue that SCA decision should be overruled?

After much debate the legal teams weighed the risks of such litigation and found that it was improbable that the Constitutional Court (CC) would overrule the SCA on the technical procedural matter regarding the application for the setting aside of the decision to toll being brought outside the permitted timeframes.  By then the tolling and collection infrastructure had already been put in place and a host of other judgements now in case law show that the judiciary is very wary of attempting to ‘un-bake’ the pudding that the Executive have already baked, even if in the eating it was unpalatable. In light of the above advice from senior counsel (SC), it was time for emotion to give way to pragmatism and the decision was made not to continue the fight against e-toll in the constitutional court, but through other means.

What other means?
Firstly by educating Gauteng motorists regarding the facts, errors, misinformation and unjustness surrounding the e-toll decision.
Secondly to set up structures to be able to bring the ‘collateral challenge’ on the validity of e-tolls, if and when SANRAL or the prosecuting authorities attempt to coerce a motorist into payment through civil or criminal procedures or withholding of licences.

What is a collateral challenge? A collateral challenge, in this context, is a defensive challenge brought against an attempt by a public authority to coerce a person into doing something. A collateral challenge would consist of a challenge to the legality of the decision to toll and the billing practices based on the following grounds:

  • Public participation and consultation was inadequate and not meaningful. Meaningful and adequate public participation is a pre-requisite before a decision to toll can even be considered. The City of Cape Town judgment has confirmed OUTA’s view that the manner in which SANRAL conduct public participation is a sham. The case of State v Smit in 2006, also confirmed this stance.  There are many examples of case law that confirm the necessity of this requirement.
  • The Minister of Transport (Jeff Radebe at the time) did not consider information that was extremely relevant to his decision to toll. Amongst these were the socio-economic impacts of tolling, the lack of alternative routes and the preposterous costs of collection. The City of Cape Town judgment has confirmed that the failure to consider socio-economic impacts of tolling poisons the decision.
  • The SANRAL board of directors failed to adopt and publish their business and strategic plan, which is required to bring projects to the attention of the public in advance.
  • The accounts rendered for e-tolling are not compliant with various prescripts of the Consumer Protection Act.
  • In addition to the above it is now come to light that the equipment used to determine the dimensions of non-registered vehicles in order to categorize the vehicles for billing purposes, might be non-compliant with the prescripts of the Trade Metrology Act and the Legal Metrology Act. The questionable accuracy of the e-toll equipment, received a further boost following the Duduzane Zuma accident case in November 2014, wherein the e-Toll information provided to the court in order to determine the date and time recordings between gantries (and therefore the speed) of both vehicles movements, was grossly inaccurate and inadmissible as evidence.

Over and above these challenges, OUTA is exploring the possibility that other decisions taken in connection with e-tolls might be unlawful too. A careful consideration when building a solid defence is that not all undesirable conduct is unlawful.

We trust the above information sheds light on the paths we have chosen and engenders confidence that the motoring public have every right to exercise civil disobedience against the e-toll scheme and that OUTA will do all it in its power to defend its contributing supporters from any attack brought by SANRAL .

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