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International debt collection: South Africa ranked 43rd most difficult country for debt collection

The Allianz Trade Collection Complexity Score has ranked South Africa the 43rd most difficult country for debt collection.

The third edition of the Allianz Trade Collection Complexity Score provides a simple assessment of how difficult it is to collect debt, helping to support decisions and manage expectations when trading internationally, essential in an environment where global business insolvencies are set to rise (+10% in 2022 and +14% in 2023).

The score covers 49 countries representing nearly 90% of global GDP and 85% of global trade. Allianz Trade operates in South Africa through the Allianz Global Corporate and Specialty (AGCS) license.

South Africa is ranked 43rd with a score of 67, indicating a severe level of collection complexity.

The Allianz Trade Collection Complexity Score measures the level of complexity relating to international debt-collection procedures from 0 (least complex) to 100 (most complex).

The score combines the expert judgment of Allianz Trade’s collection specialists worldwide and more than 40 administrative indicators relating to local payment practices; local court proceedings and local insolvency proceedings.

The score is then split into a four-modality rating system: Notable (score below 40), High (score between 40 and 50), Very High (50 to 60) and Severe (above 60).

How countries around the world ranked

Where is the best place to collect a debt? Unsurprisingly, and like in the previous edition of the Collection Complexity Score (2018), Europe takes the lead as the easiest place to collect debts. Indeed, European countries account for the top 10 easiest places to collect debts.

Sweden (with a score of 30), Germany (30) and Finland (32) are the best in class, with their scores remaining stable compared to our previous report. New Zealand is the first non-European country to be ranked 12th, with a score of 36, up one point since 2018, followed by Brazil ranked 20 (with a stable score of 43).

“In Sweden, Germany and Finland, the payment behaviour of domestic companies is good, and courts are efficient in delivering timely decisions, thus easing debt collection for companies.

"This stands in contrast to other European countries, such as France (which has a ranking of 10 and a stable score of 36), and Spain (which has a ranking of 11, and a score of 36, down one point), where collecting debt remains extremely complicated when the debtor has become insolvent, especially as far as unsecured creditors are concerned,” explains Maxime Lemerle, lead analyst for insolvency research at Allianz Trade.

South Africa's ranking explained

South Africa's ranking remains unchanged compared to the previous edition. Its severe level of collection complexity.is due to most companies having payment terms of up to 90 days compared with the average 30- and 60-day terms, and conditions which are industry-driven. In some cases, small to medium enterprises are taking as long as 120 to 180 days to settle debts.

Saudi Arabia (scored 91, -3 points), Malaysia (scored 78, stable) and the United Arab Emirates (scored 72, -9 points) are closing the ranking in 2022. Despite some improvements in court-related complexity, international debt collection is three times more complex in Saudi Arabia than in Sweden, Germany and Finland.

Almost one in two countries has seen its collection-complexity score reducing. The gap between advanced economies and emerging markets is still large. Indeed, 14 out of 16 Western Europe countries stand at the less-severe level of collection complexity (Notable).

Meanwhile, the US (with a score of 32, and a stable ranking of 55) and Canada (with a score of 29 and a stable ranking of 53) both post a very high rating. On average, the Middle East, Asia and Africa are the three regions where debt collection is the most complex.

It's not all bad news

Nonetheless, this gap has been reducing over time. “During the past four years, almost half of the countries (20 out of 49) have seen their collection-complexity score decreasing. Covid-19 lead several countries to accelerate the reforms of their insolvency frameworks.

"We also noticed some improvements in terms of preventive restructuring frameworks such as in the UK (with the new procedure moratorium), and Australia and the EU, where the Directive 2019/1023 is currently under transposition within the different member states.

"Saudi Arabia and China also showed some noticeable improvements: In these countries, the collection-complexity scores reduced by -3 points and -2 points, respectively,” illustrates Fabrice Desnos, member of the board of management of Allianz Trade, in charge of credit intelligence, reinsurance and surety.

The global collection-complexity score has decreased over the past four years: it now stands at 49, which is -2 points less than in 2018 (51). However, despite this positive trend, international debt collection remains very complex (level: High) overall.

“Pockets of collection complexity exist in all countries. Local payment practices stand out in the Middle East but they are a source of complexity in most countries.

"Court-related complexities are slightly less frequent, notably within Western Europe and North America, but each occurrence is more challenging.

"Insolvency-related complexities are the toughest ones though. Insolvency proceedings still explain half of the collection complexity around the world,” explains Lemerle.

Taking exporters' scores into account

Which exporters are the most exposed to collection complexity?

Combining each country’s collection-complexity score with their share of trading partners, Allianz Trade also calculates the exposure of exporters to international debt-collection complexity.

Finland, Austria and Norway are the least exposed as their trade partners are countries where debt collection is less complex.

At the other end of the spectrum, Asia stands out with seven countries topping the list of those most exposed to debt-collection complexity due to international trade: Hong Kong, Indonesia, Thailand, Malaysia, Japan, Singapore and India.

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Minister constitutionally obligated to withdraw Code managing Covid-19 in the workplace

Following the promulgation of the Code of Practice: Managing Exposure to SARS-CoV-2 in the Workplace, 2022 (the Code), by the Minister of Employment and Labour, Minister TW Nxesi, Neasa, on 18 May 2022, filed an application in the High Court for an order that the Code be declared ultra vires, unlawful, unconstitutional and be reviewed and set aside.

On 23 June 2022, Neasa received a letter from the Minister Nxesi, in which he informed Neasa that, in view of the fact that the Code was gazetted in terms of the wrong section of the Labour Relations Act (LRA), the Minister conceded that the Code is ultra vires [acting or done beyond one's legal power or authority], under the provision of the specific section of the LRA.

"We informed the Minister that he is now under a constitutional obligation to withdraw the Code immediately. We pointed out to the Minister that, in issuing a new Code, both he and the National Economic Development and Labour Council (Nedlac) will have to consider the 22 June 2022 withdrawal of the Regulations Relating to the Surveillance and Control of Notifiable Medical Conditions: Amendment 2022, by the Minister of Health," said Gerhard Papenfus, chief executive of Neasa.

"We have reminded the minister that, in a press statement on 23 June 2022, the Minister of Health inter alia stated the following: “Having monitored the positive direction for more than three weeks we came to the conclusion that the peak infection which we concluded was a limited fifth wave - driven by sub-variants and not a new variant of concern - was dissipating and that there was no more any eminent [sic] risk.

"It is on this basis that we approached the National Coronavirus Command Council (NCCC) and the National Health Council which is made up of all Health MECs with a proposal that the limited regulations which dealt with wearing of masks indoors, limitations of gatherings and vaccination proof or PCR negative tests at ports of entry should all be lifted.”

"We consequently pointed out to the Minister that we do not understand how he can continue to insist on the Code being part of a specific Covid-19 workplace response, where the Minister of Health has confirmed that it is no longer a public health concern; and his insistence on continuing with the Code, is out of step with the rest of the Government’s position that Covid-19 is no longer a public health threat that requires heavy-handed regulations in order to manage and mitigate.

"[We pointed out to the minister] that we struggle to understand how, in the view of the current circumstances, he would insist on persisting with the Code.

"Subsequent to our letter, we were shocked to learn that the Minister had already issued a new code, on 24 June 2022, under the auspices of a purported decision by Nedlac. This code is identical to the one previously issued by the minister and admitted to being ultra vires. The timing of the new code is indicative of the fact that the Minister and/or Nedlac did not take cognisance of any of the submissions made in our correspondence and is clearly in support of an ulterior motive.

"It is highly doubtful that Nedlac followed any proper procedure in reaching this decision.

"Neasa will be launching a new application for an order setting aside the new code on the basis of both substance and procedure.”

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Cancellation of a property sale agreement. What are the implications?

The short answer is “yes”, the provisions of the agreement and the circumstances under which the agreement was cancelled can have financial implications for either or both parties.

The non-continuation of an agreement does not always bring about financial implications. For instance, an agreement which contains a suspensive condition and which is not fulfilled will have the effect that the agreement lapses and the parties’ legal position is restored as if the agreement has never been entered into.

Examples of suspensive conditions are the requirement that the buyer should secure mortgage finance from a bank for a certain amount or that the buyer should sell his existing property. Suspensive conditions should be fulfilled within a specified period, failing which the agreement lapses.

Financial implications to consider

As alluded to above, there can be instances where there are financial implications for either or both of the parties involved when an agreement is cancelled, even if the parties agree amicably not to proceed with the transaction. Legal fees and estate agent commission come to mind.

Once the agreement has been signed, a conveyancing attorney is appointed to attend to the registration of the transfer of the property into the buyer’s name. Similarly, if the buyer is purchasing the property through bank finance, the bank will appoint an attorney to attend to the registration of a mortgage bond over the property which will serve as the bank’s security for financing the transaction.

Both attorneys would be entitled to claim what is known as “wasted costs” for the work that they have done since receiving instructions up to the point of being informed of the cancellation. The recommended tariff issued by the Legal Practice Council provides for the percentage of wasted costs which should be charged, calculated on the normal fees, depending on the stage at which the transaction was when it was cancelled.

Where an estate agent was the effective cause of a transaction, commission can be claimed, irrespective of whether the transaction was successfully completed. Sellers and buyers should take care of the provisions of an agreement in this regard. It is not uncommon for agreements to provide that commission may be recovered from the party who was the cause of the cancellation.

If an agreement required the seller to fix certain defects on the property prior to registration and the buyer subsequently elects to renege on the agreement, then the seller will be entitled to recover the expenses incurred for the repairs from the buyer.

Of concern to a purchaser should be the possibility of forfeiting a deposit paid when the terms of the agreement are not being complied with. The default provisions of the agreement should be carefully considered in this regard.

Read the terms and conditions

In as much as it is possible to cancel an agreement of sale without attracting any financial implications, it is important for parties to understand that there may be instances where the cancellation of the agreement may leave one out of pocket.

It is equally important for parties to read the terms and conditions of their sale agreement in order to understand under which circumstances they would be allowed to cancel the agreement without dire consequences. It will be prudent to consult with a property law expert to obtain proper legal advice before signing a sale agreement.

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It's about time: Court ruling clarifies dismissal of claims due to delay

In a recent ruling, the Labour Court has clarified the circumstances under which an application may be made to dismiss a case because of inordinate delay by the referring litigant.

The speedy resolution of labour disputes has long been a core principle of employment law. Much to some litigants' dismay and frustration, it is a noble principle that is not always realised in matters before the Labour Court.

Lawyers eager to serve the interests of their clients and give effect to this tenet of employment law previously relied on Rule 11 of the Labour Court Rules to apply for matters to be dismissed if applicants delay in prosecuting their claims. Developments in case law, however, indicate that Rule 11 cannot be relied on for this purpose any longer. The Practice Manual of the Labour Court of South Africa (Practice Manual) makes provision for a matter to be archived when six months has elapsed without any steps taken by the referring party from the date the last process was filed in court.

The question that arose in Lebelo and Others v The City of Johannesburg (22 March 2022) was whether archiving takes place automatically after six months have elapsed or whether it requires an action from the registrar. This case is another warning that dismissing a claim due to inordinate delay is not always that easy and, even though it may be frustrating, the interests of justice will prevail over the expeditious resolution of disputes.

Lebelo and 406 others referred a dispute for adjudication on 22 August 2014. The exchange of pleadings trudged along slowly, and pre-trial preparation had begun, when on 28 January 2020 (almost six years later), the City of Johannesburg launched an application seeking to dismiss the referral in terms of clause 16 of the Practice Manual, alleging that the applicants had delayed in prosecuting the claim. The City of Johannesburg held the view that Lebelo's inaction for a period exceeding six months caused the referral to be automatically archived and considered dismissed. The purpose behind its application was simply to seek confirmation that the referral had been archived and dismissed.

The court disagreed and found that the expiry of the six-month period referred to in clause 16 of the Practice Manual did not lead to an automatic dismissal of the claim. The Court stated that archiving does not take place automatically and that, when a party is faced with the situation where the prescribed period in clause 16 expires, it may approach the registrar of the court to exercise his or her powers to archive the file. Once the matter has been archived by the registrar, the matter will be considered to be dismissed.

Having determined that the matter had not been automatically archived and thus dismissed, the court turned to the question whether the matter could be dismissed for inordinate delay. In deciding whether to dismiss an action, the Court will only take one factor into consideration – grave injustice. Therefore, the Court may dismiss an action when the delay is inexcusable and would do grave injustice to the other side. The Court will, however, only exercise this power in exceptional circumstances, as the dismissal of an action seriously impacts the constitutional and common law rights of the referring litigant.

Three requirements must be met in an application to dismiss:

  • delay in the prosecution of the case;
  • the delay must be inexcusable; and
  • serious prejudice to the other side.

The Courts have previously held that, while finality is good, justice is better. Therefore, dismissing a matter in the absence of grave injustice will serve finality, but it will not serve the interests of justice. Another core principle of the Labour Relations Act is to advance social justice, so a balance should be struck between the two principles of speedy resolution of disputes and the advancement of social justice.

In the Lebelo case, the City of Johannesburg took almost four years to launch the application to dismiss. The Court held that the requirements for granting an application to dismiss were not met and that the City of Johannesburg failed to prove a grave injustice and/or serious prejudice, primarily because the action was already ripe for hearing at the time that the dismissal application was launched and had already been set down for trial. The matter was no longer in the hands of the litigants and the matter would soon be disposed of through the intended trial.

In conclusion, the Lebelo case provides greater clarity regarding the application of clause 16 of the Practice Manual. It clearly set outs the circumstances under which a party may approach the registrar of the Court to exercise his or her power to archive a file. Importantly, employers must ensure that their requests to the registrar to archive matters should be done timeously, at the first inaction after six months.

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Income tax return filing dates for the 2022 year of assessment

On 3 June 2022, Sars will publish a notice in the Government Gazette specifying the taxpayers that do not need to file income tax returns for the 2022 year of assessment, and the deadlines for taxpayers that have to file an income tax return.

Taxpayers who are exempt from filing are individuals who receive total income of less than R500,000 for the year from only one source and receive no other allowances or benefits, and from whom PAYE has been deducted according to the prescribed tax deduction tables. Individuals who only receive (i) interest below the interest exemption thresholds; (ii) amounts from Tax Free Savings Accounts; or (iii) dividends and are non-residents throughout the year, are also not required to file returns.

Please note the following filing deadlines:

  • for companies, within 12 months of their financial year-ends;
  • for all other taxpayers (including natural persons, trusts, institutions, boards and other bodies):
    • on or before 24 October 2022 if the return is submitted manually or with the assistance of a Sars official at one of Sars’ offices, or for a non-provisional taxpayer who is filing via Sars’ eFiling platform;
    • on or before 23 January 2023 for provisional taxpayers using eFiling;
    • where accounts are accepted by the Commissioner in terms of section 66(13A) of the Income Tax Act in respect of the whole or portion of a taxpayer’s income, which are drawn to a date after 28 February 2022 but on or before 30 September 2022, within six months from the date to which such accounts are drawn.

Further information is contained on the Sars website.

Taxpayers should note the shortened time frames to submit their returns and prepare for these submissions sooner rather than later.

Sars will continue to auto-assess individuals in the auto-assessment population based on third-party data received from employers, financial institutions, medical schemes, and retirement fund administrators. These taxpayers will receive an SMS from Sars that they have a tax return pre-populated by Sars on eFiling or the Sars MobiApp. These taxpayers will need to "Accept" or "Edit" and submit the auto-assessments by 24 October 2022 if they are individual non-provisional taxpayers. Notably, this due date for the 2022 filing season is a month earlier than the equivalent due date for the 2021 filing season (23 November 2021).

Individuals who are auto-assessed but do not accept, edit or submit their auto-assessments will receive an estimated assessment from Sars which is not subject to objection and appeal. We expect that the same penalty rules for auto-assessments in the 2021 filing season should apply for the 2022 filing season. An individual who does not agree with the estimated assessment can file an accurate ITR12 tax return within 40 business days of the date of the estimated assessment. This return will be late and subject to normal late submission admin penalties and interest. The late submission admin penalty is imposed monthly up to 35 months (if Sars has the address of the taxpayer). The monthly penalty ranges from R250 to R16,000 a month, depending on the assessed loss or taxable income of the taxpayer for the year prior to the year being assessed.

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2017 Preferential Procurement Regulations valid until Feb 2023, says ConCourt

The Constitutional Court on Monday confirmed that the suspension of the declaration of the order of invalidity of the 2017 Preferential Procurement Regulations is still valid for 12 months.

The confirmation by the apex court on Monday came after its 16 February 2022 judgment on the matter between the Minister of Finance and Afribusiness regarding the 2017 Regulations.

Subsequently, Finance Minister Enoch Godongwana launched an application to the Constitutional Court seeking clarity on its judgment of 16 February 2022.

According to the Constitutional Court judgment on Monday, section 18(1) of the Superior Courts Act suspended the operation of the Supreme Court of Appeal’s 12-month suspension of the invalidation of the 2017 Regulations.

In a statement, National Treasury said: “In practical terms, the countdown on the 12-month period of suspension commenced immediately after the date of suspension. The countdown, however, was halted by the lodgement of the application for leave to appeal in the Constitutional Court.”

The Court also confirmed that the countdown resumed on 16 February 2022, when the Constitutional Court dismissed the Minister’s appeal against the Supreme Court of Appeal’s order.

The 2017 Regulations are now valid until 15 February 2023, unless new regulations are promulgated before that date.

This, said Treasury, means that the 2017 Regulations in their entirety are still valid.

“From today, all exemptions granted to deal with the period of uncertainty following the Court’s judgment of 16 February 2022, lapse (according to the condition in the letters of exemptions).

“From today, all new quotations must be requested and tenders must be advertised and dealt with in accordance with the 2017 Regulations; a quotation requested or tenders advertised before today must be dealt with in terms of the exemption and the internal procurement policy in place for the duration of the exemption,” Treasury said.

The department said an organ of State may, however, decide to withdraw such a request for a quotation or an advert for a tender and request a new quotation or advertise a new tender that will be subject to 2017 Regulations.

National Treasury said it is currently considering the public comments on the draft Preferential Procurement Regulations published on 10 March 2022, and would prepare final regulations that accord with the Constitutional Court’s judgment of 16 February 2016.

“Organs of State should by 16 February 2023 ensure that procurement policies, in line with the Constitutional Court’s judgment of 16 February 2022, are in place or, if new Preferential Procurement Regulations are promulgated, when these Regulations take effect.”

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Rapid development of competition law across Africa

Baker McKenzie's latest Africa Competition Report 2022 provides a detailed analysis and overview of recent developments in competition law enforcement and competition policy in 32 African jurisdictions and regional bodies. The report outlines how, over the past two years, African competition regulators have actively engaged in efforts to address pandemic-related challenges, but there has also been a general upward trend in competition policy enforcement across the continent. This trend is highlighted by a number of significant recent developments in competition law regulation across the continent. Countries and regions with recent competition law developments include the Common Market for Eastern and Southern Africa (Comesa), Egypt, Ethiopia, Ghana, Kenya, Mauritius, Mozambique, Namibia, Nigeria and South Africa.

Comesa

There were various developments with regards to Comesa in 2021. In February 2021, the Comesa Competition Commission issued a Practice Note in which it amended the interpretation of the term "operate"”. Prior to this, a party "operated" in a Comesa Member State if it had turnover or assets in that Member State in excess of $5m. This requirement has now been removed, effective from 11 February 2021, and a party will "operate" in a Comesa Member State merely if it is active in it (without a minimum turnover or asset threshold). The impact of this will be to make it easier for a transaction to fall within the scope of the Comesa merger control regime.

The Comesa Commission has also recently issued Draft Guidelines on Fines and Penalties, Draft Guidelines on Settlement Procedures and Draft Guidelines on Hearing Procedures.

In September 2021, the Comesa Commission issued its first penalty for failure to notify a transaction within the prescribed time periods, which penalty amounted to 0.05% of the parties' combined turnover in the Common Market in the 2020 financial year. This was imposed in relation to the proposed acquisition by Helios Towers Limited of the shares of Madagascar Towers SA and Malawi Towers Limited.

In December 2021, the Comesa Commission imposed a fine for failure to comply with a commitment contained in a merger clearance decision.

The Comesa Commission also conducted eight investigations into restrictive business practices in 2021.

Egypt

There were numerous recent developments in Egypt, including in November 2020, when the Competition Authority announced that the Egyptian Prime Ministry had approved the Prime Minister’s draft law amending certain provisions of the Egyptian Competition Law 3/2005. In February 2021, the Egyptian parliament’s Economic Affairs Committee started the discussions on the new amendments. The Competition Authority has also recently initiated market inquiries in relation to multiple sectors including healthcare, food, electronic and electrical appliances, automotive, real estate, media and petroleum sectors.

In April 2021, the Economic Court of Cairo issued a ruling in a criminal case brought in March 2020 by the Competition Authority, against five individual poultry brokers for colluding to fix the price of chicken to the detriment of consumers and chicken breeders. The court fined each broker 30 million Egyptian pounds (approx. $1.6m) for agreeing to fix the price of a kilogram of chicken.

In July 2021, the Competition Authority initiated a criminal case against two companies who agreed to submit identical offers in one of the practices of the General Authority for Veterinary Services, in violation of Egyptian competition law.

The head of the Competition Authority announced plans for the creation of an Arab Competition Network to enhance cross-border cooperation between antitrust enforcers in the Middle East. The ACN would be the first to provide Arab competition authorities with an official platform to meet and discuss prominent issues and impending changes to antitrust law. The network would be run by the 22 members of the League of Arab States, which includes Egypt, Syria, Lebanon, Iraq, Jordan and Saudi Arabia, among others.

Ethiopia

In Ethiopia, the Trade Competition and Consumer Protection Authority is working on regulations to provide guidance on the application of the Trade Competition and Consumer Protection Proclamation (No 813/2013). Proclamation No. 1263/2021, which is expected to be enacted and come into force in 2022, transfers the powers of the Trade Competition and Consumer Protection Authority to the Ministry of Trade and Regional Integration.

Ghana

In Ghana, a draft Competition and Fair Trade Practices Bill is before parliament for consideration.

Kenya

The Competition of Authority in Kenya finalised its study into the regulated and unregulated credit markets in the country and issued its report in May 2021. The Authority further developed the Retail Trade Code of Practice 2021, in consultation with stakeholders in the retail sector, to address the abuse of buyer power issues arising from the sector. Also in 2021, the Competition Authority conducted a dawn raid in the steel industry and issued draft joint venture guidelines, to clarify the rules and filing requirements of joint venture arrangements.

Mauritius

The Competition Commission in Mauritius concluded a market study in the pharmaceutical sector on 8 June 2021.

Mozambique

There were numerous developments in competition law in Mozambique in 2021, including that the Competition Regulatory Authority became operational in January 2021. Regulations on Merger Notifications Forms were enacted by means of Resolution No. 1/2021 of 22 April 2021. The Regulations prescribe the different forms to be completed for merger notifications, as well as the details of the information and documentation required. Regulations on Filing Fees were enacted by means of Ministerial Diploma No. 77/2021 of 16 August 2021. Filing fees are currently set at 0.11% of the turnover of the parties in the previous year, up to a maximum of MZN 2,250,000 (approx. $35,000). Amendments to the Competition Regulations were enacted by means of Decree No. 101/2021 of 31 December 2021.

Namibia

A Competition Bill is in progress in Namibia, and the Competition Commission expects to submit the final version of the Competition Bill to the Ministry of Industrialisation and Trade by the end of June 2022.

Nigeria

On 2 August 2021, Nigeria adopted the Merger Review (Amended) Regulations 2021, which set out new fees applicable for merger filings. The Federal Competition and Consumer Protection Commission launched and publicised an investigation into the alleged anticompetitive conduct of five companies in the shipping and freight forwarding industry in October 2021.

South Africa

There were various developments in South Africa in 2021, including in May 2021, when the Competition Commission launched the Online Intermediation Platforms Market Inquiry, focusing on four broad online intermediation platforms and market dynamics that specifically affect business users – e-commerce marketplaces, online classified marketplaces, software app stores and intermediated services (such as accommodation, travel, transport and food delivery). The Inquiry is ongoing with a provisional report scheduled for release on 10 June 2022, and the final report scheduled for release in November 2022.

In April 2021, the Commission released its market inquiry reports on Land Based Public Transport. Furthermore, in April 2021, the Commission published its final report on an impact assessment study it conducted in relation to Covid-19. The report sets out the findings of the Competition Commission regarding the impact of the Covid-19 block exemptions and the enforcement work done by the Competition Commission during the pandemic. The Competition Commission’s fifth Essential Food Pricing Monitoring Report, which is released quarterly, focused on tracking the impact of the Covid-19 pandemic and consequent economic crisis on food markets.

In May 2021, the Commission issued, for comment, draft guidelines on Small Merger Notifications, which contain specific guidance applicable to the assessment of digital mergers.

Notably, 2021 was the year when the Commission prohibited a merger solely on public interest grounds, making it the first transaction to be prohibited on non-competitive grounds. Ultimately, however, the merger was conditionally approved before the Competition Tribunal.

In November 2021, the Commission released its Economic Concentration Report, which highlighted patterns of concentration and participation in the South African economy. The report includes details on the Commission’s power to launch market inquiries into highly concentrated industries, as well as its increased authority to impose structural remedies on businesses in these sectors.

In March 2022, the Commission issued Guidelines on Collaboration between Competitors on Localisation Initiatives, which are aimed at providing guidance to industry and government on how industry players may collaborate in identifying opportunities for localisation and implementing commitments related to localisation initiatives in a manner that does not raise competition concerns.

In March 2022, the Commission launched a market inquiry into the South African fresh produce market, which will examine whether there are any features in the fresh produce value chain, which lessen, prevent or distort the competitiveness of the market.

The Commission concluded various settlement agreements with market players (eg. grocery retailers and laboratories) to reduce the prices of goods and services.

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Zondo names main players in Eskom capture

Chairperson of the state capture commission, Chief Justice Raymond Zondo, wants most of the board of directors appointed at Eskom in December 2014 to be investigated and potentially prosecuted for what he says was their part in the capture of the power utility by the Guptas. The same should happen to former public enterprises minister Lynne Brown for her role in the board's appointment and later interference in Eskom's operations.

The commission’s latest report, released on Friday, has found that the Guptas earmarked Eskom for capture, with the help of former president Jacob Zuma and several of its board members and executive managers. Zondo details a scheme by the Guptas to place pliable individuals in strategic positions both in the board and in management, to advance their agenda.

Zuma central to state capture scheme

“The evidence proves a scheme by the Guptas to capture Eskom, install the Guptas’ selected officials in strategic positions within Eskom as members of the board, the committees of the board and the executives, and then divert Eskom's assets to the Guptas' financial advantage,” writes Zondo.

“Central to the Guptas’ scheme of state capture was [former] president [Jacob] Zuma, who the Guptas must have identified at a very early stage as somebody whose character was such that they could use him against the people of South Africa, his own country and his own government, to advance their own business interests...”

Zondo continues: “...President Zuma readily opened the doors for the Guptas to go into the SOEs and help themselves to the money and assets of the people of South Africa. Mr Zuma did this by appointing Mr Brian Molefe as Group CEO of Transnet after he had discussed the matter with them.”

Strategic appointments

Brian Molefe was later seconded from Transnet to Eskom, in April 2015, where he stayed until his resignation amid a public protector investigation into allegations of corruption.

Brown’s bypassing of the traditional procedure of the Department of Public Enterprises (DPE) to pool candidates from a database of skilled professionals did not escape scrutiny. According to Zondo, the former minister’s inability to account truthfully for her actions raises suspicions. He notes discrepancies in Brown’s account of her appointment process during an investigation by Fundudzi, and her testimony before the commission in 2021. While she insisted to Fundudzi that all protocols were followed in the DPE’s appointment process, she told the commission that she made a decision to advertise for nominations for board seats so as to open the process up to the public and attract suitable candidates.

A further finding is that while in the process of recruiting and appointing the 2014 directors, Brown was in constant communication with Gupta associate Salim Essa for about four months. “The commission obtained cellphone records relating to, among others, Mr Salim Essa and Minister Lynn Brown. These showed that from November 2014 to March 2015 there had been several cellphone calls that had been made between Mr Essa and Minister Lynne Brown. November 2014 was the month that preceded the month of the appointment of a new Board of Directors for Eskom.

“On the conspectus of all the evidence, Ms Lynne Brown’s posture of innocence must be rejected. The evidence clearly shows that she was part of a scheme to capture Eskom,” Zondo notes.

Removal of top execs

One of the first tasks of the new board involved the suspension and later removal of Eskom’s top executives in March 2015. Zondo has concluded that this was done under the guise of launching an enquiry into their performance at the entity, and was a ruse that cost the company over R18-million in eventual separation packages that had to be granted to former CEO Tshediso Matona, former CFO Tsholofelo Molefe, and former head of group capital Dan Marokane. The only executive to return to Eskom after having been suspended along with the three – Matshela Koko – did so under suspicious circumstances, and because he too was part of the Gupta scheme, hence he was required to play along.

Upon his return in July of that year, Koko brought with him project plans that appeared to be designed for the appointment of Gupta-linked companies Regiments, and later Trillian, as business development partners to larger contractor McKinsey and Company, and would cost Eskom millions of rands, Zondo finds.

Trickery

He notes: “It is plain that Mr Koko’s suspension was a ruse. That is why on the 10th March 2015 he was busy with Mr Salim Essa at Melrose Arch seeking to identify Eskom officials who could act in the positions that would become temporarily vacant the following day when the executives, including Mr Koko, would be suspended. The Guptas and their associates must have identified Mr Koko much earlier as someone who could work with them to advance their capture of Eskom and, therefore, their business interests.

“The primary purpose of the scheme was to install Mr Brian Molefe in Eskom as its CEO and Mr Anoj Singh as the Financial Director because those who devised and implemented the scheme believed that Mr Brian Molefe and Mr Singh would favour the Gupta family and channel resources of Eskom towards the Gupta family.”

A month after the suspensions, in April, Brian Molefe was indeed seconded to Eskom from Transnet, and followed later by Singh. Zondo has identified both men as having been instrumental in furthering the capture agenda at Transnet too.

Glencore mine acquisition

Once at Eskom, they allegedly railroaded international company Glencore into selling its Optimum mine to Gupta-owned Tegeta Resources, despite the latter not being in a good financial position to buy. The funds needed by Tegeta to make due on the purchase would later come from Eskom, signed off by Molefe and Singh, in the form of a pre-payment for the supply of coal at R659m, and later a guarantee of R1.6bn, approved by the board in circumstances where they were misled on the true nature of the transaction, Zondo concluded.

“These were made with the single purpose of ensuring that the Guptas' deal in terms of which they acquired the Glencore coal interests did not fall through for want of finance on the part of the Guptas.

“I cannot accept that the payment and the guarantee were for coal to be delivered. Once it is accepted that Messrs Molefe, Koko and Singh were Gupta agents, prepared when they were called to do so to do the Guptas' bidding, then the possibility that any of them did not know that the money was required to complete the purchase of shares transaction is small.”

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Is it better to die intestate than with an outdated Will?

The importance of having a Will, as opposed to dying intestate, has been broadcast on radio and television, in law clinics and by law firms. While many South Africans still die without their last will and testament recorded on paper, be it due to superstition (a Roman concept), lack of resources or otherwise, a Will which is not reflective of the deceased's intention at the date of death will lead to persons inheriting the assets of the deceased notwithstanding the deceased having agreed to the contrary.

Personal relationships and circumstances ebb and flow throughout one’s lifetime. The reason or motive for a person to leave assets to one person at a certain point in their life, may change for one reason or another. It is important that the Will reflects the intention of the testator at the date of death. Voet 2.14.16 provides:

No action arises on promise to leave inheritance or legacy. ‒ And if one has undertaken by promise or agreement that he will leave another his inheritance or a legacy, but has nevertheless not kept his undertakings afterwards, no action will be available on the agreement against the heirs of the deceased, whether to obtain the inheritance or legacy or for damages.

Exception to the rule

The last will and testament of a person is sacrosanct and the executor of a deceased estate is obligated to give effect to the last will and testament. There is only one instance in which, without agreement or a court order, the words of a person’s last will and testament can be disregarded. Such instance is governed by Section 2B of the Wills Act 7 of 1953 (the Act).

The Act provides that should a person die within three months of the dissolution of his/her marriage, such person’s Will shall be interpreted as though his/her previous spouse died before the date of the dissolution of the marriage. Presumably, the legislature deems three months an appropriate time within which a recently divorced person will amend or revoke their Will for the distribution of their assets when they die. If a person does not amend their Will within three months, it will be assumed that any bequests to a previous spouse were intended to be bequeathed to him/her, notwithstanding their divorce.

The consequence is that testamentary dispositions made at a particular time (example 18 years old) empower an executor of an estate to administer the estate in accordance with the last will and testament irrespective of the testator’s intention and the obvious change of circumstances.

Revoking an existing Will

Accordingly, more important than having a Will, is expressly revoking your existing Will so as to ensure that an outdated Will is not given effect to by an executor. There are many instances in which parties failed to execute a new Will and as a consequence unscrupulous partners / executors take advantage of the situation even when they are aware that the deceased drew a new Will but failed to execute the Will in accordance with the formalities required.

That being said, it begs the question – how far does one have to go to revoke a previous Will which no longer represents one’s wishes? Does one need to execute an entirely new valid Will? Is it enough to express that one no longer wants one’s assets to be distributed as provided for in one’s Will? The answer lies somewhere in between.

We recommend that whenever your circumstances change, you document, in writing, your unequivocal revocation of your existing Will and document your changes, sign the document and have the document witnessed. Then send the document to the person who you will instruct to draw your new Will. This will have the effect of precluding a Will which you do not want applied from being enforced.

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Death, taxes... and remote working

Given the ever-changing landscape of the past two years, the adage that nothing is certain except death and taxes is perhaps more apposite than ever. Whilst it may appear that a semblance of normality is returning, its almost as certain as death and taxes, that remote working will be a part of the next normal. South Africa's recent State of the Nation Address even made mention of a new remote working visa.

In light of this, companies with ‘work from home’ policies should be especially mindful of potential tax exposures where ‘home’ is in a foreign country. We deal with some of these potential exposures in more detail below.

Corporate income tax

The potential for a company to fall within a foreign country’s corporate income tax net as a result of employees working from home in that foreign country is generally two-fold as:

  • the company may be effectively managed from, and thus become tax resident in, that foreign country; or
  • the company may form a taxable presence (permanent establishment) in that foreign country with the consequence that some or all of its profits may be subject to corporate income tax there.

In the Tax & Exchange Control alert from 10 February 2022, we set out the guiding principles that, according to the South African Revenue Service (SARS), should be applied when determining where a company is effectively managed. The guidance set out by SARS is largely consistent with the guidance set out by the Organisation for Economic Co-operation and Development (OECD) in its commentary on how this term should be interpreted in the context of double tax agreements (DTAs). However, it is noted, that this commentary is based on a model DTA that is seldom followed to the letter when a DTA is formally concluded and brought into force by contracting states, or there may simply be no DTA. Furthermore, the underlying domestic legislation must be considered along with the impact (if any) of the multilateral instrument (MLI) on existing DTAs. For these reasons, it is recommended that companies that are possibly at risk of being effectively managed in a different country by virtue of employees working remotely there should consider the need to obtain specialist tax advice.

Regarding the second possible exposure outlined above, a company is generally at risk of having a permanent establishment in a foreign country if it:

  • derives income from a source within that foreign country;
  • has a fixed place of business there;
  • is engaged in the delivery of construction/consulting services for a certain period of time in that foreign country; or
  • it has a dependent agent operating there on its behalf.

A comprehensive analysis of the risks and ways in which a permanent establishment can arise under each of the categories outlined above, is beyond the scope of this article and a consideration of the domestic legislation and the impact (if any) of the MLI is again critical. There are also important carve-outs that may apply having regard to the nature and extent of the activities being conducted in the other country. However, we draw attention to the fact that allowing employees to work from home in a foreign country may, inadvertently, result in the company having a fixed place of business there, and it is recommended that companies consider the need for specialist tax advice where this may be the case.

Personal income tax

Income earned by a South African tax resident employee working remotely in a foreign country for a South African employer might be subject to personal income tax in that country. Where there is a DTA in place between South Africa and the foreign country, then the foreign country’s right to tax that employee’s income will likely be determined by this DTA. Whether the South African employer has a permanent establishment in that foreign country could also be a factor in determining this right to tax.

In the absence of a DTA, the income may be taxable in both the foreign country and South Africa, though the employee may qualify for a rebate in terms of section 6quat of the Income Tax Act 58 of 1962 (ITA). It should also be considered whether and to what extent the income qualifies for exemption in South Africa. For example, the income may qualify for the partial exemption outlined in section 10(1)(o)(ii) of the ITA.

Similarly, income earned by a non-South African tax resident employee working remotely in South Africa for a foreign employer will be subject to income tax in South Africa unless a DTA precludes South Africa from taxing such income.

Payroll tax and social security contributions

The obligation for an employer to register and account for payroll tax and social security contributions in a foreign country should also be considered where it has employees working from home in that foreign country. Whether or not this is indeed the case can differ vastly from one country to another, though it will generally be dependant on whether:

  • the income earned by the employee is subject to tax in the foreign country;
  • the employer has business premises or an office available to it in the foreign country. Here again it should be noted that if employees are expected to work from home in that foreign country then this may in and of itself result in the employer having business premises or an office available to it in the country; or the employer has a permanent establishment in the foreign country.

It is evident from the above that having employees work remotely in a foreign country could lead to various tax exposures and related obligations for the employer in that foreign country. It also remains to be seen how lenient or stringent revenue authorities across the globe will be particularly in those instances where the employer is entirely unaware of the fact that its employees are working remotely in a foreign country. Only time will tell.

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The State of Disaster continues...

The South African Government has yet again not removed the State of Disaster that was put in place to address the Covid-19 pandemic.

In his address to the nation tonight, President Cyril Ramaphosa revealed that several adjusted Level 1 lockdown restrictions have been lifted. These measures will take effect tomorrow, 23 March 2022, once the new regulations are gazetted.

The new rules:

  • * Indoor and outdoor venues can house 50% of their capacity so long as entrants are vaccinated, or have a negative Covid-19 test.
  • * The maximum number of people able to attend a funeral has upped from 100 to 200.
  • * Masks are mandatory in public indoor spaces, such as malls, taxis, buses and trains but not in outdoor spaces such as when exercising outdoors or attending an outdoor venue.
  • * The regulations on social distancing have changed, with people needing to keep a distance of 1m apart from each other in all settings, with the exception of schools.
  • * Inbound international travellers will need to show proof of vaccination or a Covid-19 test not older than 72 hours.
  • * Indoor and outdoor venues can house 50% of their capacity so long as entrants are vaccinated, or have proof of a negative Covid-19 test.

"We see many parts of our daily lives returning to normal," Ramaphosa said. "We feel the fear of the last two years lifting off our shoulders."

He said Government is waiting for the finalisation of public comment on the Covid-19 Health Regulations draft. The deadline is 16 April at which point it is anticipated the State of Disaster will be lifted, Ramaphosa said.

68% of people older than 60 have been vaccinated. 48% of all SA adults have received a least one vaccine.

"We need to get more people between 18 and 35 years old vaccinated," Ramaphosa added.

With these changes in place, almost all restrictions on social and economic activity as imposed by the State of Disaster will have been lifted.

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Law against harmful online content comes into effect

With the operationalisation of the Films and Publications (FP) Amendment Act of 2019, South Africans will be protected against harmful content that is distributed by online distributors.

Addressing a media briefing in Pretoria on Thursday, deputy minister of communications and digital technologies Philly Mapulane said the number of companies that are in the business of selling films, games, and publications to consumers in online formats have exploded in recent years.

“Because the online world is borderless, it is now easier than ever for consumers to access news, information and entertainment created in other countries. Many of these countries have very different values and beliefs from ours here in South Africa.

“It is therefore important that this same content is reassessed before it is distributed in South Africa so that we empower our own consumers before they access the content,” the deputy minister said.

On 25 February 2022, the operationalisation of the Amendment Act was gazetted by the Presidency with an effective date of 1 March 2022.

Chairperson of the Film and Publication Board (FPB) Council Zama Mkosi said the Amendment Act has made strides in a number of key areas to start closing that gap in a way that balances the right to free expression while protecting the public.

The Films and Publications Act 65 of 1994 established the FPB and the Appeals Tribunal as the regulator of the creation, production, possession and distribution of films, games and certain publications.

In 2015, the Films and Publications Amendment Bill advanced arguments, based on thorough research and consultation, that the FPB should extend its focus to the regulation of content on online platforms, to align with the changes in the industry.

Approaches to the classification of online content

“The FP Amendment Act introduces two approaches to the classification of online content. The first approach entails FPB entering into license agreements with online distributors.

“The agreement will allow for accreditation of the online distributor to undertake its own process of classification making use of the Classification Guidelines of the FPB,” she said.

The FPB outlines the rules of classification through the Classification Guidelines, and online distributors are required to comply with the provision of age-ratings and consumer advice in the same way as distributors of physical content do under the previous Act.

“The FPB will provide regular training to the online distributors on the application of the Classification Guidelines and conduct regular audits of films and games to ensure that they are appropriately classified.

“Should an online distributor not wish to enter into a self-classification agreement, they will be required to submit all content to the FPB for classification,” Mkosi said.

In addition, the Amendment Act draws a distinction between commercial online distributors and non-commercial online distributors.

Only commercial online distributors will be required to register and classify content.

“It is very important at this stage to emphasise that a member of the general public posting user-generated content on the internet and who does not fall within the definition of a commercial distributor is not considered a distributor under the regulations of the FPB and will not need to register or submit their content.

“Under section 18E The FPB will only have jurisdiction over non-commercial distributors in respect of complaints from the public and takedown notices can be authorised from Internet Service Providers where the content is hosted,” she said.

The process and parameters of takedown notices are found section 77 of the Electronic Communications and Transactions Act, 25 of 2002.

“Upon application by a commercial online distributor, the FPB may also accredit classification ratings by a foreign or international classification body where it finds that this aligns with the FPB’s Classification Guidelines.

Enforcement committee

“A very important change brought about by the FP Amendment Act is the establishment of an Enforcement Committee. This impartial body will conduct investigations on disputed cases that contravene the provisions of the legislation and regulations and to impose sanctions as outlined in the Amendment Act and Regulations,” Mkosi said.

She emphasised that the content must align with the Constitution, which deems hate speech, incitement to violence, propaganda for war, child pornography and bestiality as unacceptable.

“We can now add the unauthorised distribution of private sexual photos and films; as well as content depicting sexual violence and violence against children,” Mkosi said.

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SAS launches free data analytics programme for higher education students

With continued high demand for data science talent, analytics, artificial intelligence and data management software and services company SAS has launched a new programme for higher education students to learn analytics skills and earn valuable certifications sought by employers.

SAS Skill Builder for Students is a free, global, 24/7 virtual learning portal that offers access to SAS software, e-learning and certifications as well as career advice and ways to connect with employers.

“It’s never been easier for students to learn SAS and apply those skills in a career they love,” said Lynn Letukas, senior director of global academic programmes and certifications at SAS. “SAS Skill Builder for Students highlights our continued commitment to growing the next generation of analytics experts and connecting employers with the talent they need.”

The path to a great analytics career

Last year, more than 143,000 job postings listed SAS as a desired skill, according to Emsi Burning Glass, an aggregator of labor market data. SAS Skill Builder for Students can help more students seize those jobs by providing access to:

  • Free cloud-based software: SAS OnDemand for Academics and SAS Viya for Learners.
  • Free e-learning: Courses in foundational skills like data literacy and point-and-click data analytics, programming, visual analytics and visual statistics, statistical analysis, predictive modeling and machine learning.
  • Certification pathways to simplify the journey to data science certification and other valuable SAS certifications.
  • Exclusive certification exam discounts for those who register.
  • Badges that signal valuable skills to employers in areas such as data visualisation and machine learning.
  • Career resources to inspire students and help them succeed. Students can explore what it means to be a data scientist and data analytics professional, how to set themselves apart and connect with employers offering work that taps into their passions.

Thriving in a data-driven world

SAS Skill Builder for Students incorporates data from a variety of industries to gain valuable and relevant experience. Students can also learn one of the most valuable skills for success in today’s society and workplaces - data literacy. In a world awash in disinformation and misinformation, it is critical to be able to consume, interpret and understand data.

SAS Skill Builder for Students includes access to Data Literacy Essentials, a SAS course that introduces data basics and strategies for using and interrogating data, discovering meaning, making decisions and communicating data. The course follows the journeys of a concerned parent, a small business owner and a public health expert, who each use data to navigate and problem-solve through the pandemic.

The course also focuses on the ethical challenges of working with data. Data ethics refers to how we seek out, interpret and present data responsibly, including the moral judgments we make when working with data. The course covers how biases influence the ways we interact with and communicate data and provides guidance on ways we can work with data more responsibly.

An academic email domain is required to access SAS Skill Builder for Students.

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Position your SME for success in 2022

Businesses, particularly small- and medium-sized enterprises (SMEs) learned a lot in 2021 and had many hardships to overcome. This hard-won insight will now hopefully inform the decisions they make in 2022. That said, gearing up for success in 2022 can be better achieved by employing winning strategies.

SMEs contribute substantially to the South African economy and as such, need to be supported in their efforts to be successful. There are many business actions they can take to ensure their growth and sustainability, and preparations they can make to position themselves for a prosperous year.

Covid-19 lessons

While much has already been said about Covid-19, it is still a part of our reality. It would be prudent of businesses to keep an eye on local and global developments and be able to adapt to any changes. It’s essential to adhere to safety protocols to protect staff and clients and to indicate the level of professionalism of the enterprise.

Digitisation

Another significant reality that emerged from the pandemic is that digitising of operations has become essential. This trend will continue in 2022, and businesses must prioritise digital transformation. This should include continued remote working capabilities, digital marketing tools, cloud-based software, and enhanced cyber security.

As more consumers turn to mobile and online resources to procure goods and services, it’s vital that SMEs adopt an online platform where customers can easily do business with them.

Supply chain management

SMEs need to build and nurture a resilient supply chain with dependable partners. They must be able to switch between suppliers to become more adaptable. Companies also need to have plans in place to manage potential supply chain challenges and obstacles. Also keep in mind that many supply chain partners are now including zero-waste, decarbonisation and renewable energy practices, so SMEs need to be prepared to accommodate this.

Productivity

While larger companies have many advantages, SMEs are more adaptable because they manage smaller teams, and can therefore be agile in providing quality products and services. This will be an important advantage to capitalise on going forward.

Be different, be unique

Every business must stand out. Differentiation is essential for SMEs, and their unique selling point (USP) must be the basis of their brand identity and be carried through the business and through all communication, marketing efforts and customer service.

Managing your money

Getting to know effective business practices and managing cash flow effectively, is crucial in the continued success of any enterprise. Managing the accounting system is vital for the survival of any business.

Here are six practices that can help: If need be, obtain financial and business advice from a professional.

  • Budget

    Have a budget and stick to it. Track your expenses and how much revenue you need to cover everything. Take it further and find ways to cut back on expenses in tough times.

  • Unearth hidden expenses

    Look out for underutilised equipment, excess inventory, and inefficient IT systems, and ensure that your business space is being utilised profitably.

  • Be firm about money owed to you

    Business owners often don’t follow up on payments timeously out of fear of chasing clients away. However, if you don’t chase up on payments due to you, you can incur debt and delay your own path to profitability. Make it a priority to get paid.

  • Pay yourself

    Set aside a base salary for yourself as well as an amount for emergencies and a retirement fund. Also important is to not use your personal credit card for business expenses.

  • Get clued up on taxes

    You know that certain expenses, for example, rent, payroll, and equipment are tax-deductible, but you need to educate yourself on other expenses that are tax-deductible. Ask a tax consultant for advice if you need it.

  • You can’t do it all

    If you’re a busy entrepreneur, you shouldn’t be spending too much time on the accounting functions of your business. Be realistic about what you can do yourself and then seek help from a professional, even if it’s on a freelance basis. Remember, too, that cloud-based accounting software can help you manage your books easily.

Define your marketing strategy

Content marketing plays a valuable role in raising awareness of your products and services. Changes in consumer behaviour and the need for accurate information are an opportunity for SMEs to add value to their clients through marketing.

A marketing strategy should aim to create an effective brand presence through engaging content and should measure the success of this content by collecting and analysing feedback and information from your audience.

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Department of Transport to appeal Aarto ruling

The Department of Transport will appeal a Pretoria High Court ruling that last week declared the Administrative Adjudication of Road Traffic Offence (Aarto) Act, unconstitutional and invalid.

This was on Tuesday revealed by transport minister Fikile Mbalula during the release of the 2021 festive season road fatality statistics.

The Act, he said, was “the final piece of the puzzle in the implementation of a new road traffic management system.”

The minister said the department remained resolute and persevered through challenges.

He said it was also important to appreciate that the festive season campaign was not implemented in a vacuum, but is “firmly located within a broader safety campaign, 365 Days Action Agenda”.

He said: “This is anchored on policy framework that is rooted in law and reinforced by a social pact with the motoring public and organs of civil society to change behaviour on our roads.

“Our arsenal of interventions aimed at delivering a reduction of 25% of fatalities on our roads includes policy and legislative interventions.”

He said maintaining national norms and standards was “necessary to ensure effective performance by municipalities of their executive authority”.

The Minister said this was equally true of maintaining the economic unity of the republic and arrest the negative impact of road fatalities and crashes on the economy.

He said there was no better illustration of the need to maintain economic unity of the Republic than the reality that the long-term liabilities of the Road Accident Fund were now government’s largest contingent liability.

The Department anticipates that claims against the RAF would increase to R518.7bn in the 2023/2024 financial year.

He said a fragmented system that fails to recognise the importance of a system grounded on national norms and standards in order to maximise its effectiveness would only result in chaos and serve as a perverse incentive for unlawful behaviour.

“This principle is evident in all our laws that regulate road traffic matter in the country, with the primary legislation regulating road traffic being the National Road Traffic Act of 1996,” he said.

This law, he said, was further bolstered by the Road Traffic Management Act of 1998, which establishes an institutional arrangement that recognises the executive authority of provinces and municipalities.

The Administrative Adjudication of Road Traffic Offence (Aarto) provides an adjudication system for infringements of the rules of the road determined by the National Road Traffic Act.

He added that the importance of Aarto in driving behaviour change of motorists and providing disincentives for unbecoming conduct could be overemphasised.

He added that as the department continued to use legislative instruments to strengthen the road traffic regulatory framework, Parliament was considering the proposed amendments to the National Road Traffic Act, to reduce the permissible alcohol limit for motorists.

“We believe this is an important element in our efforts to arrest the scourge of fatalities on our roads,” he said.

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APA programme: Proposed model and legislation for South Africa

In 2020, Sars released a draft discussion paper on the introduction of an advance pricing agreement (APA) programme, which is intended to provide taxpayers with clarity and certainty on their transfer pricing (TP) obligations. Overall, comments from the public were supportive.

Sars has now released a proposed model for establishing the APA programme, as well as draft legislation (proposed model). In preparing this, Sars did take on board comments made on the previous discussion paper. We welcome the publication of this much-awaited draft as it demonstrates Sars' commitment to provide certainty for taxpayers in a complex and subjective area of taxation. The proposals are also a positive step towards avoiding costly TP disputes for multinationals operating in South Africa.

While this is a welcome development, we are a little sceptical about the timing of the implementation and the process outlined in the proposed model. Sars does not have a good track record in negotiating TP matters under the existing mutual agreement procedure.

APAs

Sars intends to put a pilot programme in place as soon as the enabling legislation has been passed. Interestingly, Sars has shied away from considering unilateral APAs, indicating it will only consider bilateral APAs as part of its pilot project. The proposed pilot also suggests that Sars will only accept APA applications under its pilot programme with OECD member countries. It hopes to gain valuable experience, learn from other jurisdictions, and expand its capacity before it introduces the full programme or accepts multilateral APA applications. Given this intention, it is likely that the initial bilateral APA applications will be with foreign revenue authorities that have historically demonstrated their willingness to share insights and experience with Sars.

This is disappointing on two fronts. Firstly, a unilateral APA could provide a valuable extension to the existing alternative dispute resolution process to provide taxpayers with some certainty on open years following the resolution of an audit. Sars will also not allow the outcome of an agreed APA to be rolled back, ie. to have the negotiated position in the APA applied to similar historical transactions as part of an audit resolution. This is unfortunate, as both the unilateral APA and rollback are likely to be more efficient to negotiate and can be used in settlement negotiations, providing much-needed prospective clarity and finalisation of costly TP disputes for taxpayers.

Secondly, many South African-based multinationals experience TP audits into transactions with other African jurisdictions. Resolution of these is often one-sided, resulting in significant unrelievable double taxation.

The proposed model observes that the main impediment in establishing a workable APA programme is the lack of TP expertise in South Africa. Negotiations on an APA should be undertaken by a team independent of the TP audit teams. However, due to this lack of TP expertise, there will be an exchange of expertise and staff between the two teams in the early stages.

Boundaries

This creates some concern, as it will be essential for Sars to establish clear boundaries between the APA unit and the TP unit to prevent information shared during the APA process from being used in a TP audit, notably if the initial application by the taxpayer is rejected for an APA by Sars. Sars personnel involved in an APA process should not be involved in a TP audit on the transaction which is the subject of the APA.

Access to information disclosed during an APA process should be restricted and available only to the Sars officials involved in the decision-making relating to the APA application process. If the APA process is unsuccessful, information shared during the process should not be used to audit the transaction or multinational group. As Sars has indicated it will require substantive information to be supplied in the pre-application process, establishing these boundaries could create a challenge for Sars. We therefore hope that Sars will implement the correct measures to ensure such information will not be shared with the rest of Sars, including with the other members of the TP unit.

An APA will consider a specific transaction and the most appropriate TP method to test that the pricing (or resulting profit achieved) is arm’s length. It provides certainty of relief from double taxation by ensuring the appropriate allocation of profit and, if necessary, any compensating adjustments to ensure no double taxation is suffered.

Critical assumptions

The APA will contain, among other things, "critical assumptions" that should apply to the affected transactions. We hope that Sars will provide more guidance on the scope of what they would accept as critical assumptions. Examples of critical assumptions include assumptions of economic conditions, functions and risks of enterprises involved in the affected transaction, or interpretations of South African and foreign tax law.

The draft legislation provides for taxpayers who have entered into APAs to submit "compliance reports" to Sars within 60 days of the end of the tax period within the duration of the APA, or from the date of termination of the APA. These reports should confirm that, among other things, circumstances in the relevant year are unchanged from those in the APA application. They should demonstrate compliance with the terms and conditions of the APA, and confirm that the critical assumptions in the APA have been complied with. It is uncertain whether these compliance reports would also be provided to the foreign tax authority and what would happen if the foreign tax authority disagreed on whether the critical assumptions have been complied with. This begs the question as to how successful the programme will be, especially if and when it is extended to all South Africa's treaty partners.

The draft legislation also enables Sars to terminate an APA retrospectively and sets out various instances when this could occur, for example, if the effect of the APA "will materially erode the tax base and it is in the public interest to withdraw or modify the APA retrospectively" or there is a breach of critical assumptions.

Sars can terminate an APA if a court overturns or modifies an interpretation of legislation on which the agreement is based. In that case, the agreement will cease to be effective from the date of judgment unless

  1. the decision is under appeal;
  2. the decision is fact-specific and general interpretation upon which the APA was based is unaffected; or
  3. the reference to the interpretation upon which the APA was based was obiter dicta.

It will be interesting to see how an APA can be impacted by future decisions as affected transactions are usually very fact-specific.

Webber Wentzel will be providing submissions on the proposed model and draft legislation to Sars by the due date, which is 31 January 2022.

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Unlocking a green future through technology

Existing and new technologies are pivotal to address the climate change crisis. In fact thinking outside of the box about potential green technology solutions is critical if governments are to achieve net zero by 2050.

Blockchain and IoT

For instance, blockchain technology and the Internet of Things (IoT) are not necessarily front of mind as being technology solutions that can be leveraged to transform practices in the energy sector.

However, because blockchain technology is immutable and agile in supporting automated, transparent transactions, and because of the interconnectivity of devices which underpins the IoT, there are many use cases for these technologies in addressing climate change.

One such use case pertains to monitoring and reporting on greenhouse gas (GHG) emissions.

Existing processes for monitoring GHG are frequently inept at capturing accurate information and providing adequate tracking and reporting.

Blockchain technology can be used to centrally record and track data gathered by IoT sensors, drones or robots, with the key benefit being that the information gathered will be far more accurate than data which has traditionally been manually collected.

Role of technology

The role of technology in transforming unsustainable systems, structures and practices is recognised in the United Nation's Sustainable Development Goals (SDG).

SDG 9 encompasses industry, innovation and infrastructure targets, and SDG 17, deals with the strengthening of global partnerships to achieve sustainable development, including through financing developing countries and sharing knowledge, expertise and technology.

There is an abundance of opportunity for technology companies, entrepreneurs and innovators to create new and innovative solutions to enable and accelerate a green future.

Collaboration required

The creation of such advanced technologies often requires collaboration amongst multiple parties.

Whilst a software developer may have the technical skills to write the necessary code, it may be that an investor is needed to fund the development.

Naturally this leads to various negotiation points, one of which is the ownership of the intellectual property in the new technology solution.

This is one of the most hotly debated points of negotiation in any research and development or joint venture arrangement.

Given the vital nature of a successful innovative solution to address climate change, parties will certainly be vying for ownership rights, and the agreement between the parties will need to be carefully drafted to cater for this.

Licensing arrangements

In addition, because the effects of climate change transcend borders, many new technology solutions will or should ultimately be commercialised offshore.

We foresee many cross-border licensing arrangements being negotiated by those that are first to market with new clean technology solutions.

Parties importing or exporting intellectual property into or from the Common Monetary Area (being eSwatini, Lesotho, Namibia and South Africa) will need to pay careful consideration to adhering to the South African Reserve Bank's exchange control regulations.

Stepping up to the challenge

We remain positive and hopeful that the hundreds of governments and companies that have made net zero commitments will step up to the challenge.

These institutions have billions of dollars at their disposal to invest in new technologies.

As stated by the Prime Minister of Barbados, in the last 13 years, the central banks of the world's wealthiest nations engaged in $25tn of quantitative easing.

Astonishingly, of that amount, $9tn was used to fight the Covid-19 pandemic.

Win-win solution

It is now time for wealthy nations and organisations to mobilise funds to create technology solutions that can be used to fight global warming.

In our view, the winners will be those organisations and businesses that can deliver rapidly scalable, affordable solutions that can be deployed internationally.

However, the ultimate winners will be all of us who live on this planet, particularly those individuals and communities who are in dire need of drastic action to be taken to address basic human needs such as access to clean water and reliable energy supply.

It's a win-win situation for innovators and for society at large.

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Today vaccinations for ages 12 - 17 years old begin

From today young people aged 12 to 17 years old can register and get vaccinated with the Pfizer vaccine without the consent of their parents or guardians.

This is in line with recommendations from the Ministerial Advisory Committee on Vaccines and follows the announcement made by Minister Health Dr Joe Phaahla last week.

With most of this age group at secondary or high school level, this will be beneficial as schools are preparing for end year examinations to conclude the academic year.

“Due to preparations for final year examinations, there won’t be any special vaccination sites at schools for this age group now,” says the Department of Health.

The department encourages parents, caregivers and legal guardians to assist eligible young people to register and vaccinate at their public or private nearest vaccination site.

No consent needed

The Children’s Act 38 of 2005 provides that children over the age of 12 years can consent to their own medical treatment or that of their children, provided they are of sufficient maturity and have the mental capacity to understand the benefits, risks, social and other implications of the treatment.

However, the department recommends that parents have open discussions with children about the benefits of Covid-19 vaccine to make an informed health choice, and possibly accompany them when they present themselves at vaccination sites.

Vaccination of young people from the age of 12 years is a global phenomenon of which the parents should not be too concerned about it.

Vikash Singh, Clicks managing executive agrees.

“Research has shown that vaccines are safe and effective and I urge parents to use this opportunity to discuss the benefits of vaccination with their children."

“This cohort will add another six million eligible people to the vaccination pool, which is imperative if we want to avoid another hard lockdown and lessen the impact of a fourth wave in December,” says Singh.

Avoiding another lockdown

Clicks has administered almost 1,5 million jabs out of the 20 million vaccinations administered across the public and private sectors in South Africa.

During the recent VOOMA vaccination weekend, Clicks administered 17,254 vaccinations across 500 sites, but has seen a significant slowdown in vaccinations since.

Singh attributed this to vaccine hesitancy and misinformation.

“With less than 30% of the adult population vaccinated, we need to do everything we can to protect our vulnerable populations who are most at risk, such as the elderly and those with co-morbidities,” he says.

“Last year we could not safely visit our grandparents and loved ones over the festive season due to the pandemic. Let’s make this year different, and help build a healthier future for all,” Singh adds.

As with adults, all eligible children should bring along South African ID cards, Birth certificate with registration number, foreign passport or any verifiable asylum/refugee proof of identity bearing the name of the child for purposes of registering on the EVDS.

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Be prepared - employment equity changes are coming next year

South African businesses may be in for a major mandatory paradigm shift as of next year as it has been announced that the Employment Equity Act of 1998 is being amended. The Department of Employment and Labour hopes that the amended act will take effect in 2022. Employer branding agency Universum unpacks some of the finer details and possible pitfalls.

One of the major changes in the works is that the employment and labour minister will have the authority to set specific employment equity targets for different business sectors. Different occupational levels, sub-sectors or regions can also be determined by the minister.

According to the ministry, the aim of the new legislation is to put revised rules into place for business dealings with the government and to reduce the regulatory burden on small businesses.

Ntsoaki Mamashela, the department’s director of employment equity says, “The expected introduction of five-year sector targets will mark the beginning of a clean slate. All current employment equity plans will fall away on 22 September 2022, and the new plans will have to be aligned with five-year targets. Self-regulation has not worked.”

It has been clarified that sector engagements on sector targets, which began in 2019, will continue. Several sectors, including mining, financial and business services, wholesale and retail and construction have already been in talks. The new EE Bill is now expected to go to the National Council of Provinces for consideration.

According to the government page, the amendment of the EE Act of 1998 is intended:

  • To reduce the regulatory burden on small business
  • To empower the Employment and Labour Minister to regulate sector-specific EE numerical
  • To promulgate section 53 of the EEA for the issuing of the EE Compliance Certificate

All 18 economic sectors had already been engaged by 30 June 2021, an agreement has been reached with the financial and business service sector. Written responses to the proposed sector employment equity targets have been submitted by the remaining 17 sectors and are being analysed by the department. Follow-up engagements will take place until a consensus is reached.

“It is envisaged that the sector engagements will be concluded by February 2022 with proposed targets,” Mamashela added.

Is there cause for concern?

Some sectors have warned that the new targets could be a disadvantage to the economy, despite other sectors welcoming the proposed changes.

According to news sources, Telkom’s Siyabonga Mahlangu told parliament in April that it was already a challenge to make appointments and the new targets will be even more difficult to attain. He added that South Africa was already facing a tough economic climate.

“The unilateral imposition of targets by the minister – which may not be practically implementable by electronic communications, operators and industry stakeholders – may have the unintended effect of threatening existing jobs in a difficult economic climate.”

AgriSA’s Christo van der Rheede added his voice to the concerns, stating that although lack of transformation in the agricultural sector needed to be acknowledged, sector-based consultations needed to take place as the employment and labour minister was being given too much power.

“The imposition of one-size-fits-all approach for targets would unlikely achieve the results we all yearn for. The agricultural sector is faced with a skills gap, and this remains a challenge in filling critical posts in the sector,” he said.

Pabi Mogosetsi, employer branding advisor and country manager for Universum South Africa comments, “In challenging economic times, business at large in South Africa is collectively holding its breath to see the ultimate effects of the new legislation in action. Whatever those effects may be, however, it would seem that the change is inevitable – whether it proves to be economically sustainable or not”.

She concludes, “Businesses should brace themselves for the change and now is the best time to start preparing for readiness. The Department of Employment and Labour's changes could result in closer scrutiny in terms of compliance and it is critical that employers are mindful of what’s to come”.

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Employers warned against Employment Equity Act non-compliance

The Department of Employment and Labour in the North West has cautioned employers against non-compliance with the Employment Equity Act (EEA). The warning came during the department's annual employment equity workshop for the province, which was held virtually on Thursday, 23 September.

The workshops are being held under the theme: “Real transformation makes business sense”.

Speaking during the session, the provincial chief inspector, Boikie Mampuru, said most of the challenges they experience during their reactive/proactive inspections are that of employers amending Approved Employment Equity (EE) plans without informing the department, and employers providing incorrect information on their EE reports, plans, analysis and EEA 7, among others.

For the 2020/2021 financial year, the Inspection and Enforcement branch in the province had 110 EE focused inspections, which were either reviews/re-assessment or monitoring.

Of the 61 reviews conducted, 19 were still non-compliant and were issued with the director-general’s recommendations, which gave them 60 days to comply. In addition, one from this 19 was referred for prosecution.

“Some of the reasons given for non-compliance are that employers would claim to have lost documents when contract with consultants or the EE manager resigned, or employers confusing accounting officers (CEO) with financial directors or office managers.

“These are minor but serious transgressions that can have the compliance certificate withdrawn,” Mampuru said.

Updated EE amendments, sector targets

This workshop was part of the department’s plan to give an update on the EE amendments and EE sector targets.

The EE amendments are currently in parliament for processing and are expected to become an Act once all the necessary processes have been finalised by March 2022.

The Amendment of the EE Act of 1998 is intended to reduce the regulatory burden on small businesses; empower the employment and labour minister to regulate sector specific EE numerical goals and to promulgate section 53 of the EEA for the issuing of the EE Compliance Certificate.

These workshops started early this month in all the provinces. The remaining province is Mpumalanga and its workshop is scheduled for Tuesday.

Meanwhile, the EE reporting season for both manual and online reporting opened on 1 September 2021. The manual EE reporting period closes on 1 October 2021 and the online period closes in January 2022.

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Are your remote working policies in accordance with the law?

Judging from what employees around the world are saying in surveys, many want to continue working from home, or remotely at least some of the time, and are reluctant to go back to the office full time. There have even been reports of employee resistance to back-to-the-office calls by employers in certain countries where Covid-19 vaccination programmes have reached an advanced stage and workplaces are ready for pre-pandemic occupation numbers.

South Africa is still dealing with the pandemic, so it is unlikely that employers in general have made firm decisions about whether to go back to the office, move permanently to remote working or aim for something in between, such as a hybrid working model.

If and when they do make such decisions, employers would do well to remember that any workplace changes they make (beyond those currently necessitated by the pandemic) will have to be done within the confines of the law.

Point of no return

The workplace as we have traditionally known it is rapidly evolving and is, in many instances, unlikely to exist in its previous form ever again, but the fundamental legal principles that regulate employment relationships and employment contracts generally remain the same. This means the methods or approaches an employer uses to bring about workplace changes within the confines of the law are, or ought to be, the same as those used in the traditional workplace.

Although a move to remote or home working is generally considered a win by many employees, it could have implications for traditional employee benefits such as car and travel allowances, as well as for information security, intellectual property, health and safety and other compliance matters. Employers will also need to grapple with how to deal with personal expenses, such as internet access, incurred by employees as a result of working remotely and how to deal with issues of equipment that employees may not readily have at home.

There are two main legal principles employers would need to consider when moving towards making remote working a permanent arrangement: any desired changes must be implemented fairly, and changes must be implemented in accordance with applicable laws – which do not stop at the office door.

The law reaches beyond the conventional workplace

Employers need to consider their health and safety obligations towards employees in terms of the Occupational Health and Safety Act, which requires an employer to, among other things, do everything reasonably practicable to protect employees’ health and safety in the workplace. In this regard, the employer’s obligations to ensure the health and safety of its employees extend to where the employee is working outside of the conventionally understood workplace, including the home office.

Similarly, loss of vital data and intellectual property and breaches of security may have far-reaching consequences for a business whose employees work remotely. There are additional obligations with the Protection of Personal Information Act (PoPIA) now in full force, and there will be further obligations once the commencement date of the Cybercrimes Act is announced, both of which will be of particular importance for remote working.

Then there’s the Basic Conditions of Employment Act, regulating working hours, overtime, annual leave, sick leave and the like, all of which need to be considered and applied whether employees work in the office or at home.

Generally, consult first

As a general principle, a contract of employment, like any other contract, is consensual and so any contractual changes must be agreed to by the parties to the contract. An employer moving towards new post-pandemic working modes would therefore (in most cases) need to consult with its employees before making any changes to their employment contracts. There are, however, exceptions to this general rule and employers may not always be required to engage in extensive consultations in respect of the desired changes.

The nature and extent of such consultations would depend on factors such as the size of the workforce being impacted, the nature of the work the employees are doing and, most importantly, the nature and overall impact the proposed changes would have on employees’ current terms and conditions of employment. The overriding principle is that any changes ought to be implemented in a manner that is both substantively and procedurally fair.

If consultations are required in respect of changes to working conditions, such consultations would either be with the employees themselves or, if the employer’s workforce is unionised, with union representatives. In a unionised working environment, an employer would also need to ensure that it complies with its obligations in terms of any collective bargaining agreement regulating working conditions.

When it comes to implementing the desired changes, employers should ensure that these are implemented fairly across the board and that there is no unfair discrimination. If there is any differentiation of working conditions, the employer must be able to justify these based on operational reasons (for example, where only some are able to work remotely, and others are required to come into the workplace due to the nature of the work being done).

Employers who wish to change their entire operations to a remote working structure should also be mindful of employees who may not have the means, infrastructure or a conducive environment to effectively perform their services from home (despite that it is possible).

Manage the challenges and reap the benefits

Working from home has pros and cons for employers and employees alike and is likely to become a prominent working model in a post-pandemic world. A good place to start in bringing the benefits of remote working to the fore while managing the challenges that come with them, is for employers to look to making any required changes to the employment contracts, as well as developing a remote working policy to regulate new working arrangements.

Even if employees are overwhelmingly in favour of making working from home a permanent feature, any changes to terms and conditions of employment must be done in accordance with applicable law.

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Statistics show vaccine benefit

Evidence from Momentum Life Insurance's claims experience shows that a vaccination is the best solution to the Covid-19 problem. These statistics provide a view of the impact this virus has had on the South African insured population as well as the positive effect of the vaccination rollout.

The insurer provided a window into the impact Covid-19 has had and will have on life insurance claims based on insights from a significant life insurance market share.

For 2021, until the end of July, Momentum has paid close to R1.4bn for another 842 Covid-19 related death claims, which shows the devastation inflicted by the second and third waves – and without a clear end in sight for the third wave. Of the R5.5bn in claims paid in 2020, over R370m was for 217 Covid-19 related death claims.

“Getting vaccinated is the best thing any South African can do to protect their families, themselves, and our nation’s economy. Our claims experience proves first-hand that the vaccines work,” says Jenny Ingram, head of product development at Momentum Life Insurance.

To provide perspective, Ingram says respiratory death claims (in which Covid-19 is categorised) formed the third highest number of claims in 2020, representing 19% of their 2020 death claims. However, respiratory complications had seen a dramatic increase of 145% from the previous year.

“This increase is directly linked to Covid-19,” says Ingram. “Another interesting trend that was observed during 2020, was the fact that high value death claims of R10m or more, almost doubled from the year before.”

Effect on critical illnesses

“As we battle the impact of the third wave of the Covid-19 pandemic, statistics clearly indicate that the fear of contracting the virus prevents many people from consulting with their doctors or specialists regarding treatment for the most prevalent chronic diseases in the country, which our statistics reveal as cardiovascular disease, cancers, diabetes and chronic respiratory diseases,” she says.

This trend is also highlighted by The Hospital Association of South Africa, which mostly represents private hospitals, which shows that, on a global scale, the number of new oncology patient registrations has decreased by 50% year-on-year during periods of severe Covid-19 increases in countries with established oncology care programmes.

“In all likelihood, this will result in an unusual increase in the number of claims for critical illnesses going forward,” she says.

Income protection claims down

From an income protection point of view, from March 2020 until July 2021, Momentum Life Insurance has paid 902 Covid-19 related income protection claim payouts to a total value of more than R20m.

Although medical professionals made up the bulk of income protection claims in the first wave of the infections, this number showed a steady and remarkable decrease as the country moved through the second wave and into the third.

This number went from 60% in the first wave, to 48% in the second wave to 34% in the third wave (thus far).

“I am confident that this has predominantly been driven by the fact that our healthcare workers were receiving COVID-19 vaccinations as part of the Sisonke trial,” says Ingram.

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Vinpro heads to court to fight ongoing alcohol ban

The court case whereby Vinpro contests the approach followed by government towards liquor ban restrictions within the Disaster Management Act is set down for hearing in the Western Cape High Court from 23 to 26 August 2021.

Despite all of the setbacks the South African wine industry has had to endure over the past 17 months, Vinpro has not backed down from the fight to fully reopen and rebuild the industry.

Three particular points will be argued including Vinpro’s structure of government argument, an interim application asking to take evidence regarding the third wave into account, as well as the issue of mootness since the ban has been partially lifted.

"Since the start of this pandemic we have argued that the provinces, not National Government, should decide whether or not to impose liquor restrictions and should do so with reference to provincial circumstances, including the need to preserve capacity in trauma units in hospitals in the province," says Rico Basson, Vinpro MD. "We know provinces are affected differently by the pandemic, therefore we believe a differentiated approach in handling the crisis is needed to limit the economic impact of a lockdown.”

Vinpro launched its legal application during the second wave in January this year and has now also approached the court to include evidence for the way in which the blanket liquor ban missed its purpose during the third wave.

"While we have challenged Government’s decision by way of an urgent interdict application and hearing on 21 July 2021, the matter was subsequently rendered academic because the ban was partially lifted four days later. In an interim application we now ask that this evidence should also be taken into account."

National government’s respondents have opposed the application to introduce such further evidence. This opposition is mainly based on their argument that Vinpro’s application is moot, since the ban has been lifted, says Basson. "However, we have seen how government has dealt with the previous liquor bans. A blanket ban is imposed repeatedly and with a fourth wave likely to hit the country in December, this issue most certainly is not moot.

"Wine is part of agriculture, as is tourism. Our industry supports 80,183 people working at farm and cellar level and 188, 913 people working further down the wine value chain. This industry has built a strong brand reputation as a unique asset for the country. The South African wine industry is more than a drink, it’s a livelihood. And it is our responsibility to make sure we save this industry for future generations," says Basson.

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Covid-19: Data privacy concerns of vaccination statuses - part 1

The Covid-19 pandemic has brought significant changes in the way that ordinary people attend to their daily activities. Initially, the changes in behaviour were abrupt and disrupting, but as time progressed it seems as if the changes necessitated by the Covid-19 pandemic have slowly but surely become part of our daily routine.

In a similar fashion, commerce, industry and businesses have become accustomed to functioning within a pandemic environment. In South Africa, the Disaster Management Act 57 of 2002 (the DMA), the Labour Relations Act 66 of 1995 (the LRA) and the Occupational Health and Safety Act 85 of 1993 (the OHSA) have been amended and applied with great agility in order to ensure that employers and employees are well aware of their rights and obligations relating to the employment relationship within the greater Covid-19 pandemic environment.

Enter, however, two new participants to this mix and the apple-cart does not seem as stable as it did in first half of 2021, particularly insofar as it relates to the employment relationship.

The newcomers represent competing challenges which require serious consideration, namely: (i) Data Privacy Requirements and (ii) The National Vaccination Roll Out and Strategy.

Data privacy requirements

The Protection of Personal Information Act 4 of 2013 (PoPIA) has come into full force and effect on 1 July 2021, after a 12-month grace period was allowed for businesses to implement the necessary processes and policies to be compliant with the provisions of PoPIA.

The main objective of PoPIA is to promote the protection of personal information processed by public and private bodies by, among others, introducing certain conditions for the lawful processing of personal information so as to establish minimum requirements for the processing of such information.

PoPIA also introduces the concept of so-called “Special Personal Information” (SPI) which is defined as the religious or philosophical beliefs, race or ethnic origin, trade union membership, political persuasion, health or sex life or biometric information of a data subject or the criminal behaviour of a data subject.

The national vaccination rollout and strategy

The South African government, as many other governments worldwide, has undertaken the massive task of sourcing, distributing and overseeing the roll-out of the vaccine against Covid-19. To this end, a national register for Covid-19 vaccinations was established and the vaccination system is based on a pre-vaccination registration and appointment system. All those vaccinated are recorded in a national register and provided with a vaccination card.

Internationally, a trend has formed in many developed countries requiring a vaccination card to be presented before individuals are allowed to travel, enter public spaces and before being allowed to enter the workplace.

In South Africa, however, we have not reached this point yet. The DMA, LRA and OSHA do, however, place an obligation on the employer to ensure that it provides a safe workplace for employees and the public.

Furthermore, the Department of Labour has issued the Consolidated Direction on Occupational Health and Safety Measures in Certain Workplaces (the Direction), dated 11 June 2021, which allows employers to adopt a mandatory vaccine policy.

Such a mandatory vaccine policy, however, must allow an employee to refuse to be vaccinated on constitutional grounds, such as the right to bodily integrity and the right to freedom of religion, belief and opinion, or medical grounds. If an employee refuses to be vaccinated, the employer must take steps to reasonably accommodate the employee in a position that does not require the employee to be vaccinated, in order to enable the employee to remain employed at the organisation, which might include allowing the employee to work offsite or at home, or to work in isolation from other employees.

Therefore, the South African law does not yet allow an employer to limit or refuse an employee their employment entitlements purely based on their vaccination status.

Competing challenges: Vaccination status v data privacy

It seems, therefore, that employers may be stuck between a rock and a hard place. On the one hand, the employer has an obligation to protect the personal information of its employees in terms of the provisions of PoPIA, whilst, on the other hand, international trends seem to indicate that, unless you disclose your vaccination status by way of presenting your vaccination card, certain social liberties will be withheld from you. Furthermore, employers are required in terms of the DMA, LRA and OSHA to provide a safe working environment for all of their staff.

All the while, however, employers are only empowered by the Direction with the ability to adopt a mandatory vaccine policy, which upon deeper reflection, is not truly “mandatory” in the sense of the dictionary definition of the word at all.

The question, therefore, arises as to how an employer is to deal with the personal information of their employees relating to their vaccination status.

Given the inclusion of personal information relating to an individual’s health as SPI in terms of PoPIA, employers will be required to be extremely circumspect with how they intend to deal with the collection, processing and dissemination of their employees’ vaccination status.

PoPIA is very clear in its provisions that SPI may only be processed in the event that:

  • processing is carried out with the consent of a data subject (i.e the employee);
  • processing is necessary for the establishment, exercise or defence of a right or obligation in law;
  • processing is necessary to comply with an obligation of international public law;
  • information has deliberately been made public by the data subject (i.e the employee); or
  • processing is for historical, statistical or research purposes to the extent that –
    • it serves a public interest and the processing is necessary for the purpose concerned; or
    • it appears to be impossible or would involve a disproportionate effort to ask for consent, and sufficient guarantees are provided for to ensure that the processing does not adversely affect the individual privacy of the data subject to a disproportionate extent.

As such, in order for an employer to collect, process or disseminate personal information regarding its employees’ vaccination status, the employer would have to comply with the provisions of PoPIA in respect of the processing of SPI.

As per the above, the South African law does not yet require employers to process the vaccination status of their employees as an obligation of law. As such, it would be of the utmost importance that employers obtain the consent of employees in order to collect, process and/or disseminate their employees’ vaccination status.

In this regard PoPIA requires such consent to be a voluntary, specific and informed expression of will in terms of which permission is given by the employee to the employer for the collection, processing and dissemination of the personal information of the employee.

In part 2 of this two-part series, we’ll look at practical implications.

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Competition in Africa's digital economy

Digitalisation has ushered in an era of hyper-connectivity, marked by disruptive digital platforms that operate on a global scale. According to Refinitiv data, 37 cross-border merger and acquisition (M&A) deals in Africa were announced in the technology, media and communications (TMT) sector in the first half of 2021, valued at $768 million. The growth of the digital economy across the continent has naturally been accelerated by the Covid-19 pandemic and this unabated demand for technology has caused extensive cross-sector disruption in the financial, energy, transport, retail, health and agricultural sectors.

There is an appreciation that digital markets are characterised by, among other things, multi-sided platforms, large returns to scale and complex network effects. As a result, competition authorities are increasingly presenting novel theories of anticompetitive harm, which, unlike those in the more traditional markets, are yet to be tested.

From an African perspective, this dynamic evolution of markets presents an opportunity to drive structural transformation and development, as market participants integrate to reach consumers and suppliers that would otherwise be inaccessible. To achieve this, competition authorities must balance the importance of upholding the regulatory process with the promotion of innovation and investment. The common themes related to merger control, abuse of dominance and cartel conduct in Africa point to the nexus between competition regulation and the digital economy.

Merger control

The effectiveness of merger control as a means of furthering competition policy objectives is dependent on the competition authorities’ ability to avoid two types of errors - false positives, which occur when a merger that should have been permitted is blocked; and false negatives, which occur when a merger that should have been prohibited is approved and consequently, implemented.

Competition authorities increasingly perceive false negatives as being a more probable eventuality in the context of digital transactions, suggesting that there has been inadequate enforcement in this sector. The question is whether competition authorities are adequately equipped and resourced to consider mergers in digital markets.

Market definition

Market definition is becoming more intricate in the evolving digital era, especially in relation to so-called zero-price markets where users of products or services do not pay money for their use, such as social networks.

Further, in market environments with two-sided platforms, the question is whether the relationship between the platform and the respective market sides can be considered separate markets or whether there is a single market. There is also the issue of whether there are circumstances under which a market can be viewed in isolation of the other side or whether the interplay between both sides ought to always be taken into account.

One of the emerging views is that because market boundaries are difficult to define and change rapidly in the case of platform markets, less importance should be placed on market definition in the competition assessment and more emphasis should instead be placed on the theories of harm and identification of anticompetitive strategies. This view is compounded by the methodological problems associated with applying traditional economic tests when defining digital markets.

Merger thresholds

It is commonplace for mergers to be notifiable and subject to evaluation only where the merging parties meet certain financial thresholds, usually in terms of turnover figures and asset values or market share thresholds. An unexpected consequence of the use of financial thresholds is that mergers with meaningful effects in digital markets may, in certain circumstances, fall well below the prescribed monetary thresholds, with the result that market-altering transactions are able to escape scrutiny by the competition authorities. Compounding this concern is the threat of “merger creep”, where numerous small startups are acquired through transactions that may appear relatively inconsequential on an individual basis but, when considered collectively, may have significant competition implications for the market.

Competition authorities argue that the traditional financial threshold-based approach to merger notifiability may need to be reconsidered and, perhaps, replaced in light of the dynamics of the digital market. South Africa is considering a combination of deal value and market share metrics in this initial assessment around whether the transaction should be compulsorily notified.

Killer acquisitions

A key attribute of digital markets is the acquisition of small startups by large firms. Startups often need to be acquired to access the capital required to scale-up, leading to procompetitive effects. Africa has the fastest growing tech startup ecosystem in the world – going forward, competition authorities will likely pay close attention to determining and distinguishing between procompetitive acquisitions intended to expand or improve product offerings from those that have the object of eliminating competition – also termed killer acquisitions.

In South Africa, this concern has prompted the competition authority to apply greater scrutiny to digital transactions that would ordinarily not warrant notification, and its competition authorities recently published proposed amendments to the Small Merger Guidelines, which call for notification of small merger transactions involving digital market players based on deal value and/or the parties’ market shares.

Abuse of dominance

Competition authorities have identified conduct that, if undertaken by dominant firms, may result in harm to competition. In the context of digital markets, the issue is whether existing theories of harm apply to digital markets or whether new theories should be considered. In addition, it is not clear how certain abusive conduct arising in digital markets will be assessed. In terms of the existing framework, certain conduct is automatically deemed to constitute a breach of competition with no room for the advancement of procompetitive justifications, while others are analysed by reference to the effects of the conduct on competition.

Self-preferencing

Self-preferencing is the act of giving preference to your products or services over those of your rivals. Dominant firms operating in two-sided markets may leverage the market power they possess on one side of the market, to gain an advantage in the other. Competition authorities have identified self-preferencing as potentially harmful competitive conduct that has the effect of entrenching dominance and excluding competitors.

Acquisition of data

The ability to acquire, process and analyse large volumes of data gives dominant firms a comparative advantage in the digital market. Competition authorities are concerned that firms may look to exploit user data to exclude rivals. Given its importance in the digital market, it has been debated whether data can constitute an “essential facility” and, if so, to what extent the refusal to grant access to large datasets may constitute anticompetitive conduct.

In South Africa, a dominant owner of an “essential facility” would risk abusing its dominance if it refuses to grant access to such facility to its competitors where it is economically feasible to do so. There are several difficulties associated with treating data as an “essential facility” and forcing data owners to share it with competitors. Data is ubiquitous, replicable and varies in its value and usefulness. Also, it cannot be guaranteed that the data held by one entity is essential for the market participation of another entity.

Further, placing an onerous obligation on data-rich firms to share data may also enable competitors to reverse-engineer proprietary algorithms and, in so doing, encourage free riding. Ultimately, this will deter investment in large-scale data-collection and innovation into data driven platforms. Additionally, obligations to transfer data to competitors may give rise to data privacy concerns.

Use of algorithms

There is growing concern that algorithms can result in exclusionary anti-competitive conduct and consumer harm. Potential theories of harm include the use of ranking algorithms to, inter alia, manipulate consumer and limit choice, apply different pricing/terms to different categories of consumers; and manipulate platform ranking to exclude rivals.

It is not clear how anticompetitive algorithms can be detected or assessed within the existing framework. In addition, competition authorities are faced with conceptualising whether algorithms that result in more automated processes, can constitute “unilateral” conduct for purposes of the assessment of abusive conduct.

Cartel conduct

Competition authorities are concerned that digital markets have altered the nature of interactions and are questioning whether the use of algorithms can facilitate agreements or coordination on price and other trading conditions in a more efficient way than traditional human interactions.

One of the challenges for antitrust authorities would be demarcating cartelistic flow of virtual information resulting in tacit collusion from mere market transparency and machine learning adaptation to such detected market trends.

Convergence of competition and social policy

Governments around the world have decisively shifted away from the purely economics-based origins of competition regulation, turning instead towards a model that acknowledges and, to an extent, caters to the broader needs of modern society. With digital innovation opening up the economy to many individuals and businesses that were, until recently, excluded from meaningful economic participation, it is likely that public interest imperatives will play a crucial role in the development and implementation of competition law in the digital space.

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SA moves to Adjusted Alert Level 3

The overall decline in new Covid-19 infections means that South Africa can move to Adjusted Alert Level 3 with the associated easing of restrictions on gatherings, movement and the sale of alcohol.

Addressing the nation on Sunday night, President Cyril Ramaphosa said: “Based on the recommendations of the Ministerial Advisory Committee on Covid-19, and inputs from the President’s Coordinating Council, Cabinet this afternoon decided that the country should be moved from Adjusted Alert Level 4 and be placed on Adjusted Alert Level 3.

“This will take effect later this evening once the regulations have been gazetted."

Under Adjusted Alert Lever 3

Vaccine rollout

The president announced that anyone older than 18 will be eligible for a vaccine from 1 September 2021.

In the last few weeks, the country’s vaccination campaign has gained momentum, with more than 240,000 vaccines being administered every weekday. “As a result, we have now administered more than 6.3-million vaccines, with over 10% of our population having received a vaccine dose. This has been possible through close collaboration between government and the private sector and with the active support of other social partners.”

Ramaphosa said in the coming weeks, government will substantially increase the rate of vaccination with an increase in the number of vaccination sites and improvement the vaccination registration system.

He said that the substantial increase in the rate of vaccination will be made possible by improvements in the supply of vaccines.

“Within the next two to three months, we are scheduled to receive around 31-million additional doses from Pfizer and Johnson & Johnson. We are taking decisive action now to secure the livelihoods of millions of people that have been threatened by both the pandemic and the unrest,” he said.

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Unrest leads retailers and malls to temporarily shut up shop

Multiple retailers and shopping centres in Gauteng and KwaZulu-Natal have limited their operations or closed their doors temporarily as civil unrest and looting continues.

The riots, initially sparked by protests against former president Jacob Zuma's incarceration, have led to the deaths of at least 72 people. Ten of these deaths occurred during a stampede at the looted Ndofaya Mall in Soweto on Monday evening.

Many shopping centres in the two provinces have been left empty or in ruins, including Umlazi Mega City in the south of Durban, Watercrest Mall in Hillcrest and Jabulani Mall in Soweto. Naledi Mall in Vosloorus and Brookside Mall in Pietermaritzburg were also set alight on Monday by looters.

Limited trading

Some residents in affected areas in KwaZulu-Natal have reportedly struggled to acquire basic groceries, due to stores being shut as a result of vandalism or as a precautionary measure. Stock shortages have also occurred due to supply chain and logistical disruptions.

Retail group Massmart has been hard hit, as looters made off with goods ranging from groceries, to liquor, electronics and furniture from at least 30 Makro and Game stores. A Massmart distribution centre in KwaZulu-Natal was also destroyed. Stores in affected areas have therefore been shut until the situation improves.

Meanwhile, Clicks has closed more than 200 stores in KZN, Gauteng, and other affected areas in Limpopo, Mpumalangu, North West and the Free State. Dis-Chem also announced the temporary closure of all KZN stores as well as those in Gauteng protest hotspots.

Some of the country’s largest grocery retailers have needed to limit operations in areas where protests are occurring to safeguard property, stock and staff well-being.

In a statement shared with Bizcommunity, David North, chief strategy officer at Pick n Pay, said, “In common with other retailers, some of our stores have been affected by the disruption and damage in Kwa-Zulu Natal and Gauteng. The safety of our customers and staff is always our first priority, and, as a precaution, we have temporarily closed a number of stores in the affected areas.”

Several of the Shoprite Group’s stores in KwaZulu-Natal and Gauteng have been unable to trade due to the threat of damage and violence. “The Shoprite Group strongly condemns the unrest and mayhem in parts of the country where looting and lawlessness broke out amidst protest in KwaZulu-Natal and Gauteng. It is especially damaging after the dire impact of the Covid-19-pandemic on the economy with unemployment at record highs and South African consumers under tremendous pressure and livelihoods under constant threat."

“We denounce the criminal acts of violence, looting and damage to property. It puts the lives and safety of millions of South Africans at risk and brings further food security challenges in South Africa,” the supermarket chain said.

In a statement issued by the Franchise Association of South Africa (Fasa), Tony Da Fonseca, a past Fasa chairman and the CEO of the OBC Group with supermarkets across the country and in vulnerable areas, said that the group lost more than 10 of its stores in KZN and Gauteng.

“Food security is going to be an issue in the coming weeks as retailers are forced to close which will impact all communities across the country. The destruction, not only to retailers and property, but to the very infrastructure and basic services such as supplies to hospitals and water security in the coming days is cause for alarm,” Da Fonseca said.

Woolworths confirmed that some of its stores have been closed due to the protest action, and operations will resume once it is safe to continue to trade. While telecommunications company Telkom announced on Tuesday that it opted to close all its stores across the country as a precautionary measure.

In addition to the large chains, small independent retailers and spaza shops have also been gravely affected by the violent protest action, with some business owners losing the bulk of their stock and equipment.

Security measures "insufficient"

While the deployment of 2,500 members of the South African National Defence Force has commenced to assist the South African Police Service, some business associations have described the government's response to the protest action as inadequate.

Freddy Makgato, the newly elected CEO of Fasa, said, “We are extremely concerned by the insufficient security response that is meted out taking into account the level of violence and destruction taking place. We call on government to make sure that proper security is provided in ensuring that private property, infrastructure and the safety of our people is guaranteed.

"Should this state of affairs be allowed to continue, most and major businesses may not be able to recover and people will in all likelihood lose their jobs and the economy will come to a standstill as it is already in dire straits.”

The National Clothing Retail Federation (NRCF), whose members include TFG, Mr Price, Truworths, Woolworths, Pick n Pay Clothing and Queenspark said in a statement on Tuesday that it:

  • Supports calls for the security cluster of national government to declare a State of Emergency, regionally or nationally;
  • Encourages the president as commander in chief to tenfold ramp up the available security personnel and equipment deployed in crisis areas;
  • Requests consideration that government enforce a hard lockdown of at least 48 hours in key affected zones.

"Further, government is asked to ensure that Sasria administration services and infrastructure are ramped up to speedily process legitimate claims and ensure that the economic impact is not further disrupted by unnecessarily lengthy claims processes and pay-outs," said the NRCF.

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Demerit system for drivers delayed until July 2022

Transport minister Fikile Mbalula confirmed on 1 July that the driver demerit system, which is part of the Administrative Adjudication of Road Traffic Offences (Aarto) Act, will be implemented in July 2022. Mbalula said Aarto will now be introduced in a phased approach to better prepare the public.

The phased approach is made up of four different stages. Phase 1 is from 1 July 2021 until 30 September 2021, Phase 2 is from 1 October 2021 until 31 Decemeber 2021, Phase 3 is from 1 January 2022 until 30 June 2022, and Phase 4 is from 1 July 2022 - the start date of the demerit system.

Each phase consists of planned rollout strategies for Aarto to come into full effect next year in July.

Phase 1: Establishing seven service outlets; enabling the National Administration Traffic Information System to collect Aarto payments at collecting agents; allowing elective options to be processed in infringement agencies and service outlets, and communication and education awareness campaigns.

Phase 2: Coming online of 67 local and metropolitan municipal areas proclaimed for Aarto roll-out; establishment of more than 18 service outlets; adjudication process coming online in all provinces; and the appeals tribunal coming into full operation.

Phase 3: Inclusion of the 144 remaining local municipal areas proclaimed for Aarto rollout.

Phase 4: Points demerit system goes live; rehabilitation programme coming into effect; and the establishment of 20 Aarto self-service kiosks.

  • Everyone will start with zero demerit points.
  • Different amounts of demerit points are to be allocated for different infringements (Schedule 3 of the Regulations).
  • A threshold of 15 demerit points will apply before the licence is suspended.
  • A driving licence will be suspended for three months for each demerit point above the threshold.
  • The holder of the licence may not drive during the suspension period and driving while the licence is suspended is a criminal offence.
  • A licence may be suspended only twice.
  • After two suspensions, any demerits above the threshold will result in the licence being cancelled.
  • The holder will have to apply for a learner's licence after the cancellation.

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SA moves to Alert Level 4 as Delta variant takes hold

South Africa has moved to Adjusted Alert Level 4 for 14 days as the seven-day average of new daily Covid-19 infections nationally has overtaken the peak of the first wave in July last year, and will soon overtake the peak of the second wave experienced in January this year. The virulent Delta strain of the disease is responsible for the spike, President Cyril Ramaphosa said last night.

The Delta variant of Covid-19 is rapidly displacing the previously dominant Beta variant. Gauteng now accounts for more than 60% of new cases in the country and with the exceptions of the Northern Cape and Free State, infections are rising rapidly in all other provinces.

He said the variant is more transmissible, more contagious and there is mounting evidence that people who have had the Beta variant don't have full immunity against the Delta variant. In addition, he said that the measures that were in place under Amended Alert Level 3 were not sufficient to curb the spread of the virus.

The Delta variant has now been detected in five of the provinces, namely the Eastern Cape, Free State, Gauteng, KwaZulu-Natal and Western Cape.

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To ban or not to ban plastic shopping bags? Implications and proposed solutions

Discarded single-use plastic shopping bags (SUPBs) are a growing environmental menace. Dubbed the 'white flower' in South Africa, the negative effects of SUPBs include reducing the aesthetic value of landscapes, clogging waterways, depleting petroleum reserves through their production, and endangering marine life through entanglement and ingestion.

Global carbon emissions from the litter of SUPBs range from 100 to 300 million tons per year. An estimated 8.4 million tons of plastic bag litter contaminate oceans every year. The accumulation of plastic litter in oceans is typified by the Great Pacific garbage patch and the North Atlantic sub-tropical gyre.

The tide of opinion against plastic bags has resulted in most European Union countries imposing a plastic bag tax. In Asia, Bangladesh, India, Taiwan, and China have opted for a plastic bag ban (PBB), while by 31 December 2018, more than 25 African countries had implemented a ban.

In North America, a ban was introduced by states such as California, Hawaii and New York. In Australia, South Australia, Tasmania, and the Australian Capital Territory introduced the ban in Oceania, along with Papua New Guinea. In South America, Brazil (Sao Paulo) and Argentina (Buenos Aires) also introduced a ban. South Africa, however, opted for a plastic bag tax – but it has failed to address the problem of plastic bag litter.

Environmentalists in South Africa are proposing the implementation of a plastic bag ban (PBB) as a policy alternative. A PBB outlaws the manufacturing, importation, and selling of plastic bags that do not meet the required thickness thresholds.

The key questions arising from this proposal include: 1) Should South Africa take the route of banning plastic bags? and 2) What lessons could South Africa draw from other countries that have implemented the ban?

Effects of the ban

  • The ban received widespread support in the Australian Capital Territory; and in Rwanda, a community-based environmental campaign called Umganda was instrumental in the success of the ban. Kigali, Rwanda’s capital city, earned the prestigious United Nations Scroll of Honour Award for being the cleanest city in Africa.
  • A similar ban promoted green consumerism as the demand for environmentally friendly shopping bags increased in California in the USA, and in Italy and Rwanda. Green entrepreneurship has emerged as a promising business opportunity, although it is being tainted by the use of unsubstantiated environmental claims in most developing countries.
  • Public health was enhanced in Kenya because the use of unhygienic plastic bag toilets was significantly reduced.
  • The PBB is generally criticised for causing inconvenience when shopping, failing to consider the influence of shopping occasions, increasing shopping costs owing to expensive alternatives, triggering deviant behaviours such as illegal dumping, imposing an enforcement burden on national governments, and causing negative economic impacts such as job losses and disinvestment from the plastics industry.
  • The objective of promoting ecological modernisation – premised on a circular economy, green growth, saving resources, and efficiency through recycling and green reverse logistics – is far from being realised in countries such as Rwanda, Kenya, South Sudan, and Somalia owing to the lack of recycling infrastructure and of incentives to industry such as subsidies.
  • In Uganda, Kenya, Mali, Bhutan, California, China, and India, enforcement was weakened by the structural power of plastic bag manufacturers. Law suits delayed the implementation of the ban in California, and resistance from Californian businesses resulted in a ‘banning the ban’ campaign.
  • China and India continue to be the largest contributors to sea plastic bag litter, despite their implementation of plastic bag bans. Internationally, the PBB was estimated to affect 62,000 companies, resulting in 1,45 million job losses and a revenue loss of $350bn.
  • Literature reviewed (Clapp and Swanston, 2009; Rivers et al., 2017) pointed to the limited success of a PBB owing to the lack of suitable alternatives, limited state capacity to monitor and enforce the ban, a thriving black market, and the structural and instrumental power of the plastics industry.
  • The power of the industry is revealed by the covert practice of deflecting accountability to consumers by focusing on business-oriented solutions, including an inclination to adopt self-regulation.

So what should be done?

  • There is a need for a global treaty to address the transient nature of plastic bag litter. Such a treaty should move away from the symbolic gesture of targeting only plastic shopping bags to considering the environmental impact of all forms of plastic, such as straws, foamed plastics, and plastic bottles and caps.
  • The criticism levelled against alternatives to plastic bags, such as paper bags and reusable bags, which is based on unsubstantiated environmental claims, is a major concern. To address this problem, the use of independent life cycle assessments to verify the authenticity of such claims is recommended.
  • Literature reviewed suggests that the end of plastic shopping bags is not nigh because of their utilitarian benefits. The promotion of a circular economy that focuses on ecological modernisation, sustainable plastic bag manufacturing, and recovery strategies such as recycling is recommended as a long-term strategy.
  • The adoption of community-driven approaches such as voluntary initiatives, rather than banning plastic bags, is recommended because they have proved to be effective in promoting environmental citizenship behaviours in countries such as Chile, Finland, Luxemburg, and France.

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Vaccinations will open up the country and our economy

South Africa is now three weeks into its rollout of Covid-19 vaccinations to those aged 60 and above, having just completed vaccinating almost 500,000 frontline healthcare workers through the Sisonke Study. The science tells us that mass vaccination programs against Covid-19 offer the best hope of protection against serious illness and death. While the virus continues to present new challenges to scientists and researchers, vaccines offer the hope that the nightmare that has gripped the world since December 2019, may be mitigated and hopefully eventually eliminated in the future as science advances.

We are not unaware that there are still many who are not convinced of the safety of the vaccines or how effective they are in reducing the impact of the disease.

What we know with certainty about vaccines, in general, is that they have historically been used to successfully control and even eliminate the spread of virus-based diseases and epidemics since the late 1700s. These include smallpox, measles, polio, diphtheria, tetanus, pertussis, and influenza, to name a few.

Simple, safe and effective

We do not know of any scientific evidence that shows that vaccines change your DNA. By using your body's natural defenses to build resistance to specific infections and make your immune system stronger, vaccines are a simple, safe, and effective way of protecting people against harmful diseases.

However, all vaccines (and medicines) do have side effects, even the most commonly used paracetamol has them. In the field of medicine, it is accepted that there may be some mild and short-lasting symptoms following vaccination, and rarely serious ones needing emergency medical attention.

With that understanding and acknowledgement that individuals react differently to pharmaceutical interventions including the vaccines, and to understanding and promptly manage the more severe reactions to the Covid-19 vaccine, the tracking of adverse reactions is a crucial part of the rollout. What is termed pharmacovigilance?

This vigilance is also being exercised as a way of building public trust and a safe vaccination environment during this massive national vaccination rollout program, with one of the main objectives being to help develop population immunity against Covid-19. This is achieved when the majority of people in a country develop an immunity to the virus. Therefore if people do not trust the vaccine and refuse to be vaccinated, this will impact negatively on efforts to reach population immunity, and ultimately on South Africa being able to overcome the pandemic.

Benefits outweigh risks

Based on the scientific data from the trials already conducted, we can thus advocate for the safety and use of these vaccines. Many countries have also vaccinated millions of people with a significantly small percentage of individuals reporting serious adverse effects. The benefits of getting a jab still far outweigh the risks of the potential adverse effects, which themselves depend on several epidemiological factors and not just the vaccine itself.

However, since vaccines to control Covid-19 are new, having been developed at an unprecedented pace, there is also rigorous and ongoing monitoring of adverse events at country and international levels. There is global pharmacovigilance by the Centers for Disease Control and Prevention (CDC) and by the World Health Organisation, to mention a few.

We are, of course, still learning about the longer-term impact of vaccines. For instance, we do not know at this stage, how long the vaccines will protect you against the coronavirus. It may be similar to the influenza virus, where one requires a booster each year. We simply do not have any certainty but doing the best we can to act fast based on the scientific information and expert advice we currently have. The global research community is actively looking into this and when more conclusive information is available, this will be shared with people.

Positive impact

The positive impact of Covid-19 vaccinations cannot be ignored. A team of KwaZulu-Natal researchers recently published their findings in The Lancet medical journal, showing that for each person who has been protected from dying from Covid-19, '16.8 life years' are saved.

The Covid-19 pandemic threw the world into disarray. It brought serious illness, death and for some, long term health effects. It threatened to collapse the healthcare sector, and in many countries, it did. Family structures were not spared by this disease and have left many children orphaned and destitute. Based on international collaborations, enabled by amongst others, technology, the scientific community has been able to develop a few vaccines that have been shown to protect us from serious illness and death.

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SA moves to adjusted Covid-19 Alert Level 2

South Africa has moved to Adjusted Alert Level 2 today to combat the rising number of Covid-19 infections in some regions of the country.

In his first family meeting for a while, President Cyril Ramaphosa, said the country was urgently implementing further restrictions on the advice of Ministerial Advisory Committee on Covid-19. "It bases this recommendation on the sustained increase in new cases in the last 14 days; increased hospital admissions in almost all provinces and an increase in the proportion of Covid tests that are positive."

"Further restrictions are necessary to ensure that health facilities are not overwhelmed and that lives that could be saved are not lost," Ramaphosa said.

He said the Free State, Northern Cape, North West and Gauteng have reached the statistical threshold for a third wave, with the rest of the country set to follow shortly.

Over the last seven days, the country has seen an average of 3,745 daily new infections. "The proportion of Covid-19 tests that are positive has more than doubled in the last month from around 4% to more than 11%, even as we have increased testing across the country. We are advised that a positivity rate of over 5% is a cause for concern."

Ramaphosa said that an increase in gatherings was directly responsible for the increased transmission, with funerals and school sporting events highlighted as particularly problematic.

"Delaying the spread of the virus is especially important now to allow as many people as possible to be vaccinated before the third wave reaches its peak," he said.

Vaccine update

The president went on to say that South Africa has vaccinated more than 67% of public healthcare workers.

Two weeks ago, the country started the second phase of the vaccination programme, targeting the balance of health workers, who were not vaccinated during the first phase, and all those in the country who are over 60 years of age.

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How South Africa is tracking adverse reactions to Covid-19 vaccines

South Africa has begun the second phase of its public vaccination campaign, targeting people aged 60 or older. The first vaccinations were given in February to health workers. So far almost 600,000 healthcare workers and members of the public have been vaccinated.

Healthcare workers have received the Johnson & Johnson vaccine, while the Pfizer vaccine is being rolled out as part of Phase 2 for members of the public.

A crucial aspect of the vaccination campaign is tracking adverse reactions.

It's imperative that all health events after vaccination are investigated. All vaccines (and medicines) have side effects. Globally it's acceptable that some mild and short-lasting symptoms following vaccination may happen. But moderately severe and severe side effects aren't acceptable. These need to be fully investigated to understand whether the vaccination was responsible.

It's also important to investigate these events to build trust. If the public understands that all adverse effects following immunisation are taken seriously, and appropriate action is taken, people will have more trust that vaccines are safe.

There has been intense scrutiny of vaccines approved for use against Covid-19. Each has been shown to have different effects - some more serious than others. Most reactions have been mild, going away within a few days on their own. These include mild fever or pain or redness at the injection site. Other side effects include high fever, fatigue, headache, muscle pain, rash at the injection site, chills, and mild diarrhoea.

Allergic reactions are also not uncommon. These are usually mild, but can be severe, though this isn't common. A severe allergic reaction, known as anaphylaxis, can lead to low blood pressure, collapse, difficulty breathing or skin rash. This needs emergency treatment.

More serious or long-lasting side effects to vaccines have been reported, but they're extremely rare. One is a condition known as vaccine-induced thrombosis and thrombocytopenia - blood clots together with low platelets. Symptoms appear between 10 and 14 days after vaccination. Just six cases of the rare clots - in more than 6.8 million doses of the Johnson & Johnson vaccine - were reported by the US Food and Drug Administration.

The World Health Organisation (WHO) has been supporting low and middle-income countries to establish immunisation safety expert committees and other structures to better detect, report and analyse adverse events. This is part of the Global Vaccine Safety Blueprint.

In South Africa, the Minister of Health set up the National Immunisation Safety Expert Committee to investigate and report on adverse effects following immunisation. Until now, the work of the committee has focused on adverse events reported after routine childhood vaccines. SARS-CoV-2 is the first vaccine routinely administered to adults. This has required an expansion of the committee to include people with the right skills.

My insights are gained from being a member of the committee and a public health professional. There is a great deal of anxiety about the safety of vaccines. By fully investigating and understanding adverse events following vaccination, South Africa will not only build trust in vaccine safety. It will also contribute valuable evidence towards global vaccine development.

Investigating adverse effects

Each province and district in South Africa has allocated people responsible for investigating adverse events following vaccination. They usually belong to the Expanded Programme of Immunisation team or the communicable disease surveillance team.

But any health practitioner or member of the public can report an adverse event. This can be done through a 'MedSafety App' or by completing a 'case report form'.

Once the provincial or district teams have been given the medical records of the person who experienced the adverse event, they submit these to the national immunisation safety expert committee. This committee is appointed by the minister of health and includes experts from all clinical disciplines including pharmacists, infectious disease specialists, paediatricians and pathologists.

The committee uses an algorithm created by the World Health Organisation (WHO) to examine what is reported about the event. This includes the patient's clinical details and standard case definitions.

When all the data is put together, the committee categorises the event as being:

  • 'consistent with a causal association to immunisation' (caused by the vaccine). This includes reactions related to a defect in the vaccine and anxiety-related reactions
  • a co-incidental event
  • temporally associated with vaccination but without definitive evidence that the vaccine caused the event

The committee reports its findings to the minister of health, the National Department of Health and the provincial departments of health. Adverse event data and final assessments are then reported into the WHO so that pooled data from countries can contribute to global monitoring of safety signals.

Safety data from vaccine trials has provided sufficient data that vaccines are generally safe. However vaccine trials do not have sufficient numbers of people to detect rare events. Monitoring of vaccines adverse events at country or global level will allow rare events to be detected. If detected, decisions need to be made regarding risk-benefit ratios to decide if the vaccine should continue to be used.

Recourse

All Covid-19 vaccines currently administered are made available through the WHO's emergency use assessment and listing procedures. These set out how health products should be evaluated for performance, quality and safety in truncated timelines.

However, because these are new products, there may be risks. The WHO has therefore advised countries to ensure fair compensation through creation of 'no fault compensation schemes'. This allows for a payout without the need to go to court to establish who was responsible (hence 'no fault'). This makes the compensation process faster and cheaper.

The WHO has provided funds for countries that are beneficiaries of Covid-19 vaccines through subsidised schemes. South Africa is not eligible for this. The government is therefore required to create its own compensation programme.

Details of how the South African 'no fault compensation process' will work are being finalised in new legislation being drawn up. The idea is that individuals who suffered an adverse event would be able to receive monetary compensation following review and investigation of the case.

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Mass Covid-19 vaccine roll out launches, as third wave looms

The next phase of South Africa's Covid-19 vaccine programme rolls out today, as the rates of infection in parts of the country start to rapidly climb.

The next stage comprises Phase 1B, which targets health workers not covered in the Sisonke study and Phase 2, aimed at people over 60.

The Department of Health says that 478,452 healthcare workers have been vaccinated have been inoculated, and that number will increase in the new phase, while Phase 2 will add another 16.5-million South Africans to the vaccine roster.

The number of vaccination sites across the country has increased significantly from 92 to around 3,000 - including private health facilities

The vaccine roster has also been expanded to include South Africans over 60 and over 18s with co-morbidities; those generally considered most vulnerable to the disease.

In addition, anyone who is eligible to receive a Covid-19 vaccine in this phase are urged to register on the Electronic Vaccination Data System (EVDS)

Once registered, people who meet the criteria will be assigned a vaccination date and site to visit where they will either receive the once-off Johnson and Johnson jab - or the first dose of the Pfizer vaccine with another to be taken a fortnight later.

Although the country is not officially in a third wave, there is a concerning upsurge in the infections. The department said last week that Covid-19 infections had climbed 46%, especially in the Northern Cape and Gauteng provinces, although deaths rose 18% in the week, the number of hospitalisations has not increased.

The reasons for the increase include a drop in vigilance in non-pharmaceutical interventions, such as mask wearing and social distancing, and the arrival of more aggressive strains.

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South Africa picks up first cases of coronavirus variant from India

South Africa's health ministry said it had detected the first four cases of a new coronavirus variant that emerged in India and was responsible for a surge of infections and deaths in the Asian country.

Testing had also picked up 11 cases of the variant B.1.1.7 first detected in the UK, the health ministry said in a statement.

"The Network for Genomic Surveillance in South Africa confirmed today that two variants of concern, other than the B.1.351 already dominating in South Africa, have been detected," health minister, Zweli Mkhize, said.

The four positive cases were detected in Gauteng and KwaZulu-Natal provinces, and all had a history of travel to India, which on Saturday recorded its highest ever single-day Covid-19 death toll of 4,187 fatalities.

Of the 11 people infected with the UK variant, eight were found in the Western Cape, Mkhize said, adding that the B.1.1.7 strain was detected in community samples and that this suggested community transmission had already set in.

Africa's worst-hit country in terms of infections and fatalities, South Africa's second wave was driven by its own variant that quickly dominated infections countrywide.

South Africa has ordered tens of millions of vaccine doses from Johnson & Johnson and Pfizer as it looks to ramp up its slow mass vaccination campaign, with only 382,480 frontline healthcare workers inoculated out of a population of 60 million.

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R4.8m Covid-19 contract declared unlawful

A R4.8 million contract awarded by the OR Tambo District Municipality to Phathilizwi Training Institute to conduct a Covid-19 door-to-door campaign has been declared unlawful and invalid by the Special Tribunal.

"The Special Tribunal further ordered the OR Tambo Municipality [in the Eastern Cape] not to pay two invoices amounting to R4,857,600 for the service allegedly rendered by the training institute as part of the unlawful and invalid contract," the Special Investigating Unit (SIU) said on Thursday.

The SIU approached the Special Tribunal to declare the contract unlawful and invalid on the basis that it was awarded without following the procurement procedure and not in compliance with the provision of section 217 (1) of the Constitution of South Africa.

Section 217 (1) of the Constitution states that when an organ of State in the national, provincial or local sphere of government, or any other institution identified in national legislation, contracts for goods or services, it must do so in accordance with a system which is fair, equitable, transparent and cost effective.

The SIU has uncovered evidence pointing to criminal action against three municipal officials.

"The evidence, as required by the SIU Act, was referred to the National Prosecuting Authority (NPA) for further attention. The SIU also made disciplinary referrals to OR Tambo District Municipality against three municipal officials."

"The service provider, Phumza Portia Gambula, together with municipal official, Johnson Phumzile Gwadiso, were subsequently arrested, and both have been released on bail of R20,000 each," the SIU said.

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6 vital cold weather tips for preparing your home for winter

With such a beautiful summer climate that lasts months on end, we're often caught off guard when the weather suddenly changes, and the nights start drawing in.

Use this time before the rigors of winter set in to prepare your house properly, making sure you and your family will be safe, warm, and comfy during the coming chilly days.

1. Clean out your fireplace and stock up on firewood

Fireplaces can be a most welcome experience during winter. It does not require the use of electricity, and wood is relatively inexpensive to stock up on.

Be sure to make time this autumn season for a deep clean of your property's fireplaces by clearing out fallen embers and wood ash that have accumulated over time. Ash can be a cause of allergic conditions, and prolonged exposure may lead to respiratory ailments.

Be sure to clean every nook and cranny of the fireplace, including an annual chimney sweep in order to get the greatest amount of dirt out. Whenever possible, try to use alien species of trees as firewood. This means saving indigenous trees and solving the problem of encroaching species.

Remember, it is not safe to start a fire indoors if the property does not have a chimney for smoke and fire emissions to escape. Failing to do this will certainly be harmful to your health and the health of those around you.

2. Trim tree branches

Generally, the garden would feel the brunt of the cold weather, therefore, the best place for homeowners to start would be outside. Prune any trees and bushes that are encroaching more than 1 meter away from the roof.

3. Use heavy curtains on your windows

Curtains are something most homes have in their closets or they're already hanging in the windows. It may not seem like curtains really help, but if you use them correctly, they can help add a bit of insulation to drafty windows. When the winter wind is blowing hard, close your curtains to keep the drafts out and the heat in. Besides, who couldnt use a bit of extra warmth on those extra blustery days?

Also, the sun is a free source of heat. Why not use that free heat during the day? Open the curtains on sunny winter days and let in the warmth. In contrast, shut those curtains up at night to keep the heat inside. Small changes do make a difference when you are trying to maintain a warm home.

4. Keep things clear

As winter approaches, it's good to check that gutters are clear and that there aren't any leaks that are going unattended. Clear away dried leaves as often as you can to avoid any unwanted kindling for a fire. Some of the gardens are still dry, which poses more risk.

5. Magic carpet

If you have hard floors, rug up - literally. Any distance that you can put between the cold floor and your tootsies will make a difference, so consider covering hard floors with rugs.

6. Layer it up

Soft furnishings and accessories can do wonders for a cold room. A thick pile rug, some textured cushions and a throw are must-have essentials for warming up on winter evenings.

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Sahpra recommends lifting the J&J vaccine suspension

The South African Health Products Regulatory Authority (Sahpra) has recommended the pause on the rollout of the Johnson & Johnson (J&J) vaccine be lifted.

The country's health department put the J&J vaccine on hold, after the US Food and Drug Administration paused the vaccine after reports of six women, out of 6.6-milion doses administered, developed rare cerebral venous thrombosis, with low blood levels of blood platelets.

Sahpra said in a statement that it had engaged with the J&Js Sisonke phase 3B implementation study team and Janssen Pharmaceutica to discuss the safety of the vaccines as well as the adverse findings reported in the US.

'Based on their review of the available data, Sahpra has recommended that the pause in the Sisonke study be lifted, provided that specific conditions are met.'

Healthcare workers participating in the Sisonke study will also be informed about the possible risks of developing a blood clotting disorder after vaccination.

They will also be advised to seek immediate medical assistance if they develop early signs and symptoms associated with blood clots or low platelet counts. The study team will submit the required updated documents, procedures and study arrangements to Sahpra for approval.

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Phase 2 of vaccine rollout set for 17 May

Health minister, Dr Zweli Mkhize, has announced that the second phase of the country's vaccination will begin on 17 May, as millions of doses of vaccine are set to land on South African shores over the next few weeks.

The country has secured a combined 51-million jabs in the agreements that have been signed with various drug makers, to innoculate 42-million people.

  • 31-million from Johnson & Johnson (J&J)
  • 20-million from Pfizer
  • 1.2-million vaccines from Covid-19 Vaccines Global Access, Covax.

"This means we can now move ahead with confidence as we finalise our plans for our mass rollout campaign. We said the second phase should take us six months and therefore, we're still sticking to that," he said, adding that it will be wrapped up in October.

Mkhize said government is still working hard to procure more jabs to ensure that those who may be unaccounted for or undocumented, are also immunised to reach herd immunity.

Healthcare workers

Meanwhile, he said, the final tranche of 200 000 J&J doses for the Sisonke Protocol is expected this weekend.

The protocol has enabled government to make the Covid-19 vaccine immediately available to healthcare workers using a research programme.

Mkhize reiterated that the protection of health workers against Covid-19 is paramount and vowed that government will continue to prioritise their lives.

"I want to say to our healthcare workers, we value you for the work you have done and thank you for your patience as we wait for all the vaccines to be available."

He assured all frontline workers that they will be vaccinated before the mass rollout and believes government will meet its target as more jabs are scheduled to arrive in the country.

Johnson & Johnson

The minister also announced that J&J has confirmed that South Africa will receive over 1.9-million doses, produced locally, this month.

"The advantage is that it has shortened the dispatch from the plant and the delivery to the vaccination centre," he said.

He added that 900,000 doses will be delivered in May, while another batch of 900,000 will follow in June.

AstraZeneca

He said South Africa has distributed the AstraZeneca vaccine to various African countries. In February, the country suspended the rollout of the procured 1.5-million AstraZeneca doses after studies showed that it is less effective against the mutated 501Y.V2, first discovered in the country.

Meanwhile, he said Treasury has confirmed that the Serum Institute of India has fully refunded South Africa for the remaining 500,000 doses of vaccines that have not yet been delivered.

"The money is already in our bank account... this closes the matter of the AstraZeneca vaccine and we close it without incurring fruitless expenditure," he said.

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Government expects to vaccinate 65% of population

Doctors can now prescribe ivermectin to Covid-19 patients, thanks to an order handed down by the Pretoria High Court on 6 April 2021.

The order read that: "Registered medical practitioners who are entitled to prescribe medicines in Schedule 3 of the Act, may, in their professional discretion, prescribe ivermectin to be compounded into a medicine that contains ivermectin as an active ingredient for the treatment of their patients, on condition that the medicine is compounded by the holder of a licence."

Essentially this means that a pharmacist, medical practitioner and any other person registered under the Health Professions Act may sell a medicine that contains ivermectin to a patient on prescription.

Ivermectin, an anti-parasitic veterinary drug, has been used by many doctors to prevent and treat Covid-19, however it was not registered with the South African Health Products Regulatory Authority (Sahpra) for human use.

The authority released a statement in January warning of 'lack of adequate evidence to support its use', that its quality could not be guaranteed because of 'widespread unregulated use', and the lack of any clinical trial. At the same time Sahpra set up the Ivermectin Controlled Compassionate Use Programme Guideline for access to unregistered ivermectin for human use under Section 21 of the Medicines and Related Substances Act.

Loophole

Sahpra registered a product containing ivermectin to treat the skin condition, rosacea on 16 March. This opened the door for the court application, as the Medicines and Related Substances Act requires that only registered medicines can be compounded, this meant the drug could be compounded with other registered medicines, and made accessible in accordance with the act, for the treatment of Covid-19.

As a result, four applications were made to the High Court to compel Saphra to make ivermectin accessible

Judge Cassim Sardiwalla also said in the order that:

  • Unregistered ivermectin-containing finished pharmaceutical products remain accessible under the present programme' through authorised suppliers.
  • A medical practitioner may initiate treatment with ivermectin at the same time as submitting an application for the individual to the South African Health Products Regulatory Authority (Sahpra).

Sahpra and the health minister, Zweli Mkhize were cited as the respondents in all the applications. The director-general of the Department of Health and the member of the Executive Council for Health in Gauteng were added in another application, Sahpra CEO Boitumelo Semete-Makokotla and President Cyril Ramaphosa in a third and the Department of Health in the fourth.

The respondents (without admission of any liability) were ordered to pay a total of R1.8m to the applicants.

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Government expects to vaccinate 65% of population

Health Minister, Dr Zwelini Mkhize, says government remains committed to vaccinate 65% of the population, or 40 million people, as per the original plan by the end of the year to help the country reach herd immunity. This, he said, is owing to vaccine doses being delivered by the manufacturing companies as per the agreed quarterly schedule when the vaccines were procured.

He said this when Ministers in the Social Services cluster appeared before the National Assembly to respond to oral questions on Wednesday.

"We are still targeting many of the vaccines to be administered by the end of the year."

"As we have indicated, we are mindful that some of the supplies can be delayed by the manufacturing companies."

"And therefore, we will be reviewing as we go to see whether that target needs to be altered or not. But in terms of our original plan, we would like to be able to vaccinate as many of those 40 million people by the end of the year," he said.

He said this as the country remains at lockdown alert level one, with 1,477 new Covid-19 infections being recorded since the last reporting period.

Mkhize said government has secured 43 million doses in total.

"Our agreements are currently with Johnson & Johnson as well as with Pfizer. The agreement with Johnson & Johnson is for 11 million does, and 20 million from Pfizer. In addition, the commission to procure 12 million doses from Covax," he said.

The Minister said the delivery schedule of the vaccine from Johnson & Johnson are committed into quarters, not in monthly volumes.

"In other words, at the moment, all we can tell is that by this quarter, this is likely to be how much we will get. Once we have got the matter refined, we will be in a position to know month by month or even week by week supplies of what they will give us. That helps us with the planning of the vaccination programme."

For the first quarter until 31 March, government anticipated 500,000 doses of Johnson & Johnson. Additionally, government anticipates receiving 600,000 doses from Pfizer.

"These doses will be allocated to healthcare workers. Out of those 600,000, about 110,000 of those have come from Covax."

Mkhize said in quarter two up until June, government anticipates to receive eight million doses, of which five million will come from Pfizer and three million from Johnson & Johnson. These will be used to complete vaccination for healthcare workers as phase two.

"In quarter three, July to September, we anticipate receiving 11.6 million doses, and that is about 7.6 million from Pfizer and 4 million from Johnson & Johnson. These doses will be used to complete the vaccination for phase two and a balance for phase three."

"In quarter four, October to December, we anticipate 11 million doses, seven million from Pfizer, four from Johnson & Johnson."

"These doses will be used to complete phase three group. We have not received the final delivery schedule from Covax."

Mkhize also said that government is in the final stages of closing agreements for the balance of the doses required, "which should allow us to roll out the vaccine according to our plan".

"When we have concluded all the agreements and we are in a position to do a month to month breakdown, we will be able to announce that and also, we will be procuring a bit more vaccines so that we cover more people as we have indicated."

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SA moves to Covid-19 Alert Level 1

Due to the progressive drop in new Covid-19 cases over the past few weeks, President Cyril Ramaphosa announced that the country moved Level 3 to Level 1 of the Risk Adjusted Strategy with effect from 28 February 2021.

"The country has now clearly emerged from the second wave. New infections, admissions to hospital and deaths have fallen significantly and continue to decline steadily," he said.

"In the week that has just passed, the country recorded just under 10,000 new infections," Ramaphosa said, adding that in the last week of January, the country recorded over 40,000 new cases.

He outlined the easing of regulations under the more relaxed alert level.

Curfew

The new alert level will come into effect later this evening once the regulations have been gazetted This will mean that: The hours of the #curfew will now be from 12 midnight to 4am.

Gatherings

The move will also result in gatherings-- including religious, social, political and cultural gatherings--being permitted, subject to limitations on size, adherence to social distancing and other health protocols.

Under the new regulations, night vigils or other gatherings before or after funerals are still not permitted while the doors of nightclubs will remain shut.

Sale of alcohol

The sale of alcohol will be permitted, according to normal licence provisions. In addition, no alcohol may be sold during the hours of curfew.

Face masks

It is still mandatory to wear face mask in public under level 1 #COVID19

Borders

The 33 land border posts that have been closed throughout this period will remain closed, while the other 20 will remain open.

Only five airports will be open for international travel with standard infection control measures. These are: OR Tambo, Cape Town, King Shaka, Kruger Mpumalanga and Lanseria airports.

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Steps to ensure Covid-19 compliance in the workplace

In a bid to drastically minimise the rate of infection in the workplace, the Covid-19 regulations of the current level 3 lockdown places a greater responsibility on workplace compliance with fines and jail time being touted for transgressors. But senior legal advisor at Strata-g Labour Solutions, Justin Hattingh says most employers and employees remain unclear on what is required of them to ensure the business conforms to the Disaster Management Act (DMA).

"While we have seen the introduction of fines or imprisonment for not wearing a mask in public, to mitigate infections in the workplace and avoid potential prosecution employers must appoint a dedicated Covid-19 compliance officer. He or she will be responsible for the organisation remaining compliant and accurately capturing and storing the data of people entering the work premises, should contact tracing be required. The compliance officer is also responsible for drafting and executing a pandemic policy," explains Hattingh.

The pandemic policy, while a playbook on how companies can increase their compliance and mitigate the spread of the contagion at work, is not a one size fits all and should be tailored to each organisation to reflect the dynamics of each workplace and its people. To ensure the effectiveness of their pandemic policies, organisations can use the expertise of a qualified external service provider to draft or implement such policies.

Fines or jail time for transgressors

Employers and employees who are not aware of the regulations and requirements for compliance could further transgress and violate other labour-related laws, including the Occupational Health and Safety Act (OHSA), which promotes the health and safety of people in the workplace. Any employer that breaches OHSA can face a fine of up to R100,000 or two years in prison or both. An individual who breaches OHSA could face a R50,000 fine or one year in prison, or both.

Businesses where an employee tests positive for Covid-19 must shut down to sanitise the whole work area before work can resume. This is costly and can negatively affect production, especially in an economy that is as labour intensive as South Africa. To safeguard their organisations, employers can ask employees who have travelled or been on leave to produce a negative Covid-19 test before they can be admitted back into the workplace.

"Employers have the right to ask for a negative Covid-19 test because any member of the workplace can be criminally prosecuted to the fullest extent of the law, if they intentionally expose anyone, including customers to the Covid-19 virus. Under the DMA, employees who get infected while at work have recourse under the Compensation for Occupational Injuries and Diseases Act, and can claim from the Compensation Fund should they be unable to work," explains Hattingh.

"Further, employers must also take into consideration the adjusted curfew that stems from the new regulations. Where possible, employers must accommodate their employees" working hours to ensure they do not violate the curfew, especially employees who use public transport and often must leave their places of residence early to make it to work on time.

Vaccine certificates

Hattingh says while it may be controversial, employers also have a right to request vaccination certificates of their employees once the vaccine becomes available nationally.

"An employer will be within their right to exclude employees from the workplace who cannot produce their vaccination certificate if they have such a clause in their work pandemic policy. But employees can also be exempt from getting vaccinated if they have religious beliefs or medical reasons which are incompatible with vaccination. In such an instance a balance must be struck, and this must be done fairly and transparently, including where applicable, provide reasonable accommodation to that employee."

"But rather than rely on obligating employees to get vaccinated, employers must work on good faith and appeal to their staff to get the vaccine for the sake of compliance and ensuring the viability of the organisation's future. Employers should, therefore, be willing to lead by example. This applies across every segment of compliance necessary to avoid employees and the organisation being crippled by the virus," concludes Hattingh.

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Who holds the IP rights to your social media content?

Social media platforms Instagram, Facebook and TikTok have provided a (sometimes dangerously) easy way for wannabe celebrities to get themselves into the public eye. In past decades, becoming famous, whether it be as an actor, comedian, musician or writer, meant a long, hard slog - and without money or access to influential individuals in the relevant industry, it was virtually impossible.

Today the opposite is true. Anyone can get their creative content into the public domain. All you need is a smartphone, some data and a modicum of talent (although whether the latter is actually a requirement is questionable).

But before you go posting your clips and photos on social media, take a minute to think about a few things.

Firstly, read the fine print - the legal stuff. Every social media platform has a comprehensive, and often onerous, set of terms and conditions that most users agree to without reading.

Many of these T&Cs state that the platform owner does not acquire ownership of any content posted on the platform by users. However, in most cases, by ticking the box saying that you've read and understood the T&Cs, you grant the platform a non-exclusive, fully paid and royalty-free, worldwide license to use, modify, publicly perform, publicly display, reproduce and translate your content, and to distribute it on any media platform.

This essentially means that although you remain the owner of your original content, once you have posted it, the power to control its dissemination essentially leaves your hands.

In addition, social media platforms generate some of their income from advertising sales, and often, by agreeing to the T&Cs, you consent to them placing advertisements on or in your content, without notifying you and without giving you any share in the revenue generated from the advert sales and placements.

From an intellectual property (IP) perspective, there are a couple of things you can do to protect yourself.

You own the IP rights in the content you create and post on social media. Although you give the platform the right to essentially do with that content as they please, it does not mean that anyone else has these rights. Although you probably can't stop other users from reposting your content on the platform, they are not generally allowed to make, publish or disseminate adaptations or reproductions of your content anywhere else or for any other purpose, without your permission.

Consider adopting and registering a catchy and distinctive trade mark for your social media persona. Not only will this assist in distinguishing you from the sea of other users, but a trade mark registration gives its holder a powerful right to prevent others from using the same or a similar trade mark in a similar field.

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South African scientists who discovered new Covid-19 variant share what they know

Late last year the Network for Genomic Surveillance in South Africa (NGS-SA) led by the KwaZulu-Natal Research Innovation and Sequencing Platform (KRISP) identified a rapidly spreading new variant of SARS-CoV-2, the virus that causes Covid-19. The new variant, called 501Y.V2, raises critical questions - including whether current vaccines and treatments will still be effective.

What's the science behind the search?

Viruses classically change continuously, bit by bit. A changed virus is called a "variant" of the original virus; the essential core of the virus remains the same.

Changes in the virus's genetic code are called mutations. The new variant, called 501Y.V2, has acquired 23 mutations, when compared with the original SARS-CoV-2 virus. Importantly, twenty of the mutations cause amino acids changes and eight are located in the spike protein of SARS-CoV-2.

When the mutations or genetic changes are beneficial to the virus, they persist. The changes may allow the virus to survive better or be transmitted more efficiently.

We know that similar variants with many mutations have emerged independently in the UK and Brazil too. South Africa has particularly good research capacity to pick up variants and teams of researchers have actively been looking. Furthermore the NGS-SA consortium followed a tip from clinical staff at a private hospital in the Nelson Mandela Bay in the country's Eastern Cape province. Clinicians were seeing unusual high numbers of COVID-19 cases. This possibly explains why this variant was picked up here so quickly.

Why is this variant worrying?

The concern is that 501Y.V2 may spread much more efficiently between people, compared with other variants of SARS-CoV-2.

The mutations of 501Y.V2 have included changes to a part of the virus known as the spike protein. This virus spike protein hooks onto the human cell via a "receptor" to gain entry into the cells: this is how infection starts. The virus then starts multiplying inside cells. It ultimately gets released by the cells and can go on to infect more cells.

The changes in the spike protein of 501Y.V2 are likely to enhance its binding with human cell receptors, allowing easier infection and greater replication within the host. This may result in greater amounts of virus in an infected person, who can then infect other people more easily. The ultimate result could be quicker spread among people.

Scientists have observed that 501Y.V2 has quickly become "dominant" among multiple variants that have been circulating in the South African population. This strongly suggests the new mutations of this variant offer a transmission advantage. In some regions of South Africa, more than 80% of viruses currently isolated from infected people are now 501Y.V2.

This is likely to mean that most people who are now infected have a coronavirus that is more easily transmissible.

The new variants identified in the UK and Brazil have many similar mutations and potentially similar outcomes. Research confirmed greater transmissibility in the UK.

In addition, new research from South Africa shows that 501Y.V2 may escape antibodies generated from previous infection. This means that antibodies from people who were infected with previous variants may not work as well against 501Y.V2.

The research team used blood plasma from patients who had Covid-19 in the earlier surges to see if antibodies in their blood could neutralise, or make ineffective, 501Y.V2. They found that these patients' antibodies were less able to neutralise 501Y.V2 relative to previous Covid-19 variants in South Africa. About a 6 to 200-fold higher plasma concentration was needed to neutralise 501Y.V2 in a lab setting.

Meanwhile, research from a different group in South Africa comes to similar conclusions. The team tested the antibody response from blood plasma samples from 44 people who had prior infection with earlier variants of Covid-19. They found nearly half of the plasmas tested could not neutralise 501Y.V2 in a lab setting.

This data is a cause for concern. But more work needs to be done before we can categorically say what this means for people's immunity against 501Y.V2, as well as the implications for vaccines designed for the earlier variants. This is because our immune response to infection and to vaccines involve components beyond just antibodies.

Does this variant cause different symptoms or more severe disease?

This is a topic of ongoing research. So far, clinicians and scientists working in the frontline have not observed any differences in symptoms in people infected with the new variant, compared with people infected by other variants. It therefore does not appear that the virus will make people more ill, or lead to more deaths.

At this stage, it also appears that the new variant causes a similar spectrum of disease - older people, men, and people with certain other medical conditions do worse.

The clinical management remains exactly the same: oxygen therapy when people need it, steroids (like dexamethasone) for people with more severe disease, and blood-thinning medication to prevent blood clots, a common complication of Covid-19. The main therapy that has been proven to reduce deaths is dexamethasone, which targets the overactive immune response to the virus, not the virus itself.

Are current vaccines likely to protect against the new variant?

Research is under way. Until shown to be otherwise, it is reasonable to expect vaccines to be effective against this variant as has been shown in clinical trials to date.

Vaccines protect us by causing an immune response against the spike protein of the virus. The vaccines present the spike protein to the immune system, which recognises it as foreign - an invader - and makes an immune response to the protein. When the body later encounters the actual virus, the immune response is ready to recognise and destroy it before it causes illness.

Part of the immune response is the generation of antibodies. Antibodies bind to the virus, making it non-infectious. We know that some parts of the spike proteins in the new variant have changed and so the antibodies created by the vaccines may not recognise them as well as before. But it's likely that the vaccine-induced antibodies will also recognise other parts of this target spike protection. In addition, other arms of the immune response induced by vaccines, such as the T cell response, also important in controlling viruses, could also compensate.

The ongoing research falls into two categories:

First, blood from people who have received Covid19 vaccines is used to see whether the antibodies in this blood, induced by the vaccine, can neutralise the virus in a test tube. If they do, the vaccine is still likely to work as well against 501Y.V2 as against other variants.

Second, researchers are studying which variants were present in people who took part in vaccine trials and still developed Covid-19 disease. If more 501Y.V2 is identified compared with other variants, it is likely that the vaccine does not work as well against 501Y.V2.

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Are SA employers allowed to implement a compulsory Covid-19 vaccine policy? (Part 1)

South Africa is now deeply within its second wave of Covid-19 infections, which appears to be significantly more widespread than that which prevailed during early to mid-2020. Since then, and in response to the pandemic, global efforts have successfully developed both expedited means of testing for the virus and, more recently, vaccines.

Employers may thus wish to explore the introduction of workplace policies which formalise mandatory testing and vaccination protocols in order to restore their workplaces to some level of normality, particularly workplaces where remote working is not suitable.

In this piece we attempt to give employers some guidance as to how to approach these issues. We must however stress at the outset that these questions are unprecedented and throw into stark relief the competing rights of individuals, their employers and the public at large. We also appreciate that a number of the issues involve moral and ethical considerations that are difficult, if not impossible, to resolve.

Vaccinations

On 7 January 2021, the South African Government publicised its Covid-19 vaccine roll-out plan. The plan involves a number of stages, the priority being to ensure the vaccination of approximately 1.25 million healthcare workers and those directly involved in the collection and processing of Covid-19 specimens. Thereafter it is planned to ensure the rapid vaccination of the more vulnerable segments of the population and those persons with underlying health conditions.

The Government has made clear on a number of occasions that whilst the uptake of vaccines was to be encouraged, it would not require South African citizens to become vaccinated. It may accordingly be safely assumed that the Government will not seek to legislate compulsory Covid-19 vaccinations. This is consistent with the reluctance by governments to require vaccinations for other contagions such as polio and MMR.

The Government aims to vaccinate up to 70% of the country's citizens over 16 years of age in order to reach herd immunity (the condition under which the spread of a contagious disease is contained) by the end of 2021. In order to monitor the uptake of vaccination, the Government intends to create a vaccine registration and contact tracing system.

The Government envisages sourcing vaccines from a limited number of suppliers. Vaccinations will be administered through a broad range of providers ranging from hospitals, clinics and medical scheme facilities. The Government also hopes to enter into public-private partnerships with medical schemes whereby such schemes would effectively cross-subsidise part of the costs.

Given the impact of Covid-19 on employers and employees in the private sphere, the prospect of early vaccination is particularly attractive. As a consequence, employers may wish to consider the introduction of workplace policies requiring mandatory vaccination as a precondition for ongoing employment. The subject of compulsory vaccinations has however become increasingly contentious and there are significant legal and moral facets that must be considered.

Given the lack of any legislation requiring vaccinations, employers will need to assess whether it would be permissible or desirable to require their employees to be vaccinated.

Legal risk

In our view, there would be considerable legal risk attendant upon employers adopting workplace policies that require their employees to be vaccinated in order to prevent them from contracting or spreading Covid-19. Any mandatory vaccination policy could, depending on the circumstances, violate section 12 of South Africa's Constitution, which guarantees everyone the right to bodily integrity.

Section 187(1)(f) of the Labour Relations Act of 1995 (the LRA) prohibits dismissals that discriminate against employees based, inter alia, on their religion, conscience, belief, political opinion or culture. The Employment Equity Act of 1998 (the EEA) offers similar protection against discriminatory conduct that falls short of a dismissal. The EEA also protects applicants for employment. Section 5(2)((c)(iv) of the LRA prohibits employers from prejudicing an employee (or person seeking employment) for refusing to do something that the employer is not lawfully entitled to require them to do.

In our view, it is unlikely that a Court would uphold a decision by an employer to subject an employee, or applicant for employment, to occupational detriment for failing to undergo a vaccination, subject to the exceptions that we discuss below. Thus, as a general principle, employees who refuse to undergo a vaccination may not be dismissed and, where such employees are unable to work remotely, ought to be allowed to return to the workplace, subject to existing safe working practices and symptom monitoring.

Employers would generally be limited to encouraging their employees to become vaccinated, provided that such encouragement does not go any further than providing information and facilitating the logistics, through the provision of special leave or hiring a nurse for the purpose. The employees should be informed that vaccination is not compulsory. The final choice must be that of the employee, and employers should take care to ensure that there is clear consent on the employee's part.

Concessions and incapacity

There may be some limited scope for employers to provide that only employees who have been vaccinated may work from the employer's premises. Thus, and in keeping with the employer's general obligation to accommodate objecting employees, a work-from-home option could be explored, provided that this is feasible given the nature of the employer's business. However, employers would need to carefully assess whether differentiating between employees on this basis would itself constitute a form of indirect discrimination.

Employers in certain limited industries might justify the dismissal of an objecting employee on the basis of that employee's incapacity to do the job. This would likely be limited to employees working in industries where there is regular and obligatory interaction with members of the public, for example the health industry or those caring for the sick and elderly in care homes.

In this regard, the Supreme Court of Appeals has clarified in Department of Correctional Services v POPCRU & others[1] that religious and personal beliefs may be trumped by an employer's legitimate operational requirements or its occupational health and safety obligations. The Court did however emphasise that where a workplace policy offends against a central tenet of a person's religion or beliefs, the employer was obliged to demonstrate that there was no means by which the employee could be reasonably accommodated or that the employer's requirement was a fair and inherent requirement of the job.

In Part 2 of this article, we look at whether employers have the right to introduce the mandatory testing of employees for Covid-19.

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How to manage retrenchments in turbulent times

During the lockdown period from May to June 2020, the Commission for Conciliation, Mediation and Arbitration (CCMA) received 28,000 retrenchment cases. In August, it revealed that it had received 190 large-scale retrenchment referrals and 1,307 small-scale retrenchment referrals in that month alone. While we can expect these numbers to drop with the easing of lockdown regulations, it is imperative that organisations clearly understand the retrenchment procedure and how to ensure both employee and business are protected.

While the numbers may be slowly dropping as the lockdown eases, it is important that organisations have a clear understanding of the regulations that come with retrenchment and how to ensure that both employee and business are protected. According to Nicol Myburgh, Head: CRS Technologies HCM Business Unit, there are a lot of considerations that go with retrenchment and a Section 189 dismissal, and it is critical that these are carried out in accordance with the letter of the law.

"It is a very difficult time for business - the lockdown has exacerbated an already fragile economy and many companies are struggling and going into retrenchment procedures," he explains. "However, retrenchment is complex and there are pitfalls that need to be avoided so as to not end up falling foul of the CCMA and the law."

The role of the CCMA is to mediate the process of retrenchment and ensure it is done fairly and correctly. The role of the business is to ensure that the paperwork and regulations are adhered to so that employees are taken care of correctly. Companies have to know how to undertake this process properly, clearly outlining the financial reasons and issues that have brought them to this point.

"Companies need to know the ins and outs of retrenchment regulations and paperwork," says Myburgh. "Retrenchments are 99% procedural, so if you miss a step or do something wrong, you are immediately procedurally unfair and the CCMA will grant an arbitration award to the employee."

The first step the business needs to take is to issue a Section 189 letter that informs employees that you're embarking on a retrenchment process. There are 21 items that have to be covered in this letter and if even one is missing, you're putting your business at risk.

Once you've released the letter, you can then set a date for consultations and this is when you will need to discuss the retrenchment process with employees, and sometimes unions. Any discussions and negotiations have to be put in writing, otherwise you are opening yourself up to complications. Once these processes have been completed, you will need to make specific payments at a specific time, and you have to provide people with very clear deadlines and notice periods.

It's a little-known fact that the principle of 'last in, first out' is not one that the business is forced to adhere to. Many companies believe that they're locked in to this method and have to get rid of the last people they hired. This is not true. There are different methods for retrenchment that do not involve you having to dismiss your top performers. You can manage this process by working with a consultant who can help you identify the best route through the retrenchment process and help you manage morale, paperwork and procedure as carefully as possible.

"As much as it's an extra cost at a time when costs are tight, it's worth getting a consultant to help you go through retrenchment processes so you are completely aligned with the law," concludes Myburgh. "If you're not a specialist, it can be daunting to follow each employee case and ensure that every box is correctly ticked and that both business and employees are protected. A specialist will not only support you in getting the paperwork right, but will help you manage your people and processes correctly."

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Health workers demand vaccine rollout

"We call on the Department of Health to act urgently, transparently and decisively now to obtain vaccines and to implement vaccination, so as to reduce death and illness, and bring the pandemic under control." So reads a letter started by Professor Heather Zar, a leading public sector paediatrician at Cape Town's Red Cross Childrens Hospital.

Over 2,500 people had signed the petition by the time of publication of this article. Many are well-known doctors, nurses and researchers, including Professor Francois Venter, former head of the Southern African HIV Clinicians Society, Professor Ntobeko Ntusi, Head of the Department of Medicine at Groote Schuur Hospital, Professor Lucille Blumberg of the National Institute of Communicable Diseases and Professor Helen McShane of Oxford University.

The letter states: "There are several effective Covid-19 vaccines being produced and many countries have begun or are about to begin vaccinating, including some low- and middle-income ones. South Africa has a strong primary healthcare system. The success of the antiretroviral program shows what the health system is capable of. We are well-placed to implement vaccination."

The petition calls on the health department to start by vaccinating frontline health workers, followed by those most at risk including elderly people and people with comorbidities.

"I'm a health worker and want to know that I am not putting my clients and family at further risk," wrote Laila Dalwai who signed the petition.

Left it too late?

Shabir Madhi, professor of vaccinology at Wits University, criticised the health department's vaccine procurement strategy. He said the department had put all its eggs in one basket by only relying on Covax and leaving bilateral negotiations with pharmaceutical companies too late.

Will vaccines bring life back to normal?

In an interview on ENCA, Professor Barry Schoub, head of South Africa's Ministerial Advisory Committee on coronavirus vaccine development, said that South Africa could not afford to buy vaccines in advance like many rich countries have done because it would have meant purchasing vaccines on risk. In other words the government would have had to pay for vaccines that were still being tested even if they failed to work.

But Madhi said this was "nonsense". He said that making an "advance market commitment" to vaccine producers would mean only paying if the vaccine was successfully brought to market. This is why countries like Canada have enough vaccines committed to it to vaccinate their entire population.

A petition by civil society organisations, known as the C-19 Coalition, has also been started.

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Some nationwide lockdown restrictions in South Africa could be back sooner than expected: analysts

South Africa's rapid increase in coronavirus cases and the appearance of a second wave means that the country could see national lockdown restrictions be reintroduced sooner than expected, says Stellenbosch's Bureau for Economic Research (BER).

In a research note on Monday (14 December), the BER said that, given the surge in cases and declaration of an official second wave of Covid-19 in the country, the likelihood of an earlier re-imposition of some nationwide lockdown measures has now increased.

"While we were worried about the possibility of a second wave leading to stricter restrictions sometime in autumn 2021, the likelihood of an earlier re-imposition of some nationwide lockdown measures has now increased," it said.

"Hopefully, a stricter adherence to non-pharmaceutical interventions can quell the recent uptick in cases, as a return to stricter restrictions on mobility and economic activity (on a national level) would be a significant setback to the economic recovery that started in 2020 Q3."

President Cyril Ramaphosa will address the nation at 20h00 on Monday evening, with reports from the executive indicating that localised restrictions are likely to be introduced.

The address follows meetings with the National Coronavirus Command Council and provincial governments as the country battles with the impact of a second coronavirus wave.

A member of Ramaphosa's executive told the City Press that it is unlikely that the entire country will return to a hard lockdown as experienced earlier this year.

Instead, higher restrictions are set to be introduced at a localised level in the country's coronavirus hotspot areas. It is not yet clear if any national restrictions will be introduced.

Vaccine developments

One positive amid South Africa's bleak Covid-19 numbers are the developments around a Covid-19 vaccine, with both the US and UK approving a vaccine for public use in the last week.

However, there are questions about how a vaccine will be procured and distributed in South Africa.

"While the latest developments on vaccine development are very positive for global growth prospects in the second half of next year it remains to be seen how South Africa will approach the procurement and ultimately the distribution of vaccines," said the BER.

In this regard, the information currently available does not warrant an upgrade to our 2021 forecast, it said.

"If anything, the latest virus developments and less of a technical bounce given that the 2020 GDP decline will be less than expected before, puts downside risk on 2021's growth figure."

South Africa reported 7,999 new Covid-19 cases on Sunday (14 December), taking the total reported to 860,964.

Deaths have reached 23,276 (a daily increase of 170), while recoveries have climbed to 761,011, leaving the country with a balance of 76,677 active cases.

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All regional courts to adjudicate civil disputes

Justice Minister Ronald Lamola has announced an increase in regional courts that will adjudicate civil disputes as of December 2020.

Until recently, regional courts heard more serious criminal offences and civil disputes including divorce matters.

In terms of the Magistrates Court Act, the Minister of Justice and Correctional Services, with effect from 1 December 2020, appointed every regional court as a place for the holding of a civil court.

The places so listed for the holding of a court for the adjudication of civil disputes are set out in Government Gazette 43861, 30 Oct 2020.

"Up until the end of November only a few of the regional courts could hear civil matters," said the Ministry of Justice and Correctional Services.

"Prior to this change being made, people often had to travel long distances, and at great expense, to litigate and be able to access civil law services offered by the regional courts, including having their applications for divorce heard," said the ministry on Tuesday.

Now with the publication of the seats in the Gazette, people may access these services closer to where they live.

With the appointment of more seats, divorce matters and civil disputes such as those involving immovable property under a low price range - such as RDP houses - can be heard closer to where people live.

"Many of the seats are in the historically Black areas and rural villages. As an example, in the former Transkei area of the Eastern Cape, persons would have had to travel to Mthatha for their divorces to be heard. With the new changes, they can now go to any of the 25 Regional Courts spread around the region. There are, in total, 72 proclaimed civil regional court seats across the Eastern Cape province"

Similarly, in the Southern Cape, for example, where persons would have needed to travel to George to get divorced, they can now go to Heidelberg, Mossel Bay, Oudtshoorn, Plettenberg Bay, Riversdale, Swellendam, Thembalethu or Uniondale to access civil law services.

There are 32 seats in the Western Cape to serve the population in the province.

Of further importance, is that the shortened distances will also reduce the cost of the sheriffs exponentially, as fees payable to serve court process with be calculated from the proclaimed areas and no longer from the main court in the city or town.

"Regional courts are vital to ensure access to justice. Enhancing access to justice means taking the courts closer to the people which, in turn, minimizes costs and inconvenience when matters are to be heard. By establishing these civil seats, we are taking justice to the door steps of peoples' homesteads," said the Minister.

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Do employers have the right to change an employee's retirement date?

As many people are now forced to work for longer, the question of when an employee is obliged to retire has become topical and much discussed.

The obligation to retire depends on a number of factors which include the industry of the particular employee and, more particularly, the rules and policies of their employer in relation to prescribing a retirement age.

A retirement age is often prescribed in an employee's contract of employment or may well be imposed by virtue of an employer's retirement policy. In most instances, employees are aware of when they would be obliged to retire and thus make provision for this so that they have sufficient financial resources to cover their expenses after they have stopped working.

It is important for employers to have certainty and to create consistent policies so that there can be no ambiguities or confusion as to when employees will need to retire.

Unfair discrimination

However, what is the position where an employer does not consent to the change of his employee's retirement age? And does this constitute an automatically unfair dismissal on account of age discrimination?

This issue was considered in the Labour Appeal Court in the matter between BMW South Africa and National Union of Metalworkers of South Africa on behalf of Karl Deppe.

Without going into lengthy detail about the factual background to the dispute, Deppe's age of retirement was changed from 65 to 60. However, Deppe had not consented to the change in as much as he did not receive the relevant election form to indicate whether he was prepared to retire at age 65 or 60 as the case may be.

Deppe's case contending for an automatically unfair dismissal was brought in terms of Section 187(1)(f) of the Labour Relations Act (LRA). He argued that BMW unfairly discriminated against him on the grounds of his age by forcing him to retire at 60 years when he believed that his agreed retirement age was 65.

In the trial Court, BMW bore the onus to prove that the reason for Deppe's dismissal did not constitute unfair discrimination on the basis of age.

BMW relied on the provisions of Section 187(2)(b) of the LRA and suggested that they did not dismiss Deppe on account of his age but rather as he had reached the normal retirement age in the industry.

The Labour Appeal Court, however, confirmed that, in fact, Deppe's dismissal was automatically unfair.

The effects of Covid-19 on retirement

As a practitioner, one is often faced with clients seeking advice on whether they could fairly terminate an employee's contract on the basis that such employee had reached retirement age.

This is particularly in vogue now with the advent of the Covid-19 pandemic which has caused wide scale restructuring amongst many organisations and, in many instances, employees who the employer believed had reached retirement may not legally have their contracts of employment terminated on that basis.

An automatically unfair dismissal based on a discriminatory ground including age could well result in the Labour Court awarding up to a maximum of 24 months' remuneration as compensation to an employee who was dismissed where the employer contended that the employee had reached an agreed or normal retirement age, which argument was not accepted by the trial court.

Employer's considerations

Employers are therefore urged to include very clear provisions in employee's contracts of employment to regulate the specific retirement age of the employee as they, particularly in these trying economic times, do not want to face uncertain and unnecessary litigation.

What is furthermore noteworthy from the BMW judgment is that where employers seek to amend or alter the date of a retirement age of an employee, it must be done with the appropriate degree of care, and the employer must have documentary evidence/records of any amendment made.

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Is your legal research evolving with these unprecedented times?

Legal research and case preparation ordinarily consume a large part of the legal practitioner's day and energy, because - as complicated and time-consuming as the process can be - there is no more effective way to strengthen an argument in court than with sound case and precedent referencing. The most basic step in legal research is to find the leading case governing the issues in question and then to begin building your argument around this.

But in the new world presented by Covid-19, harnessing all that legal technology has to offer has become even more important for streamlining legal research and ensuring sustainability and survival.

Numerous studies and surveys have shown that lawyers view the increasing importance of legal technology as the top trend likely to impact their organisations and that technology is needed to manage the increased volume and complexity of information at this time.

While legal professionals still spend many unbillable hours sifting through conventional law reports and texts, and searching for relevant cases and precedents, Covid-19 has seen a growing breed of tech-savvy practitioners turning to technology powered solutions to overcome many of the restrictions of social distancing and remote working.

Mellony Ramalho, Sales and Marketing Director at LexisNexis South Africa, offers the following tips to aid your legal research processes:

1. Avoid some of the pitfalls and risks of manual research by harnessing legal technology to save time, costs and resources, while increasing billable hours.

"By inputting a few keywords and parameters into a legal tech search engine, professionals can have access to a world of knowledge, curated to their specific case requirements, with relevant and key precedents and awards easily accessible, making them adaptable in this challenging market," says Ramalho.

2. Look for solutions that make it easier to keep you on top of constant changes in the law and are up-to-date with prevailing legislation, case law and even legal theory.

Says Ramalho, "One of the biggest challenges associated with manual research is the risk of unintentionally referencing outdated information, or a researcher missing a vital piece of information or misinterpreting a judgment, thereby significantly hurting the case."

Laws and precedents change rapidly because cases can be appealed against or overruled, but the result of an appealed case may not immediately be updated in conventional law reports, indices and online law report products. In addition, other courts may have treated the judgements differently and having this information to hand in advance assists you to avoid jeopardising your case with a weakened argument.

"To build a winning case, it's vital to have all of the pertinent and latest information affecting cases referenced with you in court," says Ramalho.

Any technology solution should therefore help to facilitate quicker assessment of the precedential value of reported judgments and should work to reduce the risk of misinterpretation by lessening the need to evaluate cases yourself. Ideally, the case history should quickly show how a particular case has been utilised by other courts, whether the case was subject to review or appeal, what the result was, subsequent appeals and where the case fits in the appeal hierarchy.

3. Make sure that the source you're accessing is known for providing accurate, authoritative law that you can rely on for supporting your case and arguments.

While internet search engines and other free resources may seem appealing, when it comes to authoritative research content that will hold up in court, it's best to partner with a respected legal technology partner.

Lawyers need access to national, provincial and municipal legislation with a complete collection of Acts, regulations, bills, by-laws, subordinate legislation and gazettes.

4. Invest in yourself during these challenging times and take advantage of remote learning opportunities to boost your legal research.

The Practical Legal Research Skills eLearning course, for example, provides guidelines and practical assessments around developing a research methodology using all available resources within limited timelines. While this course is specifically aimed at practitioners and their needs in the everyday running of a legal practice, it is also suitable for anyone interested in improving their legal research skills, including law students and Candidate Attorneys.

5. Look for next-gen features that intelligently interpret your searches.

Legal technology firms like LexisNexis are exploring how to build machine understanding and natural language processes into search functions, so that solutions can more intelligently interpret searches and return recommended documents, or pages based on current research activity and search patterns. Another focus area is the incorporation of prediction technology that will enable users to predict the outcome and cost of a case.

With advanced legal technology, easy searches can be done by case details (ranging from a delivering judge's name to the date of the judgment), legislation, regulations, rules or subjects, complete with a predictive type-ahead feature. This gives the ability to efficiently locate cases that deal with a specific section in an Act, rule or regulation and enables users to easily find similar cases for reference through a quick search.

With time of the essence in legal research and Covid-19 only accelerating the need for effective digital tools, making the most of support resources and evolving legal technology can ensure you're not left behind in this unprecedented and uncertain time.

Need to embrace legal tech but have no idea where to start? Looking for a leading partner with a history of supporting the legal industry with market firsts? Look no further, click here.

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Challenges facing SABC's proposal to collect license fees on private streaming channels

On 20 October 2020, Pinky Kekana, the Deputy Minister of Communications, in a presentation to Parliament's Portfolio Committee on Communications, put forward a number of proposed legislative measures aimed at improving the SABC's revenue shortfalls.

The proposed regulations included:

  • requiring pay-TV service providers like MultiChoice (DStv) and Netflix to collect TV licences on behalf of the public broadcaster; and
  • expanding the range of devices on which licence fees would be payable to include, inter alia, smartphones and tablets, and not only conventional television sets.

This proposal, only a few days after it was presented and reported, is already the subject of some quite passionate debate and controversy. The measures are widely seen as a desperate measure to address the SABC's dire financial plight without addressing the reasons that created it in the first place, corruption, inefficiency and political interference, and shift responsibility for generating and collecting revenue for the national broadcaster's benefit, to the private sector.

The low levels of collections the SABC has achieved to date may largely be attributed to public resistance to funding what is seen to be endemic wastage and corruption, and there is understandably considerable resistance to widening the revenue base if the funds are going to be similarly misused.

In this piece, we attempt to look beyond the emotion and analyse the practical, legal and logistical issues that will have to be confronted if the Deputy Minister's proposals are to be successfully legislated and implemented.

The duty on members of the public to obtain and pay for television licences arises from section 27 of the Broadcasting Act, 4 of 1999. In terms of the section, the liability to pay a license fee arises from owning and using a TV set (in other words, it is purely related to the hardware), and not what programme content you are accessing. A TV set owner who is subscribed to a pay-TV channel has the same obligation to obtain and pay for a TV license as one who only watches the SABC's programmes.

In terms of section 27(1)(b), dealers are not allowed to sell TV sets to anyone who is not in possession of a license and are therefore effectively made part of the enforcement mechanism (notably, they are not actually obliged to collect license fees). It would be easy enough to introduce a similar regulation obliging a subscription service provider to ensure that a potential subscriber has a license before making the service available. The more difficult issue arises if the SABC is actually going to try and compel the service providers to collect the license fee and pay it over to the SABC. In this regard, having regard to reality of the way in which internet services are typically provided, some challenges arise as to how the proposals are to be implemented in practice:

  • In the case of many, if not most, subscription services, the contracts between the subscriber and the service provider run from month-to-month and a monthly. Will a service provider have to confirm once a month that every subscriber has a license? Or will they have to keep a record of how long each subscriber's TV license has left to run when their subscriptions commence and ensure that it is renewed prior to expiry, before continuing to provide the subscription service?
  • If a subscriber receives content from several service providers, which one will bear the primary responsibility of collecting the license fee?
  • As mentioned, the obligation to obtain a TV license arises when a person owns and uses a 'television set'. Amongst the Minister's proposals is that the range of devices on which license fees will be payable should be expanded to include laptops, smartphones and others on which video content can be received and viewed. This is in fact a bit of a red herring; the Television License Fees Regulations published in terms of the Broadcasting Act define a 'television set' for which a license is required as 'any apparatus designed or adapted to be capable of receiving transmissions broadcast in the course of a television broadcasting service', a definition wide enough to include smartphones, tablets and laptops. So, no amendments to the existing legislation actually seem to be necessary to give effect to this idea. However, it does raise a question regarding retailers of these devices, and network service providers who provide the devices as part of a package to subscribers, should they in fact be insisting on seeing every customer's TV license before they supply the device?

Collection authority

A question also arises as to the legal authority of the SABC to delegate the authority to collect license fees to businesses in the private sector. In some of the media coverage of the proposal, it has been reported that the SABC has said that requiring the providers of subscription services to collect TV license fees 'would be similar to municipalities collecting traffic fines and motor vehicle license disks'. There may be a similarity in that the duty to collect revenue due to a particular entity (in the case of vehicle licences, the provincial government) is delegated to another body, but there the similarity ends. The National Road Traffic Act and the regulations promulgated under it expressly allow the 'Shareholders Committee' appointed in terms of the Road Traffic Management Corporation Act to designate local authorities as registering authorities. No such authority exists in terms of the Broadcasting Act; a provision permitting the SABC to delegate the collection of license fees was actually deleted in 2003.

It is also interesting to note that there does not appear to be any global precedent for the proposed system. In countries where television license fees are collected by a body other than the national broadcaster itself, they are generally billed along with fixed line telephone services or electricity. Given the credibility issues around the providers of both of those services in South Africa, it is unlikely that public resistance to paying television license fees is going to be any less if those precedents are followed.

Additional administration

The fact that very few, if any, other countries have imposed a duty on private sector service providers to collect license fees on behalf of the public broadcaster may well be an indication that the legal, logistical and economic obstacles simply do not make it viable. One issue that immediately comes to mind is the cost; the service providers will have to establish an entirely new layer of administration to monitor the invoicing and collection of fees. In order for the system to run effectively, that would have to include provision for legal action against defaulters. It is unlikely that any private business will react kindly to having to bear an additional layer of expense from which they will not benefit.

The process of making any proposals into enforceable law is always a long road, with any number of public hearings, parliamentary debates and drafts and redrafts of the regulations to be expected. This is especially so in the case of a controversial measures like this one, and it is likely to be some time before it becomes enforceable law, and if it does, whether it will not meet with the same public resistance that doomed e-tolls to failure.

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What South Africans must do to avoid a resurgence of Covid-19 infections

South Africa's stringent lockdown earlier this year may have saved lives by containing the spread of Covid-19. New infections have been declining and lockdown restrictions relaxed. But this has triggered fears of a new wave of infections.

Several countries have experienced a spike in infections following the easing of harsh lockdown measures. These include South Korea, Canada, Spain and the UK. Health systems are once again becoming overwhelmed, and countries have resorted to stringent lockdown measures once again.

The new round has been characterised by increases in cases - mostly driven by infections among younger groups - but not necessarily increased deaths.

To understand how the country might avoid this it's useful to look at patterns of behaviour among South Africans after the initial easing of lockdown restrictions from level 4 to level 3 on the 1st of June. A further easing was introduced on 17 August, moving people from level 3 to level 2. This left only a few restrictions in place, such as mandatory mask-wearing, no international travel and a six-hour curfew at night.

In a survey done during July and August we found that more people were wearing masks than was the case when we conducted the survey in May and June. But this was coupled with a significant decrease in staying at home.

The survey findings signal trade-off in behaviours. This doesn't bode well for the country as people adjust to life with virtually no restrictions. It is key to continue high-impact non-pharmaceutical interventions that will not impede economic activity, but limit spread. These measures include wearing masks, handwashing and physical distancing.

More must be done to re-inforce these preventative behaviours to avoid a surge in infections. This is particularly urgent given that South Africa's early strict lockdown resulted in tremendous social and economic costs to the country.

But for these to be effective, high levels of public adherence are required. For instance, research has shown that to flatten the infection curve, 80% of the population must wear masks.

Why human behaviour matters

Human behaviour has been shown to play a significant role in the spike of infections, commonly referred to as the second wave. As restrictions on movement have been relaxed, social activities have increased. In South Korea, nightclubs have been identified as one of the biggest Covid-19 clusters in Seoul. There have also been outbreaks at several churches.

An increase in social night life has also been identified as a significant contributor in Spain. A recent cluster outbreak at a nightclub in Cape Town may signal the start of similar events in South Africa.

The findings of the survey we conducted don't bode well.

As part of the National Income Dynamics Study-Coronavirus Rapid Mobile Survey (NIDS-CRAM), we measured the adoption of non-pharmaceutical interventions between May and June; as well as July and August in South Africa.

The broadly nationally representative panel survey collected information on 7,073 South Africans in May and June. Follow-up surveys were conducted with 5,676 individuals in July and August. The two surveys coincided with the relaxation of lockdown regulations from alert level 4 to alert level 3. This included a return to economic activity for more jobs, outdoor exercise, reopening of restaurants and the gradual return to schools.

Our study found that between May/June and July/August this year, self-reported mask-wearing increased from 49% to 74%. The use of hand sanitisers increased from 10% to 35%.

But over the same period there was a drop in physical distancing (23% to 19%), avoiding large groups (16% to 7%) and staying at home (44% to 36%).

The one silver lining was that there was little evidence of respondents placing their trust in poor science. In the July/August survey less than 2% of respondents reported protecting themselves against Covid-19 by drinking hot lemon water and eating garlic. The number was only 1% in the earlier survey.

Going forward

The concern is that non-pharmaeucital interventions adherence among South Africans may decrease over time. Mask-wearing and physical distancing are among the more cost-effective and least disruptive measures of mitigating the risk of infection. As South African policy makers err on the side of caution and take steps to prepare for another wave of infections, non-pharmaceutical intervention adherence should remain top of mind.

Covid-19 messaging must continue to highlight the importance of adherence to these interventions. Wearing masks and avoiding large gatherings should be considered the social norm. The South African government's mandatory mask-wearing policy, published in July this year, should therefore remain in place until a vaccine is accessible to all.

Messaging should target young people, warning them about the danger of transmitting the disease to vulnerable groups, including populations older than 60 and those with comorbidities.

Non-pharmaceutical intervention messaging should also contain specific and actionable recommendations, as these have been found to be more effective than generalist recommendations. For instance, messaging that reads 'wear a mask when you go shopping' may be more effective than just 'wear a mask'.

South Africa is a long way off from being able to rely on immunity from infection. In any event, the evidence on whether people can contract COVID-19 twice is still mixed, and accurately measuring immunity to the virus is difficult.

This underscores the need to take the precautions that have been shown to slow the spread of infection. This will not only reduce the number of people dying from the disease. It will also mitigate against the need to impose tough new restrictions on economic activity.

This article is republished from The Conversation under a Creative Commons license. Read the original article.The Conversation

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Customer privacy is part of the experience and is critical to build trust

Customer privacy is under the spotlight as South Africa follows in the footsteps of Europe's General Data Protection Regulation (GDPR) and other privacy regulations that have come into effect across the globe. The newly implemented Protection of Personal Information Act (PoPI Act) aims to govern how organisations collect, store and use personal information and while compliance and governance have traditionally fallen under the legal department's domain, this is changing. Marketing departments can no longer ignore their role in adhering to the requirements of the PoPI Act.

Privacy management is critical, not only as a compliance tool for legal and compliance practitioners but also as a tool for building trust with customers. As such marketers have to be involved in privacy programmes to establish trust and deliver the best user experience to meet customer expectations which include treating customers in a manner in which they feel respected and valued.

While customers are willing to disclose personal information and have this information used by an organisation, they want to know that the company has procedures in place to protect their individual privacy. According to Deloitte, data privacy is about more than keeping hackers at bay, it is also about assuring consumers that the trust they place in a brand is warranted.

What is privacy worth?

Customer privacy and its importance for business and profitability is gaining attention as consumers are increasingly aware that companies are collecting their data and do not know what it is being used for.

Consumers are increasingly concerned about their privacy with the PWC Consumer Intelligence Series: Protect.Me citing that as many as 85% of consumers will not do business with a company if they have concerns about its security practices. Further, if companies have privacy scandals associated with them, it eliminates the potential brand from being considered during the selection process of the buyer's journey, thereby decreasing the chances of being chosen for purchase.

However, as many customers are not experts on data privacy, they expect the brands that they trust to put their privacy at the center of all decisions they make. In other words, the trust that consumers place in brands trickles down to the privacy measures they believe the brand has in place to keep their data secure.

Trust and customer privacy go hand-in-hand and companies need to live by their brand promise and protect their customer's data if they are to meet customer expectations and establish a relationship of trust.

Customer experience builds trust

Although marketers have traditionally used customer data, gained either directly or via third party sources, to develop targeted campaigns, consumers needs have changed. While customers want personalised experiences and targeted campaigns this needs to be balanced with compliance and privacy requirements.

Transparency is critical to this process. Customers are more likely to give companies their data if they know that they are collecting it and what they will be using it for. This is supported by Deloitte's 2019 US Retail Privacy Survey, investing in building trust through consumer privacy can deliver a measurable return with 73% of consumers stating they are more likely to share data with companies that have privacy policies in place and advise how their data will be used.

In essence, the customer experiences develop trust and the data companies collect should add value to the consumer. Consumers want customer-centric user experiences that deliver on the brand promise while adhering to privacy policies. To achieve this the customer has to be central to the business strategy which includes the marketing and technology strategies that need to drive brand security.

Implement privacy by design

Legal, marketing and IT departments need to work closely together to ensure that the proper privacy standards are adhered to, brand experiences delivered according to the brand promise and customer data is secure all times. As such marketing departments are becoming more reliant on IT departments to gather customer data and implement technology solutions to deliver on-brand experiences that adhere to brand security standards and maintain relationships of trust with customers.

Companies stand to benefit from using technologies that have been independently tested and align with European security standards to give customers and employees peace of mind that data is gathered and stored securely. Further solutions that have been designed with security upfront to include segmentation of risk, ensure that content is safeguarded and secure throughout the data storage and usage processes.

Consistency gives peace of mind

The increased focus on customer privacy means that marketing departments need to keep customers informed that they are collecting their data and how they are using it. They also need to ensure that they are engaging customers on their terms according to the data they have collected.

It is equally important that marketing departments pay close attention to brand consistency across all company platforms such as websites and emails as this reassures customers that the company takes their privacy seriously. When companies pay attention to the smallest details in their branding, it gives customers peace of mind that they take their brand seriously and will have put thought into the brand security, privacy policy and strategy.

Trust is marketing's responsibility

Customer privacy can no longer fall solely in the domain of the legal department. Customer privacy has to move beyond checking compliance boxes to ensure that the company adheres to privacy regulations that have been stipulated by the government. Rather it is about focusing on the customer and prioritising trust.

To enhance customer experiences and build relationships of trust, marketing departments need to play an active role in establishing privacy or trust policies, implementing brand security measures and putting the customer at the centre of these strategies. Customers seek transparency and confirmation that companies will protect their data while balancing this with personalised customer experiences.

Overall marketing departments need to invest in privacy and take it seriously. From the newsletters companies send to pop-ups on websites and the technology solutions they implement to help deliver customer-centric experiences, customer privacy and brand security needs to be at the core.

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How to protect your IP rights during the Covid-19 pandemic

As Daniel Kahneman observed in his book Thinking, Fast and Slow, there are two principal modes of human thinking. In a crisis, like our current one, our instinct is to think fast, simplify and leap to conclusions. But when we do this, we tend to rush, and by rushing we risk neglecting the all-important slow thinking, reflecting and anticipating.

Let us examine how to think slower, to safeguard our intellectual property (IP) rights. After all, Covid-19 means that an especially well thought-out plan is required, to ensure that critical IP matters do not fall by the wayside against the backdrop of a global health crisis.

Individual vigilance

When people are working from home, they tend to work in a manner similar to that of when they were 'at work', not recognising the risks inherent in the different setting.

It is important that your people remain vigilant in their standard IP practices, even while away from corporate headquarters. After all, once your employees return to the office, they don't want to be surprised by lapsed protections on some of your organisation's IP.

To avoid unintentional IP loss, remind employees and contractors to be aware of protections to be observed when using and disposing of confidential information. In addition, ask that they save information only on company storage systems; use only company computers, if available, to perform work; avoid unsecured sites while sharing documents; and refrain from using personal e-mail to transmit work-related data.

Review of agreements

Ensure that any royalty/minimum payments are continuing to be made, or consider alternate payment arrangements to avoid termination of agreement and loss of licensed-in IP rights.

There is a likelihood that companies may enter bankruptcy during the Covid-19 pandemic or thereafter. If your business is struggling financially and does not have the financial resources to maintain your rights when fees are due to be paid, talk to your lawyer.

This is especially true if you have rights to many marks in many countries and can't afford to maintain all rights in all countries. You don't want your registered rights to lapse, and third parties to try to take advantage of the situation by infringing on them or trying to register the mark themselves.

I have been approached by several corporate clients requesting a 'reprieve' from invoices for a certain period of time and also that we place all but the critical work on hold. Others have requested special discounts during this time noting that the businesses are struggling. Many lawyers are willing to assist clients with such requests, although a well-established relation with the client certainly assists in a law firm deciding to honour requests like these.

Review all IP agreements (including licenses, joint ownership, joint development and research agreements) to maintain your obligations to keep agreements in force. During the review, determine which obligations can be delayed due to force majeure and what the requirements are both during and after the force majeure period.

Deadlines and extensions

With remote working and perhaps a reduced staff for in-house lawyers or the IP team, leaders are advised to commit personnel and financial resources to meeting deadlines.

Many businesses and trade mark registries are not working at optimal capacity, and in some cases, are closed for long periods of time. As such, deadlines may be missed, including:

  • filing renewals of patents or trade marks,
  • filing statements of use of a trade mark,
  • filing an application to claim convention priority based on a file of the same mark in another country,
  • responding to office actions rendered by the patent or trade mark office, and
  • filing documents at courts where litigation is involved.

In many cases, registries will grant automatic extensions without request, but each will have its own rules, depending on the situation in the specific country at the time. The World Intellectual Property Office (WIPO) has a website that provides information on what measures and extensions of deadlines have been adopted by various IP offices in the world to deal with Covid-19 related issues.

It's important to be aware that different countries offer different special deadlines. What's more, these will expire at different times. Don't count on every IP office being willing to grant one, and don't assume an automatic extension, just because one country granted them.

'First to file'

Most intellectual property offices operate on a 'first to file' basis and as such, hesitating now could lead to someone else filing before you. The first to file usually has the senior rights, unless the rights are in a country that recognises common law rights through use.

If you intend to file for IP protection, but are unsure of when you will actually do so, consider the impact of a deferral. By hesitating, you may lose not only priority over a competing party, but also any costs, effort, and time already invested in developing the IP.

It is a good idea to file at least the first application now, or as soon as possible. If you do, you can delay filing for the same mark in other countries for up to six months and still preserve the filing date of the first application, provided that you claim convention priority through the Paris Convention when filing in other countries.

With regard to hearings before the registrar or enforcement matters before a court, it is important to be aware that, in light of the pandemic, some matters will likely not be heard for some time. Alternatively, if your matter is urgent, it may be heard on a virtual basis and not in person, as you might have expected.

In conclusion, whenever IP rights are on the table, there must be a plan in place. But now, more than ever, what's needed is slow thinking, reflection and anticipation, not haste, if we are to yield a well thought-out IP protection plan that contains clear priorities.

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NCOP approves Covid-19 Tax Bills

The National Council of Provinces (NCOP) has passed the Disaster Management Tax Relief Administration Bill, the Disaster Management Tax Relief Bill and the Prescription in Civil and Criminal Matters (Sexual Offences) Amendment Bill.

The three bills were approved during the NCOPs virtual plenary on Thursday.

Disaster Management Tax Relief

The Disaster Management Tax Relief Administration Bill and Disaster Management Tax Relief Bill, commonly referred to as the Covid-19 Tax Bill and the Covid-19 Tax Administration Bill, were introduced by Finance Minister Tito Mboweni together with the special adjustment budget on 24 June 2020.

The adjustment budget was promulgated to deal with and minimise the impact of the Covid-19 lockdown and the resultant economic downturn.

The two Bills were passed with amendments by the National Assembly on 25 August 2020.

Having considered them, the Select Committee on Finance recommended the NCOP pass them with those amendments.

Prescription in Civil and Criminal Matters Amendment Bill

The Prescription in Civil and Criminal Matters (Sexual Offences) Amendment Bill aims to amend the Prescription Act, 1969, so as to extend the list of sexual offences in respect of which prescription does not commence to run under certain circumstances regarding a debt that is based on the alleged commission of any of those sexual offences.

It also amends the Criminal Procedure Act, 1977, so as to extend the list of sexual offences in respect of which a prosecution may be instituted after a period of 20 years has lapsed since the date of the alleged commission of the sexual offence, and to provide for matters connected therewith.

The NCOP, having considered the bill, accepted it without any proposed amendments.

The three Bills will now be sent to the President for assent.

Provisional suspension of magistrate Bodlani

During the same sitting, the NCOP also confirmed the provisional suspension from office of the Acting Regional Magistrate of Umlazi, Kholeka Bodlani.

The provisional suspension follows allegations of misconduct levelled against Bodlani.

Accession to Treaty of Amity and Cooperation

The sitting further approved South Africa's accession to the Treaty of Amity and Cooperation (TAC) in South East Asia.

The Treaty aims to formalise diplomatic relations with the Association of South East Asian Nations (ASEAN).

It will also contribute to the elimination of tariffs between member States, which will in turn lead to reduced prices and more investment opportunities.

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Covid-19 is no excuse for unfair dismissals

The pandemic brought with it a slew of realisations for business owners; one such an epiphany is how most organisations need fewer employees to remain functional. But using Covid-19 as a reason for retrenching a surplus of employees constitutes as unfair dismissal, warns Advocate Tertius Wessels, Legal Director, from Strata-G Labour Solutions.

'Businesses are understandably struggling and have decided to restructure to become more efficient with less staff. But the termination of employees even as a result of the pandemic and the loss of income that followed, without following due process, is a violation of fair labour practice. Forging ahead without conducting proper consultation can lead to costly consequences for businesses,' explains Wessels.

He says employees who feel they were dismissed unfairly can challenge their dismissal by referring their cases to the Commission for Conciliation, Mediation and Arbitration (CCMA) or any appropriate dispute resolution body.

"According to legislation, the employee can be entitled to any one of three reliefs. The first is a reinstatement into their position, with all the backpay for loss of income. The second relief is re-employment where the employee would be considered as a new employee, and the last option may involve compensation where the aggrieved employee could be entitled to a maximum of 12 months salary," Wessels explains.

But employees may also run into a problem of waiting. According to the CCMA when compared with last year July, the number of employees who were likely to be affected by retrenchment was in the range of about 5,728. But over the same month in 2020, the number of affected employees who are likely to be affected by retrenchment is around 22,722.

This has created a bottleneck and has slowed down the number of cases that can be resolved expeditiously.

Wessels says the law is clear on employers using Covid-19 as a reason to retrench employees and organisations must further ensure they do not discriminate against employees that have tested positive for the coronavirus.

"Even at a capacity level when an employee is isolating at home and is not coming into work for 14 days, the employer does not have grounds to terminate that contract. They may have grounds if that employee refuses to return to work, citing Covid-19. In that case, it becomes about the capacity of that individual and what their employment contract stipulates," says Wessels.

"Any company that is about to embark on restructuring must have a clear strategy on how they will facilitate the process and who are the people that they will need to consult with. They need to understand what the expectations are surrounding the process. Retrenchments are not just a tick box exercise. There has to be meaningful engagement and that can only be done if there is proper planning from the beginning.

"This goes even for companies that have closed shop as a result of Covid-19. They must adhere to legislation with regards to dismissals. The easiest way to avoid being on the wrong side of the law once you have decided to embark on retrenchments, is to involve a professional body who understands how the process works," concludes Wessels.

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New tax bill: Taxpayers could be criminally liable for honest mistakes

Section 34 of the draft Tax Administration Laws Amendment Bill, 2020 proposes to amend section 234 of the Tax Administration Act, 2011 (TA Act), to remove willfulness (intention) from the range of acts that constitute an offence under the Act, and which are subject to a maximum penalty of two years' imprisonment. This is a concerning erosion of the safeguards against criminalising inadvertent mistakes by taxpayers.

Section 234 of the TA Act provides that a person may be guilty of an offence if he or she willfully and without just cause fails or neglects to perform a number of acts, including but not limited to notifying the South African Revenue Service (Sars) of a change in registered details (addresses, bank accounts and email addresses), a change in public officer, submitting a return or document to Sars, responding to a request for documents or information from Sars, maintain records or pay taxes when due.

In Memorandum of Objects of the draft bill, the government submits that the current wording of section 234 of the TA Act, requiring proof of intention by a taxpayer, substantially undermines the ability of Sars to ensure compliance based on the objective standard expected of the reasonable person, and hampers the criminal prosecution of non-compliant taxpayers by the National Prosecuting Authority in seeking to prove the elements of the crime.

Proof of intention

However, it has always been the case that a wide variety of crimes require proof of intent. While a person' subjective intent may be difficult to establish in some circumstances, it is often inferred from the person' conduct.

Further, the presumption that a statutory crime requires proof of intention, instead of negligence, or strictly liability, is in order to avoid the injustice and hardship that may result from the serious punishment that may imposed in the event that the accused is found guilty.

These considerations do not appear to concern the government, and it is likely that if passed, the threat of criminal sanction will be used by Sars to force taxpayers to comply with their obligations, particularly relating to the filing of returns and payment of tax debts.

However, regardless of Sars' intentions this proposal is particularly concerning, in light of common occurrences such as:

  • Supporting documents being misplaced, or clerical errors, which result in adjustments to VAT returns by Sars. As VAT is a self-assessed tax, any adjustments to the return inevitably results in the taxpayer having failed to pay VAT to SARS timeously;
  • Late payments of VAT or PAYE by businesses, where a payment is only released late on a Friday night, and is not received by SARS until the next day; and
  • Taxpayers that are unaware that may have a tax liability due to increasing complex provisions of the tax Acts, and fail to pay the correct amount of VAT or PAYE to Sars timeously.

In all of these circumstances, Sars is able to impose penalties on taxpayers (as it often does), which makes the need for the amendments to section 234 of the TA Act, and additional criminal sanctions, questionable.

Further, while it has, in the last few years, been uncommon for Sars to seek criminal prosecution of taxpayers except in the most egregious cases of non-compliance, we should all be concerned that this position could change at any time if the amendments to the TA Act are passed, and taxpayer' could be criminally liable for inadvertent errors.

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