Determining asset ownership for litigation purposes

Determining what assets are owned by a defendant, prior to instituting legal action, is a necessary part of due diligence in litigation. Technology has revolutionised the way in which asset searches take place, resulting in time and cost savings.

“An asset search will reveal the assets and liabilities of an individual or business, assisting litigators in the process of filing a civil action – or to determine assets for the purposes of a divorce settlement,” says Greg Brown, Director Data Services at LexisNexis South Africa. 

Assets include real estate and other personal property such as motor vehicles, boats or works of art and may also include assets held under other entities such as family trusts, limited liability companies or partnerships that may have been used as vehicles for fraudulent asset transfers to avoid judgement or financial loss. 

“Identifying properties, cars or companies owned or linked to an individual will assist litigators with a complete picture of the financial position of a respondent in a civil suit or divorce case,” says Brown. “In civil cases, the decision to proceed with litigation may be determined by knowledge gained from these reports – to ascertain whether or not the debtor is able to pay. Basically, an asset search enables a litigator to sort fact from fiction!” 

Crucial information can also be ascertained from asset search reports that will impact negotiations prior to litigation. This includes establishing what the value of the claim should be as well as determining who to file against, in the case of a civil case. Deciding who to pursue – the business or the individual or both – will be clarified in the discovery of who has sufficient assets to cover damages.

In the case of the dissolution of a marriage, the type of agreement signed by marriage parties prior to their marriage determines how the assets will be divided. The assets are determined as being those owned at the time of the divorce. 

“Establishing what comprises those assets and what form of marriage contract parties entered into, is the responsibility of the litigator and with an online tool such as Lexis WinDeed, South Africa’s leading search tool for individual, company and property information, this task has now been simplified,” Brown says.

For more information, visit: https://www.lexisnexis.co.za/lexiswindeed. 

Court gives Hermanus occupiers till June to oppose eviction

Over 200 people occupying private land in Schulphoek, Hermanus, picketed outside the Western Cape High Court on Tuesday, where eviction proceedings have been brought against them by the owners of the land, Cape Theme Parks and Cavcor. The case was postponed to 18 June 2019 to give time for the respondents to file answering affidavits.
The former Zwelihle backyarders have occupied the land since March last year. They have named the informal settlement Dubai. They resisted attempts by the Red Ants to remove them throughout 2018, and there was wide-scale unrest and protests in Hermanus that spilled into the residential areas in July.

The other respondents are Overstrand Municipality, SAPS and the Western Cape MEC for Human Settlements.

The picketers were supported by community leaders from Vosho informal settlement in Khayelitsha.

The Zwelihle community and the land occupiers say they were promised Schulphoek would be used to build houses for backyarders. There is a bitter controversy over Schulphoek. In 2010, land nearby was sold by the Overstrand municipality to property developers Rabcav (a joint venture of Cape Theme Parks and Cavcor).

In May, Ntomboxolo Makoba-Somdaka, spokesperson for provincial Department of Human Settlements, said a decision was reached with the land owner: “They are willing to sell and we are willing to buy [the land].” But she said the land would first have to be valued before a sale could take place.

However, Rabcav had already signed an agreement to sell the property to Cape Metropolitan Investments in May 2017 for R30 million. Rabcav has to hand over vacant land to the purchaser, hence the eviction proceedings.

Applicants’ attorney Craig Ward said the eviction application was in terms of the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act (PIE). He said the respondents have already been interdicted in a previous case by the court from entering or occupying the land and from erecting structures on the land.

Community leader Gcobani Nzongane said residents had occupied the land because they were tired of empty promises. “Over 4,000 people are now living on that land, desperate people who have no place else to go. The community was overcrowded; people could no longer afford to pay rent, because some of them are unemployed,” said Nzongane.

He said the community had signed a memorandum of agreement saying that the land will be bought by the national and provincial government.

“That land was left vacant for many years. They were not developing it while people were struggling to find places to stay,” said Nzongane.

For 24-year-old mother of two, Mihle Mpotulwana, moving into the informal settlement has helped relieve some of her money worries. With a monthly salary of R2,500, she says living as a backyarder was a struggle. She paid R500 rent and still had to pay for electricity. “Now I do not have to pay rent. Yes, basic services are harder to reach but I have more money to spend on my children and I can save a little,” she said.

This article was originally published on GroundUp.

Cape Town General Valuation 2018 Roll open for public inspection this month

The General Valuation 2018 (GV2018) Roll contains some 875,000 registered properties in Cape Town and is drawn up for the purpose of billing fair rates to each property owner. Rates income is used by the city to pay for shared public services such as roads, street lights, parks, beaches, area cleansing, libraries, clinics, law enforcement and fire services.

"Property valuations are not based on speculation but on market value at the date of the valuation, which in this case is on or around 2 July 2018. There is no difference between ‘market value’ and ‘municipal value’," said the city’s mayoral committee member for finance, Ian Neilson.

"It is also often falsely claimed that the percentage of property value growth determines the percentage that rates will increase by. Property valuations are independent of the money required to fund services. Cape Town experienced positive growth in property value over the last three years since the previous General Valuation in 2015. This is advantageous to property owners. Although the year-on-year property growth in the first half of 2018 has, in some areas, been less substantial than in the recent past, the full three-year period between the valuation cycles should be considered to determine the trend."

An indication of the rates payable, based on the GV2018 valuation and the rating category, will be available on the city’s website in April 2019. This will be after the new rate-in-the-rand is determined by council and this is subject to the city’s budget requirements for the 2019/20 financial year.

The GV2018 Roll will be implemented for the billing of rates with effect from 1 July 2019.
 

How it is done

The city chooses to conduct a general valuation every three years, instead of the legislatively mandated four-year period, in order to mitigate against large fluctuations in property values between general valuations.

The city valuer makes use of a computer modelling programme called Computer-Assisted Mass Appraisal (CAMA) which uses sales data, aerial imagery and other property information (for example the property’s location, size, number of rooms, outbuildings, general quality and view) to determine the market value of a property.

The results are then reviewed by professional property valuers and adjusted if necessary. There is no involvement by councillors in the determination of property values, nor may they be involved in dealing with any objection to a valuation.
 

Public inspection venues

More information about the operations of the public inspection and objection venues can be obtained from the city’s website at www.capetown.gov.za/propertyvaluations.
 

Objections may be submitted as follows:

• 21 Feb 2019 - 30 Apr 2019: directly via the e-services portal by registering at eservices@capetown.gov.za.
• 21 Feb 2019 - 30 Apr 2019: by downloading the prescribed objection form from www.capetown.gov.za/propertyvaluations and submitting the completed form to valuationsobjection@capetown.gov.za.
• 21 Feb 2019 and 29 March 2019: by visiting one of the city’s public inspection and objection venues.

 

Nature of objections

When submitting an objection, it is important to provide a motivation as to why it is believed that the valuation is incorrect. It is advisable to use sales of comparable properties sold on or around the date of valuation (2 July 2018) as motivation for an amended valuation. A comparison with neighbouring properties on the valuation roll does not suffice as a motivation for an objection.

 

Will the Budget Speech keep the promises of Sona?

President Cyril Ramaphosa's State of the Nation Address (Sona) theme was "Following up on our commitments. Making your Future Work Better." The objectives of which were twofold: firstly, to appeal to business and the investment community which would be carefully listening for indications of policy consistency; and secondly, winning over South Africa's voting public who would listening for messages of hope that a better future is within grasp.

Hitting the target on both counts, Ramaphosa, the business person, spoke of the billions of rands circulating in South Africa’s economy, he outlined financial targets and what can be achieved through the fiscus (with the private sector as a firm partner). As a politician he highlighted the significant achievements made, most particularly in the realms of health and education, without losing sight of the urgency to do more.

Taking a step backwards, it is important to be aware that Ramaphosa’s Sona does not exist in a vacuum. It is offset by his economic stimulus and recovery programme that was announced last year in September and which in turn was further articulated by Finance Minister Tito Mboweni in his Medium-Term Budget Policy Statement (MTBPS) in October. 

The key objectives of the economic stimulus and recovery programme were to:

• Implement growth-enhancing economic reforms;
• Reprioritise public spending to support job creation;
• Establish an infrastructure fund;
• Address urgent and pressing matters in education and health; and
• Invest in municipal social infrastructure improvement.

The Competition Amendment Bill

Ramaphosa committed to signing this somewhat controversial Bill into law. Designed as a transformation tool, the bill explicitly defines contraventions and uncompetitive conduct by companies in relation to the Competition Act. 

Read together with the BBBEE policy, a question to consider is to what extent do these two pieces of legislation work either for or against one another? The general perception in the economy is that BBBEE is not producing expected results which will arguably be remedied in part through the Competition Amendment Bill. 
 

SOEs

The plight of SOEs has been threaded throughout Ramaphosa’s addresses since last year, headlined by Eskom. 

A signal that Eskom’s turnaround is slowly beginning to emerge is evidenced by the utility having to develop a nine-point plan for presentation prior to Tito Mboweni’s Budget speech on 20 February and the proposed restructuring of the power utility into three parts (generation, transmission and distribution).

However, with a debt of R419bn and an anticipated loss of around R20bn for the year through March as coal and maintenance costs increased, it will be critical for Budget 2019 to outline just where the source of funds will come from. With an overstretched budget and a junk status credit rating from two major credit rating companies, time is of the essence.

A knock-on effect of poorly managed state resources is a growing culture of non-payment for services, which is negatively impacting service delivery at local and national level. 
 

Education and skills development

Ramaphosa announced that two additional years of compulsory pre-primary school will be incorporated into the education system. The MTBPS last year outlined that 15% of the R1.7trn allocated to consolidated expenditure for social spending last year goes to basic education. Education is the fastest growing area of expenditure. 

Into this mix, the notion of digitalisation of education materials - although welcome - is slightly incongruous. Many schools continue to lack basic infrastructure such as electricity and network connectivity, thus the idea of digitalisation needs to be carefully considered on a scale of need. Additional costs associated with IT technicians to maintain the gadgets and servers, often significant amounts, must also be taken into account.

At high school level, in an effort to expand participation in the technical streams, several ordinary public schools will be transformed into technical high schools. However, teacher training colleges will be needed to be brought onstream in order to equip teachers for this new development to ensure that there are sufficient human resources to deliver the subjects.

Ramaphosa has undoubtedly announced some exciting possibilities in our educational landscape. But it will be up to Mboweni to balance the numbers. 
 

Land reform let down

Land reform and the expropriation of land without compensation, while the biggest area of contestation in the public domain, has seen the least political movement since last year. From a voter perspective, it is going to be crucial for the ruling party to be seen as actively engaging with past injustices and moving the process forward.

Yet the policy is still not clear on how this it will be implemented. As such, we don’t expect much to come out of the upcoming budget. You cannot attach figures to something that is not clearly defined. This remains a concern for both domestic and international investors. Lack of clarity might be hampering new investment in the agricultural sector, so this has to be resolved as a matter of urgency.
 

Conclusion

By focusing in on some aspects of the Sona there are strong indications that Ramaphosa and his government are aiming for policy consistency. The next coming months will be critical in seeing whether this does bear up to scrutiny. But most importantly, it will be up to Mboweni’s budget to take Ramaphosa’s desire of ‘following up on our commitments’ and creatively carve up the fiscus to ‘make the future work better.’

Advisory panel on land reform makes progress

The ten-member expert Advisory Panel on Land Reform has its hands full with a looming deadline to submit a policy perspective to the Presidency that will drive land reform in the country. With a deadline of 15 March 2019 on the horizon, the panel held its second colloquium on land reform to present, debate and suggest ideas on how to deliver an effective, productive and just reform policy.
The work of the panel is partly informed by a resolution of Parliament to consider expropriation of land without compensation. 

The colloquium saw industry players converge at Saint George Hotel in Centurion to thrash out challenges and possible solutions to land reform.
 

Key to driving development

Addressing the colloquium, Planning, Monitoring and Evaluation Minister Nkosazana Dlamini-Zuma said land is a key asset to drive development, the reform of which must address socio-economic issues.

“Land is the centrepiece in the development strategy towards the South Africa we want.

“Land is the most important asset because that is where all activities take place. It is not just important for agriculture but anyone who has a business must have land. If you have a residence, you must have land,” said Dlamini-Zuma. 
 

Gender inequality

In addition to development, the minister expressed that land reform must address gender inequality.

“Gender equality and improved food security will require equality and access to ownership of land,” said Dlamini-Zuma.

In a 2017 report, the World Economic Forum (WEF) estimated that land and property can form up to 75% of a nation’s wealth and yet women, who make up three quarters of the world’s population, cannot prove they own the land on which they live or work.

This, according to the WEF, is despite the fact that more than 400 million women farm and produce the majority of the world’s food supply.
 

Land claims

Sharing some of the work done by her commission, chief land claims commissioner Nomfundo Gobodo-Ntloko pointed the advisory panel to challenges to heed in their policy perspective.

“You often find that when you are faced with land claims, you have a layer of rights and you need to take account of all of those rights and you need to identify the correct beneficiary,” said Gobodo-Ntloko.

Entering into plenary sessions, delegates raised several issues that need to find expression in the much anticipated policy perspective.

Among the issues raised is determining the rightful owners of land, economic use of the land once in the hands of claimants and claimants opting for cash over land.

The University of the Western Cape's Poverty, Land and Agrarian Studies (PLAAS) chairperson, Professor Ben Cousins, said land reform must address inequality and environmental change amongst others. 

The colloquium will entered day two of its discussions on Saturday with delegates discussing land administration and the financing of land reform.

Deemed receipt of income for property developers

In the recent case of Milnerton Estates Limited v CSARS, the Supreme Court of Appeal had to decide whether to include the purchase price in a property developer's 2013 year of assessment, even though payment was only received by the developer in its 2014 year of assessment.
A property developer concluded 25 sale agreements for a residential estate. The purchasers were required to pay a nominal deposit and the balance of the purchase price was payable against transfer. In 16 transfers, the purchasers had to raise finance and furnish a guarantee, the contracts containing suspensive conditions for obtaining the finance. In all 16 contracts the suspensive conditions were fulfilled by the end of the 2013 tax year. In the other nine sales, the purchasers either deposited the purchase price in cash with the conveyancers or provided guarantees from financial institutions for the purchase price. The result was that in all 25 transfers the purchase price was fully secured before the end of the 2013 tax year.
 

Section 24(1) of the Income Tax Act

The taxpayer contended that at the end of the 2013 tax year its entitlement to the purchase price remained conditional on its performance of the remaining tasks necessary to effect transfer of the properties into the names of the purchasers. It therefore omitted the purchase price of the 25 properties from its gross income in that year. SARS, on the other hand, contended that the purchase price in each instance had accrued to the taxpayer in the 2013 year, alternatively it was deemed to have done so by virtue of section 24(1) of the Income Tax Act. SARS accordingly raised assessments including the purchase price in the taxpayer’s taxable income attracting income tax of R1.9m.

SARS argued that the requirements in section 24(1) had been met as the taxpayer had entered into agreements with the purchasers of the properties in respect of immovable property, the effect of which agreements was that transfer would be passed from Milnerton Estates to the purchasers, upon or after the receipt by Milnerton Estates of the whole of the amount payable to it under the agreements. On this basis SARS contended that the whole amount was deemed to have accrued to the taxpayer on the date on which the agreements were entered into.
The taxpayer put forward several arguments as to why the purchase price did not accrue to it in 2013. It contended, for example, that section 24(1) does not concern itself with cash sales, but only with the sale of immovable property on credit. None of the arguments were accepted by the court. It was held that the agreements provided for Milnerton Estates to pass ownership to the purchasers upon or after receipt of the whole purchase price in terms of section 24(1). The purchase price was therefore deemed to be received in its entirety in the 2013 tax year, not the 2014 year when payment was in fact made.

 

Rental Amendment Act will help eradicate blurred lines

While the looming implementation of the Rental Housing Amendment Act has sparked considerable concern, many property professionals believe that there is little or no cause for panic as long as all parties are well-informed and compliant - and that the amendments could, in fact, have a positive impact on the market and encourage rather than deter investors.
Lorraine Dellbridge, rental specialist in the Southern Suburbs for Lew Geffen Sotheby’s International Realty, says: “The new Act actually highlights and remedies a number of practical and statutory weaknesses in the current act and the proposed changes will eradicate any existing blurred lines, making it easier for landlords and tenants to comply.

“Fundamentally, the law remains the same but there are significant amendments to the statutory rights and obligations of landlords and tenants and rules relating to stipulations in a lease, however, these points are already in place in the existing leases of most reputable agencies.

“Factors that landlords are going to have to look out for include ensuring that all lease agreements are in writing with clear definitions and guidelines and that properties are habitable in accordance with the Rental Housing Act or they could find themselves incurring fines and also face possible imprisonment.

“It’s therefore essential that both parties understand their rights and obligations and familiarise themselves with the new Act,” she says, adding, “It is also more important than ever that landlords appoint an experienced agent from an established and reputable agency to manage the property and fight in their corner if necessary.”
 

Clearer definition of the law

Debra Levin and Lisa Hendricks, partner area specialists on the Atlantic Seaboard for the group believe that legislation has been moving in this direction for a while and that many will welcome a clearer definition of the law.

“As much as these new regulations don’t seem to favour property buyers, the fact that laws are being further defined is probably an advantage in the mind of buyers who now have a clearer cut idea as to what is expected within their relationships with their tenants.

“Foreign buyers, especially, prefer legislation to be laid out up front. It is therefore important for current landlords to follow due process as this bodes well for buyers taking over existing leases and being assured of having well-regulated contracts in place going forward.”

They add that with Cape Town recently having been voted the top tourist destination for the sixth year in a row, foreign property investment on this exclusive coastal strip is once again picking up and a more streamlined process for rental management can only boost these sales.

Craig Guthrie, partner at Guthrie Colananni Attorneys, explains the main changes to the act and takes a closer look at several of the proposed amendments and their implications for landlords and tenants.

“As it stands, the rights of tenants in the residential property sector are protected by the Rental Housing Act, the common law, and the Consumer Protection Act, however the proposed Amendment Act creates new offences which are punishable by law and landlords now face the possibility of a fine or even imprisonment.”
 

These infringements include:

• Not issuing a written rental agreement - this is a positive development in South African law as it creates more legal certainty for both parties and usually, due to a non-variation clause - cannot be amended orally or unilaterally. It affords the tenant security of tenure, while affording the landlord proof of an existing agreement, which can be enforced in court;
• Failure to provide a habitable dwelling - a ‘habitable’ condition refers to a dwelling being safe and suitable for living, with adequate space, protection from the elements and the supply of necessary utilities;
• Failure to maintain the property - landlords must maintain building structures and ensure that their rental properties have proper access to basic services;
• Failure to repay the deposit and accrued interest - the responsibility of arranging a joint inspection of the property with the tenant will fall on the landlord. A list of defects to the property must be attached as an annexure to the lease agreement and if a joint inspection is not done at the commencement of the lease, the landlord will not be allowed to withhold a portion of the tenant’s deposit for repairs or damage. Deposits, together with the interest earned, must be paid out to tenants within seven days of the expiration of the lease, subject to deductions for damages;
• Cutting utilities – only the municipality may cut services for non-payment;
• Locking the tenant out of the property – you may not keep a tenant from entering the property without a court order.

Guthrie strongly urges both landlords and tenants to familiarise themselves with the act as there are a number of clauses that could easily trip up both parties: “For instance, Section 4A (9) expressly prohibits subletting of the leased premises, without the consent of the landlord.

“And in this Airbnb day and age, together with the strict requirements of service on each occupant for eviction proceedings, it is imperative for the landlord to know at any given time who is occupying the leased premises.” 

Dellbridge concludes: “Although no firm date has been set for the amended act to come into operation, landlords and tenants will be required to comply with the new requirements within six months from the date of commencement.

“And in this case knowledge definitely is power and it’s not too soon to begin familiarising oneself with the act and note the important changes. In fact, landlords should embrace it – it will eradicate much frustration and will also help weed out tenants who take advantage and work the current system."

Activists battle property company over right to protest

Activist groups Reclaim the City (RTC) and #UniteBehind have opposed an interdict granted in December to Growthpoint Properties. RTC claims that Growthpoint misled the court when it made its application for an urgent interdict and it used a private security company to suppress the organisation's right to protest.
About 30 RTC members protested silently outside the Western Cape High Court on Monday, 4 March, while attorney Jonty Cogger filed the papers. The protesters wore red regalia and had their mouths tied with red cloth.

On 4 December, RTC — supported by #UniteBehind and the Social Justice Coalition (SJC) — protested on the Foreshore in Cape Town by building shacks on vacant land known as Site B.

Site B had been sold by the city to Growthpoint in 2016 for R86.5m. RTC says this was well below the market value for the company’s proposed 46,000m2 development.

Cogger told GroundUp that when Growthpoint applied for the interdict it had a duty to disclose all material facts. He said Growthpoint lied; it knew RTC was holding a protest and not a land invasion. It also brought its application without informing the protesters.

“When you do that you have an utmost duty to disclose all your material facts. If you don’t, the court has discretion to overturn that order,” said Cogger. “This case touches on issues like: Can you protest on private property? Can you protest in church if you want to raise problems happening in that church? What are the limits of holding a private party accountable for their actions?”

“Growthpoint knew us and the reason for the protest, but deliberately misled the court to ensure that we could not defend ourselves. In the late afternoon, Growthpoint secured its interdict and enforced it by deploying a private security company called Vetus Schola. Vetus Schola arrived in armoured vehicles and carrying automatic rifles to shut down the protest,” RTC said in a statement on Monday.

RTC said Growthpoint told the court that RTC members were planning a large scale “invasion” to settle on the land permanently and enrich themselves by charging fees for plots.

It said Growthpoint had also claimed that people who are homeless in the area are those who have an “unfortunate dependence on alcohol and other substances and their homelessness is accordingly situational rather than as a result of economic conditions or lack of space”, but Growthpoint had no evidence for this claim.

RTC said it was unacceptable that Growthpoint used a private security company to intimidate and threaten peaceful protesters. The interdict should have been enforced by the South African police, not private security.

GroundUp contacted Growthpoint. At the time of publishing no reply had been received.

The matter will be heard in court on 3 June.

RTC also criticised the City of Cape Town: “The city promised a forensic investigation into the botched sale of Site B, but no further action has been taken for far.”

However, Luthando Tyhalibongo, spokesperson for the city, told GroundUp that a forensic investigation is underway and it is being treated as a priority matter. “The city cannot commit to time lines as it could hamper the investigation,” he said.

Article originally published on GroundUp.

How the Rental Housing Amendment Act will affect landlords, tenants

The Rental Housing Amendment Act 35 of 2014 has been on the cards for some time, and once it is in place, landlords and tenants will have six months to comply with the new legislation. Currently, no date has been set for implementation but many experts believe it is imminent.
“With serious repercussions that will be seen as offences, landlords need to pay careful attention,” says HouseMe CEO, Ben Shaw. “The Rental Housing Amendment Act creates stricter rules for landlords that could lead to fines or even imprisonment if found guilty of contravening specific parts of the Act,” Shaw says. “A renewed focus on lease documentation, deposit repayment, utilities management, tenant premises access, and ensuring the maintenance/habitability of the premises has been put forward strongly.”

All lease agreements will now have to be in writing. “It is required that landlords invest the tenant's deposit in an interest-bearing account where the interest may not be less than the rate applicable to a savings account with that financial institution.” Tenants have the right to request written proof of this.

If a property is not deemed to be in a ‘habitable’ state, a landlord can face jail time. “This means it is important for landlords to maintain their properties if they have tenants.” Tenants have the right to basic services like water and electricity and they have the right to a building structure that has been maintained. “According to the Act, ‘habitability’ refers to safety and suitability for living,” Shaw says.

The Act states that a landlord may not seize possessions of a tenant, visitors or family of the tenant except in terms of a law of general application and after having first obtained a court ruling, Shaw adds.

“In advertising a dwelling for purposes of leasing it, or in negotiating a lease with a prospective tenant, or during the term of a lease, a landlord may not unfairly discriminate against such prospective tenant or tenants on grounds including race, gender, sex, marital status, sexual orientation, disability or religion.” If a landlord doesn't comply to the above, they will be found guilty of an offence in terms of the Amendment Act.

Defining the lines for automatic transfer of employees

Do employees automatically transfer from an old service provider to a new service provider when the client replaces the one with the other? The Labour Appeal Court (LAC) recently engaged low gear to provide proper traction on the automatic transfer of employees.
The Labour Relations Act (LRA) provides for automatic transfer of employees following the transfer of a business (or part of a business) as a going concern. Our local version of the Transfer of Undertakings and Protection of Employment (TUPE) Regulations in the United Kingdom, or Acquired Rights Directive in the European Union, is section 197 of the LRA. Section 197 provides protection of employment to employees where their employer is taken over by another business, or where a portion of their employer's business is transferred to another. This aspect has been the source of considerable juridical attention when it comes to a change in service providers. Whilst it is relatively settled that employees will transfer where the entire business is taken over, sold or otherwise transferred, it is not as clear in respect of changes in service providers.

In Imvula Protection and others vs University of South Africa, the LAC heard an appeal of the original court's judgment. The labour court originally held that the university had not taken over the business of the security service when it terminated the service agreement, insourced some of the functions and appointed another provider to perform other functions. The case turned on what constituted a business for the purpose of section 197.

The LAC was at pains to highlight the unique nature of the case - including the university's decision to employ the majority of the security guards in the light of protests against outsourcing during the "Fees Must Fall" campaign that swept tertiary institutions during 2015. The university did not take over infrastructure or assets involved in managing the security guards or service but instead required a new service provider to provide managers and supervisors for the overall management of the security staff. The appellants argued that the university employing the majority of the security staff triggered the automatic transfer provisions, especially when considering that the assets required for them to perform their work were insignificant.

In its judgment delivered on 25 September 2018, the LAC held that the business of providing security at the campuses constituted more than merely a group of guards patrolling the premises. The business included management, equipment or strategy with regard to their deployment. The university did not take over any of these, hence it did not take over the business of providing security. As a result, the termination of the service provider agreement and employment of the majority of the guards did not constitute a transfer of a business as a going concern on these facts. The old service provider had to deal with its remaining staff in the normal course - redeploy them or terminate their service due to redundancy or operational requirements.

Employers keen to get in the right gear when facing business transfers should consider the nature of the business they will hand over or accept. From the original labour court judgment and the LAC's views it is clear that the courts appreciate that most businesses require assets of various shapes and forms to conduct the business. Absent a transfer of assets, most transfers of a portion of the business will not meet the requirements of section 197 (that it must be a business or identifiable portion of it) that is transferred as a going concern. Structuring transactions accordingly will assist in avoiding unwanted consequences. In appropriate circumstances and if properly structured, employee transfers can take place manually and not automatically.


http://www.bizcommunity.com/Article/196/607/182608.html

Alarming rise of racial insults in the workplace

Recently, there has been an unsettling rise in the instances of racial slander in the workplace.
For example, ex-DJ Sasha Martinengo was fired - with immediate effect - from his position at Hot 91.9 for calling the leader of the EFF, Julius Malema, a "monkey". Velaphi Khumalo - employee of the Gauteng Sports, Arts, Culture and Recreation - made the comment that whites in South Africa need to be dealt with like Hitler handled the Jews in Nazi Germany. This comment of his has been seen as hate speech and he is facing a disciplinary enquiry. The action taken by those in a superior position to these individuals is well documented in the media. However, is this the norm in terms of dealing with cases of racial insults?
The two recent cases below show the approaches that our courts have adopted towards instances of racially provoked commentary.

Rustenburg Platinum Mine v SAEWA obo Bester and Others (17 May 2018)

In this case, it is shown that it can be a dismissible offence for an employee to use racial statements about their employers.



Facts of the case

A senior training officer was dismissed for insubordination and making derogatory remarks: it was held that he used the words “swart man” when he addressed a grievance. The employee addressed his complaints in emails to the chief safety officer who assigned the parking bays. 

The employer’s evidence was that the employee had stormed into a management meeting and - while raising his voice - said “verwyder daardie swart man se voertuig”. The employee disputed this. A Commissioner held that his dismissal was substantively and procedurally unfair. The employee was awarded retrospective reinstatement and compensation to the value of R191,834. It was found that - on a balance of probabilities - the employee had used the term “swart man” to describe someone he had never met however the Commissioner found that this was not be a racial remark as it was describing an attribute of a person.

The Labour Court took note of evidence which showed a memorandum was issued within the workplace that stipulated that abusive or derogatory language would not be tolerated. Thus the employee had knowledge of the rule. On review the undisputed evidence confirmed a zero-tolerance rule for racial remarks. The Labour Court found that the dismissal was fair in the circumstances (serious misconduct). The award was set aside. 
On appeal, the Labour Appeal Court had to determine if using the words “swart man” was derogatory and if – objectively - it was a breach of the employer’s rules. The Labour Appeal Court found that the use of the words in the context could not be said to be intended to be a racial remark. The Court noted that the LC had failed to recognise the impact of apartheid and racial segregation that has left society with a racially charged state of affairs. 

The test was if, objectively, the words were capable of bearing a meaning that was deemed to be a racial remark. The Court noted the employee was dishonest in denying that he had made the statement and the other witnesses were consistent in their version that this did occur. The Court held that the employee had not separated himself from the apartheid past and that an acknowledgement of wrong doing by the employee would have gone a long way in rehabilitation. 

The Court found that the dismissal was appropriate in the circumstances. The appeal was dismissed and there was no order as to costs. 

Shoprite Checkers (Pty) Ltd v Samka and others - (2018)

This case shows that, in cases of racial slander, the extent to which the employer has a responsibility to protect its staff from customers who abuse them verbally.



Facts of the case

The employee claimed that she had been discriminated against, on the grounds of race, by being bullied, victimised and harassed by the staff of the store at which she worked as a customer had called her a "stupid k****". A CCMA Commissioner rejected the employee's claim that she had been harassed by staff because of her race. Instead it was found that the employer had failed to investigate the customer's racist comment, for which the employer was liable, properly. The employer was ordered to pay the employee compensation of R75,000. The employer appealed against the award. The employee cross-appealed against the findings that she had not also been discriminated against by bullying and harassment. 

The Court accepted that the words used by the customer constituted one of the worst racist insults. However, the question was if the employer could be held liable for the utterances of one of its customers. The Court held that it could not. The Employment Equity Act (EEA) provides that if an employee discriminates against a colleague while at work, the employer may be held liable if it does not take steps to eliminate the racist conduct. It was clear to the Court that section 60 of the EEA applies only to conduct by an employee of the defendant employer. The Court added that the employee had remedies under the common law or other statutes.

Turning to the cross-appeal, the Court noted the Commissioner had accepted that the employee had been bullied and harassed by colleagues, but that this conduct was not motivated by the employee's race. Although harassment is declared as a form of discrimination by the EEA, it must still be based on one of the listed or analogous grounds, which the employee had failed to prove.

The appeal was upheld and the cross-appeal was dismissed. 

Given South Africa’s racially clouded history, hate speech needs to be dealt with in an extremely serious manner. The Prevention and Combating of Hate Crimes and Hate Speech Bill is government’s contribution to the fight against hate speech.


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Former employees to lay charges over provident fund deductions

The case of a Sea Point security company and its owner, who have been accused of failing to pay provident fund contributions, has been postponed until February.
This is to allow the attorneys representing the Private Security Sector Provident Fund enough time to respond to the company’s version of events. On Thursday, the matter was then moved to the Western Cape High Court’s semi-urgent roll for argument.

Proexec Security Network and its owner Geoffrey Levy have been accused of failing to pay contributions to the Fund for about 12 years. The Fund brought an application to ask the court to compel Levy to pay outstanding contributions as well as interest on the late payments.

During the previous court appearance, the Fund’s attorneys told the court that Levy was claiming that he could not pay the outstanding R2.5 million. “If that is his purported defence, then my submission is that isn’t a defence,” the attorney said.

On Thursday, Levy’s wife, Natasha, told Judge Patrick Gamble that they agreed to the postponement as there was “a lot of information to share”. Asked about her role at Proexec, Levy said, “I have been assisting with administrative functions and communicating with the necessary people.”

Levy told the court that the reason her husband was not in court was because “his health was not great and that we have received death threats and were on News24”.

“It’s a messy situation but somebody needs to come forward and deal with the matter,” she said.

Gamble then postponed the matter until 13 February 2019.

Outside the courtroom, at least ten former employees stood together in the passage. Fikile Vakele, who had worked for Proexec from 2008 to April 2017, said the group planned to lodge their own criminal charges against the company.

“We have been waiting too long for answers ... We went to Legal Aid and they told us the Pension Fund Adjudicator needs to give us the outcome of its investigation but they are still busy. We are running out of time,” he said.


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Agreement improves handling of school sex offences

The Department of Basic Education (DBE) has welcomed the signing of new collective agreements, which will be instrumental in ensuring that justice prevails in cases where educators are accused of sexual misconduct.
The agreements, which were presented to the Portfolio Committee on Basic Education in Parliament today, are a positive development for learners who are either the victim or witness to the offence committed by teachers.

Collective Agreement No. 3 of 2018 provides a one-stop process (arbitration) that replaces the DBE’s internal disciplinary hearing and prevents the child from having to testify multiple times and going through secondary trauma.

The department said in the past, there were three platforms available to learners who are victims of sexual misconduct or witnesses. These were the Provincial Department of Education’s internal disciplinary hearing processes; the South African Council for Educators (SACE) investigative process, where the child is also required to testify; and the Education Labour Relations Council (ELRC) arbitration process, in the event that the teacher refers a dispute to the council.

The learner was required to testify in all three processes, reliving the trauma at every stage.

“Up to now, children and parents have been reluctant to testify afresh due to the secondary trauma that learners would be subjected to. This resulted in the absence of witnesses in many instances and a lack of evidence for the employer to act on,” the department said.

Due to this, sexual offenders would often be reinstated through the Education Labour Relations Council arbitration outcome and the teacher would not be struck off the roll of educators by SACE.

This created a loophole for paedophiles and sexual predators to re-enter the sector, the department said.

However, today’s one-stop arbitration process will replace the department’s internal disciplinary hearing, where there will be a special panel of suitably qualified and experienced arbitrators to deal with matters related to sexual misconduct between learners and teachers.

According to the department, the judgement of an arbitration shall be final and binding, and has the same status as an arbitration award under the Labour Relations Act.

“This particular agreement is important because it will play a critical role in ensuring that justice prevails in cases where educators are accused of sexual misconduct involving children,“ the department said.

The ELRC has an obligation to fulfil its broader mandate and ensure that the principle of fairness is applied. Intermediaries have been appointed and trained to aid the child victim or witness to give evidence at a special venue such as the Children’s Court and two-way mirrors will be used.

A partnership has also been initiated with the Registrar of the National Sexual Offenders Register, and a Memorandum of Understanding has been put in place with the Department of Justice and Constitutional Development for the use of the Children’s Court for special cases, and the recruitment of intermediaries.

Furthermore, the ELRC and SACE have established a partnership to synchronise the processes of the two entities in relation to special cases, where children are involved and both have agreed to collaborate on an awareness and advocacy campaign.
 

Registering sex offenders

The ELRC has also partnered with the South African Police Service (SAPS) to ensure that the names of people involved in sexual offences with children are registered.

The department said the sector needs to align appointment processes to include a SAPS clearance certificate and also collaborate with School Governing Bodies for public schools and private schools where teachers are appointed at the school level.

Access to the offender registers will also be reviewed in light of the obligations of the employer in respect of employees.

“With the current scourge of sexual crimes, particularly against children in the country, this agreement would be instrumental in ensuring that justice prevails in cases where educators are accused of sexual misconduct involving children.

“The Department of Basic Education is confident that these improved measures will close gaps in processes and ensure that sexual predators are not able to operate in schools,” the department said.

The ELRC also welcomed the agreements, saying collective agreements will go a long way to creating a safe environment for learners as well as enhance stability in schools.

http://www.bizcommunity.com/Article/196/546/183245.html

There are currently several pieces of environmental legislation being updated or coming into force, with which the mining industry will be obliged to comply, such as the National Environmental Management Act (Nema) regulations - including new legislation around mine rehabilitation - and the Carbon Tax Act.
As a prequel to its annual think tank, The Joburg Indaba team gathered for a discussion, sharing industry insights and paving the way for the main event in October. 
 

Old habits die hard

The industry can no longer put its head in the sand as the new Bill will be passed in the near future. "Issues like climate change and carbon tax are not going away. It may be a while before we can see all the implications, but by 2020 we will have legislation around these challenges and companies need to begin to take action now instead of adopting a wait and see approach," said Garyn Rapson, partner, environment & natural resources, Webber Wentzel.

He was supported by Carlyn Davies, director, Natural Resources and Environmental Department, ENSafrica, who pointed out that old habits are being curtailed in the new legislation: "Often companies just include in their budget that they will have to pay a fine, so these amendments have increased the fines to a maximum of R10m and for those companies for whom this is still not a deterrent, the minister can now cease activities at the mine in question."

The industry needs to take responsibility, carry out proper assessments and build technical solutions that work instead of leaving all regulation to the DMR: "How do we make decisions and regulate complexities? The only way is for everyone to take responsibility. Our intent is the same. When you mine you have a responsibility, you don't need to wait for regulations, do things now and budget for that. As an industry don’t look for minimum compliance. Be responsible," said Ben Burnand, managing director, The MSA Group.
 

Enforcement is key

Challenges remain, as pointed out by Reuben Masenya, director of mine closure, Department of Mineral Resources: "Previously we had no enforcement branch, but we are learning from the past and enforcement is now key; without it, event the best legislation cannot work. We depend on taxpayers' money so we haven't reached a point where we have sufficient budget yet, but government is aware of this and taking cognizance. We also want to work alongside industry, so wherever possible, that is what we do."

Izak van der Walt, chief financial officer, Wescoal Holdings Limited, supports the legislation and the trend towards One Environmental System that involves simplifying and integrating the processes but says the devil is in the details: "There are flaws relating to the timing and synchronising of the different pieces of legislation and getting all the role players to engage and align. We need proper defined plans and the proof is always in the execution."
 

Financial provisioning

The new proposed section 24PA proposes that the minister of mineral resources may approve "drawdowns" of financial provisioning to support final decommissioning and closure from a period of 10 years prior to the expected date for final decommissioning and closure. Unlocking the funds set aside for rehabilitation has been a gripe of the mining industry for many years and it seems that these concerns have been heard, but many questions remain.

"Having provisioning for drawdowns would encourage mines to take more action. When funds are not accessible then the industry is more conservative and we've already agreed we need to go beyond just compliance. If we have access to funding, capital investment is more likely," he said.

There is also the possibility of making financial provisioning payments to a closure rehabilitation company as a suitable financial vehicle, which would create a new specialist rehabilitation industry in the country.

Mine closure could become a feasible economic activity, offering massive job creation. "We are talking about billions being available with all the work required. If we can find a mechanism that means funds aren't locked up until final mine closure and are more accessible, it opens up the possibility of multiple thousands of jobs. It's a superb opportunity with massive potential," said Burnand

In conclusion, it is vital that mining houses start to prepare now to comply with existing and future legislation and to ensure the protection of directors and managers from possible fines imposed for a breach of environmental regulations.

The Joburg Indaba takes place on 3-4 October 2018 at the Inanda Polo Club Johannesburg.

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The Department of Labour says it will direct more energy in the efforts to improve enforcement of the occupational safety and health regulations.
The department is pinning its hope on the Occupational Health and Safety Amendment Bill of 2018, which seeks to amend the current legislation, namely the Occupational Health and Safety Act, 85 of 1993.

The bill, which was approved by Cabinet in May, aims to provide greater protection for workers regarding injuries and diseases at the workplace.

However, the Bill has not yet been released for public comment, but this is imminent, Department of Labour Director-General Thobile Lamati told the media on Thursday.

“Once adopted, this bill will ensure greater protection of workers in respect of injuries and diseases at the workplace.”

Among others, Lamati said the bill would establish a clearly defined Health and Safety Management System - in line with international best practice. 

It also provides for mandatory risk assessment to be conducted by the employer and a workplace-specific risk management plan developed and implemented to minimise the exposure of employees to risk.

He said one of the major changes in the bill relates to the change in the administration of fines in cases of non-compliance.

“The amended OHS Bill also proposes among others that workers can run away from unsafe workplaces without being victimised, companies regularly share statistics of fatalities, and that fines are made more punitive,” he said, adding that inspectors would also be empowered to issue spot fines.

The next step is for the bill to be introduced in Parliament where it will be referred to the Portfolio Committee for consideration.
 

Preventable incidents

The briefing by Lamati follows the death of eight people at the Somerset West Denel plant, following an explosion.

It also follows the death of the three firefighters; Simphiwe Moropane (28), Mduduzi Ndlovu (40) and Khathutshelo Muedi (37) - who lost their lives while responding to the fire that erupted at The Bank of Lisbon building last Wednesday.

Lamati said all these incidents were preventable. “There is no workplace that should be prone to incidents. That is why we subscribe to ‘zero harm’ strategy. The Occupational Health and Safety (OHS) of 1993 put specific responsibility on people managing establishments to adhere to health and safety in the workplaces.”

The Director-General said the current legislation puts an emphasis on self-regulation hence every workplace should have safety committees.

It has since emerged that the building was non-compliant with occupational health and safety (OHS) standards, as it only had 21% compliance against the norm of 85%.
 

Bank of Lisbon building

According to the Department of Labour’s records, The Bank of Lisbon building was inspected in 2017 following a complaint lodged by the union.

During the inspection, it was discovered that there was non-compliance to occupational health and safety and subsequently a prohibition notice was issued on 20 November 2017 halting the occupation of the building - from the ground to the tenth floor - until such time renovations were completed and the building safe to occupy.

Lamati said the prohibition notice was observed and the construction work was carried out in the absence of Gauteng Department of Human Settlements employees.

On completion of the renovations, the Gauteng Department of Human Settlements requested the occupation certificate from the Department of Labour.

The offices were inspected again and on 4 December 2017, the Department of Labour was satisfied that the Department of Human Settlements had complied with the prohibition notice, the inspector revoked the notice and allowed occupation from ground to the tenth floor which belongs to the Human Settlements of which the Gauteng Department of Health did not form part.
 

Labour to close non-compliant buildings

Lamati says as a department they will be cracking the whip at those who don’t comply with the regulations- including government departments.

“We constantly have to work with the Department of Public Works as landlord of most of these buildings. We have previously taken a stance that government will not subject its employees to bad working conditions. Every employer -public and private- has a responsibility to ensure healthy and safe working environments. We cannot accept the excuse that there is no money.”

He said the department has closed a lot of non-compliant buildings, including one of its own in Johannesburg and Durban.

Department of Labour’s Director-General for Inspection and Enforcement Services Aggy Moiloa said they have found a challenge as institutions don’t comply with health and safety regulations.

“What we have picked up is that in some instances there is a lack of health and safety as a culture…some don’t see it as something that needs to be complied with,” said Moiloa.

Moiloa went on to name the chemical, iron and steel, construction and health sector as the problematic sectors in terms of the compliance.
 

Over R2-billion claims

She estimated that there were more than R2-billion worth of claims lodged annually with the department’s entity, the Compensation Fund for occupational injuries and diseases, most of which were due to non-compliance.

International Labour Organization’s (ILO’s) estimates a worker dies from a work-related accident or disease every 15 seconds.

Every day, some 6,300 workers die from occupational accidents or work-related diseases, amounting to more than 2.3 million deaths a year.

Furthermore, over 313 million workers suffer non-fatal occupational injuries each year, or in other words, 860,000 people are injured on the job every day.

The department has assured workers that it will leave no stone unturned and all those who are found to have flouted the law will be dealt with accordingly.

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A female student carrying almost R10 million in US currency in a plastic bag appeared in court Thursday, 13 September 2018, said the South African Revenue Service (SARS).
The woman appeared on charges of smuggling currency and failure to declare it.

The revenue service said the South African student was intercepted on a flight bound for Hong Kong on Tuesday at OR Tambo International Airport.

“The passenger, a South African female student, who had boarded with two bags as hand luggage, was then alighted with her luggage. Initially, she denied having currency in her possession but after further questioning, she admitted that she had a substantial amount of money in her backpack,” said SARS.

The money totalled $630,700 and was packed in 50 and 100 dollar bundles in a plastic bag.

Officers led her to the Customs search area, where she was placed in an interview room and requested to complete a traveller card. In the interview, the woman admitted that she was not the owner of the currency nor could she supply any proof of ownership.

“SARS remains appreciative of the constructive collaboration between Airports Company South Africa (ACSA), the South African Police Service (SAPS), Asset Forfeiture Unit and the State Security Agency (SSA), which is yielding positive results in the fight against the scourge of illicit financial flows,” said Acting Chief Officer of Customs and Excise Beyers Theron.

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The driver of a truck that was transporting 87 illegal immigrants intercepted at the Polokwane control centre on Wednesday, is expected to appear before the Polokwane High Court on Monday, 17 September.
He faces charges of bribery, violation of immigration laws and possible additional criminal charges. 

The truck was spotted by traffic officers after it did not adhere to a traffic sign leading to the Polokwane traffic centre. 

The officers pulled the truck off the road and upon inspection, they discovered the 87 illegal immigrants from Malawi, who were allegedly traveling to Durban.

The truck was impounded and the police were called to arrest the 50-year-old truck driver and the Malawian nationals. 

The Limpopo provincial government says it is pleased with the officers for intercepting the truck. 

According to the MEC for Transport and Community Safety in the province, Makoma Makhurupetje, the Department of Home Affairs confirmed that all the 87 immigrants are undocumented. This means that they are also facing charges of violating immigration laws. 

“As the Limpopo provincial government, we have full confidence in the justice system that they will deal with this matter accordingly without fear or favour and we maintain that Limpopo is not a crime zone,” Makhurupetje said.

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Is an employer bound by its own changes to its leave policy? What happens when the employer disputes whether the changes were ever implemented, and there is no witness to gainsay claims of what happened a decade or so ago? The Labour Court in South Africa had to consider this and other interesting issues in deciding whether an employee had a legal entitlement to accrued annual leave upon termination of employment. The judgment confirms the importance of employers taking special care in clarifying employee entitlements in their employment policies. It also highlights the importance of maintaining a record of the implementation and communication of salient changes.
The employee in Bester v Selfmed Medical Scheme (judgment delivered 31 July 2018) claimed she was entitled to over 200 days annual leave at the termination of her fixed-term contract. Her salary advice, or payslip, recorded this as the number of annual leave days due to her. The employer declined to pay the leave days claimed. It disputed whether the original terms and conditions of employment were in fact amended by a subsequent policy. 

The employee testified about the changes to the standard terms and conditions of employment brought about by the board adopting a new leave policy in 2005. The employer's witness was not in the company's employ at that time and was unable to refute salient facts supporting the implementation of the policy. The policy entitled employees to accumulate 50% of their annual leave allotment.

The court confirmed the general position in respect of resolving the disputes of fact. Quoting from the leading case on the issue, the court stated as follows:

The technique to resolve disputes of fact is well known:

The technique generally employed by courts in resolving factual disputes of this nature may conveniently be summarised as follows. To come to a conclusion on the disputed issues a court must make findings on 
the credibility of the various factual witnesses;  their reliability; and  the probabilities.
As to (a), the court's finding on the credibility of a particular witness will depend on its impression about the veracity of the witness. That in turn will depend on a variety of subsidiary factors, not necessarily in order of importance, such as 
the witness's candour and demeanour in the witness-box,  his bias, latent and blatant,  internal contradictions in his evidence,  external contradictions with what was pleaded or put on his behalf, or with established fact or with his own extracurial statements or actions,  the probability or improbability of particular aspects of his version,  the calibre and cogency of his performance compared to that of other witnesses testifying about the same incident or events.

As to (b), a witness' reliability will depend, apart from the factors mentioned under (a)(ii), (iv) and (v) above, on (i) the opportunities he had to experience or observe the event in question and (ii) the quality, integrity and independence of his recall thereof. 

As to (c), this necessitates an analysis and evaluation of the probability or improbability of each party's version on each of the disputed issues. 

In the light of its assessment of (a), (b) and (c) the court will then, as a final step, determine whether the party burdened with the onus of proof has succeeded in discharging it. The hard case, which will doubtless be the rare one, occurs when a court's credibility findings compel it in one direction and its evaluation of the general probabilities in another. The more convincing the former, the less convincing will be the latter. But when all factors are equipoised probabilities prevail. - (Stellenbosch Farmers' Winery Group Ltd and another v Martell et Cie and others (SCA))

The court upheld the employee's claim for payment of her accumulated annual leave payable upon termination of employment.
 

Importance of records

What value should the employers rake from this annual leave judgment? Critical to any business’s long-term ability to manage employment disputes is sound record-keeping. Where changes are made to terms and conditions of employment, new policies introduced or work practices amended, proper records should be maintained and preserved. Keeping detailed records will assist the organisation in dealing with disputes long after the current role-players have left the business. Important information that should be recorded includes: exactly what was changed; when amendments took effect; what prior process was followed and how changes were communicated to staff. 

In this technological age, it is relatively simple to track and record how policies are communicated via email, to whom such emails were delivered and who actually read the emails. Some businesses append important communications to payslips when these are distributed to staff, allowing further confirmation of the communication of important issues or workplace changes. Whatever method is preferred, sound record keeping allows parties the ability to reconstruct events when the organisational memory has faded. A system that gathers the institutional memory leaves that fall as seasons change may prevent money from leaving the organisational coffers in years to come.

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Legal information platform Baobob.law has been named winner of the Southern African leg of the Hague Institute for Innovation of Law (HiiL) Innovating Justice Challenge.
The announcement was made at an event at Sandton Convention Centre on 4 September 2018, after finalists pitched to a panel of expert judges from the fields of law and innovation.

Winner Baobab.law, founded by Khokela Daula and Guy Stern, seeks to remove barriers to entry for legal assistance by providing information DIY legal solutions in the form of video tutorials that can speed up process of resolving legal matters. Videos are recorded with professional lawyers and available in multiple local languages.

“Our challenge was to find a solution that would bring access to justice to millions,” said Stern. “A solution that is going to impact millions needs to have a few key ingredients: it needs to be 100 per cent free to use, accessible in many languages on social multiple channels and viral in nature. Video checks all of these boxes.”

Second place went to Zimbabwe’s PhoenixCMS, a low-cost case management service, designed to help human rights organisations track important information and improve reporting of rights abuses around the country. South Africa’s Masenze Strategic Advisors, a rights awareness platform working on innovative ways to improve legal education for underserved communities, was third.

“All of our finalists demonstrated incredible new ideas for providing access to justice services in cost effective, sustainable and scalable ways,” said Ellen Tacoma, director of the HiiL Justice Accelerator in The Netherlands, “And their commitment to principles of justice as a human right is truly humbling. They’ve set the bar exceptionally high for our other regional finals in Nairobi, Kampala, Lagos, Dhaka and The Netherlands over the coming month.”

Following the conclusion of the regional finals around the world, HiiL will invite selected startups and innovators to join its Justice Accelerator programme, through which it supports fledgling organisations with seed funding and development assistance.

This article was originally published on Disrupt Africa.

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In July, the Deeds Office officially entered the digital era when the Bloemfontein office registered its first property transfer with a digitally signed document, paving the way to a more efficient and streamlined process in an industry which is renowned for cumbersome reams of documentation.
Arnold Maritz, Southern Suburbs co-principal for Lew Geffen Sotheby’s International Realty, says: “When one considers that there are only 10 deeds offices country-wide, an innovation that facilitates the registration process is most welcome, and this change alone can speed up the lengthy sale process by a few days. 

“This step is part of a broader transformation to be implemented under The Deeds Registries Amendment Bill, 2015 that also provides for an electronic deeds registration system, the electronic keeping of registers and the electronic issuing of deeds for information and judicial purposes only.”
 

Pen and ink

He adds that although the document submitted in Bloemfontein was a Power of Attorney, the Deeds Office has since ruled that this document as well as the Deed of Sale must still be hand-signed in pen before being lodged together with the other documents, so a significant amount of paperwork and facetime is still necessary. 

“When a fully digital system that is safe, user-friendly and accessible is developed, it will change the way property sales are handled,” says Lara Colananni, specialist conveyancing attorney from Guthrie Colananni Attorneys. 

“However, at this stage it is still necessary to physically FICA individuals, companies and trusts, and not all documents can be signed electronically. Using trusted encryption techniques, like biometrics, will be far more efficient and less risky, if highly sophisticated electronic security and firewalls are out in place.” 

Given the spike in digital fraud in the real estate industry in recent years, many people are understandably apprehensive and concerned that further digitisation will create new opportunities for brazen fraudsters.

Colananni says: “Innovation and change often increase risks because it is just a matter of time before an enterprising criminal finds a way to abuse the new system. Then, it comes right back to cops and robbers. 

“The key factor is that when entering into digital contracts, you have no idea who is on the other side of an email address. Identity theft and digital editing make it possible to create false online identities and many of these fake profiles are so convincing that even astute parties may be duped.”
 

Staying protected while saving paper

So how does one protect oneself without staying in the dark ages, killing half a forest with each transaction? 

It is essential to sign documents through recognised and reputable encryption agencies that facilitate advanced electronic signatures. Advanced electronic signatures aren’t signatures made by hand, scanned and pasted onto a document – they are encrypted, using a public and private key system, so that if information is intercepted in cyberspace it cannot be read.

“In other words, it will read like gibberish until the party receiving it unlocks it, or decodes it with a matching key,” says Colananni.

“Advanced e-signatures also serve to confirm the identity of the person on the other side of the digital correspondence, because encryption agencies verify identity before granting keys.

“Biometrics, like face recognition or finger prints also unlock encrypted information. A perfect example is Whatsapp messages, which are encrypted until the recipient of the message unlocks their phone using a code or a thumb print. However, there is a risk that a cybercriminal could find a way to copy the key that decodes the information.”

Colananni believes that there will definitely be more pros than cons once all legal procedures become digitised, because it will make legal services cheaper, faster and more accessible to the public, however, the cons will not be of minor significance, relating to identity theft, fraud and monetary theft. 

“While digitisation is safer theoretically, a recurring problem with cybercrime is that in many instances there is no trace of the perpetrator after the fact. In the event that someone’s online identity is stolen, it will be possible for the thief to sell their property and disappear with the proceeds of sale.”

Maritz concludes: “As the industry continues to digitise, it will become increasingly critical for buyers and sellers to ensure that they appoint accredited, experienced and knowledgeable professionals. The diminishing human connection will become all the more important in circumnavigating cyber fraud which will be adapting as quickly as technology advances.”

http://www.bizcommunity.com/Article/196/368/181981.html
 

NEWSWATCH: The Constitutional Court's landmark judgment that every pot-smoker across South Africa has been waiting for since the Cape High Court ruled in favour of decriminalising the use of marijuana, has been made...
In a unanimous judgment, the ConCourt this morning ruled that sections of the Drugs Act, as well as the Medicines and Related Substances Control Act (Medicines Act), are unconstitutional and rendered invalid. The Drugs Act currently criminalises the use, cultivation and possession of cannabis.

In his ruling statement, Deputy Chief Justice Raymond Zondo declared, "The right to privacy is not confined to a home or private dwelling. It will not be a criminal offence for an adult person to use or be in possession of cannabis in a private space.

"The judgment does not specify how many grams of cannabis can a person use or have in private."

It will now be up to Parliament to decide on what quantity will be considered "for personal use". Until then, police officers will need to use their own discretion to gauge whether the amount of dagga found on an individual could be considered for personal consumption only. If an officer, through reasonable judgment, suspects someone of dealing, they may arrest the person.

For more:

• ConCourt rules that personal use of dagga is not a criminal offence
• Highest court gives green light to dagga
• The highest court has spoken: You are allowed to smoke - and grow - dagga at home
• Dagga use decriminalised

http://www.bizcommunity.com/Article/196/717/182037.html
 

The Competition Commission will next month hold public hearings for the Data Services Market Inquiry.
The Commission initiated the Market Inquiry following numerous complaints relating to data services in the country.

“The Market Inquiry seeks to understand features in the market and the value chain that may cause or lead to high prices for data services. It also seeks to make recommendations that would result in lower prices for data services,” the Commission said.

In August last year, the Commission launched a Market Inquiry into data services with the release of the terms of reference and call for submissions.

A number of stakeholders in the data services sector made submissions in response to the call for submissions.

These stakeholders include the Internet Service Providers’ Association, Media Monitoring Africa, MTN, the Right2Know Campaign, Tarifica, Telkom, the Alliance for Affordable Internet, amandla.mobi, Broadband Infraco, Cell C, DG Murray Trust, Electronic Communications Network and Vodacom.

The Market Inquiry will be held on 17 and 18 October 2018 in Gauteng, following the extension of the Market Inquiry’s deadline to 31 March 2019.

“The Market Inquiry will cover all market participants involved at any point in the value chain for data services that are provided to customers such as government, businesses, trade associations, public entities, regulatory authorities and end-consumers in South Africa,” the Commission said.

Non-confidential versions of these submissions are available on the Commission’s website on www.compcom.co.za/data-market-inquiry.

The Market Inquiry is being conducted in response to a request from Economic Development Minister Ebrahim Patel.

The concerns of Minister Patel relate to high data costs in South Africa and the importance of data affordability for the South African economy and consumers.

Stakeholders who wish to participate in the public hearings by making oral submissions should communicate their interest by no later than 21 September 2018.

Expressions of interest must be sent to the Commission’s Inquiry team on datainquiry@compcom.co.za.

The Commission will require participating stakeholders to make written submissions prior to the oral submissions.

Written submissions should be received by the Commission by no later than 11 October 2018.

Submissions in respect of the public hearings should focus on the following key questions:

• Are data prices in South Africa (whether mobile, fixed or other) higher than they ought to be?
• To the extent that data prices in South Africa are higher than they ought to be, what are the factors that drive these outcomes?
• How can these factors be effectively remedied?
• What is the impact of data prices and access to data more broadly on lower-income customers, rural customers, small businesses and the unemployed?
• How important are affordable data prices for these customers?

http://www.bizcommunity.com/Article/196/739/182072.html
 

Public Enterprises Minister Pravin Gordhan has welcomed the high court's decision to dismiss Seth Radebe's application challenging his removal from office.
On Tuesday, the Gauteng Division of the High Court in Pretoria, dismissed an application by Radebe who had sought an order to set aside the decision by the Minister of Public Enterprises, Pravin Gordhan, to remove him from the Transnet board.

“The Ministry of Public Enterprises welcomes the judgment, in particular, the emphasis it places on the need to urgently restore good corporate governance at state-owned companies like Transnet, given their position and role in the South African economy,” said the Ministry on Tuesday evening.

Radebe was appointed to the post at the rail, port and pipeline company in December 2017.

In the judgement, Judge Hans J. Fabricius rejected this application describing it as “rather vague”.

Gordhan said Radebe’s litigation was frivolous and devoid of fact and truth.

The court observed a lack of decisive actions by the previous board against Transnet employees implicated in corruption, specifically in the 1,064 locomotives tender.

The court accepted legal arguments that investigation reports by Werksmans Attorneys and Professor H E Wainer were “incomplete” but maintained this “did not mean that they were inconclusive and could not be acted upon”.

Radebe argued, amongst others, that Gordhan’s decision to remove him as one of the last three directors on the previous Transnet board by May this year, was a racist act. Gordhan, who took the helm of the Department of Public Enterprises, which is the shareholder in Transnet and six other state owned companies, announced a new Transnet board in May.

Radebe was the only former director who approached the court to seek such relief.

The High Court dismissed his arguments in their entirety.

Judge Fabricius stated that he could not find that the Minister’s decision to remove Radebe was racially motivated or that it could be regarded as racial discrimination.

“Today’s judgment confirms our belief that the previous board failed to demonstrate an appreciation of the seriousness of allegations of maladministration and corruption or the ability to deal with these decisively in order to protect the institution,” said Gordhan.

The court further rejected Radebe’s arguments that he is entitled to a board position by virtue of his academic qualification.

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The ban on private possession, consumption and private cultivation of marijuana at home was ruled unconstitutional by the Constitutional Court on 18 September 2018, effectively decriminalising both the use and cultivation of dagga in private. What, however, does this mean for employers, and what should they do next?
Deputy chief justice Raymond Zondo, more often found recently probing alleged state capture at the commission of inquiry he helms, delivered the unanimous judgment.

The court not only upheld but expanded on Dennis Davis’ landmark judgment last year that adults using and growing marijuana in the privacy of their own home should be left in peace.

In addition to this, parliament has been given two years to change sections of both the drug trafficking act and the medicine controls act after these sections were found constitutionally invalid.
The ConCourt confirmed the ruling of the Western Cape High Court in part and added that the references to “in a private dwelling” or “in private dwellings” is replaced with “in private” or in the case of cultivation, “in a private place.” This is a very significant change as it no longer restricts the use and possession to the inside of a dwelling, but also includes a vehicle or on one’s person, even your carry-on luggage at the airport. 

The court ruled that sections 4(b) of the Drugs and Drug Trafficking Act 140 of 1992 read with Part III of Schedule 2 of that Act and the provisions of section 22A(9)(a)(i) of the Medicines and Related Substances Control Act 101 of 1965 read with Schedule 7 of GN R509 of 2003 published in terms of section 22A(2) of that Act are inconsistent with right to privacy entrenched in section 14 of the Constitution to the extent that the use or possession of cannabis in private by an adult person for his or her own consumption in private is not a criminal offence.

The court also did not specify any quantity restrictions.

While parliament will take up to 24 months to adapt the law to reflect all these changes, Justice Zondo explained that individuals are allowed to smoke privately in their own home in the meanwhile.

Zondo also stressed that both selling the substance and use of it by minors is still illegal.

Employers may now face some challenges from cannabis-consuming employees and it imperative that the correct message is conveyed from the out-set.
 

What should be treated differently in lieu of the ConCourt ruling?

General Safety Regulation 2A(1) states that “Subject to the provisions of subregulation (3), an employer or a user, as the case may be, shall not permit any person who is or who appears to be under the influence of intoxicating liquor or drugs, to enter or remain at a workplace.

(2) Subject to the provisions of subregulation (3), no person at a workplace shall be under the influence of or have in his or her possession or partake of or offer any other person intoxicating liquor or drugs.

(3) An employer or a user, as the case may be, shall, in the case where a person is taking medicines, only allow such person to perform duties at the workplace if the side effects of such medicine do not constitute a threat to the health or safety of the person concerned or other persons at such workplace”.

Although the ConCourt’s order did not include changes to the OHS Act or the GSR, it does however have some serious implications.
 

Weed in the workplace

What do you do when an employee comes to work with cannabis in his or her pocket or handbag? It is “in private”. It is thus not illegal.

In the judgment (Order in “100”) Judge Zondo said: “It seems to me that, indeed, there was no persuasive reason why the High Court confined its declaration of invalidity to the use or possession or cultivation of cannabis at a home or in a private dwelling. In my view, as long as the use or possession of cannabis is in private and not in public and the use or possession of cannabis is for the personal consumption of an adult, it is protected. Therefore, provided the use or possession of cannabis is by an adult person in private for his or her personal consumption, it is protected by the right to privacy entrenched in section 14 of our Constitution.
The judgment also deliberated extensively to the right to privacy, citing numerous arguments in previous cases, but Judge Zondo summarised it appropriately as the right to be left alone.

GSR 2A is in similar fashion thus also in part contrary to the ConCourt’s ruling although no ruling was made.

Here are my reasons for saying this:
The purpose of GSR 2(A) is to protect employees from injury (or injuring others) while under the influence of alcohol or drugs. In order to fulfil this purpose: The employer may not allow a person who is or appears to intoxicated on the premises, An employee may not work while intoxicated or use while at work, and If under medication, the employer must consider the side affects and allow an employee to only do such tasks that would not pose a safety or health risk. The purpose of GSR2(A) was extended to criminalise possession of alcohol or drugs in the phrase “have in his or her possession” in 2(A)2. It is important to note that possession is not illegal if solely for own use in private. And although a workplace toilet is private, the purpose of the regulation is to protect the employee and “use in private while at work” is still illegal.  It is only the part of the regulation referring to possession, which is contrary to the ConCourt ruling and it can also be extended to alcohol and other drugs.
The fact is that “possession” alone is not sufficient to enforce GSR2(A)2, and companies need to carefully evaluation their access control procedure. “Possession” may however be cause for concern for “under the influence.”
 

What should an employer do now?

In my opinion, given the extent of privacy argued by the ConCourt, employers need to re-evaluate their alcohol and drug abuse policies and procedures through a consultative process and since the “use in private of cannabis” is no longer illegal, encourage voluntary disclosure of such use. From there, an assessment can be made as to the extent of controls needed.

Cannabis remains detectable in the human system for up to 30 days, but the “intoxication” effects or short-term effects start to taper off after three or four hours. When marijuana is ingested, its effects peak between four and six hours.

The regulatory reference “appear to be under the influence” has often caused companies to “test and be sure” of intoxication but given the time lapse, one would never be 100% certain. One therefore needs to be extremely cautious not to subject an employee to undue corrective action in the interest of safety, where there are no legal grounds to do so.

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The Eastern Cape Directorate for Priority Crime Investigation (Hawks) has lauded the 20-year sentence the Port Elizabeth High Court handed down to convicted abalone poacher Morné Blignaut (48) on Wednesday.
In June 2016, Blignaut was arrested and charged on two counts of racketeering and one count for operating a fishing establishment without a permit. He was arrested with Frederick Nance (22), William Nance (55), Petrus Smith (34), Jacobus Naumann (37) and Marshelle Blignaut (42) by the Hawks’ Serious Organised Crime Investigation.

Between 2014 and 2016, the Hawks conducted a project driven investigation, into an abalone syndicate.

“Blignaut and his accomplices were the subject of this project driven investigation dubbed ‘Little Rhino’. Investigations established that from the July 2013 to August 2014, the syndicate made a total of R30 million from their criminal activities,” said Eastern Cape police spokesperson Captain Anelisa Feni.

Frederick and Nance, Smith, Naumann and Marshelle Blignaut pleaded guilty before the Port Elizabeth High court on the 22 August 2018. They are expected to be sentenced by the Port Elizabeth High Court on Thursday.

Welcoming the sentence, acting Eastern Cape Hawks head Brigadier Gopz Govender, warned that the plundering of abalone would not be taken lightly.

“This sentence should inform would be poachers that they are likely to face a similar imprisonment term after we arrest them,” he said.

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The South African Competition Commission has recommended that the South African Competition Tribunal approves the Sibanye-Stillwater acquisition of Lonmin subject to certain conditions.
Despite the commission noting a vertical and horizontal overlap of Sibanye-Stillwater and Lonmin’s activities in the platinum group metals (PGM) industry, it found that the proposed merger is unlikely to substantially prevent or lessen competition in any of the markets affected by the proposed merger. 

These conditions laid out by the commission include Sibanye-Stillwater:

• Investigating and implementing certain mining projects to avoid retrenchments, subject to the economic viability of the projects being supported by prevailing future metal prices and enhanced operating costs achieved through the realisation of expected synergies.
• Committing to investigate the feasibility of an agri-industrial community development programme in the Rustenburg area similar to the Bokamoso Barona Initiative, a public-private partnership on the West Rand, which was announced on Friday 7 September 2018.
• Honouring Lonmin’s current and future social and labour plans as agreed with the Department of Mineral Resources, as well as the agreements currently in place with the Bapo ba Mogale Community
• Continuing to support transformation in the mining industry, including the development of historically disadvantaged persons (HDP). In this regard Sibanye-Stillwater will both honour existing contracted HDP suppliers to Lonmin and endeavour to continue to utilise HDP suppliers, on reasonable commercial terms, in line with the Company’s existing procurement policies.

“The positive recommendation by the commission to the tribunal is pleasing and on terms which we believe are fair, reasonable and in the best interest of all stakeholders. We are confident that this transaction will not only bring greater stability to these assets and ensure a more sustainable and positive future, but also demonstrate Sibanye- Stillwater’s commitment to the South African mining sector,” says Neal Froneman CEO of Sibanye-Stillwater.

http://www.bizcommunity.com/Article/196/608/182113.html

While this week's Constitutional Court ruling means that South Africans can now smoke marijuana in the privacy of their own homes, those living in sectional title developments should arm themselves with more information before lighting up on their balcony or cultivating cannabis among their dahlias, says specialist sectional title attorney Marina Constas.
“Prior to this case, if you smoked in your own home, you could have been arrested. You would have had to use the defence of privacy in order to fight the charge. Now, you cannot get arrested. That’s the nub of it,” clarifies Constas, who is a director of BBM Attorneys.

“In Sectional Title, your own home would include your ‘section' and registered or rule-created exclusive use areas. So, you could sit and smoke a dagga joint in your lounge or on your balcony; but only if your balcony is part of your section, or if it is an exclusive use area either registered in the Deeds Office or allocated to you through the development’s Conduct Rules,” she states.
Constas cautions, however, that those living in sectional title developments should take care to check whether the balcony is, in fact, registered as common property, as they sometimes are. “Strictly speaking then, this area can be utilised by everyone and is not in law ‘private’.”

Smoking dagga in your garden may also be problematic if the garden is common property, she notes. “Growing it on common property would also be an issue. If the garden is a private, exclusive use area - registered or rule-created as such - then you would be in a position to use the Constitutional Court case.”

Constas believes that even in a private garden in a sectional title complex, the question of accessibility could become problematic if a resident was growing marijuana. 

Measures would need to be put in place to ensure that the area is secured and only accessible to the owner for private use. Having a flowerbed filled with dagga plants in an area accessible to the complex’s other residents, including children and teenagers, could be cause for concern.

While many sectional title developments have clubhouses where residents relax and socialise, Constas says the Court ruling does not mean that this may now include indulging in marijuana beside the pool. “There can definitely be no smoking of marijuana at the clubhouse or pool area. The ruling specifically states that you can only smoke it in the privacy of your home. Marijuana is distinguishable from cigarettes and alcohol, so even if these are allowed at the clubhouse, the smoking of dagga on any common property area in a sectional title development is not legal.”

BY RUDY D MARITZ 19 SEP 2018

Duplex situations in sectional title developments also pose an issue, she contends. “Where you have a duplex situation, it would have to be borne in mind that the actual physical smoking of the marijuana in the privacy of one’s own home is legal. So, if you smoke on your exclusive use patio, you are within your rights so to do. Smoke is insidious, however, and will move beyond the boundaries of your own home. Consequently it would have to be treated the same as cigarette smoke or other smells that could offend neighbours in the complex. The latest Sectional Title legislation’s new Rule 30(e) under the heading dealing with the use of sections and common property may offer an answer. It states that owners or occupiers of sections or exclusive use areas must not do anything within these areas that will have a ‘material negative effect’ on the value or utility of any other section or exclusive use area.”

Constas says that there may be place for Sectional Title trustees to set out certain conditions in the rules of the scheme, but that they would not be able to ban the smoking of marijuana in their rules. 

It could not be banned – even if 75% of the complex took a special resolution.

While there are many misconceptions around the latest Constitutional Court ruling on marijuana, Constas stresses that it simply reinforces the right to privacy. “In a Sectional Title development, however, where neighbours live in close proximity to each other, that can be complex concept.”

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In an important victory for smaller unions, the Constitutional Court has ruled that a minority union can organise in the workplace even if it doesn't meet membership requirements agreed on by the majority union and the employer.
The POPCRU v SACOSWU case was an appeal to the Constitutional Court from the Labour Appeal Court. The matter dealt with minority unions and their organisational rights, including access to the workplace; access to stop-order facilities for union subscriptions; leave for union activities; use of facilities; and the right to elect shop stewards.

The application was made by the Police and Prisons Civil Rights Union (POPCRU) which is the majority union. The respondents were the South African Correctional Services Union (SACOSWU) which is the minority union, the Minister of Correctional Services, LGP Ledwaba and the General Public Service Sectoral Bargaining Council.
 

Background

POPCRU and the Department of Correctional Services signed an agreement under section 18 of the Labour Relations Act. The agreement set a minimum requirement of 9,000 members for trade unions to be part of the Bargaining Council and to acquire organisational rights.

SACOSWU, a minority union with about 1,500 members, approached the Department of Correctional Services seeking to be granted organisational rights. The request was granted.

But POPCRU opposed the granting of organisational rights to SACOSWU. POPCRU said that the granting of these rights to a minority union that did not meet the minimum requirements was a violation of the agreement between POPCRU and the Department of Correctional Services.

SACOSWU argued that agreements under Section 18 of the Act could not prevent minority unions from entering into other agreements with employers over organisational rights.

The matter was referred to the Bargaining Council and an arbitrator was appointed. The arbitrator decided that the threshold agreement between POPCRU and the Department of Correctional Services did not prevent minority unions from negotiating their own agreements over organisational rights.

POPCRU then appealed this decision to the Labour Court. The Labour Court upheld the appeal and overturned the decision of the Bargaining Council. The Labour Court found that the threshold agreement did prohibit minority unions who did not meet the minimum threshold from accessing organisational rights.

SACOSWU appealed this decision to the Labour Appeal Court. The Labour Appeal Court upheld the appeal and found that the threshold agreement does not prevent minority unions from entering agreements for the acquisition of organisational rights.

This led to POPCRU making the appeal to the Constitutional Court.
 

Issues before the court

There were two issues for the Court to decide. The first was whether it was still relevant for the matter to be decided as the threshold agreement had expired. The second was whether an agreement concluded in terms of Section 18 of the LRA prohibited minority unions from accessing organisational rights.

The Constitutional Court held that although the agreement had expired, it was still in the interests of justice to hear the matter. This was because the decision would have practical consequences in future for minority unions who would like to exercise their rights.

The Court found that Section 18 of the LRA has an effect on the rights guaranteed in the Constitution relating to the formation of trade unions and the right to engage in collective bargaining. Because of this, the LRA had to be interpreted in a manner that would give effect to the spirit and letter of the Bill of Rights. The Court found that the interpretation put forward by POPCRU was incorrect. This interpretation would deny minority unions the right to engage in collective bargaining. The Court also held that the Constitution granted this right to all trade unions, regardless of whether they were majority or minority unions. This right could therefore not be limited by way of agreement between a majority union and employer.

As a result, the Court held that Section 18 of the LRA does not prevent minority trade unions from entering into collective bargaining agreements even where a threshold requirement has been agreed upon between a majority trade union and an employer. To prevent minority unions from exercising their constitutionally guaranteed rights would constitute an unjustifiable limitation, the Court said.

On a proper reading of the Labour Relations Act, the Court said, minority unions could acquire organisational rights in three ways. First, they would acquire these rights automatically if they met the threshold set out in the Section 18 agreement between the employer and the majority union. Second, if they did not meet the threshold requirement, they could enter into a separate agreement with the employer for the acquisition of the rights. Third, in terms of Section 21 of the LRA, they could refer the matter to an arbitrator who could determine if the minority union should acquire organisational rights.
Why is the decision important?

This case is important as it enforces the principle that constitutionally guaranteed rights can only be limited in a constitutionally justifiable way and not by means of private agreements.

This decision means that workers are free to join a trade union of their choice, even if it’s a minority union, and still be able to exercise their constitutionally guaranteed rights.

This article was originally published on GroundUp.

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Communications Deputy Minister Pinky Kekana says the draft Film and Publication Board's (FPB) Classification Guidelines seek to determine the extent to which media content is reflective of the public's values and expectations.
The Deputy Minister was speaking during a discussion document on the review of the draft FPB Classification Guidelines, on Thursday, at the Constitutional Hill in Johannesburg.

She said the document seeks to determine the extent to which the public is aware of the age ratings attributed to media content, and the degree to which they adopt and apply the age ratings when making decisions relating to media consumptions.

“The document seeks to determine the level of awareness of the South African public regarding the Classification Guidelines and ascertain the extent to which the public agrees with the specified guideline, as well as assess the extent to which the public comply with the guidelines,” Kekana said.
 

Evaluating work of artists, cultural practices

Kekana said if the public accept the premise that artists have a fundamental role to play in building a society cohesive nation, “then we must also be willing to ask if culture is a reflection of the human spirit, then what is the spirit of South Africa”.

“These are some of the lenses we have to apply when evaluating the work of artists and cultural practices. These two very important principles in our society may violently clash at times. We must develop the tools to sensitize our people of the clash that may arise.

“This is precisely what FPB guidelines seek to achieve, they are not means of distorting one’s artistic expression or condoning an irrational critic of one’s culture. The guidelines are there to explain to people the nature of the content they may be exposed to, so that one may choose whether they are ready to view society through the lens of a particular film or artistic works,” Kekana said.

Kekana also called on South Africans to express themselves about the content of the classification guidelines.
 

Consult when making films

During a panel discussion on the guidelines, Chairperson of Culture and Heritage Committee in the National House of Traditional Leaders, iNkosi Xolile Ndevu, expressed his concern about film writers’ lack of consultation with the custodians when making a film concerning peoples’ traditions and cultures.

“Our main concern in the whole film making and story-telling is that it should not be simple for the producers to make a film without getting a feeling and understanding from the custodians on the very same issue,” Ndevu said.

However, co-writer of the controversial movie Inxeba The Wound, Melusi Bhengu, argued that one of the biggest problems with African customs and culture is the secrecy and hiding of information.

“As a story teller I’m responsible to the entity, which is society not the custodians of the culture, but people who live and practice the culture. If the people who practice the culture are not happy because of the culture, I’m not going to turn a blind eye because I’m not carrying my responsibility as a story teller. My responsibility is to administer and reflect....I keep my finger on the pulse of the society, check what’s going on and tell the story,” Bhengu said.
 

Cultural sensitivity

Bhengu added that as a story teller, he is highly sensitive, adding that a culture demanding sensitivity should also be sensitive to the times and the season that it finds itself in.

FPB Chief Operations Officer Abongile Mashele said culture evolves, but tradition stays the same, and “this is an important conversation that we need to have”.

“Our discussion is about cultural sensitivity. As we do classification, what extent is it important that we’ve got so many criteria that we used, your nudity, sexuality, violence, language etc... how important is it that we include cultural sensitivity, perhaps as one of the criteria, or is it something that we can find a way to accommodate into our daily discourse,” Mashele said.

The FPB will hold consultations in all nine provinces. The public is urged to participate in the consultations in order to take ownership of the guidelines.

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Equity Amendment Bill pushes workplace transformation agenda

The Employment Equity Amendment Bill and the Draft Employment Equity Regulations, which aim to fast-track slow transformation in the workplace, are expected to be published in the Government Gazette this afternoon.
The amendment bill promulgates Section 53 of the Employment Equity Act (EEA), which was never promulgated since the inception of the act in 1998.

The amendments seek to strengthen the compliance mechanisms and will allow for the setting up of employment equity sector-specific numerical targets. 

This means that the Minister of Labour, in consultation with the stakeholders of the sector, will be able to set employment equity sector-specific numerical targets, the Department of Labour said on Friday.

The EE amendments, as well as the EE regulations, were approved by Parliament on Thursday for public comment for 60 days. 

The department said its concern is the slow pace of transformation portrayed in the quarterly reports on demographics of the economically active population (EAP) released by Statistics South Africa.

“The Commission for Employment Equity (CEE) annual reports have repeatedly shown marginal progress in relation to the equitable representation of the designated groups, in particular, Africans, Coloureds and persons with disabilities in the middle-to-upper occupational levels.”

The CEE annual reports submitted from 2001 to 2017 showed that the public sector made significant progress in transformation compared to the private sector, even though women in the public sector are underrepresented when taking into account their 45.3% of the EAP.

Labour said it will now start consulting through public hearings, which will be conducted in all nine provinces, during October 2018 to raise public awareness and solicit oral representations on the proposed amendments.

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Is it misconduct to make statements that are offensive to members of a particular race or ethnic background? If so, should an employer retain offending employees in its service? In Duncanmec v Gaylard N.O. and Others, the highest court considered whether employees singing struggle songs - with racial undertones - warranted dismissal.
The court heard that nine employees of Duncanmec embarked upon an unprotected strike. After rejecting the employer's ultimatum, the employees climbed onto the roof of the workplace and sang the struggle song. The employer later invited them to attend a disciplinary hearing to answer to allegations of misconduct. The alleged wrongdoing related to their participation in an unprotected strike, singing racial songs in an offensive manner and defying management’s ultimatum to return to work. In terms of the allegations, the offending portion of the struggle song translates to, "tell them that my mother is rejoicing when we hit the boer". (Depending on the context, "boer" may mean “farmer” or “white person”).

The chairperson of the disciplinary enquiry held that the elements of misconduct relating to racism were of such a serious nature that it warranted dismissal. The terminated employees challenged the fairness of their dismissal at the Commission for Conciliation, Mediation and Arbitration (CCMA). 

The CCMA held that, although the singing of the song was inappropriate and could be offensive and hurtful to some, it did not amount to racism. It held that there was a difference between singing a struggle song - typically with historical context - and an employee using a racist term.

The strike was both peaceful and short-lived. The Commissioner disagreed with the employer that dismissal was the appropriate sanction. However, she confirmed that the singing of that struggle song in the workplace was inappropriate and limited the employees’ compensation to three months' remuneration each.

The employer was dissatisfied with the outcome. It approached the Labour Court to review and set aside the CCMA award. The trade union, in opposing this application, disputed that the singing of the relevant struggle song constituted hate speech. It argued that it was a historic struggle song sung by workers during Apartheid. 

The court agreed with the trade union. It held that local strikes often still involve the singing of struggle songs in support of worker demands. In dismissing the employer's application, the court disagreed that the award was unreasonable. It confirmed the distinction between the current matter and other cases involving racism.

The employer eventually approached the Constitutional Court (CC). This court held that the appropriate test was whether the award meets the requirements of reasonableness, which requirement protects parties from arbitrary decisions which are not justified by rational decisions. The CC did not clarify whether the conduct would amount to racism. Instead, it held that the dismissal of the workers did not flow automatically even if the conduct did amount to racism. Each case of misconduct must be judged on its own merits to determine whether dismissal is appropriate. 

The court was, however, unequivocal that racism is a scourge that has no place in the workplace or our society. Employers can play a significant part in ensuring that all employees appreciate this message. It should adopt clear workplace rules that stipulate the exact requirements of the organisation in respect of such conduct. Dismissing staff who utter racist statements or otherwise engage in racism is an important mechanism to eradicate this vile behaviour. Ensuring that employees appreciate that there is zero tolerance for such workplace behaviour, including singing such songs, can enhance prospects of sustaining dismissals arising from this conduct. That, and of course, ensuring that the circumstances of each employee and the infringement are taken into account when determining the appropriate sanction.

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Viewing specific changes to legislation and keeping up to date with all the latest amendments can be a time-consuming and tedious process for legal practitioners, particularly when it involves following a multitude of hypertext links to search for historical versions of Principal Acts.
Now new, enhanced functionality from LexisNexis enables subscribers to South Africa’s most comprehensive online legal research tool, Lexis Library®, to view not only current legislation, but also all previous amendments since 2014.

Wendy Campbell-White, Business & Content Development Manager: Legislation, LAWSA & Tax at LexisNexis South Africa, explains the benefits of the new Lexis Library Point in Time feature. “Lexis Library provides our clients with the most comprehensive and up-to-date national legislation and Principal Acts. However, legal practitioners ranging from judges to advocates, attorneys and even legal librarians and secretaries often need to refer to historical versions of Acts in carrying out their work to establish the law at a particular point in time. 

“For example, if you are assisting a client with a dispute that relates to a previous year, the legislation relevant to the dispute may have been amended subsequent to the dispute arising. Lexis Library Point in Time enables you to go back and look at what the legislation looked like at that point in time while clearly highlighting the differences between then and now,” she says.

Users can choose to view the legislation and changes in either PDF or RTF view.

Campbell-White adds: “The Lexis Library Point in Time functionality also offers users a quick and easy way to scroll through highlighted changes in certain legislation where there may be frequent and substantial amendments from year to year, such as Income Tax, Labour Law and Finance.”

An added enhancement exclusive to Lexis Library is the Compare feature, which seamlessly displays different versions of each Principal Act side by side with changes highlighted through colour-coding. Red highlighted text indicates the earlier version while green displays the latest, most up-to-date version. Scrolling within the later version then enables users to view all the Amendments.

Section by section point in time comparisons are also available within specific sections of larger Acts, simply by navigating to the Section, clicking on the Point in Time icon and viewing a list of all historical versions of both the full Act and the Section in the pop-up display.

The Point in Time feature comes ahead of several revamps planned for Lexis Library later this year, according to Campbell-White. Also in the pipeline is a facelift of the table of contents within the library, together with a revolutionary revamp of national, provincial and local government legislation as well as Gazettes Online – making it much easier for users to navigate their way around and to locate content that is relevant to them.

More recent updates already on offer from Lexis Library include the consolidation and grouping of content according to specific fields of interest, termed Research Areas. This has helped to narrow down search results without showing information that is irrelevant. While the original way of searching by Publications is still there for those who prefer to conduct their research the way they always have, LexisNexis complemented this with additional search options grouped by content relevant to particular topics - such as Civil Procedure, Labour and Employment, Banking and Finance, B-BBEE, Family Law and Persons, Provincial Governments, Tax, Corporate and Commercial – as well as by Legislation, Case Law, LAWSA, Forms and Precedents, Commentary works and Practical Guidance. 

The end result is improved navigation and indexing which makes it even easier for lawyers to find exactly what they are looking for.

“Helping clients to uphold the Rule of Law is our global purpose and - with that at the core of our work - we will continue to invest in technology and content solutions that provide clients with the right tools, to make the right call at the right time in an efficient and user-friendly way,” says Campbell-White. 

For further information on the new Point in Time feature, clients can email content@lexisnexis.co.za or visit https://www.lexisnexis.co.za/lexislibrary/point-in-time. 

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National Treasury has published the Financial Sector Laws Amendment Bill, which will strengthen the Reserve Bank to manage the orderly resolution or winding down of a failing financial institution for public consultation.
Treasury published the Bill for public comment on Tuesday after its approval by Cabinet.

“The amendments will strengthen the ability of the South African Reserve Bank to manage the orderly resolution or winding down of a failing financial institution, with minimum disruption to the broader economy.

“In addition, the amendments will ensure that depositors’ funds are protected in the event of a bank failure, and that depositors’ funds will be paid out speedily to protect the most vulnerable customers,” said Treasury.

These amendments apply to all registered South African banks, including mutual and cooperative banks.

Comments on the Bill are invited and should be sent to Jeannine Bednar-Giyose at CommentDraftLegislation@treasury.gov.za by 7 November 2018. 

The National Treasury, the South African Reserve Bank and the Financial Sector Conduct Authority will be convening meetings and workshops with interested stakeholders.

http://www.bizcommunity.com/Article/196/717/182288.html

Winners of the African Legal Awards 2018

International law firm Baker McKenzie and South Africa-based Bowmans were among the big winners at the African Legal Awards 2018, which took place at The Wanderers Club, Johannesburg, South Africa on Friday 7 September
Baker McKenzie was named International Law Firm of the Year for the second year in a row, earning its third win in four years. Bowmans secured African Law Firm of the Year - Large Practice, one of four awards it received on the night which also included Property and Construction Team of the Year, and Energy and Natural Resources Team of the Year.

It was also a good night for Bowmans’ South African rivals ENSAfrica and Webber Wentzel, which each secured three awards.

Flagship awards for in-house lawyers and legal teams went to Tinuade Awe of The Nigerian Stock Exchange, who was named General Counsel of the Year, while Legal Department of the Year - Large Team went to the African Legal Support Facility, which is affiliated with the African Development Bank and helps African governments negotiate commercial transactions.
The ceremony, which was attended by nearly 300 lawyers from in-house legal departments and law firms, was jointly hosted by CCASA (the Corporate Counsel Association of South Africa) and Legal Week (organisers of The British Legal Awards). Emcee for the night was night was leading South African journalist, radio host and television presenter, Jeremy Maggs.
The evening culminated with the CCASA Lifetime Achievement Award, which went to Justice Edwin Cameron, who sits on the Constitutional Court of South Africa and is renowned for his pioneering work campaigning for gay rights.

Presenting the award, CCASA president Howard Snoyman, head of legal and regulatory affairs at Discovery Health Medical Scheme, said: “Judge Cameron, with his combination of exceptional legal learning skills, proven commitment to a democratic South Africa in its transformation and his personal courage, must be acknowledged as, in the words of Nelson Mandela, ‘one of South Africa’s heroes’.”

The awards were judged by an independent panel comprised of senior in-house lawyers and general counsel from an array of leading companies including Nokia, Standard Bank, Absa Capital and Sasol. 

For more information, visit: www.africanlegalawards.com

Article Taken From: http://www.bizcommunity.com/Article/196/546/181791.html
 

Are suspensive conditions in employment contracts valid?

There is a fine line between suspending (or resolving) an employment agreement in a permissible manner and depriving an employee of the right to security of employment. The Labour Appeal Court (LAC) in South Africa recently dealt with whether an employment agreement was capable of automatic termination if a condition therein provided for the automatic termination of the employment, should a vetting and screening process return a negative outcome.
In certain circumstances, it is permissible to incorporate suspensive or resolutive conditions into an employment agreement. Where a contract contains a suspensive condition, there is no employment agreement pending the fulfilment of that suspensive condition. Whereas a resolutive condition terminates a valid contract upon the fulfilment of that resolutive condition (in this case the negative outcome of the vetting and screening process) and the contract is regarded as never having come into existence.

In Nogcantsi v Mnquma Local Municipality and Others (2017), the employee argued that the court a quo ought to have distinguished between suspensive and resolutive conditions in employment agreements. The court found that it does not matter whether the condition is suspensive or resolutive, what matters is whether the condition prevents the employee from exercising any right conferred by the Labour Relations Act 66 of 1995 (LRA).
 

Case background

In this case, the employee was offered a position as a protection officer in terms of a fixed term contract, which contract was subject to the outcome of a positive vetting process. In this regard, the employment agreement contained a resolutive condition which provided that the offer was subject to a vetting process and that the employment agreement would automatically terminate should the employer become aware of any negative information pertaining to the employee.

The South African Police Service (SAPS), as the previous employer, informed the municipality that the employee had pending charges against him. The charges ranged from defeating the ends of justice to gross bodily harm and attempted murder. The municipality's letter of appointment clearly stated that the employment agreement would automatically terminate upon receiving negative results of the vetting process. The municipality wrote a second letter to the employee informing him that his employment had been terminated. In addition, the letter stated that it was regrettable that the employee did not disclose the negative information and that that alone, "displays dishonesty".
 

Dismissal vs contract termination

The employee sought reinstatement through the Bargaining Council where he contended that his termination was both substantively and procedurally unfair. He alleged that it was substantively unfair because he had disclosed all that was required during the interview and procedurally unfair because he was not given reasons for his dismissal, and it was with immediate effect. The Bargaining Council arbitrator ruled that the employee had not been dismissed, and the automatic termination of the contract was valid. The Labour Court upheld the ruling on review, where the employee contended that the arbitrator had erred by finding that his contract had terminated automatically, without constituting a dismissal, and argued that the termination clause was invalid or void for vagueness.

The employee took the Labour Court's decision on appeal. The LAC held that it was not the act of the municipality which produced a negative vetting result and consequently, caused the resolutive condition to be fulfilled, resulting in the automatic termination of the agreement. The negative result of the vetting came from the SAPS who provided the information to the municipality and it is not the third party (SAPS) who "made" the information negative, it was inherently and objectively negative. Therefore, there was no dismissal since the automatic termination was not caused by any decision or act of the municipality or the SAPS, which had as its objective the termination of the employee's employment agreement.

The LAC held further that it makes no difference whether the condition is suspensive or resolutive. The importance lies in whether the condition prevents the employee from exercising any right conferred by the LRA, as contemplated in section 5(2)(b) read with section 5(4) of the LRA.
 

Conclusion

Put differently, the enquiry into whether a condition is permissible or not is whether the condition prevents the employee from exercising any rights conferred by the LRA as envisaged above, and not whether the condition is suspensive or resolutive. The LAC stated that conditional employment agreements are a commercial reality and that the LRA is not opposed to such contracts.

Having the LAC's stamp of approval on automatic terminations arising from negative pre-screening should give comfort to employers to use suspensive and resolutive conditions of this nature more freely in their employment agreements.

Article Taken From: http://www.bizcommunity.com/Article/196/548/181812.html

Community Schemes Ombud Service: Who is guarding the guardian?

While there has been much focus in the property media on how homeowners can save costs as the fees for basic services continue to rise, sectional title property owners had more added to their monthly levies from late 2016 in the form of an additional levy to the Community Schemes Ombud Service, which was established to regulate the conduct of parties within community schemes and to ensure their good governance.
While on the surface this was a good move that was welcomed by many community scheme homeowners who appreciated having a ‘guardian’ they could turn to should they encounter disputes that were not easily resolved, this umbrella body for sectional title consumer complaints and watchdog over sectional title rules has recently come under the microscope for a number of financial irregularities.
 

A woeful tale

Recent media reports tell a woeful tale about the Community Schemes Ombud Service (CSOS), which, while still in its infancy of 24 months, has already lost some R80m of homeowners’ money. While the CSOS was established to protect owners and tenants in community schemes, it has instead placed them at risk and lost the monies which were paid to ensure its proper functioning.

Ironically, the CSOS finds itself in a position where its own audit has moved from qualified to adverse, when it is mandated to check each and every registered community schemes’ audited financials. In addition, there are further reports of unauthorised expenditure running into millions.

The CSOS has recently announced the suspension of its acting chief ombud, Adv. Seeng Letele and chief financial officer Themba Mabuya with effect from 3 September 2018, “following allegations of gross negligence, dishonesty and dereliction of duty in regards to an R80m investment in VBS Bank and failure to provide relevant information to the board relating to the investment of surplus funds” according to a recent press statement.
 

Basic incompetencies rife

It is clear that the CSOS are not meeting their undertaken requirements to the property owners who pay the monthly levies for their services and there are a number of basic incompetencies rife throughout the organisation.

Our experience of the two-year report card has been that adjudicators arrive late or not at all for hearings. Poor decisions that are made in adjudication are being referred to the High Courts for relief, which is costly and counterproductive and can potentially be stuck in the system for a number of years. There is also non-adherence to their own practice directive timelines. All of this means that managing agents are spending an inordinate amount of time managing their clients’ interests at their own cost and time.
 

Tax creep

From the outset, the CSOS has been overprovided for, and is nothing more than tax creep. Monthly levies paid by homeowners on the Renprop book to the CSOS average between R30 and R40 per unit for a limited service. Managing agents, by comparison, only charge R70-R100 per unit per month for a 24/7 service. So why is the CSOS levy so high?.

To date, only a small number of the approximately 200,000 community schemes have registered with the CSOS. How much money will the CSOS have to spend when there is full compliance and all schemes are registered, and who is guarding the guardian?

Word on the community scheme street is that owners may well boycott these levies. This is a mess that could easily have been avoided. Sadly, the CSOS had the opportunity to have a positive impact on the way this sector of the property industry functions, if they had operated properly and professionally from the outset.

Article Taken From: http://www.bizcommunity.com/Article/196/568/181785.html

Nominations for legal council open

Justice and Correctional Services Minister Michael Masutha has officially signalled the beginning of the nomination process for legal practitioners to serve on the inaugural South African Legal Practice Council.
Masutha said the council has to be established by 1 November 2018. The process began in 2015 with the establishment of the National Forum of the Legal Profession. 

The task of the forum was to provide a legislative framework for the transformation and restructuring of the legal profession in line with constitutional imperatives. This is done with the end goal of building an independent legal profession that broadly reflects the diversity and demographics of the country, as set out in the Legal Practice Act. 

The council, Masutha said, will exist as a national body with provincial structures throughout the nine provinces. The provincial structures will be established after the national body has been finalised. 

“The Legal Practice Council replaces the four statutory provincial law societies which have to date fulfilled the dual purpose of regulating and representing attorneys. Advocates and attorneys will now be regulated by the Legal Practice Council,” the minister said. 

Bar associations will no longer have the responsibility to regulate the profession, however, they can continue to exist as voluntary associations to advance any non-statutory interests of the profession. 

Masutha said the nomination process was an important milestone in the transformation of the legal profession. 

One of the benefits expected to be produced by the council is the establishment of community service, through which aspirant and serving legal practitioners will be required to perform community service to increase access to justice. 

The council will also see the enhancement of the accountability arrangements of the legal profession through the establishment of the legal service ombud, Masutha said. 

The council is also expected to oversee the transformation of the process for the conferral of senior counsel status (or silk status) through the creation of a transparent nomination process, which is based on the expertise and experience of legal practitioners. 

The National Forum of the Legal Profession chairperson, Advocate Kgomotso Moroka, pleaded with legal practitioners to make their voices heard during this process. 

“We have very tight timeframes so I ask and plead with members of the legal profession – attorneys and advocates – to start nominating the attorneys they want to serve on the council. I urge you all to take advantage of this process to make a difference.”

Nomination forms, Moroka said, have already been distributed to attorneys on Monday but forms are also available on the Department of Justice, the Law Society of South Africa and the National Forum of the Legal Profession and Bar Council websites. 

Nominations will close on midnight 14 September. Ballot papers will be printed and sent to legal practitioners for voting on 19 September and close on 30 September. 

Counting will be done between 1 and 3 October. Voting results will be announced on 5 October.

Article Taken From: http://www.bizcommunity.com/Article/196/546/181477.html

City's Maiden's Cove development under fire

A R1.5bn plan by the City of Cape Town to develop Maiden's Cove - a scenic headland and beach between Clifton Fourth Beach and Glen Beach in Camps Bay - is facing a court challenge from city residents.
The development of the cove area, devised in 2015, includes plans for 52 residential homes, a boutique hotel, retail and restaurant spaces, and a parking garage for 700 vehicles.

Maiden’s Cove remains a special place for many people from the Bo-Kaap and Cape Flats, who were forbidden to use the beaches of Clifton and Camps Bay during apartheid.

The Clifton Precinct Development Plan has been met with outrage, expressed in affidavits from the Bo-Kaap Civic Association and community activists. They say they were left in the dark and excluded from public consultations.
 

Public participation

Maiden’s Cove for All (MCA), a nonprofit dedicated to maintaining public access to the cove, was permitted by the Western Cape High Court on 17 July to join as a fifth applicant in the court battle. MCA will also present a new process that involves the public from the beginning to decide what to do with Maiden’s Cove.

Applicants in the case include the Bungalow Owners Association (BOA), Attorney and Member of the Bungalow Owners’ Association Billy Gundelfinger, and residents of Clifton Mark John Willcox and Gavin Howard Varejes.

The respondents are (1) the City of Cape Town, (2) the Chairperson of Immovable Property Adjudication Committee of the City of Cape Town, (3) Heritage Western Cape, (4) South African Heritage Resources Agency, (5) National Minister of Environmental Affairs, (6) South African National Parks, and (7) the shareholders of a private development company called K2015298271.

MCA says the city has no legal authority to impose the plan, since the Constitution and many statutes deem the land a public trust and a protected open coastal reserve. The organisation argues that the development strays from a more equal society by benefiting affluent people and limiting opportunity for the majority of people.
 

City 'intensifying racial spatial segmentation'

Vanessa September, chairperson of MCA, said the city is failing its constitutional duty “to engage meaningfully with those most directly affected by the proposed development, and to heal the divisions of the past by overcoming rather than intensifying racial spatial segmentation of the city”.

“They [the Bo-Kaap and Cape Flats communities] will lose their large present parking area, and instead of having the mountain-side behind them, will find their picnic space overlooked by rich, privileged people in their newly built upmarket homes,” she said.

September recalls how she sometimes brought her mother, who had arthritic knees, to Maiden’s Cove because it was a short distance to the water. Later in life, she brought her son to play in the pools. But now, her lifelong adventures to Maiden’s Cove might come to an end.

Former Constitutional Court judge Albie Sachs, writing in the Daily Maverick, says that the Constitution and law places “insurmountable barriers to the realisation of the council’s project” as the council is legally obliged to preserve the area as a public trust (and prohibited from commercial sale on a space beloved by Capetonians); the council cannot devise a commercial plan and then ask for comment; consultations with the public were inadequate; the law on coastal management says public authorities must enhance rather than restrict public access to the ocean; and the development will further divide the city along historical lines of prejudice.

Councillor Stuart Diamond, the Mayoral Committee Member for Assets and Facilities Management, would not comment while the matter is still before the court.

The city has requested more time to assess the new issues that have been raised by MCA. It has asked for indulgence until 30 November in order to respond to the papers. The Judge President will look at the Court Roll and decide when the case can be held.

“It appears extremely unlikely that the matter will be heard this year,” said September.

MCA will host a community gathering at Maiden’s Cove on 24 September. It has encouraged people to come and braai, picnic, and share their stories about Maiden’s Cove.

Article originally published on GroundUp.

Article Taken From: http://www.bizcommunity.com/Article/196/712/181452.html

Gauteng embarks on a clean-up of fake goods

To combat the selling of illegal and fake goods, the Gauteng Provincial Government will from 18 September 2018 embark on unannounced visits to a number of spaza shops across the province.
“We will be kick-starting our ‘O Kae Moloa’ [where is the law] campaign to wipe out the selling of illegal and fake goods or products in all spaza shops across the province. We will be embarking on unannounced visits to a number of spaza across the length and breadth of the province,” said the spokesperson for the MEC of Economic Development, Castro Ngobese.

The spot checks follow a spate of attacks and looting of businesses owned by foreign nationals in Soweto and elsewhere in the province in August.

“A number of shops owned by foreign nationals were targeted and looted by some unruly elements in some parts of Soweto and in other areas. This saw a number of our people taking the law into their own hands.

“We salute the role played by the men and women in blue uniform. We commend them for acting decisively to restore order.

“This brought some level of stability and order in all the affected areas. The police have been mandated to investigate the circumstances that triggered the attacks and looting, or their underlying reasons,” said Ngobese.

The visits form part of the provincial government’s efforts to bring about order and stability in the township business landscape under their O Kae Molao campaign.

The campaign will be spearheaded by the Department of Economic Development (GDED). 

“These unfortunate developments should not be de-linked from the broader economic and social challenges faced by our people.

“It is within this context that as government we are working hard to deliver on our electoral mandate to create decent jobs and a better life for all,” said Ngobese.

The GDED said while the attacks and looting could partly be attributed to allegations - that some of the shops are involved in selling illegal and fake products, there will be a clean-up of such goods in the market.

“These goods and products will no longer have space or market in our townships. We are putting a stop from now onwards, working closely with all relevant enforcement agencies and entities tasked with the responsibility to vet or monitor such goods,” said Ngobese.

A team from the provincial government has already been dispatched to monitor and intervene where necessary.

Pilot operations were undertaken within the City of Ekurhuleni from the 30th of August 2018. The Executive Mayor of the City of Ekurhuleni, Mzwandile Masina, led a joint operation of South African Police Services, Ekurhuleni Metro Police Department, Home Affairs, Health, and city planning officials into the communities of Reiger Park, Tembisa and Thokoza.

Over the three-day operation, 51 spaza shops where inspected; 37 shops were closed down for further investigation; over 25 undocumented immigrants were detained; and over eight tons of suspicious goods were seized and sent to the health laboratories for testing.

“The City of Ekurhuleni will also investigate how it may begin to collaborate with communities in monitoring and enforcing by-laws in the City,” said Ngobese.

Article Taken From: http://www.bizcommunity.com/Article/196/546/181700.html

Recession? What recession? Now let's talk land reform

Economist, Dr Roelof Botha is quite adamant that South Africa is not in a recession despite what Statistics South Africa (Stats SA) said in its latest economic report.
According to the report, a quarter-on-quarter review shows that the country’s economy shrunk by 0.7% in the second quarter, following a 2.6% contraction in the first quarter of 2018.

Botha said the quarter-on-quarter methodology used by Stats SA is faulty because you can’t compare October, November and December (when consumer spending is high in the run up to the festive season) and January, February, March (when spend drops off significantly). This approach also doesn’t take into account seasonal factors that would affect the agricultural sector.

He told Momentum Consult’s annual conference last week, that there was more than one way to evaluate economic growth, or lack thereof.

“The OECD (Organisation for Economic Cooperation and Development) says one should compare GDP year-on-year, rather than on a quarterly basis. If you compare the second quarter of 2018 to the second quarter of 2017 one can see SA is not in a recession. That is a fact,” said Botha.

He is also not overly concerned about the rand’s plummet against the dollar, along with other emerging market currencies, saying “it will bounce back”. Compared to Turkey (which saw a dramatic dip in the lira), South Africa has investment status. “I think Moody’s will give us a break. Besides a weaker rand is always good for growth,” Botha said.
 

Land reform

On the question of land reform, Botha defines three enabling factors needed to develop food and agriculture value chains: 

• essential enabling factors such as property rights, adequate infrastructure and supportive trade policy.
• Important enabling factors are standards and regulations, sufficient research and development, and access to financial services.
• Useful enabling factors refer to the ease of doing business and business development services.

“I cannot see how productive pieces of land would be expropriated without market-related compensation. Nobody will convince me that the Constitutional Review Committee in Parliament is so stupid that it will allow the same thing that happened in Zimbabwe to happen in SA,” said Botha.

Zimbabwe is a case study in what can go wrong when there’s land expropriation without compensation. “There was an exodus of an estimated three-million people, the unemployment rate is at 95% and the GDP has declined by 20% since 2000,” he said.

If the Constitution is amended to allow for radical land reform, the consequences include a diminishing of the protection of property rights, heightened policy uncertainty, a decline in the prices of land and related assets, a negative impact on banks and their ability to provide loans, and rand weakness.

Disinvestment in agriculture and food processing industries, a threat to food security, a substantial rise in litigation costs, a negative impact on GDP and fiscal revenue, growing unemployment and eventually heightened potential for sociopolitical unrest are other likely scenarios, he said.

In addition, junk status will follow “within minutes” of radical land reform being implemented, with a knock-on effect on the rand.

“I am not here to tell you who is right and who is wrong and who stole land from whom. I am just saying SA will go into recession without a shadow of a doubt if radical land reform is implemented,” said Botha.

Article Taken From: http://www.bizcommunity.com/Article/196/518/181664.html

To zero-rate, or not to zero-rate: why the VAT debate is more complex than it appears

The one percentage point increase in South Africa's Value Added Tax (VAT) rate, which was implemented in April this year, has raised important questions about how the tax system can and should address inequality. In response to the increase, Nhlanhla Nene, the minister of finance, appointed an expert panel to look into ways that zero rating can better tackle inequality. The panel made recommendations about additional items which should be zero rated.
It’s important that the recommendations of the panel be considered within the framework of a larger conversation about tax policy in South Africa. This is particularly true because the tax system is key to addressing the extremely high levels of inequality in South Africa. 

To be both fair and to address inequality, tax systems need to do two things. First, they should treat people with the same income and circumstances in the same way. Secondly, they should treat people with different incomes and different circumstances appropriately differently – rich people should both pay a greater amount of taxes and also a larger portion of their income in taxes.

But South Africans should also be realistic about what tax policies can achieve. Zero rating isn’t a panacea: it should be accompanied by policies that help poor people access essential products. In addition, its unintended consequences should be noted: by providing relief for the poor, it also provides a large amount of relief for the rich. The rich consume far more than the poor, and thus benefit in absolute terms to a far greater degree than the poor.
 

The example of sanitary pads

The panel’s recommendation about sanitary products is a good example of the limitations of VAT in addressing inequality.

The panel agreed that it was important to include sanitary products on the zero-rated list. But addressing the issue only through tax policy effectively subsidises the consumption of women from higher-income households, but does very little to address the fact that most poor women are simply unable to afford sanitary pads, whether they are zero rated or not.

The panel therefore argued that it was imperative that free sanitary pads should be given to women and girls who can’t afford to buy them. It found that women in the poorest 70% of households are able to meet only 8% of their needs for sanitary products. Zero rating won’t help them much.

If South Africa is to address the problem of access to sanitary pads, zero rating has to be accompanied by policies that make sanitary pads available, free of charge, to those who cannot afford to purchase them.
 

The case of books

A number of submissions to the panel argued for zero rating books to promote access to reading material. But unlike sanitary pads, the case for zero rating books is not a strong one.

Books are very expensive and bought almost entirely by the richest 10% of households. Zero-rating books would be symbolically good, but it would, in effect only subsidise the consumption of high-income households and do very little to actually promote a culture of reading among low-income households. Better provision of books in schools and access to libraries are likely to have a much bigger impact.

This highlights that targeted expenditure programmes can ensure that the relief reaches those who need it most. This is not to say that one or the other of these options must prevail. But tax collection tools should always be weighed against expenditure policy options.
 

Unintended consequences

It’s also important to be aware that changes in tax policies often generate changes in economic behaviour. That’s why there are “sin” taxes on products like alcohol and tobacco. The assumption is that a higher tax will result in reduced consumption. Zero-rating may change economic behaviour which could result in unintended consequences.

Take the example of zero rating frozen chicken pieces. The argument for zero rating them is that poor people buy chicken in pieces, so exempting them from VAT will make them more affordable.

But high-cost chicken (including organic or free range) consumed mainly by the rich could also be sold in pieces. The fact that they also enjoyed the benefits of zero rating would allow wealthy consumers to benefit. This highlights the related issue of demarcation – how can we define items for zero rating in a way that is efficient and practicable? 

The zero rating of school uniforms is the best example of this challenge. School uniforms consist, say, of white shirts, grey skirts and trousers, black shoes, and blazers or jackets. But these items are also consumed by wealthy people many of whom wear white shirts and black shoes with their business attire. What distinguishes a business shirt from a school shirt, and how do we ensure only the latter is VAT exempt? If we are unable to do this in an effective manner, the benefit of the zero rating will be enjoyed both by the intended group – parents of school children - but also by the wealthy. 

Another problem is that those who have economic power are often able to pass on the costs of a tax to others. For example, if company taxes are increased, a firm that has a monopoly may be able to pass on the full costs of the tax to consumers by increasing the price of the goods. 

In the case of zero rating, the problem is reversed – how do we ensure that any benefit from zero rating is passed on to the consumer and not captured by producers, wholesalers and retailers? In markets where producers or retailers are in a powerful position, we can’t assume that the zero rating benefit will be passed on to the consumer. 
 

Simplicity is key

Issues of administrative ease and efficiency are very important for tax policy. Issues of demarcation must be easy to define and implement at the risk or passing an administrative and therefore financial burden onto both business and the receiver of revenue. In addition, the more complex a tax system is, the more the incentive there is for evasion and the greater the resources needed for enforcement and collection.

Our argument is that while issues of zero rating are very important, it’s vital to understand them in the context of the larger tax policy universe. This includes how revenue is allocated, how consumers respond to changes, and the importance of being realistic and pragmatic about implementation.

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

Article Taken From: http://www.bizcommunity.com/Article/196/512/181631.html

The return of Sars' Large Business Centre welcomed

South African Revenue Service's (Sars) decision to re-establish its Large Business Centre (LBC) will undoubtedly ease the administrative and compliance burden of big business and high net-worth individuals
It will also enhance tax collections that have fallen sharply since the centre was dismantled in 2015 following major restructuring under the reign of suspended commissioner, Tom Moyane.

Under the restructured business model, currently the focus of the Nugent commission of inquiry into governance and administration at the tax agency, the LBC was systematically dismantled to “eliminate duplication and improve efficiencies”, Sars said at the time.
 

The impact of the dismantled LBC

The tax affairs of large corporates and high net-worth individuals are highly complex. Their risk profiles differ vastly from ordinary taxpayers. The potential loss to the fiscus is substantial if they are not managed properly.

Before the LBC was dismantled it was responsible for the collection of more than 30% of total tax collections. This included individual income tax, corporate income tax, VAT, employee taxes, dividends tax, donations tax and royalties tax.

Dismantling the centre led to a decline in the ability of Sars to collect what was due to the fiscus. Concerns were also raised about a decline in compliance. The “one-stop-shop” for large businesses was gone, leaving multi-million-rand enterprises in the same position as ordinary taxpayers.

This had a major impact on the way they had to deal with complex issues, the manner and time in which queries was solved, audits conducted, and disputes resolved.
 

Compliance, collections and enforcement

When the LBC was established in 2004 the aim was to encourage compliance, to ensure responsible enforcement and to offer specialised and sector specific expertise to large businesses.

Sector specific expertise was developed in the most crucial sectors in the economy, including financial services, construction, mining and agriculture. The scope of the LBC covered listed and unlisted companies, parastatals and high net worth individuals. Expertise in highly complex tax legislation, notably transfer pricing, was developed to ensure that revenue is taxed where it is generated.

The expertise in the LBC was not only in terms of the interpretation and implementation of tax legislation, but also included expert knowledge of the businesses in the different economic sectors.

This assisted hugely with greater administrative knowledge, better risk-profiling in terms of audits, and better audit and dispute outcomes. The LBC ensured that there was one dedicated relationship manager which dealt with clients within specific sectors. This meant that a company raising a specific issue or query with Sars were dealing with the same individuals, who not only understood the essence of the issue, but was able to give feedback to how the matter was being dealt with.

The dismantling led to much of the expertise being lost to Sars. An exodus of expertise followed the restructuring process, which was done by the consultancy firm Bain at a cost of more than R160m.
 

Pivotal role of the LBC

The announcement by Acting Commissioner, Mark Kingon, to reinstate the LBC, as well as the Illicit Economy Team, must be welcomed. The acting commissioner said in his statement, announcing the move, that it was based on the “pivotal role” these units play in its service to large corporate taxpayers, and in fighting illicit trade in the country.

There is a deep understanding of the time and effort it will take to rebuild the capacity that existed before the dismantling of the units. However, this will certain increase better administrative outcomes, faster turnaround times and better compliance, audit results and dispute resolution.

Although Sars has not put a timeline on when the units will be reinstituted, the fact that dedicated teams have already started the process, is encouraging.

Article Taken From: http://www.bizcommunity.com/Article/196/512/181500.html

Injunction upholds Djibouti port joint venture agreement

An injunction restraining Djibouti's port company, Port de Djibouti S.A. (PDSA), from treating its joint venture shareholders' agreement with global trade enabler DP World as terminated has been granted by the High Court of England & Wales.
The court has further prohibited PDSA from removing directors of the Doraleh Container Terminal (DCT) joint venture company who were appointed by DP World pursuant to that agreement. PDSA is not to interfere with the management of DCT until further orders of the court or the resolution of the dispute by a London-seated arbitration tribunal.

PDSA is owned in majority by the Government of Djibouti and its CEO is the chairman of the Ports & Free Zones Authority of Djibouti. Hong Kong-based China Merchants is the minority shareholder in PDSA.

The order follows the unlawful attempt by PDSA to terminate the joint venture agreement with DP World and the calling of an extraordinary shareholders’ meeting on 9 September by PDSA to replace DP World appointed directors of the DCT joint venture company. 
 

Third ruling

This is the third legal ruling in relation to the Doraleh Container Terminal following two previous decisions from the London Court of International Arbitration (LCIA), all of them in favour of DP World. It recognises that although PDSA is the majority shareholder of the DCT joint venture company, it is DP World that has management control of the company, in accordance with the parties’ legally binding contracts.

The new ruling makes clear that PDSA:

• Cannot act as if the joint venture agreement with DP World has been terminated
• Cannot appoint new directors or remove DP World’s nominated directors without its consent
• Cannot cause the DCT joint venture company to act on the “Reserved Matters” without DP World’s consent
• Cannot instruct or cause DCT to give instructions to Standard Chartered Bank in London to transfer funds to Djibouti

If PDSA disobeys the court’s order and seeks to replace DP World nominated directors of DCT on 9 September, it may be in contempt of court and face a fine or the seizure of its assets and its officers and directors may be imprisoned.

The court has ordered PDSA to present its defence at another hearing on 14 September.

Meanwhile, DP World is notifying Standard Chartered Bank so that the bank will reject any instructions that may be sent to them after the 9 September meeting. China Merchants, who have been given operational control of the Djibouti Freezone in breach of DP World’s exclusivity rights, will also be informed given its minority shareholding in PDSA.

Article Taken From: http://www.bizcommunity.com/Article/60/547/181546.html

Fertiliser producer gets R30m fine for collusion

The Competition Commission has welcomed the decision of the Competition Tribunal to confirm as an order a settlement agreement reached with Omnia Fertilizer Limited.
Omnia has agreed to pay a R30 million administrative fine for contravening the Competition Act. It has also agreed to withdraw its review application on this matter, which is currently before the Competition Appeal Court. 

The agreement follows an admission by the fertiliser producer, Omnia, that between 1998 and 2005, its Nitrochem division fixed prices and allocated markets in the fertiliser market in contravention of the Competition Act. 

In a case marked by protracted litigation, in 2003 Nutri-Flo CC and Nutri-Fertilizer CC complained to the Commission that Sasol Chemical Industries Limited was involved in anti-competitive conduct. There were also allegations of collusive conduct against Omnia and its Nitrochem business. 

Subsequently, there was an investigation which discovered that there was an arrangement so that Sasol became the exclusive supplier of limestone ammonia nitrate (LAN) to the wholesale market. 

Further, the investigation found that there were arrangements to fix the prices of LAN and other fertilisers as well as allocating customers, suppliers and volumes.

These collusive arrangements were facilitated through meeting platforms such as the Nitrogen Balance Committee, Import Planning Committee and the Export Club. 

The collusion related to ammonia, potash, urea, mono-ammonium phosphate (MAP), di-ammonium phosphate (DAP), and LAN. 

In May 2005, Sasol, Yara South Africa (PTY) Limited and Omnia were charged with market allocation and price fixing. 

In May 2009, Sasol paid an administrative penalty of about R251 million after it signed a settlement agreement with the Commission in which it admitted to have contravened the Competition Act. Yara has since been liquidated. 

“It’s encouraging to see that a complaint by a relatively small player has resulted in a positive behavioural change towards more pro-competitive conduct by larger players in such an important agricultural input.

“The matter has highlighted the benefit of competition to small businesses, such as emerging farmers, where key inputs, such as fertilisers, are procured from competitive manufacturers. 

“Further, in a country with enormous food security challenges, manipulation of prices of key agricultural ingredients is of great concern. 

“We invite more players to approach us when they detect any foul-play as far as anti-competitive conduct is concerned,” said Competition Commissioner Tembinkosi Bonakele.

Article Taken From: http://www.bizcommunity.com/Article/196/739/181671.html

FMRC: Reward whistle-blowers

The South African government should consider setting up a programme that will reward persons who blow the whistle on alleged corruption in the financial sphere, a draft report on financial market conduct has recommended.
This is one of a number of recommendations contained in the 2018 Financial Markets Review(FMR) compiled by a regulator committee appointed in May 2017.

Last year, National Treasury, the South African Reserve Bank (Sarb) and the Financial Sector Conduct Authority (FSCA) established the FMRC to develop recommendations to reinforce conduct standards in wholesale financial markets. This was in the wake of international financial misconduct scandals which meant, according to the report, South Africa could not afford to be complacent.

Former Finance Minister, Pravin Gordhan, announced the review during his final budget speech in February last year.

In the report, released on Monday, the FMR committee contends that although in South Africa whistle-blowers are defended by the Protected Disclosures Act, more needs to be done. 

The Act provides protection for disclosures made in good faith by an employee who believes that the information disclosed is substantially true, “and who does not make the disclosure for purposes of personal gain, excluding any reward payable in terms of any law”.

“It is recommended that the regulators consider implementing a programme that rewards whistle-blowers for providing information about substantial misconduct in financial markets that leads to a successful enforcement action with monetary sanctions,” reads the report.

The report notes whistle-blowing is an important mechanism to prevent and detect improper conduct, fraud and corruption.

The FMRC, in the report, said it had received responses from market participants indicating that whistle-blowing arrangements were in place. However, implementation varied with government and individual businesses participants.
 

Vital source of information

Should the recommendations get the thumbs up, South Africa will join the likes of the United States and the United Kingdom who reward whistle-blowers.

“In more opaque markets, whistle-blowers who inform regulators of suspected instances of misconduct can be a vital source of information to support regulation against misconduct.

“Market regulators can incentivise market participants to provide such information by ensuring that necessary protections are in place so that no retaliation is taken against a whistle-blower for disclosure of information and, in certain circumstances, monetary rewards are provided,” the report states.

The public now has four weeks to comment on the recommendations contained in the draft report.

The final report is expected to be published in early 2019.

Understanding obligations and the law when it comes to immigrant employees

Many people throughout Africa, look at South Africa as a place which offers socio-economic opportunities; and as a result, it has become home to many inter-regional and inter-continental migrants seeking gainful employment. What many employers don't realise is that there are particular laws applicable to employing (and dismissing) these immigrants, which all employers will need to be aware of. We set out below a high-level summary of the key considerations you ought to be aware of in employing foreign nationals.
In terms of the Immigration Act, it is unlawful for an employer to knowingly employ a foreigner who is not authorised to be employed in South Africa. Any foreigner requires a valid work visa to work in South Africa. Often such visas are linked to a specific employer and are not transferrable. All employers are also required to make a good faith effort to ensure that they do not employ illegal foreigners. Employing a foreigner without the required visa and/or a failure to make the required good faith effort to determine an employee's status are offences which could result in a fine or imprisonment. This means that it is incumbent on all employers to obtain the identity documents and, where appropriate, the visas of all its employees and ensure their continued validity.
 

Immigration vs labour relations laws

In our experience, the dilemma that many employers face is how to address a situation where post-employment they realise that members of their workforce do not have the required permit to legally work in South Africa either because the employee never had the required visa (the employer failed to check this at the time of employment) or because the employee's work visa has expired. 

An employer's inclination may be to simply terminate the relationship on the basis that due to the Immigration Act the relationship is unlawful. Such a termination, however, falls short of the requirements set out in the Labour Relations Act which protects all employees regardless of the employee's legal status to work in South Africa. As with any other employee, the employment relationship between the parties may only be lawfully terminated for a fair reason and after following a fair process. 
 

Reviewing work permits

There are only three grounds on which an employer may lawfully terminate an employment relationship: misconduct; incapacity; and the employer's operational requirements. 

The specific ground for termination determines which process an employer must follow. A failure to hold the required visa may be treated as an incapacity issue. Case law has, however, indicated that the employer must provide the employee with reasonable assistance to attempt to rectify his or her illegal status. This includes affording the employee an opportunity to engage with the Department of Home Affairs (giving reasonable time off) and completing and submitting necessary forms to support the employee's efforts. Paramount to the entire process is that an employer must ensure that the employee is treated with dignity and respect.

Notwithstanding the general guidelines set out above, the facts and circumstances of each individual are unique, and each situation must be addressed and dealt with on its specific merits. As a starting point, all employers need to conduct careful and periodic reviews of their employees' work permits to ensure that they are not falling foul of the law and are appropriately managing any risks.

Article Taken From: http://www.bizcommunity.com/Article/196/548/181606.html

Investing in holiday rental property? Here's what you need to know

With the rise in popularity of Airbnb, many people are hoping to capitalise on the potential lucrative rental income by investing in short-term rentals. While the income can be attractive, there are many complexities and pitfalls, says Natalie Muller, sales and rentals manager for Seeff Atlantic Seaboard and City Bowl.
According to an Airbnb Report released in October last year, 43,000 homes in SA are listed on the site (about 17,000 in Cape Town) and the typical host earns R28,000/annum based on 19 nights a year.

Muller says, that property owners need to ensure that they are legally compliant as a priority and then, to really ensure you can meet your income targets, attract good calibre guests with a top quality product. She puts this into perspective by using Cape Town as a case study.

Cape Town is the busiest tourist city on the African continent and regularly features as a top destination, the latest being CNN Travel naming it one of the world’s most beautiful cities. The tourist season runs from around October to April annually and the city attracts people from across the country along with a great deal of foreigners who often spend lengthy periods in the city to escape the cold European winter.
 

Legislative landscape

Town and city councils have bylaws which regulate the use of property. In the case of Cape Town, there is a comprehensive “Guest Accommodation Policy” drawn up pre-2010 for the Soccer World Cup which regulates the zoning and requirement. Guest accommodation is also regulated in terms of the Municipal Planning Bylaw of 2015. You can generally operate a B&B from a full title house without prior consent, but subject to certain conditions (like, not renting out more than three rooms), but it is more complex when it comes to sectional schemes.
 

Sectional title schemes

Sectional schemes are more challenging, and would only be permitted if zoned GR2-GR6, which most of Cape Town properties are. If not, then permission is required from the city’s development management department. The Sectional Titles Act and the Sectional Titles Schemes Management Act (STSMA) also empowers a body corporate to make or amend appropriate rules and holiday rentals could therefore be blocked if problematic. The body corporate must also be informed of names and ID numbers of all occupants and tenants must be informed of rules including security arrangements and noise (which can be problematic with short-lets).
 

Agreement and governance

Janine van Heerden, rentals manager for Seeff Hout Bay and Llandudno, says that it is important to have a detailed short-term lease to regulate the tenancy, deposit and payment terms, cancellation policies, breakages, complaints and general conduct. Set out all rights and responsibilities clearly. Note also that the CPA (Consumer Protection Act) and the PIE (Preventions of Illegal Evictions Act) do not apply to short-term rentals, but the Rental Housing Act applies as a holiday rental is still seen as a lease. Inspection handovers and managing the tenant's deposit and the refunding of it in accordance with the Act therefore applies.
 

Setup and ensuring a great guest experience

Muller says further that for holiday and short lets, the unit needs to be furnished and equipped for self-catering purposes with basic cooking, crockery and utensils as well as cleaning materials, bedding and towels as a minimum. Television and internet (WiFi) is also a prerequisite.

Top end apartments and villas may also need to be equipped with luxury finishes such as sophisticated home automation, temperature control, a heated swimming pool and a fabulous location with top class sea views, she says.
 

Inventory and insurances

Always conduct in- and outgoing inventory reports and document everything and every item. Insist on a minimum of weekly clean so that you can keep an eye on the condition of the property during the stay. Collect relevant details about your tenant (ID, bank details, copy of credit card), and do not allow occupation until the money has cleared in your (or the agency's) bank account. Take a sufficient deposit to cover potential damages, but don't scare guests with unreasonable requirements. Don’t forget to check your insurance cover as you may need added cover for Airbnb and holiday rentals.
 

Check-in, departure and other arrangements

Van Heerden says further that many property owners soon realise that short-term rentals, especially holiday rentals, are complex and perhaps best manged by a skilled rental agent. It requires a lot of administration and a hands-on approach. There is a lot of information to be communicated to the guests to ensure they know where the property is, what it offers, what to expect etc. There is also key handovers, inspections and assisting guests with their ongoing needs including how to operate the various equipment etc.

Lastly, put a bunch of flowers, fresh fruit or other welcoming gesture and it is always good to be on-hand to welcome the guests. Referrals and repeat business are vital to any short-term or holiday property owner.

Article Taken From: http://www.bizcommunity.com/Article/196/569/181782.html

Can you dismiss an employeewho refuses to obey instructions?

In the case of Media Workers' Association of South Africa obo Hoohlo and others v SABC SOC Ltd, the Commission for Conciliation, Mediation and Arbitration (CCMA) had to consider whether the employees were fairly dismissed for gross insubordination. The applicants were all media specialists in SABC's department of marketing services.
Tshifhiwa Mulaudzi, the group executive for Commercial Enterprises was tasked with reviewing the performance of certain divisions within SABC, one such division being the marketing services division. Mulaudzi instructed the applicants to do an individual presentation of their work done for the period April to September 2016, in order to assess their performance. Mulaudzi drew up a template to be used by the applicants for their presentation. 

Prior to the date of the presentation, the applicant's raised a concern regarding the management style of Florence Kikine, to whom the applicants reported. This concern was not addressed. On the day of the presentation, the applicants again raised their concern with regards to Kikine and no presentation took place. The presentation was postponed for a week. 

On the following date of the presentation, Mulaudzi continuously attempted to persuade the applicants to do their presentations, but they refused to do so. The applicants insisted that their concerns regarding Kikine be addressed before they undertook to do their presentations. Mulaudzi regarded the applicants' refusal as insubordination.

One of the employees, Ms Hoohlo testified that they were never asked to do presentations in the past. She further testified that on the day of the presentation, the applicants were ready to present, but would not do so until their concerns were addressed.

The Commissioner held that Mulaudzi's instruction was neither unfair nor unlawful, and was given in clear terms. The Commissioner assessed the meaning of 'gross' as denoting conduct that is so reckless as to demonstrate a substantial lack of concern for one's obligations and whether injury or loss results. The Commissioner held that the applicants' actions were a deliberate and gross challenge to Mulaudzi's authority, and thus constituted gross insubordination. 

The Commissioner concluded that the applicants conduct could not be condoned, as they were acutely aware of what was required of them. The Commissioner noted that the applicants' failure to furnish any evidence of their presentations supported the inference that they had not prepared anything. In light of all of the evidence, the Commissioner held that the dismissal of the applicants was procedurally and substantively fair. 
 

Importance of this case

The notion of "gross insubordination" entails:

• The giving of an instruction in clear terms. The employees must be aware of what is required of them;
• The instruction must be fair and lawful. They employees should be able to carry out the instruction and it should not be unlawful;
  The employees' refusal must be, in order to be gross, conduct that is so reckless as to demonstrate a substantial lack of concern for one's obligations and should, potentially or actually result in injury or loss.

Article Taken from: http://www.bizcommunity.com/Article/196/548/181755.html
 

Execs still unprepared for liability risks

Stakeholders have made their voices heard in recent years, resulting in more companies and their directors facing litigation. High profile cases, such as the discrimination lawsuit against the CEO of Imperial Holdings to name one, demonstrate the costs involved in such proceedings can be devastating.
In addition, there are two trends that pose a growing risk for business owners and top-level executives, says Anton Meyer, executive head: claims (financial lines; A & H and motor) at SHA Specialist Underwriters., 
 

Duty of care and skill

“The first concern is the notable lack of awareness among South Africa’s C-suite executives regarding the full extent of their obligations to their companies and stakeholders. Our Business Leader Risk Survey, and found that 56.5% of South African business owners did not have a clear understanding of their obligations under the new Companies Act. Equally alarming was the fact that around 25% of company directors and 28% of all C-suite level executives were also unaware of the sheer magnitude of their responsibilities as detailed in the legislation.

“The Companies Act compels directors and officers to act with a duty of care and skill, while placing the organisation’s interests at the forefront. Any party who contravenes the Act may be held liable for any loss or damage suffered by another party as a result of that contravention. Claiming ignorance of these legal responsibilities is also not an adequate defence for a director. Given that the risk landscape is continually evolving with new cyber, environmental and regulatory risks constantly arising, it also means that executives are under constant pressure to ensure that they understand their roles and responsibilities intimately.”
 

Directors' and officers' liability

Secondly, Meyer says that the majority of South African directors and officers are not adequately insured. “Executives who act negligently are not the only individuals at risk when an injured or wronged party sues for damages. Directors and officers who act on behalf of an organisation are still at risk of losing millions in legal costs, even if the courts eventually settle in their favour. It is therefore worrying to note that the SHA survey has found that 52% of the businesses surveyed do not have adequate directors’ and officers’ insurance cover (D&O cover) in place.”

Executives who have responsibilities to shareholders under the Companies Act, should recognise that adequate D&O cover is integral to fulfilling their duties. “Directors’ and officers’ liabilities are exceedingly complex, and can become even more intricate when considering variables such as the totally different defences and strategies between different individuals. Each case can also lead to further disputes and conflicts, meaning that the potential impact on the financial security of any affected individual can increase exponentially. It is for this reason that companies need to conduct thorough due diligence and invest not only in adequate training for all of their directors and officers, but also in comprehensive D&O cover,” concludes Meyer.

Article Taken From: http://www.bizcommunity.com/Article/196/511/181877.html

Are chemicals in cosmeticsplacing your business at risk?

Chemicals commonly found in beauty products may place manufacturers and suppliers at significant liability risk, states a new report released by Allianz Global Corporate & Specialty SE (AGCS) and Praedicat.
The cosmetics industry uses hundreds of chemicals in manufacturing, dozens of which can be present in the final product, leading to potential consumer and workplace exposure, particularly in nail and hair salons. Three chemicals have particular notoriety for their use in nail polish – dibutyl phthalate (DBP), toluene and formaldehyde. Scientists have identified this 'toxic trio' of chemicals, which are also used in perfumes, body lotions and other personal care products, as hazardous. 

In Africa, the beauty and skin industry is not well-regulated, making it a lot more risky for consumers to get exposed to dangerous chemicals. Currently, there is a rising trend in skin bleaching and it is estimated that over 70% of women in Nigeria are using skin lightening products. 

This phenomenon is creating concerns around increasing health issues that may be caused by these products. Many of these skin lightening products are easily accessible in the region, despite them being banned in countries such as South Africa, Mali and Cote d’Ivoire.
 

Rosks associated with the 'toxic trio'

With global sales for skincare products estimated to grow by 40% to $180 billion by 2024, manufacturers and suppliers face liability risk if bodily injuries are linked to 'toxic trio' exposure. These risks include:

• Product recalls if a product containing one of the 'toxic trio' is deemed risky to consumers by regulators, whose attention is increasing. 

• Product mislabelling is a growing threat. Manufacturers who market their products as being “three-free” could be held liable if their products contain any of these chemicals, even if it is not their fault. 

• Latent liability from DBP affecting both consumers and workers has the potential to generate in excess of $100 billion in losses to the U.S. economy, based on Praedicat’s model estimates, due to the broad exposure. 

“Companies need to implement rigorous testing to reduce the risk of mislabelling and proactively monitor scientific literature to identify future risks rather than reacting to public perception or regulatory action,” said Michael Hohmann, global head of liability at AGCS. 

View the full Emerging Liability Risks: The ‘Toxic Trio report.

Article Taken From: http://www.bizcommunity.com/Article/196/784/181860.html

Land reform panicunnecessary, Seeff welcomes clarity and support

There is no doubt that there is great concern about land reform amongst ordinary South Africans and especially property owners and buyers. At the same time, there is a huge amount of noise in the media and public discourse around this, often sending mixed messages.
In light of this, the Seeff Property Group has welcomed the clarity provided by President Ramaphosa in various media reports and in a recent parliamentary sitting that there will be no wide-scale land grabs of any kind. He made it clear that there will be no nationalisation and that property rights will be protected, and that illegal land grabs will not be tolerated.

The president again reiterated that expropriation will be done in a planned manner in pursuance of economic growth. This was also again echoed in the very important recent meeting between the president and UK Prime Minister Theresa May and during his visit to China.

There is no need for consumers to fear that their houses will be taken, or that it is pointless to invest in property. In fact, far from it. The president has been very clear that SA has learnt from the experiences of other countries (including Zimbabwe), in terms of what has worked and what has not, and will not make the same mistakes.
 

No intention to erode property rights

The president has also given the assurance that the governing party does not intend to erode property rights, but rather to ensure that the property rights of all South Africans are strengthened. It should also be noted that ratings agencies and other international commentators including the IMF have all urged clarity on land reform which is seen as a vital step to future prosperity and stability.

Following US President Donald Trump’s tweet regarding land expropriation, the Seeff Group is urging buyers and investors to be wary of the noise, misinterpretation and misinformation. This is causing unwarranted and unnecessary fear and concerns among consumers about whether they should be investing in property when in fact, it is an excellent time to buy.

There has been no indication that expropriation will affect ordinary residential property, far from it. Ramaphosa is on record as stating that the intention is to unlock the economic potential by looking at unused land, derelict buildings, purely speculative land holdings, or circumstances where occupiers have strong historical rights and title holders do not occupy or use their land, such as labour tenancy, informal settlements and abandoned inner-city buildings.

While agricultural land is a stated target for expropriation, recent developments, pledges of co-operation and undertakings following high level meetings with various agricultural bodies and stakeholders are welcome.
 

Banking sector committed to land reform

Additionally, South Africans and foreigners should rest assured that SA’s interested parties are keeping an eye on developments and are setting up high level meetings and making representations as needed, all in the interest of the country, the people and property. This includes the Banking Association of South Africa (BASA), and its managing director, Cas Coovadia, is on record confirming that the banks continue grating property loans including in the agricultural sector and that the banking sector is also committed to land reform.

Without downplaying the seriousness of the matter, South Africans need to be reminded that SA is in a much stronger position than what Zimbabwe was. We have a strong constitution and Chapter Nine institutions and civil rights organisations. SA is also a party to international treaties which require the protection of property rights and we should take encouragement from all of these factors.

While the economic and political challenges remain an obstacle for the property market, it is important to remember that there is still plenty of activity. Regardless of the state of the economy and market, there will always be people who need to buy and sell for a range of reasons. Deeds office data shows that thousands of sales transactions are still concluded each month and it is important to filter out the negative noise.

The important take-out is that while there are challenges, there are opportunities aplenty. Timing the market is impossible, so it is best to work with what we know. There is very little to indicate that there will be any dramatic upward shift in the economy and property market this year, but for as long as people need a roof over their heads, there will be buyers, and with that, opportunities to sell. We certainly would urge buyers not to waste time waiting for a better time to buy.

Article Taken from: http://www.bizcommunity.com/Article/196/368/181424.html

Affordable housing: City of Cape Town and developers at crossroads

Politicians, civil servants and people in Cape Town's property industry are at a crossroads. The next few months will tell who is committed to building an inclusive and spatially just city.
A black majority live on the densely populated urban periphery, in townships, as backyarders or in informal settlements, while the wealthy continue to live in low density mostly white suburbs in well-located areas.

Over the last year, Ndifuna Ukwazi has been objecting to exclusive and unaffordable private developments across the city of Cape Town. Our concern, shared by many, is that this pattern of spatial planning has negative long-term fiscal, social, environmental and political costs and is ultimately detrimental to the sustainability of the Western Cape economy. In effect, this pattern replicates the apartheid city.

For example, to buy an average one-bedroom apartment selling for R1,250,000, a household would have to pay at least R12,270 per month in bond repayments. To pay this, a household would need to earn a minimum monthly income of at least R36,800, assuming that the bond repayment is no more than one third of income on a bond.

Most poor and working class families are between three and five people in the household, so even if the family can afford to buy a one-bedroom property, they may not be able to fit. So to measure access, we need to be able to determine how many household can both afford and fit. Our estimate is that a maximum of four people could fit into a one-bedroom home comfortably.
 

Extraordinary exclusion of the majority of resident

Based on 2011 Census data, only 118,133 of all households living in the city, or 11% could both afford and fit into a one-bedroom property. If we break the number of households down by race, the results are staggering: Black African households who can both afford and fit represent only 1% of all households in the city; likewise Coloured households represent 2.2%; Indian households represent 0.3%; and White households represent 7.3%. It demonstrates the extraordinary exclusion of the majority of residents from the housing market, which is most acutely felt by black (Black Arican, Coloured and Indian) households.

The basis for Ndifuna Ukwazi’s objections is the Spatial Planning Land Use Management Act of 2013 (SPLUMA), which establishes a set of compulsory principles applicable in every land use decision. These principles are spatial justice, spatial sustainability, and spatial efficiency.

The principle of spatial justice, in particular, is consistent with the Constitution’s transformative aspirations. It aims to address spatial imbalances by improving access to land. Land use decisions must address the colonial and apartheid era dispossession and exclusion of black people, and provide new opportunities today.

To date, the City of Cape Town has not implemented their statutory obligations. This means a core legislative principle that should be at the heart of all planning approvals has not been realised practically in land use management on individual applications.
 

Empowered to redress spatial imbalances

Both the city and the Municipal Planning Tribunal (MPT) are mandated to redress spatial imbalances and empowered to impose conditions that mitigate against exclusionary developments. One way to do this would be for the city to ask for a fair and proportional contribution from developers towards affordable housing. To date, both city planners and the MPT have refused to do this, arguing mainly that there is a lack of policy guidelines.

Internationally, cities have passed inclusionary housing policies to secure a fair and proportionate contribution towards affordable housing on-site (in the development), off-site (on well-located state owned land), or as a fee in lieu in exchange for the value unlocked through the granting of land use rights.

To address this, mayoral committee member for transport and urban development (TDA) Brett Herron has committed to bringing a policy to council as a matter of urgency. Last week, the city’s mayoral committee approved a concept document on inclusionary housing, which now opens the way for engagement.

While the TDA is in the process of drafting policy, it is not certain. Some politicians and officials seem adamant to shut down the inclusive agenda that the TDA has embarked on in the belief that a policy would be damaging to the property and development industry. This would be a mistake.
 

Responsive inclusionary housing policy

A good inclusionary housing policy would, in fact, stimulate density and new development in well-located areas and along transport corridors. This could be done by creating a density overlay zone in the current bylaw, which would grant additional rights as an incentive in exchange for affordable housing. Developers would be able to build higher and denser as long as this is more inclusive.

This would only work if the inclusionary housing policy was responsive to the ebbs and flows of the property market and across different areas. A blanket percentage would not work. So, for example, in areas where the value of land is high and the market is hot, the contribution would be higher. In areas which are well-located but have less hot markets, the city could increase the incentive but reduce the contribution.

An inclusionary housing policy should not be punitive, and the contribution could be paid for through any additional profits, efficiencies in the planning application system, and the ability to negotiate down land costs.

An effective inclusionary housing policy would dovetail with and help to unlock the city’s significant stock of smaller parcels of land for social housing that it is unable to develop itself due to the small economies of scale. Inclusionary housing, could be the very mechanism that is needed to advance inclusive transport-orientated development.

It is clear that a change in the bylaw and a policy is needed urgently to create certainty and manage the significant risks that must be navigated in the current economic environment. Further delays from the mayoral committee and within council present the greatest risk to the industry.
 

Policy not required

Policy would be preferable but it is not required for the city and MPT to impose conditions to secure affordable housing.

It is up to developers to justify how their development complies with principles of spatial justice, and why a condition for affordable housing should not be imposed.

In a ruling on an appeal to the development application for Zero2One skyscraper, Mayor Patricia De Lille, after seeking the opinion of senior counsel, confirmed that the city and the MPT can impose conditions for the contribution of affordable housing in private developments without having a city policy in place.

According to the mayor’s ruling, a condition for a fair and proportionate contribution towards affordable housing in a private development can be imposed if three requirements from section 100 of the City of Cape Town’s current Municipal Planning Bylaw are met, namely, the condition must be:

1. objective;
2. reasonable; and 
3. “arise from the proposed use of the land”.

If it is undisputed that a development is spatially unjust, and the city and MPT has the power to fix the problem, neither the developer nor the city or MPT can ignore the problem. Approving a spatially unjust application with no reasonable justification or attempts to fix the problem is unlawful. This opens up the decision to be reviewed in the courts.
 

Choice for developers

Depending on how you view the situation, this poses a choice for developers: Wait for policy to be passed, which will provide more clarity for what is expected from developers; or preempt policy and possible delays by submitting applications which include a fair and proportionate contribution of affordable housing now.

There are four good criteria to think about when considering whether a housing project in the private sector advances spatial justice. It must promote equal opportunity to black households, be truly affordable based on income, be well-located and use the right mechanism to ensure it is retained in perpetuity (which means it stays affordable in the long term).

There is now an opportunity for developers to make sure that an inclusionary housing policy works for them not against them, to explore ways to build affordable housing feasibly, and to contribute towards an inclusive, efficient and sustainable property developments that bring both economic and social returns for the industry and our city for generations to come.

Article originally published on GroundUp.

Article Taken From: http://www.bizcommunity.com/Article/196/801/181839.html

South Africa's labour market, currently fraught with high rates of poverty, inequality and unemployment, will soon see an overhaul as far as employee wages are concerned. With the National Minimum Wage Bill on the cusp of becoming law, the time for employers to familiarise themselves with the looming change is now. The only thing standing in the way of this ground-breaking legislation is the president's signature.

The main objectives of the Bill are to provide for a national minimum wage, advance economic development and social justice through improvements to wages of the lowest paid in society, promote collective bargaining and support economic policy.

Once enacted as law, the Bill will apply to all workers and their employers. It will not, however, apply to members of the South African National Defence Force, the National Intelligence Agency, the South African Secret Service as well as volunteers who perform work for another person without remuneration. The Bill currently proposes a minimum wage of R20 per hour for ordinary hours of work.
 

No shortcuts

Employers cannot circumvent the national minimum wage by agreement with employees, nor can the minimum wage be lowered through collective agreement or law (unless it is an amending law). The minimum wage will form part of the employee's employment contract, unless the employment contract provides for more favourable remuneration.

The Bill further provides that where an employer unilaterally alters the hours of work or other conditions of employment in implementing the national minimum wage, this would constitute an unfair labour practice, thus affording the CCMA jurisdiction to hear such matters.

There are, however, temporary exceptions to the national minimum wage for the first year of its operation. These exceptions are for farm workers, domestic workers and workers in the expanded public works programme.
 

Annual review

A Minimum Wage Commission will be established, which is tasked with reviewing the national minimum wage annually and submitting a report to the Minister of Labour indicating the recommended changes to the national minimum wage. The Minister will then make any adjustment to the national minimum wage by no later than 31 March each year.

Employers should be mindful of the looming changes to the country's national minimum wage and be forewarned that any attempts to circumvent the national minimum wage may constitute an unfair labour practice.

Article Taken From: http://www.bizcommunity.com/Article/196/548/181326.html

South Africa is emerging from a debilitating period where politicians and their benefactors systematically placed pliable individuals into key positions at state institutions to gain undue influence and ultimately financial advantage. The ensuing malaise is called state capture.
A commission of inquiry to investigate state capture was initiated in January, headed by the Constitutional Court’s Deputy Chief Justice Raymond Zondo.

The first week of hearings ended with shocking testimony by former deputy finance minister Mcebisi Jonas. He reiterated his previous claim that a member of the influential Gupta family offered him a bribe of R600 million plus appointment as finance minister in return for favours. He also disclosed, for the first time, that his life was threatened should he fail to cooperate.

Jonas declined the bribe, and eventually went public about the offer – becoming the first and most senior person in government to lay bare the role being played by the Gupta family at former president Jacob Zuma’s behest. The fact that he worked at National Treasury was particularly significant as it was the department that vetted government expenditure. 

The testimony of Jonas as well as that of subsequent witness Vytjie Mentor both also referred to the proposed nuclear build, and how this was influencing efforts to control state institutions.

The dismissal of Finance Minister Nhlanhla Nene in December 2015 precipitated a national currency collapse and public outrage that forced Zuma to remove his replacement after only four days and install Pravin Gordhan. But Gordhan’s tenure was marked by high tension and Zuma dismissed him in March 2017.

Jonas’s testimony reminded South Africans why Zuma was so keen to have a compliant ally as finance minister. He posited that the reason for the hostility towards Nene was that he was blocking the implementation of a nuclear deal with Russia.

The inquiry will be probing this further, a welcome development given that so many unanswered questions remain.
 

The nuclear deal

The construction of new nuclear power stations was first mooted around 2010 in response to electricity shortages and projected increased future demand. But the idea never gained traction when it became clear that electricity demand was growing less than expected. The hugely expensive new nuclear development was no longer financially defensible.

But Zuma’s government persisted with the idea. It soon became clear that Zuma favoured a Russian bid, and in 2014 the Russian nuclear company Rosatom stunned the country by announcing it had secured the rights to build the new South African plants.

It was a move with massive long-term financial implications for South Africa, and raised many red flags. The nuclear build soon came to be viewed as the most audacious example of state capture.

One of the questions the inquiry needs to try and answer is why, given that the programme was massively tainted by controversy and was deemed unaffordable, the ex-president doggedly pursued it.
 

The Shiva uranium mine acquisition

Some reasons are already known.

In 2010 a consortium that included the Gupta family and ex-president Zuma’s son Duduzane purchased the Dominion uranium mine near Klerksdorp in the North West province. The transaction baffled mining sector observers; in an era of weak global uranium demand, Dominion was considered a poor asset.

But the mine, soon to be renamed Shiva, would become exceptionally valuable if it was going to become the uranium supplier to South Africa’s new nuclear power plants. Mentor’s testimony specifically stated that the Guptas already considered themselves the exclusive uranium suppliers. Because of his family association, the former president had a vested interest in the nuclear build coming to fruition.

It was also odd that the transaction involved Rosatom’s mining subsidiary. 

Because the buyers did not have the finance to conclude the purchase, they approached state-linked agencies to attempt to raise the funding. The mine was eventually purchased through a R250 million loan from the Industrial Development Corporation.

The questions that remain unanswered are:

• What were the exact details surrounding the mine purchase, and what was Rosatom’s role in this transaction? And,


• Did ex-president Zuma or other high-ranking officials unduly pressure funding bodies to grant a loan for the mine acquisition?

 

The Russian agreement

Zuma’s many meetings with his Russian counterparts resulted in the Russian bidders inexplicably receiving preferential status ahead of other potential bidders. This engagement produced an astounding intergovernmental agreement, signed by then Energy Minister Tina Joemat-Pettersson.

After a court challenge from civil society organisations, the Russian agreement was declared illegal. But this didn’t stop government efforts towards the realisation of a Russian-led nuclear build.

Here the unanswered questions are:

• Why did Joemat-Pettersson sign an agreement she must have known to be unprocedural and irregular?
• Which officials were instrumental in promoting this agreement, and who instructed them?

Ministerial reshuffles and redeployments

The last period of Zuma’s presidency was characterised by the drama of frequent cabinet reshuffles.

National Treasury was at the centre of the reshuffle storm. But the Ministry of Energy was equally afflicted by frequent transitions, with five ministers throughout Zuma’s presidency. 

The unanswered questions to the finance and energy ministries are:

• Were two finance ministers and a string of ministers dismissed because they were opposed to the nuclear build, or not pushing it vigorously enough?
• Were these dismissals initiated by ex-president Zuma, or enacted at the request of other parties?

Connecting the remaining dots

The inquiry will undoubtedly investigate the infiltration and abuse of the national power utility Eskom, which also manages South Africa’s nuclear power facilities. In recent years the previously neutral entity had increasingly taken on the role of a nuclear lobbyist. 

A key question here is:

• Was the obsessive promotion of the nuclear build by several Eskom leaders driven by a genuine belief in the technology and its affordability, or by pressure?

It’s important to know what happened, and how, if South Africa is going to be able to put processes in place that ensure the entire energy sector never becomes compromised again.

This article was originally published on The Conversation. Read the original article.

Article Taken From: http://www.bizcommunity.com/Article/196/693/181249.html
 

The Department of Home Affairs has noted a judgement by the Western Cape High Court ordering the state to introduce legislation to recognise Muslim marriages within 24 months
The Western Cape High Court ordered that the state is obliged to introduce legislation to recognise Muslim marriages as valid, and to regulate the consequences of these unions.

The application for the recognition of Muslim marriages was brought by the Women's Legal Centre, which said it was aimed at providing Muslim women and their children with legal protection upon divorce.

“We are in the process of studying the order and will make further comments in due course. We also note that the decision is subject to confirmation by the Constitutional Court,” the department said.

Article Taken From: http://www.bizcommunity.com/Article/196/717/181401.html
 

Parties that are not happy with the decisions of the Pension Funds Adjudicator (PFA) may now lodge appeals with the Financial Services Tribunal.

Until recently PFA determinations could only be taken on appeal to the High Court - at great cost - within six weeks of the decision.

The Financial Sector Regulation Act, 9 of 2017 (“FSR Act”) considers the Pension Funds Adjudicator as a “decision-maker” and his/her decisions are “decisions” as respectively defined in paragraphs (e) and (d) of section 218 thereof.

This section came into effect on 1 April 2018 along with the FSR Act. Thus, the tribunal is now in a position to entertain appeals of determinations handed down by the Office of the Pension Funds Adjudicator (OPFA) with immediate effect.

Pension Funds Adjudicator, Muvhango Lukhaimane, welcomes the new move, saying anyone who is aggrieved with the outcome of a determination is entitled to lodge an application for the reconsideration of the determination within 30 days of the date of the determination to the Financial Services Tribunal.
 

Inexpensive avenue

“This measure is greatly appreciated by the OPFA as it will avail an inexpensive avenue for all those aggrieved to lodge appeals and not be prohibited to do so by costly High Court processes.

“It will also provide room for special attention to be given to some of the succinct issues pertaining to retirement fund management instead of these being resolved in terms of general law,” she said.

An order of the Financial Services Tribunal has the effect of a civil judgement and may be enforced as if lawfully given in a competent court.

The contact details of the Tribunal Secretariat are: telephone (012) 428 8012 / (012) 367 7259 or email LEG.Tribunal@fsca.co.za

Article Taken From: http://www.bizcommunity.com/Article/196/518/181443.html

Advisory committee appointed to investigate legal fees

Justice and Correctional Services Minister Michael Masutha has appointed an advisory committee to assist the South African Law Reform Commission to investigate and make recommendations on the fees charged by the legal profession to clients.
More specifically and as required by the Legal Practice Act, 2014, the committee will investigate and make recommendations on:

• The circumstances that give rise to legal fees that are beyond the affordability of most people;
• Legislative and other interventions in order to improve access to justice by members of the public;
• The desirability of establishing a mechanism for determining fees and tariffs payable to legal practitioners, the composition of such a mechanism and the process it would follow in determining fees or tariffs;
• The desirability of giving clients the option of negotiating fees with senior legal practitioners such as advocates;
• The feasibility of determining the total cost of matters before the commencement of the brief; and
• The use of contingency fee arrangements in the promotion (or otherwise) of access to justice.

The committee will commence with its work immediately and report to the minister within 24 months. 

In conducting its work, the committee will consider, among other factors, public interest, international best practice and the interest of the legal profession. 

The South African Law Reform Commission will also convene an international conference on legal fees in Durban from October 31 to 2 November later this year. 

The committee comprises the following members:
Rochelle Francis-Subbiah, magistrate, Pretoria Magistrate Court
Fawzia Cassim, former associate professor, Department of Criminal and Civil Procedure, Unisa
Willem Henrik Gravett, senior lecturer, Department of Procedural Law, University of Pretoria
Vela Mdaka, regional operations executive, Legal Aid South Africa
Thobeka Nkabinde, Office of the Chief Litigation Officer, Department of Justice and Constitutional Development
Trudy Zeelie, registrar and taxing master, Office of the Chief Justice, High Court of South Africa
Morne Oosthuizen, deputy director. Development Policy Research Unit, University of Cape Town.

“The advisory committee is part of a series of measures that government is continuing to take to ensure access to justice for all,” Masutha said.

http://www.bizcommunity.com/Article/196/546/180868.html
 

Putting the client first in financial services

The Financial Sector Conduct Authority (FSCA) issued one of the much-anticipated discussion documents on the implementation of the Retail Distribution Review (RDR). Through enacting relevant and progressive legislation, the FSCA remains committed to ensuring that customers achieve fair outcomes when dealing with financial services providers (FSPs) under the framework of Treating Customers Fairly (TCF).
RDR encompasses a series of regulatory reforms aimed at ensuring that financial services models:

• support the delivery of suitable products and provide fair access to suitable advice for customers;
• enable customers to understand and compare the nature, value and cost of advice and other services that FSPs provide;
• enhance standards of professionalism in the industry to build consumer confidence and trust;
• enable customers to benefit from fair competition at a price more closely aligned with the nature and quality of the service being rendered;
• support sustainable business models for financial advice that enable adviser businesses to viably deliver in the long term.

The key objective of RDR is to remove or mitigate conflicts of interest that may arise in relationships between financial advisers and the product providers.

Through the discussion document, the industry is deliberating over one of the most critical proposals of RDR: how to define and price a variety of investment product and the investment services offered by an array of providers / advisers.

The objective of the FSCA’s discussion document is to seek out input from those in the investment industry to ensure that future legislation and licensing take cognisance of the actual work performed and relationships between role players, so that the investment value chain is clearly understood.

RDR has distinguished between the following:

• Product supplier agents (PSAs): These are advisers that operate as part of the licence of the product provider and may only provide advice on the products of that product provider (and other product suppliers in its group).
• Registered financial advisors (RFAs): These are advisors that are separately licensed in their own right to provide advice on whichever products their licence permits, and are not limited to offering the products of any particular product provider.

Furthermore, an entity will have to make a choice between the aforementioned adviser categories, as operating as both a PSA and an RFA will not be allowed.

This is a good development, as it will be clear whether advice provided to customers is independent or not.

http://www.bizcommunity.com/Article/196/518/180892.html

South Africa's criminal justice system is on the mend. But it's just the beginning

The recent judgment by South Africa's Constitutional Court that ended the reign of the country's national prosecutions boss marked the end of former president Jacob Zuma's hold on the country's criminal justice system.
The court found that Zuma had appointed Shaun Abrahams unlawfully to the powerful position, and ordered him removed. President Cyril Ramaphosa has since replaced him with Silas Ramaite in an acting position.

Abrahams was the last remaining Zuma acolyte in the country’s criminal justice system. Finally, Zuma has lost the iron grip he once held on crucial state institutions.

Abrahams’ departure follows sweeping changes to other key positions in the government’s criminal justice and security cluster. The highly compromised Arthur Fraser has been moved from the State Security Agency while the priority crimes investigating unit, the Hawks, has a new head.

There are still two relatively new Zuma appointments in position: the national police commissioner Khehla Sitole, and the Inspector General of Intelligence Isaac Dintwe. Both of them have received Parliament’s endorsement at a time when it was already increasingly critical of Zuma. Dintwe, for example, was directly responsible for Fraser’s demise. They are, therefore, not Zuma functionaries. 

The fact that the final step against Abrahams was taken by the Constitutional Court, and wasn’t a political decision, adds legitimacy to his departure. The clarity of the judgment on the constitutional and legal aspects of the position of the country’s prosecutions’ boss, and independence of the prosecutions authority, deepens the democratic character of criminal justice. 
 

Court’s role in deepening democracy

The court’s ruling on Abrahams follows a trend of taking decisions that have promoted democracy in a tangible way. A few examples illustrate the point.

In 2016 the Court reaffirmed that remedial decisions taken by the Public Protector were binding on all public officials and representatives of the country.

The court also ruled that the appointments of two previous prosecutions bosses were invalid. 

Another example was the court’s interpretation of the parliamentary Speaker’s powers on no confidence motions. This entrenched the principle that the speaker can decide when voting would be by secret ballot or by public electronic voting.

The court also set aside a decision by the former National Director of Public Prosecutions, Mokotedi Mpshe, to withdraw corruption charges against Zuma. 

In another key judgment, the court ruled that political parties should disclose the sources of their private funding.
 

Public expectation

Abrahams’ demise has created the public expectation that stronger action can now be taken against corruption. The ongoing revelations of state capture excesses have left the National Prosecuting Authority with no room to sidestep prosecutions. 

If there’s no action it will be difficult for Ramaphosa to refute the claim that those accused of corruption continue to enjoy political protection on his watch. His promise of a new era of clean governance and efficient government is unquestionably bound to visible prosecutions without fear or favour. Urgent progress with prosecutions is just as important as his economic renewal agenda.

But progress in the fight against corruption doesn’t only depend on the National Prosecuting Authority. The police – and special investigative units in particular, such as the Hawks who are responsible for criminal investigations – would have to be seen to be doing their jobs. Their efficiency and effectiveness in investigations are crucial to the success of prosecutions. Serious reform of the police services is therefore equally important for effective prosecutions.
 

Public perception

Arguably, one of the most serious challenges facing the prosecutions authority is how to address the public perception that it’s politically compromised. A range of factors account for this. 

Firstly, there’s the high turnover of national directors which in turn is a symptom of political pressure. The incumbent’s term of office is ten years, in line with fixed, non-renewable terms for the Public Protector and judges. But since 1998 the five permanent and two acting national directors have all, on average, lasted only three years. On top of this, two previous commissions of inquiry against national directors – the Hefer and Ginwala inquiries – happened within a politicised environment.

There have been a number of cases that have pointed directly to political manipulation of the National Prosecutions Authority. These include the abuse of the Hawks’ and the prosecutions authority’s investigations against former national tax commissioner Pravin Gordhan and other tax officials to protect Zuma’s interests. So was Mpshe’s decision to rescind corruption charges against Zuma.

An immediate priority for prosecuting authority is to change this legacy of political abuse, and to cultivate credibility. 
 

What needs to be done

Ramaphosa’s campaign of renewal will initially require many more investigations of politicians to combat corruption in the public sector. That entails potentially more political complications for him and the risk of creating more political enemies. It will also threaten deeply entrenched patronage networks in the governing ANC.

For the National Prosecuting Authority, only after it has shown visible success in significantly reducing corruption in the public sector can its political exposure be reduced. The most critical factor in changing its negative legacy is for the prosecutions authority to safeguard its independence.

The latest Court judgment has made an important contribution to this. It has provided clarity on the prosecutions boss’s tenure of office. It also instructed the National Prosecuting Authority Act to be changed to curtail the president’s powers to appoint and dismiss the national head of prosecutions.

Independence in terms of decision making is equally important, but does not form part of the court judgment. This will require consistency and a show of high levels of integrity and competence by the National Prosecuting Authority.

To promote its independence, it would help if its leading figures are career professionals with no public political profiles. The appointment of Silas Ramaite as the acting National Director of Public Prosecutions, is a good beginning.

This article was originally published on The Conversation. Read the original article.

http://www.bizcommunity.com/Article/196/549/180954.html


 

Is a court order necessary to terminate municipal services?

Is it necessary for a municipality to obtain a court order before terminating the supply of electricity and/or water to a consumer's property for non-payment of municipal charges?
 

Principles of spoliation

It is trite (accepted) law that if any person or entity (including a state entity such as a municipality) unlawfully deprives another person of a thing (which includes the supply of services such as electricity and water), that the person so deprived has a remedy in our law based on the mandament van spolie for the immediate restoration of the thing deprived.

This is because our law frowns on self-help, and in the great majority of cases will only authorize the ‘taking’ of a thing from another after a court has considered the issue and granted an order authorising the taking.

The taking of a thing without a court order is thus normally considered unlawful, unless there is another authorisation in law for the taking (such as legislation authorising it).
 

Restrictive interpretation of statutes

It is an accepted principle of our law that statutes that authorise acts that can be potentially harmful must be ‘restrictively interpreted’, meaning strictly interpreted and adhered to, in order to ensure that the minimum amount of damage is done. This applies to any statute authorizing the termination by a municipality of electricity and/or water supply – the most notable of which is section 97 of the Local Government: Municipal Systems Act 32 of 2000.
 

Cases law applying a restrictive interpretation

The above principle has been upheld in a number of reported and unreported cases, including Midvaal Local Municipality vs Meyerton Gold Club (A30338/14) 2014 ZA GPJHC 256 15 October 2014, African Billboard Advertising (Pty) Ltd vs North & South Central Local Councils Durban 2004 (3) SA 223 (N), Sithole vs Resettlement Board 1959 (4) SA 115 (W), Minister of Finance & Others vs Ramos 1998 (4) SA 1096 (C) and George Municipality vs Wiener & Another 1989 (2) SA 263.

This principle was most recently upheld by Judge Wepener of the Johannesburg High Court in the unreported case of Shanike Investments 85 (Pty) Ltd v The City of Johannesburg Metropolitan Municipality (8187-2018) [2018] ZAGPJHC 420 (7 March 2018) (unreported), a copy of which can be accessed on the Saflii website. In his judgment Wepener J cited the above cases with approval, and found that the City of Johannesburg’s actions in terminating the supply of electricity to a property without a court order was unlawful, because the statute upon which the municipality relied for authorisation to terminate the supply (when interpreted restrictively) did not expressly authorize the termination without a court order.
 

Contradictory opinion

In Rademan v Moqhaka Municipality & others (173/11) [2011] ZASCA 244 (01 December 2011), Judge Bosielo opined in para 16 (Judges Lewis and Petse concurring) that: “I am of the view that it would not be practical for municipalities to pursue these matters [obtaining court orders authorising termination] in court. It cannot be gainsaid that such a step would result in the municipalities being mired in such cases, losing precious time in the process and incurring high legal bills unnecessarily.”

At para 27 he further concluded that: “Having considered all the relevant legislation, it is clear to me that there is no statutory instrument which requires a municipality to obtain a court order authorising the discontinuation of a municipal service.”

With the greatest of respect to the Supreme Court of Appeal, judges referred to above, the authors hereof are of the view that their decision was flawed inasmuch as it did not take into account the precedents set, and up to that point of time, maintained for decades, in our law. It is possible that this principle was not argued before the court and that this explains why it was not considered in this case.
 

Conclusion

The principle that statutes that can cause people harm must be restrictively interpreted remains intact, and as such, all state action (including terminations of service supply by municipalities) must take place strictly in accordance with the authorizing legislation. However, unfortunately, the Supreme Court of Appeal case in Rademan overrules all other precedents set in relation to the termination of services by a municipality. Accordingly, until such time that the Rademan case is overturned by another ruling in either the SCA or a higher court, a municipality may disconnect the municipal services to a property, without first having to obtain a court order authorising them to do so.

http://www.bizcommunity.com/Article/196/546/181009.html

Where does graffiti stand when it comes to copyright?

Once considered vandalism and destruction of public property, graffiti has been embraced by fashion houses and major corporations in their advertising campaigns. There are three terms commonly used to describe this kind of art - street art, graffiti and vandalism.

Street art is an umbrella term for most public art (legal and illegal), and includes commissioned murals, graffiti and public art displays.

Graffiti is merely illicit public art, generally spray-painted murals, writings or drawings, which does not have the prior permission of the property owner, whereas vandalism is any wilful destruction of property, which is how many people perceive graffiti.

Overall, these art forms have now become a marketable commodity, although their legal status as art has not been established. Can graffiti be protected by copyright? And what about the commercial use of the artists’ work?
 

US case study

The question of copyright protection may be settled in the USA this month (August 2018), when the lawsuit brought by graffiti artist, Adrian Falkner against General Motors (GM) is heard before a federal judge in California.

Falkner, known by his tagline SMASH 137, filed a lawsuit against GM in January this year, after a mural he had been commissioned to paint on the outdoor elevator shed of a 10-storey parking garage in Detroit in 2014 featured prominently in GM’s Cadillac XT5 advertising campaign across most of its social media platforms.

Falkner alleged copyright infringement, as well as damage to his reputation, because he has “carefully and selectively approached any association with corporate culture and mass-market consumerism”.

GM, however, claimed that the graffiti mural painted on the Detroit parking garage is “architectural work”, and therefore use of the work does not constitute copyright infringement. The court filing states: “This right to photograph an architectural work extends to those portions of the work containing pictorial, graphic or sculptural elements. Because [Falkner’s] mural is painted onto an architectural work it falls squarely within the ‘pictorial representation’ exemption, and his copyright infringement claim should be dismissed.”

GM also stated that the photographer who took the image in question was part of a programme in which Cadillac loans cars to a variety of artists to use in their work, and the photographer had provided Cadillac with the images with written permission to use in social media.
 

Copyright in SA

Although the Falkner/GM decision will be based on US copyright law, the decision in this case could impact on copyright protection for graffiti in South Africa.

To qualify for copyright protection, a work needs to be original and reduced to material form. Originality refers to the fact that the author or creator created the work through his or her own skill and efforts (and without copying another work).

Graffiti, then, meets both of these requirements. It is creative and is a tangible medium of expression. There are no formalities required, and copyright subsists in an artistic work as soon as it is created. The Copyright Act 98 of 1978 grants the creator or owner of the work the exclusive right to do or authorise, amongst other things, the reproduction of the work, the publishing of the work or the inclusion of the work in a cinematograph film or television broadcast.
 

Public spaces

So, does this mean that a graffiti artist can claim copyright protection when his or her graffiti is applied to statues and buildings (legal or otherwise) and appears in a video/film or photograph of the Johannesburg skyline or any other public space? Public art may be defined as visual artwork that has been planned and executed with the intention of being displayed in public spaces, and includes works of architecture.

The man in the street or average person has the expectation that he or she can photograph or film whatever he or she sees in a public space, which includes public art. This expectation can and does conflict with the exclusive rights of the creator or owner of the copyright in such work. Although some public artwork has entered the public domain, such as the Union Buildings in Pretoria, due to the expiry of the work’s copyright term which, for artistic works, is 50 years from the end of the year in which the creator died, many other works are still under copyright protection, and the (mostly incidental) use of these works create a potential risk for photographers and videographers in public spaces.

The Copyright Act 98 of 1978 (“the Act”) contains several exclusions to copyright infringement, such as fair dealing and freedom of panorama. Section 12 of the Act deals with fair dealing, and is not discussed here.
 

Freedom of panorama

Section 15(1) of the Act provides a general exception from the protection of artistic works, and states that the copyright in an artistic work will not be infringed by its inclusion in a cinematograph film or television broadcast providing the inclusion is merely by way of background, or is incidental to the principal matters represented in the film or broadcast. 

This exception can and does lead to ambiguity, as it is not always clear what constitutes the principal matter of a work. An example would be the wide shot of a public square, as all of the elements of the square could constitute principal matter. The use, however, needs to be “by way of background, or incidental” thereto, and case law in South Africa does not provide guidance on the interpretation of the concept of “incidental inclusion”.

Freedom of panorama generally allows for the creation of images such as photographs, films, paintings, etc, that predominantly include three-dimensional copyright-protected works such as buildings, sculptures, etc which are permanently or ordinarily located in the public space, without permission.

Section 15(3) of the Act further provides that the copyright in an artistic work shall not be infringed by its reproduction or inclusion in a cinematograph film or television broadcast if the work is permanently situated in a street, square or similar public place. Although a public gallery may also qualify as a public space, these often restrict photography and videography on their premises, leading to additional ambiguity.

Further ambiguity appears in the meaning of the phrase “permanently situated”, and the Act does not provide any guidance with regard to the interpretation of this concept. This means that artistic works which are temporarily displayed in the public space would not qualify.
 

Amendment Bill

The Portfolio Committee on Trade and Industry recently published specific clauses of the Copyright Amendment Bill [B13-2017] for public comment. The draft Bill seeks to substitute subsection (1) of Section 15 with a new clause relating to the incidental and/or background use (previously inclusion) of an artistic work within another work.

In seeking to address the limits of the current Section (which does not include photographers and other visual artists in the exception, which is restricted to inclusion in cinematograph films, television broadcasts or transmission in a diffusion service), the legislator has attempted to broaden the general exception relating to incidentl /background use of an artistic work to apply to all types of works.

It is difficult to see how the exception can apply to use of an artistic work in, for example, a sound recording or a literary work, and perhaps the Bill should rather specify the additional types of works to which this exception will apply, such as cinematographic films, television broadcasts, transmissions in a diffusion service, photographs, drawings, engravings or paintings.

Furthermore, the application of this exception has been extended to cover background or incidental use of an artistic work that is situated in a public space, leading to the concern that it may be open to abuse. The mere fact that the artistic work happens to be located in a public place means that its use would not constitute an infringement, providing the infringer could show that its inclusion was of a background or incidental manner.

A knock-on effect of this amendment is that artists may not want to display their artistic works in public places for fear that other parties could use these (normally copyrighted) works in their own works under this general exception.

The South African Institute of Intellectual Property Law (SAIIPL), amongst other parties, has submitted its comments to the Portfolio Committee, to address issues in the Bill, and it remains to be seen in what form the final Bill will emerge.

http://www.bizcommunity.com/Article/196/717/181034.html

 

Saps makes progress at OR Tambo Airport

The multi-disciplinary team, tasked to prevent and combat crime at the OR Tambo International Airport, continues to make arrests of suspects on various crimes.
Over the past few days, the team recovered drugs worth millions, as well as abalone with an estimated value of R1.8m, when they arrested four alleged drug and abalone traffickers.

Saps spokesperson, Lieutenant Colonel Katlego Mogale, said the first suspects were intercepted at the check-in counters, where officials found container boxes of Kellogg’s corn flakes cereal.

Sachets containing white powder suspected to be crystal meth were found concealed in the boxes. 

Mogale said the team at the airport are always on the lookout for suspicious looking people and luggage.

Another suspect, upon realising he was under surveillance, ran off to the basement where he had parked his vehicle.

“The team pursued him and discovered suspected drugs weighing about 6.62kg with an estimated street value of R1.98 million.”

The suspect was placed under arrest for possession of suspected drugs.

The third suspect, on the other hand, was found with suspected cocaine weighing 3.4kg and estimated to be about R940,000 when his luggage.

The last suspect was arrested as he arrived at the airport. Mogale said the preliminary investigation revealed that his name did not appear on the passenger list. 

“He was searched and his luggage contained 17kg of ephedrine with an estimated street value of R690,000.”

In a different incident, the team intercepted a suspicious consignment en-route to Hong Kong. Upon inspecting the consignment, which had been declared as personal effects, 60kg of abalone with an estimated street value of R1.8 million was found. 

The suspects have since appeared in court and further investigations are continuing.

http://www.bizcommunity.com/Article/196/549/181014.html

The not-so golden loop structure of cross-border tax

In deciding whether to invest abroad and which country to invest in, taxpayers would potentially consider whether South Africa has a double tax agreement with a specific country.

However, it is important that taxpayers also consider South Africa’s exchange control rules and ensure that where an offshore investment is made, they comply with these rules. One of the biggest pitfalls to avoid, is creating a loop structure, which is considered to be a serious contravention of South Africa’s exchange control rules.
 

What is a loop structure and why is it unlawful?

A good description of a loop structure is set out in a policy document that was released by the South African Reserve Bank’s Financial Surveillance Department (FinSurv) on 17 November 2016 entitled: Exchange Control Special Voluntary Disclosure Programme policy dealing with ‘loop structures’ (including 74/26 structures). This document sets out FinSurv’s policy regarding the regularisation of loop structures in terms of the exchange control special voluntary disclosure programme that was in place between 1 October 2016 and 31 August 2017.

According to the policy document, loop structures entail the formation by a South African resident of an offshore structure which, by reinvestment into the republic, acquires shares, loan accounts or some other interest in a South African resident company or a South African asset. The document adds that transactions creating loop structures contravene, amongst other provisions, Regulation 10(1)(c) of the Exchange Control Regulations, 1961 (Regulations). Regulation 10(1)(c) states that no person shall, except with permission granted by the Treasury and in accordance with such conditions as the Treasury may impose, enter into any transaction whereby capital or any right to capital is directly or indirectly exported from the republic.

The Policy Document sets out how a loop structure can be created and its potential consequences, as follows:

• A South African resident individual, trust or corporate entity transfers authorised or unauthorised funds (could also be existing offshore funds or a combination thereof) from the republic to set up, for example, a foreign trust or foreign entity. (Authorised funds are those foreign funds held in a manner that does not contravene the regulations.);
• The foreign trust or entity involved would then directly or indirectly (via another offshore entity) reinvest its authorised or unauthorised funds in the republic, thereby creating a loop structure. The reinvestment could be in the form of South African shares, assets or loan accounts being acquired or created;
• The South African resident would in some instances thereafter export returns made on the South African investment by way of, amongst other things, the payment of dividends, profits, interest and/or loans to the foreign structure; and
• The result of the loop structure is that the investment of funds from the offshore structure into the republic and the payment of dividends, profits or interest offshore results in the accumulation of value over and above the nominal foreign investment that was initially made.

From the above example, one can also see that a loop structure has the effect of reducing South Africa’s tax base and could reduce any taxes that the offshore structure would have to pay in South Africa.

South African residents must keep in mind that although the regulations and policy document only refer to the republic, the prohibition against creating loop structures applies to the reinvestment into all countries forming part of the Common Monetary Area (CMA). The CMA consists of South Africa, Swaziland, Lesotho and Namibia. This is stated in the Currency and Exchanges Manual for Authorised Dealers, which must be read with the regulations.
 

Are loop structures unlawful under all circumstances?

As stated above, Regulation 10(1)(c) states that transactions which result in the export of capital from the republic may only be entered into with the permission of the Treasury and on such conditions as the Treasury may impose. According to the manual, the word “Treasury” refers to the minister of finance or National Treasury, including the persons to which the minister has delegated this authority, including the governor and deputy-governor of the South African Reserve Bank. Loop structures may therefore only be created where Treasury has given its permission for this to take place.

In terms of the manual, some of the circumstances under which a loop structure may be created, are the following:

• Section B.2(B) of the manual states that where a South African resident has created an unintentional loop structure, by investing with non-resident asset or fund managers who invest in foreign companies that have CMA assets, or in offshore global investment funds that hold CMA investments (directly or indirectly) over which the South African investor has no control, are permitted. It is important to keep in mind that the South African investor must have made the investment after taking the invested funds abroad legally.
• In terms of section B.2(F) of the manual, South African technology, media, telecommunications, exploration and other research and development companies may establish an offshore company to raise foreign funding for their operations, subject to certain conditions. These conditions include registering with FinSurv and ensuring that the established offshore company is a tax resident in South Africa. Such companies may hold investments and/or make loans into South Africa, even though the investment or loan would create a loop structure; and
• In terms of section B.2(A) of the manual, a South African company is now permitted to acquire up to 40% equity and/or voting rights, whichever is the higher, in a foreign market entity, which may in turn hold investments and/or make loans into any CMA country. This dispensation does not apply to foreign direct investments where the South African company on its own or where several South African companies collectively hold an equity interest and/or voting rights in the foreign target entity that exceed 40% in total. Loop structures that exceed the 40% threshold require FinSurv approval with due consideration to transparency, tax, equivalent audit standards and governance. Previously, a South African company could not hold an interest in the foreign entity exceeding 20%. The increase to a maximum 40% interest that may be held was announced in the 2018 Budget and was set out in Exchange Control Circular No. 5/2018, which was released on 21 February 2018.

When considering investing abroad or setting-up offshore structures through which to invest or do business, South African residents must ensure that they comply with not only South Africa’s tax laws, but also with South Africa’s exchange control laws. FinSurv has broad powers in terms of the Regulations and at worst, could even declare that foreign assets held in contravention of the regulations, such as through an unlawful loop structure, must be forfeited to the state. It is therefore important that before investing abroad, South African residents ensure that they receive correct and accurate advice, especially where large sums of money are involved.

http://www.bizcommunity.com/Article/196/512/181061.html

Cessation of temporary letting of residential property by developers

SARS released a Binding General Ruling on 25 July 2018 on the temporary letting of residential dwellings by developers, principally to provide clarity of the cessation of section 18B of the Value Added Tax Act, 1991.

When a property developer constructs residential dwellings for resale, the VAT incurred on the development cost may be deducted. In turn the developer is obliged to levy VAT on the purchase price when the residential dwelling is sold. If there is a slump in the property market, it has been commonplace for developers to temporarily let dwellings. Historically, the difficulty that this created for developers was that SARS regarded the temporary letting as a change of use from making taxable supplies to exempt supplies. This resulted in the developer having to make an output tax adjustment calculated by applying the tax fraction of the open market value of the property when the change of use occurs.

With effect from 10 January 2012 section 18B of the Act was introduced, which allowed a developer to temporarily let dwellings for a period up to 36 months. Initially, section 18B was to cease on 1 January 2015 but was extended for three years up until 1 January 2018. Under these provisions the developer was deemed not to have made a taxable supply when the property was temporarily let, and the output tax adjustment was suspended during the relief period. The developer was only deemed to have made a taxable supply at open market value on the earlier date of the expiry of a 36-month period after concluding the lease, or the date when the developer permanently applied the property for a non-taxable purpose.

SARS has now issued a ruling to give clarity on the cessation of section 18B. According to the ruling, the 36-month period is calculated from the date that any agreement for temporary letting is entered into for the first time during the period 10 January 2012 to 31 December 2017. Where the 36-month period expires after 31 December 2017, and the property was not permanently applied for non-taxable purposes, the developer must account for the output tax in the tax period when the 36-month period expired. For example, if a developer entered into a lease for the temporary letting of a dwelling for the first time on 31 December 2017, then the developer must account for the output tax adjustment in the tax period within which 31 December 2020 falls.

http://www.bizcommunity.com/Article/196/569/181054.html

 

Bridging the gap between what the law is and how to apply it

Emerging forces in the environment pose a variety of challenges for today's legal professionals. Attorneys and corporate counsel are expected to keep abreast of increased regulatory complexity in local and global jurisdictions, while clients are facing cost challenges and demanding more competitive pricing and efficient services. As legal information becomes easier to access, so alternative service providers such as legal consultants and legal outsourcing services can often provide similar service for less.
Being knowledgeable as a lawyer is therefore no longer enough of a value proposition on which to build relevance and credibility. Legal experts, be they attorneys or in-house counsel, need access to a wider range of legal information. Nobody can be expected to have all legal knowledge committed to memory, but clients expect practitioners to have access to the answer, and to be able to provide fast, actionable legal guidance. 

“Knowing the law is only one part of the process,” says Yoni Balkind, head of Practical Guidance at LexisNexis South Africa. “In the information age, knowledge – which was previously a lawyer’s primary offering – is now a commodity. To have a competitive advantage lawyers need to optimise their information gathering process. It is now about gathering legal information and identifying the best practices efficiently, accurately and fast.” 

This is especially true when practitioners seek answers outside of their specialty, where the time required to get an answer becomes prohibitive. 

A further challenge in the legal knowledge space is that traditional material can fail to capture the practical aspect of working with the law. The legal profession has traditionally relied on a variety of primary research materials such as legislation and case law, as well as secondary resources such as precedent banks, legal encyclopaedias, text books, academic works and journals. These resources provide an essential base for a theoretical understanding of the law, however, there is a body of practical knowledge that falls outside of these sources. Workflows and best practices are typically learned on the job. Many areas of law have a practical application that is simply not captured in text books. 

“In order to address the challenges of processing and storing legal information, some large law firms increasingly rely on separate support functions within the firm such as library managers, knowledge managers and practical support lawyers. Together these roles function to manage information, harvest knowledge and best practices and handle the research requirement in the law firm." 

Whilst separating the knowledge management function from other legal work does allow frontline legal practitioners to produce tangible outcomes faster and more accurately, this is not a complete solution. Large firms are under pressure to decrease overheads and to create more streamlined knowledge functions. Small firms and in-house teams seldom have the luxury to consider a dedicated knowledge team, so practitioners are expected to be skilled in legal knowledge management. 

This, Balkind explains, is why outsourced practical legal information offerings have emerged globally as a solution to several of these converging trends. Practical law resources take the best of primary and secondary material, pulling together case law, legislation, commentary, and precedents, as well as other material not typically found elsewhere such as decision trees, checklists and policy templates. These are consolidated into guides that highlight prevailing law, set out best practices and workflows, and tackle law from a practical angle. 

Practical Law products have become ubiquitous in more developed markets. In the UK and Australia offerings such as Lexis® PSL are well established and respected. LexisNexis South Africa has relied on these offerings as a blueprint to create the first such material tailored specifically for South Africa - Lexis® Practical Guidance. 

Authored by leading practitioners from the top legal firms in South Africa, and focusing on the practical application of the law, Lexis® Practical Guidance is an online platform that provides smart, all-in-one guidance for professionals across 31 broad areas of law such as Corporate Governance, Mergers & Acquisitions, Civil Procedure, Competition, IP, Data Protection, Labour, Corporate Finance and many others. Unlike textbooks, Lexis Practical Guidance is structured as a practical guide, focused on best practices, policies and procedures. Short overviews of legal topics provide quick insights which can then be followed by deeper searching through an expansive collection of case law commentaries, legislation, precedents, checklists and additional analyses for users wanting to engage further on a specific topic.
Lexis Practical Guidance is designed to bridge the gap between understanding the law and knowing how it applies, providing the type of knowledge that could previously only be gained from years of real life experience and mentorship. It is designed to aid in house counsel and attorneys at all level of expertise. 

For further information or to request a demo, visit: https://www.lexisnexis.co.za/practical-guidance. 

http://www.bizcommunity.com/Article/196/546/181048.html

 

Impact of a "right of extension" clause in a sectional title sale agreement

Andrew Schaefer, MD of Trafalgar, advises sectional title home buyers to look out for a "right of extension" clause in their sale agreement, as it could make a big difference to their property's value in the future.
“The right of extension describes the situation when the developer of a sectional title (ST) scheme reserves the right, in terms of Section 25 of the Sectional Titles Act, to extend the scheme by building more sections at some later date.

“And the effects of that right could be quite profound. It could mean the return of builders to a settled community many years after its establishment, for example. We have also seen instances where it resulted in the views from existing patios or balconies being obscured by a new building, and where a vertical extension meant that apartments bought as penthouses were no longer on the top floor.”

Fortunately, however, strict conditions apply for a developer to register a right of extension, he notes. Among other requirements, the developer must:

• Reserve the right of extension when the original sectional plan is registered,
• Specify the time within which the extra sections will be built,
• State exactly how many extra sections will be built,
• Show where and how they will be built,
• Show the size of those sections and the effect that they will have on the existing participation quotas (PQs), and
• Show the external appearance of the new sections.

In addition, once the body corporate has been established, the developer cannot alter any of the plans, specifications or positioning of the additional sections without the unanimous consent of the existing owners.

To further protect ST consumers, says Schaefer, the Act also stipulates that every person who buys into the scheme must be made aware, in writing, of the developer’s right of extension, for as long as that right exists - failing which, they are entitled to cancel the sale.

“This means that if a right of extension has been reserved for 20 years, every sale agreement entered into during that 20-year period must contain a clause disclosing that right, no matter how many times each unit changes hands.” 

It is also important for ST owners to know, he says, that reserving the right to extend a scheme on an undeveloped portion of land within the scheme does not confer ownership of that land on the developer.
 

Developer has certain restricted rights

“The undeveloped portion of the land forms part of the common property and is owned in undivided shares by the members of the body corporate. Section 25 only gives the developer certain restricted rights in regard to that land, and for those rights to be altered, every owner has to agree in writing. This means the developer cannot simply abandon plans to build more sections and decide instead to subdivide the original site and sell off the unused portion.”

And finally, says Schaefer, Section 25 stipulates that a developer who does exercise the right of extension must apply for the new units to be included in the scheme’s ST register within 90 days of completion – failing which the body corporate will have the right to charge levies on those units as if they had been registered anyway.

“For instance, in a Cape Town complex we manage where the developer is building in phases, we recently found that the units in the second phase had been let without being put on the ST register. The developer was not very happy to learn that after 90 days, he would in any case owe the body corporate levies on those units, but this is just one more example of why it is important for ST trustees to appoint a professional and knowledgeable managing agent like Trafalgar.”

http://www.bizcommunity.com/Article/196/568/181056.html
 

Can you dismiss an employee for making racist comments in the workplace?
Is the dismissal of an employee, who compares a fellow employee to a monkey, fair, if the employee doing so alleges the statement was made in a friendly and inoffensive manner, according to the employee's culture?

Despite the subjective belief of an employee that her comparison was not racist, the test for determining whether her statement is racist is an objective assessment. If the statement or comparison is found to be objectively racist, the dismissal of the employee will be substantively fair.
 

Court's decision

In the case of Ward v South African Revenue Services (2018) 27 CCMA 8.37.14, the Commission for Conciliation, Mediation and Arbitration (CCMA) was tasked with assessing the fairness of Sumaya Ward’s dismissal. She was employed as a team member in debt management by the South African Revenue Services (SARS). On 2 March 2017, Ward compared the actions of her fellow employee to that of a monkey, due to her fellow employee’s lateness. Ward refused to apologise, stating that she was not a racist and that an apology would be an admission that she was a racist. Following a disciplinary enquiry, Ward was dismissed on 28 July 2017, and referred an unfair dismissal dispute to the CCMA for conciliation. The matter remained unresolved, and was referred for arbitration.

At the arbitration, the assessment of the substantive fairness of Ward’s dismissal was the only issue to be considered. SARS called three witnesses to testify. The first and second witness for SARS confirmed the incident. The third witness for SARS submitted that the incident caused animosity between the employees in the department. Ward then testified, submitting that in her culture, people were often compared to animals in a friendly, inoffensive manner. 

An additional witness, Fayroes Abdulla testified that in her culture, like that of Ward’s, giving people nicknames relating to animals was common and not offensive. The commissioner noted that Ward’s defence amounted to her not knowing that calling a black person a monkey or comparing a black person with a money was racist. Further, the commissioner acknowledged that SARS did not dismiss an employee who wrote an email where he used the words relating to following examples, of “monkey see, monkey do”.

The commissioner went on to assess whether Ward’s comment was racist, giving effect to the test that whether words uttered or comparisons made amount to racism is an objective test. The commissioner held that Ward’s defence that she did not know that the comparison was racist was highly improbable, as it was common knowledge through the press that comparing black people with monkeys is racist as confirmed by the Penny Sparrow incident. The commissioner held further that objectively seen, and as testified on behalf of SARS, everybody at SARS with knowledge of the incident was shocked, thus confirming that Ward’s comparison was objectively racist. The commissioner concluded that Ward’s dismissal was fair.
 

Importance of this case

An employee’s lack of intent or knowledge that comments he or she made are racist is not a defence against a charge of racism. The test for whether comments are racist is objective.

http://www.bizcommunity.com/Article/196/607/181044.html

A South African's guide to moving to and making it in Malta: How to steal a million

Tender fraud and corruption are probably endemic throughout the world but a case has recently been unearthed in Malta that is so diabolically clever, so deviously contrived that it makes the various SAA, SABC, SANRAL and other cadre-deployment shenanigans seem blunt and clunky in comparison.
Here’s a masterclass in cunning. This is how you steal a million…

The site and subject of the scam is the St Vincent de Paul Residence (SVPR), an example of what we in SA would call an old-age home. On the Maltese government’s Active Ageing website, SVPR is described as a hybrid between a nursing home and a hospital. With a total population of over 1,100 residents, emphasis is made on supporting the activities of daily living giving particular attention to nutrition, mobility, personal hygiene and social and spiritual activities. The multidisciplinary healthcare professional and non-caring staff manning the residence accounts to a population of 1,090 employees. The residence is a public funded entity, with the residents’ contributing 80% of retirement pension and 60% of other income.

A tender was advertised in 2015 for a 10-year catering contract and the provision of new kitchen facilities for SVPR. The RFQ was somewhat unconventional as there were two primary scoring criteria. The lesser weighted score was for price but the greater score was for ‘additional investment’. In an unusual twist, the government required that tenderers should propose a gift to SVPR and to specify in their bid submission what the nature and value of their gift was. So far, so open to malfeasance…

Two parties submitted bids. ‘Bid Lose’ (a JV called CCV) was for €38 million. ‘Bid Win’ (a consortium including James Caterers, Malta Healthcare Caterers Ltd and a subsidiary owned by the shareholders of the db Group, a Maltese listed company in the hospitality and leisure industry in general and – spoiler alert – property development in particular) was for €58 million. Can you see the first twist coming? Bid ‘Win’ was named the preferred bidder – because of their ‘additional investment’, and what a spectacular gift it was! Over and above providing meals (breakfast, lunch and supper) for the nearly 2,200 residents and staff (remember this was a catering contract after all) the winning bidder proposed to build a new 500-bed facility to the value of €30 million. Consider then the numbers: Win offered a €30 million gift that was more than 50% of the value of their €58 million catering bid and would be increasing the capacity of SVPR by a nearly equal percentage (from 1,100 beds to 1,600 beds). Poor ‘Loser’, this was a case of the ‘Winner’ using a steamroller to crack a nut. 

But more than ‘Bidder Win’ bringing the big guns to a knife fight, this was a conjuring act where the audience was directed to look at the big sparkly 500-bed facility and not watching what the other hand was doing… 

Enter the voiceover – the Greek chorus commenting on the action – from investigative journalist Ivan Camilleri of The Times of Malta. In an ongoing series of questing articles, Camilleri has probed the shadowy corners of the deal:

The Family Ministry has, so far, failed to answer questions on what will happen during the term of the contract. Questions to Parliamentary Secretary Anthony Agius Decelis on whether the winning consortium would be paid for the extra meals necessary to feed the 500 new residents and hundreds of new personnel to run the extension remain unanswered.

The government has also still to say whether it will be ‘leasing’ the new facility from the James Caterers/Malta Healthcare consortium during the 10-15-year term of the contract. Who will manage the new facility and who will employ the required carers also has still to be established.

Camilleri joined the dots in spectacular fashion earlier this month by uncovering the management contract for the new facility. Not put out to tender, the contract was given as a ‘direct order’ to ‘Bid Win’. The value of the contract – a staggering €272 million! At over a quarter of a billion euros, this is the largest direct order in Maltese history. 

In a surprise ending worthy of Roald Dahl, it now transpires that the direct order was signed before the result of the tender was announced. 

It’s feasible to interpret that the whole tender process was mere set dressing for a backroom deal script that had been written beforehand. Instead of paying €38 million for ‘Loser Bidder’ to fulfil the requirements of the 10-year catering contract, Maltese taxpayers will now be forking out €330 million (‘Win’s’ €58 million catering bid + the €272 million direct order). So, that’s €330 million to be spent in order to receive a ‘gift’ (the 500 bed wing) valued at R30 million. 

Steal a million? I undersold the premise – this is how to steal a quarter of a billion euros! The irony is it’s not even clear whether Malta needs another 500-bed facility in the first place.

http://www.bizcommunity.com/Article/133/90/181005.html

 

K-word user is a social media pariah, but he may escape prosecution

Social media exploded when a video of Johannesburg businessman, Adam Catzavelos, using the 'K-word' on a beach in Greece went viral.
Since then, Catzavelos has been fired from the family business, St George's Fine Foods, which is losing clients; his children's school has barred him from its premises; the EFF has laid a crimen injuria charge; his life has been threatened and social media continues to condemn him. 

Attorney Buang Jones said the incident will be investigated by the Human Rights Commission, but whether his offence can be prosecuted in SA is another matter. 
 

Foreign country

In a report in The Star. Legal experts said crimen injuria could be difficult to prosecute as he committed it in a foreign country that does not deem the use of the K-word as a criminal offence. 

Advocate Zola Majavu said it would be a long stretch to prosecute Catzavelos. “The offence was committed in a foreign country so you can’t prosecute him in SA unless what he did is also an offence where he recorded the video; then you can have him extradited. The rule is, you are prosecuted where you commit the offence.”

He added that even though Catzavelos’ video circulated on social media, the state would have to determine the exact original location of the offender at the time of distribution. “If he posted the video (directly to Twitter) while in SA then he can be charged in terms of the Electronic Communications Act. Also, if he shot the video in SA and then distributed it while overseas,’ said Majavu.

Crimen injuria must be directed at an individual

Advocate Mark Oppenheimer agreed that prosecuting Catzavelos for crimen injuria would be challenging. He reportedly told Times Select: “Crimen injuria is the unlawful, intentional and serious impairment of a person's dignity. Should the NPA decide to prosecute Catzavelos for his statement, there will be two hurdles to overcome: First, it must be proven that he intended to impair someone’s dignity. This may be difficult because his words were aimed at his friends in a private message, not at someone he was intending to demean. Secondly, his words are offensive to all South Africans, particularly black South Africans, but unlike the case of Vicki Momberg, they are not aimed at a particular individual (as is required).”

Verlie Oosthuizen, social media lawyer at law firm Shepstone and Wylie, said she could not see how Catzavelos would be criminally charged, although she understood the video was very offensive. Crimen injuria needs to be directed at someone. His comments were not directed at anyone in particular, said Oosthuizen. The government has entered the debate, strongly condemning the video.”‘His racist comments cannot be justified and display one of the most despicable forms of racism. Government urges law enforcement agencies to take action against Mr Catzavelos‚” said the official statement recorded by TimesLIVE. “Racism is punishable by law‚ under the Prevention and Combating of Hate Crimes & Hate Speech Bill. Whilst government respects freedom of expression‚ the public should be responsible in how they express their views. Racism has detrimental effects in disrupting the advances we have made as a country‚” said acting Government Communication and Information System DG, Phumla Williams.
 

Long-term reputational harm

“For somebody to take a video of themselves (saying the K-word) and posting it in a WhatsApp group is just unbelievable,” lawyer and social media expert Emma Sadleir reportedly told News24. 

She said perpetrators of racism are usually filmed on CCTV cameras or by another party. “For me, the biggest issue here is reputation. There may be criminal charges or civil cases, but the big thing is the long-term reputational harm. If you google this guy’s name in five years’ time, this is still what you’re going to get.”

While the fact that the video was taken from a WhatsApp group was an infringement of Catzavelos’ privacy, and that he himself had not posted it on social media,”it’s a valid infringement”. 

“There are two defences to privacy infringement: consent and public interest. There’s a lot of public interest in rooting out racism,” René Koraan, senior lecturer at the law faculty of North West University, reportedly told News24 that Catzavelos’ actions could lead to a ‘stiff fine’ or suspended sentence, with the possibility of jail time. But Sadleir reckons that a show of remorse could play a big part in what happens to him. “I think one of the reasons Vicki Momberg was sent to prison was because she didn’t show any remorse. She said the K-word 48 times, she tried to plead severe emotional stress, temporary insanity, and messed around with the judicial system.” 

Sadleir said she found it unacceptable that people are targeting Catzavelos’ wife and children. “Public opinion is important, but you have to be careful that you’re not held to ransom by the digital vigilante mob.”
 

Postscript

Catzavelos has issued an apology, although it has been rejected by many on social media as insincere.

Source: LegalBrief

http://www.bizcommunity.com/Article/196/639/181046.html
 

Transitional justice: lessons from Kenya on what works, and what doesn't

In today's world it's almost expected that transitional justice mechanisms - such as criminal trials, reparations, memorialisation, and truth commissions - will be introduced to help consolidate a country's transition from authoritarianism and conflict to democracy and peace.
For example, an International Criminal Tribunal for Rwanda was established after the country’s 1994 genocide. In 2002, the Sierra Leone government and United Nations (UN) set up a Special Court to address serious crimes committed during the country’s decade long civil war (1991-2002).

The International Criminal Court (ICC) has also had various interventions in Africa, and scores of truth commissions have been established around the world since the 1980s.

The underlying idea is that societies need to deal with violent and unjust histories if they are to move on to a new future. The aim is to bring about substantive results, such as the imprisonment of individuals or reparations. It’s also to perform or enact a clean break with the past. 

As transitional justice efforts have become more widespread, their mandates have also become increasingly ambitious. They are now often called on to reveal the truth about past injustices, to see that justice is done, and to reconcile individuals and communities. 

But it’s increasingly evident that these mechanisms often fall far short of such lofty goals. This is despite the time and money spent on transitional justice, and the hope that they often inspire.

In my new book, Performances of Injustice: The politics of truth, just and reconciliation in Kenya, I explore the gap between aspiration and reality by looking at the two transitional justice mechanisms that were introduced following Kenya’s post-election violence in 2007/8. 

The first is the ICC intervention, which initially confirmed charges against four Kenyans for their alleged role in the violence. The second is the country’s Truth, Justice and Reconciliation Commission. 

The ICC focused only on those deemed most responsible for the violence. In contrast, the commission was tasked with looking at a wide range of injustices that had occurred between Kenya’s independence in 1963, and the end of the post-election violence in 2008. Between 2009 and 2013, the commission received more than 40,000 victims’ statements, held public hearings in 35 locations across the country and published a substantial report. 

One key lesson from my research is that transitional justice mechanisms are not generic “tools” that can be used in different contexts with the same effect. Rather, their success or failure depends on their design and approach, but also on how they are received, and responded to, by people on the ground. 
 

Politics of truth, justice and reconciliation

The ICC’s intervention was soon mired in controversy. Those indicted and their allies spun the court’s involvement as a biased imposition by foreign powers, an extension of colonialism, and a path to further injustice. 

Their supporters rallied around them and two of the accused – Uhuru Kenyatta and William Ruto – were elected President and Deputy President in 2013 while their cases were still underway. The cases later collapsed due to a lack of evidence amid claims of witness intimidation and harassment.

The commission, meanwhile, was quickly dismissed by many as just another commission of inquiry whose report would be relegated to dusty shelves. Its hearings generally attracted small audiences and little media coverage, while the report is yet to be discussed in parliament.

The Kenyan experience highlights the importance of context, and of public reception and interpretation. It also provides evidence of the law of unintended consequences. 

The ICC failed to bring any perpetrators to book. It also fuelled a sense – among opponents and supporters alike – that further injustice had occurred either as a result of neo-colonialism or impunity. 

The commission also helped to reinforce a culture of impunity. Thousands of victims gave extended testimony about the injustices and atrocities they had suffered, and their ongoing impact. But with the exception of one unnamed individual who testified in a closed hearing, not a single person admitted to wrongdoing.

The accused – or “adversely mentioned persons”, as they were called – did not deny that injustices had occurred. But they did deny, through one line of reasoning or another, that they could be held responsible.

Instead, and as had occurred with the ICC, alleged wrongdoers used the opportunity to present themselves as good and strong leaders. Their appearance in turn helped to entrench a sense of injustice and continuity: the same political elite were in power and could rely on state, peer and community support to protect themselves.

The book also discusses other ways in which Kenya’s transitional justice efforts were undermined or reinterpreted, and how they unintentionally served to reinforce certain inequalities and injustices. 
 

Justice that works

Despite these problems, my argument isn’t that transitional justice should be abandoned. Nor would it be correct to say that the Truth, Justice and Reconciliation Commission or ICC were a waste of time with no positive impact. There were some commendable outcomes from both. 

The ICC’s intervention highlighted that there can be consequences for leaders accused of involvement in inciting or organising violence. The commission’s report also provided a historical overview of injustice in Kenya and offered wide ranging recommendations that activists and politicians can use to lobby for justice and reform.

The point is that transitional justice mechanisms can’t be applied with the same effect in different contexts. Instead, justice seekers need to consider the ways in which the past actually persists in a particular context, and how transitional justice efforts are likely to be received and interpreted. 

And while these mechanisms can make positive contributions to a transition, they are ill suited to meet the increasingly ambitious expectations placed on them. 

Transitional justice mechanisms are typically short-term efforts with limited mandates. As such, they cannot grasp the complex ways in which unjust and violent pasts affect the present. 

Such ambitious goals as truth, justice and reconciliation require ongoing political struggle, and substantive socio-economic and political change, which transitional justice mechanisms can recommend, and sometimes contribute to, but cannot be expected to achieve.

This article was originally published on The Conversation. Read the original article.

http://www.bizcommunity.co.ke/Article/111/549/181104.html

International escrow and tax services offered by Europlaw Group

Europlaw Group, operating mostly in the Republic of South Africa and the United Kingdom, decided to enter into a formal business collaboration via a joint venture with Ithuba Savings Credit Corp Limited representing ISCC Group, operating from Indonesia, Germany, Hong Kong and Singapore, that has an international footprint from the banking to oil and gas industries.
Europlaw Group is a member of The International Association of Lawyers (UIA - Union Internationale des Avocats) situated in Paris, France, that brings together over 2,000 individual members and 200 bars, federations and association members, from more than 110 countries. 

14 May 2018 marked a significant milestone for Europlaw Group. On this day, Ithuba Savings Credit Coop Ltd representing ISCC Group, Europlaw Group Incorporated and Europlaw Accountants (Pty) Ltd (a member of the International Association of Accounting Professionals - IAAP, situated in London, UK) entered into a strategic joint venture agreement which was signed in Jakarta, Indonesia. Europlaw Group is now in the position to offer both paymaster and escrow services to our international clients with the international banking platform provided by the ISCC Group of Companies; under ISC Bank and also presently working through both PT Bank Mandiri (Persero) Tbk in Indonesia and Volksbank Pforzheim in Germany as well. 

The joint venture entered into between ISCC Group and Europlaw Group offers escrow banking facilities to both clients of ISCC Group and Europlaw Group clients under the custody of ISC Bank under ISCC Group. Europlaw Group will be used as the escrow and paymaster receiving funds for various projects under the required international banking KYC requirements at all times. 

Europlaw Accountants (Pty) Ltd is an established accounting firm based in South Africa and run by qualified accountants. They provide bookkeeping, accounting, payroll administration, compliance services, financial advisory services and taxation services to small and medium-sized businesses as well as individuals. Our clients are our main priority and our aim is to provide excellent services at affordable rates. Europlaw Accounts (Pty) Ltd is a member company of Europlaw Group. Europlaw Accountants (Pty) Ltd as tax consultants and advisors advise international taxpayers on how to best comply with the tax legislation and also offer strategies on how to best minimise tax liabilities by using the available rebates and tax deductions as per the various tax legislations. 

ISCC Group of Companies have provided an international banking platform to Europlaw Group offering both paymaster and escrow services to its international clients receiving funds throughout the world for investment purposes. Europlaw Group also offers offshore sub accounts under the Europlaw Group profile held with ISCC Group of Companies through ISC Bank. 

The ISC Bank through ISCC Group banking platform offers the unique facility for MT103 downloads that can be performed under the Europlaw Group profile and that such funds will be used with the consent of the client for investments under the banking and financial licenses held within the ISCC Group of Companies. 

Europlaw Group believes that the ISCC Group’s banking platform will offer new advance opportunities by providing paymaster and escrow services to Europlaw clients worldwide with offshore banking services. Europlaw Group then also provides additional tax advisory and services/opinions to both ISCC Group and Europlaw Group clients. 

ISCC Group of Companies works for the economic and social well-being of their members, and not just for the enrichment of a select few investors. Because of the close cooperative nature, ISCC Group protects the interests of their members and clients by offering them profitable and secure financial products and services and always prioritises sustainable development. Furthermore, for few years now, ISCC Group had been providing technical support and investment services in developing countries through their subsidiary companies in Asia. 

ISCC Group, Europlaw Group and our overseas international financial service providers aim to provide a comprehensive service covering all aspects of treasury, including acting as paymasters for various companies, complementary services such as the raising of finance, insurance, investments management, buy-outs and special projects. We are also experts in arranging incoming loan structures for foreign investors, taking into account, the volatility of currencies and the need to protect the liability side of the loan. 

Europlaw Group’s core strategy is based on the concept of reputable and intelligent partnerships and alliances. Through this, experts from the fields of law, business, asset management, project management, project funding and financing, paymaster services, escrow services, fiduciary, audit and tax advisory we deliver excellent services to clients at reasonable and competitive rates. The group’s senior partner structure allows seasoned and experienced lawyers, escrow agents, auditors, advocates, investment bankers, accountants, financial advisors, and real estate experts to work together in competent teams for successful operations in locations worldwide. 

Please visit our websites at www.iscbank.de; www.ithubasavingscredit.com and www.europlaw.com for any further enquiries related to this press release. 

For any further questions or enquiries related to paymaster and escrow Services, please visit http://www.europlaw.com/paymaster.php and our link https://youtu.be/eER_8OSn1wk. 

http://www.bizcommunity.com/Article/196/546/181115.html

What changing the ownership of South Africa's central bankwill, and won't, do

South Africa's second largest opposition party, the Economic Freedom Fighters (EFF), has lodged a parliamentary motion to amend laws that govern the management and ownership of the country's central bank.

Judging by the content of the South African Reserve Bank Amendment Bill the EFF is clearly intent on upping the ante on economic policy ahead of the national elections in 2019. The amendments come hot on the heels of the party pushing for the expropriation of land without compensation. The EFF was formed five years ago after it split from the African National Congress, positioning itself on the left of the political spectrum.

The EFF on its own won’t be able to affect the Reserve Bank change given that it only has 25 MPs in parliament. But the ANC has also thrown its weight behind the idea, adopting a resolution at its national conference last year to nationalise the South African Reserve Bank. 

It’s not the call for the nationalisation of the central bank, per se, that’s raising concern. It’s how its been dressed up by the EFF and the prevailing political environment.

What the EFF wants to achieve is control of monetary policy by politicians. This would be dangerous for South Africa. Experiences from other countries that do this, like Zimbabwe and Venezuela, are not good. They are all economic basket cases.

The fact is that a change of ownership of the South African Reserve Bank would not in and of itself be a disaster. Most central banks in the world have a share ownership structure that has the state as the majority, or only, shareholder. The South African Reserve Bank is one of only eight central banks in the world with private shareholders. But this does not equate to politicians running central banks. There are governing structures in place that ensure that central banks – even if the majority shareholder is the state – are free to implement monetary policy without political interference. 
 

Ownership isn’t the point

South Africa’s central bank has come under attack over the years. Many of the attacks have come from the left – within the ruling party and its allies the Congress of South African Trade Unions and the South African Communist Party.

The unhappiness has revolved around the role of the South African Reserve Bank – particularly its focus on keeping inflation under control by sticking to an inflation target – and its perceived failure to inspire economic growth. These concerns are now being manifested in the debate about the bank’s shareholding structures.

Unfortunately, the debate is informed by the mistaken view that private shareholders affect monetary policy. The corollary is that nationalisation would give the government, as the major shareholder, control over central bank policy. 

Both assumptions are wrong. 

Even though South Africa’s Reserve Bank has private shareholders, they have absolutely no say over monetary policy. Similarly, the state doesn’t dictate monetary policy in the vast majority of central banks that have governments as their major holders.

What this means is that changing the shareholding of South Africa’s bank won’t change the way the bank is run. 

The bank main mandate – to keep inflation under control – is in fact anchored in the country’s Constitution. To change this focus would require a change in the constitution.

Private shareholders of the South African Reserve Bank have very little influence over it. They play no role in the day-to-day management of the institution and also no role in the appointment of the executive management, the Governor and deputy governors.

Their powers are limited to electing a minority of board members, the right to attend the ordinary general meeting of the central bank where they also approve the minutes of the previous year’s meeting and the annual report of the bank, and the appointment of the external auditors. 

The private shareholders are also entitled to receive a dividend of 10c per share per annum (before dividend withholding tax of 20%). But no individual shareholder, or group of shareholders, can hold more than 10 000 shares. This is to prevent any concentration of power. This means that in any given year the maximum a shareholder can be paid in dividends (after dividend withholding tax) is a paltry R800.
 

Expropriation without compensation

The EFF bill is styled as an amendment to the existing South African Reserve Bank Act. The bill aims to change the ownership of the bank through nationalisation. The state would, under this scenario, own 100% of the bank.

The bill also seeks to move functions currently entrusted to private shareholders to the minister of finance. These include the appointment of some board members and the appointment of external auditors.

Giving the minister the power to appoint certain board members doesn’t make sense given that the SA Reserve Bank Act currently stipulates that the President of South Africa appoints the majority of the board members (including the governor and deputy governors). Giving the finance minister the power to appoint some board members would create two classes of board members – a nonsensical state of affairs.

More disconcerting is the fact that the bill makes no provision for any compensation for current shareholders. The bill simply transfers ownership from shareholders to the state. 

The proposed amendment goes as far as to state that the change of ownership will have no financial implications. This may be taken as confirmation that provisions on compensation were not inadvertently omitted or left to be considered later. The stated objective is clearly nationalisation without compensation.

This comes on the back of efforts to push for the expropriation of land without compensation.

Both moves set a dangerous principle and put South Africa on the dangerous slope of economic disintegration.

This article was originally published on The Conversation. Read the original article.

http://www.bizcommunity.com/Article/196/513/181111.html
 

The deeming provision ruling: what businesses need to know

On 26 July 2018, after three years of debate, the Constitutional Court made a judgement regarding the roles and responsibilities of temporary employment service (TES) providers and their clients with regards to employees.
This pertains to the deeming provision referred to in section 198A of the Labour Relations Act (LRA).
The ruling states that the client of a TES provider is deemed to be the sole employer of assigned temporary employees earning R17,119 or less per month, following three months of employment.
Until the ruling was made, following the insertion of the clause in 2015, interpretation was up in the air, and it was deemed that employees remained under the employment of both the TES provider and their client for the duration of the employment contract.
This meant that both the TES and their client were dually responsible for an employee under contract for the purposes of the LRA, which deals primarily with unfair labour practices and dismissals.
 

What this means

It all sounds very complex, however it’s relatively simple.

The new ruling does not mean that an employee automatically transfers from the TES provider’s contractual responsibility to the client’s, following three months of employment, but rather that – unless outlined in the TES/client contract - the client becomes responsible for any liability defined by the LRA in the event of a dispute, however, awards may still be executed against either the TES or the client.

In order for clients of TES providers to mitigate risk, it becomes important to, firstly, select a trusted TES provider who has a well-structured and solid in-house legal counsel and, secondly, to ensure that they are indemnified against risk in their commercial contract with their TES provider.
 

What has changed?

The triangular relationship between TES provider, client and employee still remains in place for every other labour act, regulation and council, apart from those set out in the LRA, which covers unfair labour practices. For the purposes of the LRA, the triangular relationship still remains in place for the duration of the commercial contract between the TES provider and client.

The TES provider is still responsible for remuneration of the employee, as well as for overseeing employee wellbeing, benefits and fair practice. After three months, for employees earning below the stated income bracket, the client assumes legal responsibility for maintaining remunerations and fair work practices.

However, a reputable TES provider will absolve the client of that responsibility through commercial contractual commitment, providing both legal assistance and recompense to their client for any claims of unfair practices, dismissals or other LRA-related matters. The TES provider still assumes full responsibility, handling such matters themselves and covering any claims made to the client by contracted employees.
 

What to do

As the judgement only dealt with a single question on the interpretation of the 2014 amendments to the LRA, further litigation and case law will determine how the CCMA and courts shall deal with the “deemed employee” relationship within the context of the various provisions of the LRA and other applicable legislation. It has therefore become more important than ever before to engage with skilled, reputable TES providers for temporary contract employee needs.

Businesses should be aware of the impact of the new ruling and avoid rash temporary employment decisions without consulting with an experienced and knowledgeable TES provider. Projects that are cut short, temporary workers suddenly no longer required, and dissatisfied temporary employees are but a few of the risky situations that businesses can find themselves in, coming under fire from LRA regulations unless they engage with a TES provider who can shoulder this for them.

Many organisations have frequent requirements for contracted employees for project-specific work, and often are for “unskilled” or blue-collar positions where the employee’s income averages at below the mentioned monthly wage. For these businesses, consulting with a TES provider who can alleviate risk and offer service such as employment requirement analyses becomes critical.

The commercial contract between the TES provider and the client needs to be specific on contract duration and the responsibilities for each party so that, if a dispute pertaining to the LRA arises, the client is protected, both legally and financially. The contract should underpin the entire relationship, and requires a collaborative employment initiative plan, strategic thinking and legal consideration.

http://www.bizcommunity.com/Article/196/607/181113.html

Attorney admission exam to be rewritten after leaks

The Law Society of South Africa (LSSA) and the examination committee has decided that based on the leaks of the attorneys admission examinations, all four papers should be rewritten in October 2018, with the exact dates to rewrite the examinations to be confirmed.
While the society acknowledges that many candidate attorneys did not participate in this unethical and unprofessional conduct, the rewrite is necessary to protect the integrity of the profession.

Investigations are ongoing to determine the source of the leaks and those persons involved.
The LSSA will ensure that appropriate action will be taken against any candidate who was complicit in the leak.

A national hotline will be established for individuals to act ethically and do what is right by making anonymous disclosure of any examination leaks or information as to the circumstances which led to it.

http://www.bizcommunity.com/Article/196/546/181138.html

British Prime Minister Theresa May says the United Kingdom has for some time supported land reform in South Africa - as it is a process carried out in a legal, transparent and democratic manner.
The prime minister said this in response to a question by the SABC at a business forum event in Cape Town ahead of meeting with President Cyril Ramaphosa at the Presidential headquarter’s in Tuynhuys on Tuesday, 28 August.

Her remarks come not long after US President Donald Trump posted a tweet over South Africa’s land reform programme last week, a tweet that the Department of International Relations and Cooperation has since described as “unfortunate”.
“The UK has for some time now supported land reform. Land reform that is legal, that is transparent, that is generated through a democratic process,” May said.

She went on to say that SA’s land reform programme is “…an issue that I raised and discussed with President Ramaphosa when he was in London earlier this year. I’ll be talking about it with him later today”.
 

Conditional support

The prime minister said that during those discussions, President Ramaphosa had further briefed her about South Africa’s approach to the talks, which she welcomed. She reportedly went on to say that the support was on condition that there will be no land grabs during the process.

Her remarks come after international relations minister Lindiwe Sisulu said at a media briefing on Monday that the department had decided not to sit back and allow lobby groups to go around the world spreading false information about SA’s land reform.

“We indicated to the chargé d'affaires that what they had reported was unfortunate and it was based on information that was not verified,” she said during the media briefing, adding that she wished they had contacted South Africa first to clarify the information.

http://www.bizcommunity.com/Article/196/368/181198.html

A bogus tax practitioner was one of two people sentenced to a combined 26 years direct imprisonment for defrauding the South African Revenue Service (Sars).
Cornelius Johannes Kriek (42) from the East Rand pleaded guilty to 29 fraud charges, 21 money laundering charges and one charge of corrupting a public official.

Kriek was sentenced to 20 years imprisonment at the Specialised Commercial Crime Court in Johannesburg.

Meanwhile, the Cape Town Magistrate’s Court sentenced Thomas Bloemeris Fortuin (66) to six years direct imprisonment. He pleaded guilty to 236 charges of fraud and forgery relating to the tax affairs of close corporations belonging to members of his family.

He pleaded guilty to all the charges put to him in terms of a plea bargain agreement reached with the state. Magistrate W van der Merwe handed down an additional 12 months imprisonment to Fortuin for failure to submit two income tax returns.

Three of the six year imprisonment sentence and the one year jail sentence for failure to submit outstanding returns were suspended conditionally for five years.

Sars said Kriek presented himself as a bookkeeper to unsuspecting value added tax (VAT) vendors, offering swift and corrective action by submitting VAT201 returns on their behalf.

Suspicion was raised by a legitimate tax practitioner, who discovered that a large refund had been paid into the account of her former client within a short while after the client had switched his account to Kriek.

The 42 year old was also sentenced to 84 years imprisonment, suspended wholly, but conditionally for money laundering and 10-years imprisonment for corrupting a public official.

Five of the 10 years is to be served concurrently with sentences for other charges.
 

Sars employee

“It is alleged that a former Sars VAT auditor for 35 years experience, assisted Kriek to commit the fraud. The cases against the two accused were recently separated after Kriek pleaded guilty. The case against the former Sars employee continues on 23 October 2018,” said the revenue service.

The fraudulent refunds were divided between the vendors, Kriek and the Sars employee. A total of 18 companies were involved in the VAT refund scheme, which created an actual loss of just over R32.9m to the fiscus.

In Fortuin’s case, two other accused were also sentenced, namely his son Tom Ross and bookkeeper Ivor Carlo Carolissen, who assisted the family to commit the crimes.

The two also entered into a plea bargain with the state and they were both sentenced to four years imprisonment, suspended for five years and 18 months correctional supervision, which includes house arrest and community service.

Fortuin was found guilty of 79 charges of fraud, while Carolissen was found guilty on 167 charges of fraud.

“Mr Fortuin (junior) was ordered to pay Sars back an amount of R615,592, representing the full capital amount of money stolen from Sars through the scams perpetuated by the accused. This money had to be paid in full before the sentencing procedure, and has been received by Sars."

He was also sentenced to 12 months, suspended for five years, for failure to submit three income tax returns.

The sentences follow an investigation by Sars criminal investigators, which revealed that the individuals submitted fraudulent VAT refund claims to Sars, based on fictitious transactions between the family’s four close corporations.

Group executive for criminal investigations at Sars, Neo Tsholanku, welcomed the sentences, adding that the revenue service is committed to the fight against corruption.

Tsholanku said the sentences also show that the courts are increasingly taking a stance against failure to submit tax returns to Sars.

The National Prosecuting Authority (NPA) has prosecuted 29 cases since April 2018, maintaining a conviction rate of 97%. More than 400 other cases dealing with tax crimes are currently on trial.

http://www.bizcommunity.com/Article/196/546/181224.html

Everything around us is for sale, from the airwaves that we listen to, to the TV programmes that we watch - even movies on the big screen have products snuck into them to subliminally drive our brand preferences. Our social media spaces are dotted with influencers who endorse products that they are paid to promote in a 'non-intrusive manner' - whether we're aware of the brand affiliation or not.
Online influencers are a complex market, especially in the social media space where boundaries between public and private domains have become blurred and where we have perceived closer access to celebrities and role models that we have idolized since our teen years.
 

Social media celebrities have become increasingly industrious

We can interact with these stars at the click of a button, and the choices they make inspire the choices that we make.

If social media trends are not on your radar, you might not have become aware of the influx of celebrities suddenly letting us into their lives and sharing with us their latest secrets to their brightest smile, or the smallest waist, or the longest hair. Social media celebrities have become increasingly industrious, and it’s hard to tell when they’re endorsing a product, or letting us into their personal lives. 

Ingenious managers (or in the case of the Kardashian/Jenner clan – momagers) have negotiated clauses into contracts that have managed to bypass the protection of consumers – you didn’t really think Kim and her clan whitened their own teeth, did you?

Consumers are rushing to buy products trusted (read: endorsed) by their favourite celebrities, increasing the revenue of both the product and the celebrity, with absolutely no regard for authenticity, trust or transparency.
 

Lack of transparency

Advertising, marketing and competition authorities have cottoned on to this lack of transparency, and have started taking influencers to task for being duty-free brand marketers. The onus has now been placed on the influencers to protect their integrity and authenticity when it comes to brand endorsement to their audiences. Although creating sponsored branded content allows them all kinds of creativity, influencers now need to comply with the law of disclosure, and the initial approach to online influencer endorsement no longer has the legs it used to.

Following in the wake of highly debatable and controversial rules and regulations of sponsored content set out by the Federal Trade Commission (FTC) that were put into place in South Africa, online influencers need to disclose any sponsored brand content – for the protection of themselves and the brands they endorse, as well as ours. 

This places a large amount of responsibility in the hands of influencers, and those who don’t pay attention to the regulations run the risk of loss of credibility, as well as being heftily fined. After all, if you’re going to be the face of a product as well as an inspiration to many, you need to do so responsibly and be aware of industry best practice.

As a consumer, this might not soothe the taste buds as well as those endorsed detox teas do, so here’s a breakdown of a few best practice guidelines on all platforms, which we can now hold our influencers accountable for:
 

Hashtags

All sponsored content needs to be clearly labelled. If the influencers themselves cannot tell that the posts are sponsored, chances are that we can’t either – so hiding them in a blur of words won’t be considered as full disclosure. The following hashtags have been approved on all platforms – from Facebook to Instagram, Twitter and blogs:

• #sponsored
• #ad/#advertising
• #affiliate
• #promotion/#promo

*(The FTC has made a point of noting that hashtags that are not easily identifiable as sponsored content, simply don’t count. Sorry Kim – but your very cryptic #sp, #spon, and #spons just don’t make the cut anymore.)
 

Links and handles

• Links to brand websites need to be fully visible without being shortened, and need to contain the brand name in any accompanying descriptions.
• Brand @handles need to be included

 

Videos and YouTube

• The Advertising Standards Authority (ASA) of South Africa denotes that all sponsored content needs to be disclosed to viewers in both the text and the start of each video.
• When uploading videos, influencers are compelled to notify YouTube of sponsorship elements under a content clause/declaration.
• Advertising needs to be disabled if the influencer feels this may clash with their sponsorship deal.
• In the words of the FTC, a hyperlink is not enough, nor is a brief mention of a brand.
• Live streams need to have endorsement information clearly displayed throughout.

 

Rules and guidelines

Although these rules may seem excessive at first, they are necessary to avoid the repercussions of not abiding by them. Not following these guidelines could result in permanent bans from social platforms – and no influencer can afford for their social platforms to be negatively affected.

In case you need a few pointers on whether your influencers are ‘behaving’, the FTC has laid out this helpful set of guidelines so that you can hold them accountable for their endorsements.

The IAB UK has weighed in with their guide to best native online advertising disclosure practice, too – both guides are enforceable to the influencer market, and will help you as a brand, to protect yourself.

http://www.bizcommunity.com/Article/196/669/181204.html
 

Navigating the minefield of a tax audit

As a taxpayer you have the right to administrative justice. So, if you undergo a South African Revenue Service (Sars) audit, both you and tax office need to be compliant. But it is a complicated process to police. And costly.
Sars announced in June that the tax season has been shortened by three weeks and will run from 1 July to 31 October 2018. It also announced a campaign of stricter verification and collection of taxes. Not only from previous tax dodgers, but an increased vigilance among all taxpayers. This will mean more queries, proof of documents and expenses and Sars going through tax returns with a fine toothcomb. It also increases the possibility of a tax audit.

The word ‘tax audit’ strikes fear into most people – even if you have nothing to hide. “If you have ever been targeted for a Sars audit, you will know the feeling”’ says tax expert, Dr Daniel Erasmus. Whether it is an internal desk audit, or an in-depth audit in more high-risk cases, it’s stressful, time-consuming and can be very expensive. Your accountant (or tax attorney if necessary) will need to collate information and follow the strict procedural rules. A task which requires time, experience and special expertise.
 

Rights

“The good news is that as a taxpayer you have rights in terms of the Constitution, the Tax Administration Act (TAA) and surrounding applicable legislation. The ‘not’ so good news is that most taxpayers are unaware of these rights and how to access them. It often happens that Sars fails to follow proper procedures when conducting an audit and in some cases they neglect to respect the rights of a taxpayer as set out in the Constitution. A recent example is the case of IT13726 where an assessment that followed from an audit was found to be constitutionally invalid for failure to comply with applicable tax laws,” says Erasmus.

The different legal and internal remedies available to you as a taxpayer are set out in the different tax laws, the Constitution and even the common law. It’s unrealistic to expect you to know these, never mind police them. “If you’re still not convinced, cast your memory back to the budget speech this year. The tax revenue shortfall in 2018 was an eye-watering R48.2bn. Fingers are being pointed at Sars – it is after all a reflection of poor administration, productivity and expertise. Sars is not without its internal politics either and they are under constant pressure by the Treasury to meet targets. This means a crack-down on taxpayers who have failed to submit their returns, and a massive increase in verifications and audits on taxpayers, even those who are honest and who pay their taxes diligently.” 

The inevitable result of a Sars tax audit in most cases is that an additional assessment is issued, and an additional tax liability is created for which you are legally responsible. The ‘new liability’ often includes penalties, sometimes as high as 200% of the new tax debt. 
 

Due process

Sars is required to follow a due process when they engage a taxpayer for an audit, which includes: 

• A notification of audit and an opportunity to reply.
• To keep the taxpayer informed during the audit process and the potential adjustments.
• Once an audit has been conducted, they are obliged to provide the taxpayer with an ‘audit findings’ letter and provide adequate explanatory reasons why they wish to make a potential adjustment.
• They have to give the taxpayer 30 days to respond prior to issuing the new additional assessment.

Failure to follow these steps will be regarded as a contravention of the principles codified in Section 33 of the Constitution, which includes, “the right to fair, reasonable and lawful conduct” by Sars officials.

http://www.bizcommunity.com/Article/196/710/181244.html
 

Civil organisations challenge new coal inclusion in IRP

Allowing the two new coal plants contemplated by the draft Integrate Resource Plan (IRP) to go ahead would be disastrous for water resources, air quality, health, land, and the climate.
The Life After Coal Campaign and Greenpeace Africa say the inclusion of new coal will cost South Africa close to R20bn more than we need to spend, and will make electricity more expensive for all South Africans. If the Department of Energy were to publish the least-cost plan that civil society organisations have been demanding, it would not include any new coal.

Including an additional 1000 MW of new coal-fired power - on top of existing and under-construction coal - puts the Department of Energy in conflict with the rights enshrined in the Constitution, given that there are safer, cleaner, and less-expensive energy options available.

“While we recognise the increased emphasis on renewable energy in the draft IRP, unless the minister of energy substantially revises and amends the draft IRP to ensure that the constitutional right to a healthy environment is preserved and protected - and specifically excludes any new coal - the department runs the risk of the IRP being challenged in court,” warns Melita Steele, senior climate and energy campaign manager at Greenpeace Africa.
 

Coal is outdated

Robyn Hugo, head of the pollution & climate change programme at the Centre for Environmental Rights, says that the updated IRP fails to take sufficient account of the external costs of the various available technologies. “Coal is an outdated and dirty technology – the environmental and health costs of which have not been factored into electricity planning.” At present, almost 90% of South Africa’s energy mix is already comprised of coal, despite many of these plants failing to meet the required emission standards and causing devastating health impacts.

A 2016 report by UK-based air quality and health expert, Dr Mike Holland, found that air pollution from Eskom coal-fired power stations kills more than 2,200 South Africans every year, and causes thousands of cases of bronchitis and asthma in adults and children annually. “This costs the country more than R33bn annually, through hospital admissions and lost working days”, says Bobby Peek, director of groundWork. 
 

Health impacts

“In addition to these severe health impacts, coal-fired electricity is also enormously water-intensive and the estimated costs of rehabilitating old mines and mining areas runs into the billions”, says Steele.

“Even discounting the health and environmental dangers of coal, it simply makes no economic sense to include coal in the IRP, as it is more expensive than other technologies such as wind and solar power,” says Makoma Lekalakala, director of Earthlife Africa. 

The Campaign and Greenpeace Africa will reiterate all of these – and other concerns – in comments on the draft IRP. It is crucial that South Africa’s future electricity plan is least-cost and in the public interest. All South Africans – including coal workers and the unemployed – must be part of the process to ensure a just energy transition.

http://www.bizcommunity.com/Article/196/693/181250.html

Incorrect to assume that SA labour laws are one-sided towards employee

South African labour laws are renowned as being progressive and protective of employees' rights. And labour dispute resolution procedures are intentionally designed to provide expeditious and cost effective dispute resolutions fora within which issues can be resolved without resorting to overly formal, costly or time-consuming processes.
However, what is not appreciated is that the structure of the rights and duties and processes which are available to both parties also takes into account fairness towards the employer. It would be incorrect to assume that South African labour laws are one-sidedly pro-employee, or that the employer has no expectation to also be treated fairly.

This is especially on the case of employees who are less likely, due to their skills, experience, length of professional service or qualification, to need the aid of the courts. 

This approach has been demonstrated and followed by the labour courts from as early as 2001 in the case of Building Bargaining Council (Southern & Eastern Cape) v Melmons Cabinets CC & another (2001) 22 ILJ 120 (LC), in which the court found that the employer had tried to perpetrate a "cruel hoax" on a vulnerable worker who performed cabinet making duties, by having him sign an independent contractor agreement which stripped him of all of its employment rights. 

On the other hand, earlier in the case of CMS Support Services v Briggs, the Labour Appeal Court in 1997 had found that Briggs, who had elected to be a consultant for tax purposes, and had made an informed decision about her rights and duties as an employee or a consultant, had no right to claim employment protections.
 

Scales are balanced

In the recent case of Kabe v Nedbank Ltd (2018) 39 ILJ 1760 (LC), the Labour Court also demonstrated that the scales are balanced, and that there are circumstances in which an employer is also entitled to fairness in the relationship, and in any disputes that may arise. In this case, Kabe was dismissed for poor work performance, but referred a dispute claiming that she had been not merely unfairly, but automatically unfairly dismissed. Kabe was herself a qualified lawyer, and had been advised by her legal team that such a referral was not competent in the circumstances. Kabe subsequently fired her legal team and amended her statement of claim to reflect an alleged automatically unfair dismissal. 

Since Kabe had alleged the reason for dismissal as automatically unfair, she had to raise a credible possibility that her dismissal fell within the scope of s 187(1)(h) or (d) of the Labour Relations Act, which provides for protection from dismissal in the case of an employee being dismissed for having taken action, or indicating an intention to take action, against the employer by exercising any right conferred by the LRA or participating in any proceedings in terms of the LRA (in this case that she referred a dispute of unfair labour practice) or due to her having made a protected disclosure. 

The court was satisfied that the employee had not produced any evidence supporting either of these claims. In addition, the court took into account that Nedbank had offered a generous settlement to her, which she had refused.
 

Frivolous claim

In light of the above facts, the Labour Court granted Nedbank absolution from the instance, which is an extreme form of dismissal of the dispute, which doesn’t require the employer to defend the allegations further, and instead assesses that the employee has not formed even the basis of a possible claim. In addition, due to the Labour Court taking into account Kabe's position, it determined that her claim was frivolous, and awarded Nedbank its legal costs. 

The court also considered the interests of justice in general and realising that the courts should be reserved for persons with actual claims, determined that "allowing parties to bring frivolous cases does not only affect the opposing party, but also affects the administration of justice and the business of the court and judges".

The above case demonstrates that the labour courts and other dispute fora, including the CCMA, have to take fairness towards the employer into account, and that labour rights are not exclusively for the benefit of employees. 

Employees of a sufficiently executive, senior or professional status should be aware of this judgement, and the approach of the court, and ensure that they receive and follow expert legal guidance in assessing and pursuing any potential legal claims they may have that flow from the employment relationship.

http://www.bizcommunity.com/Article/196/607/181243.html
 

The Gauteng Provincial Road Traffic Act (No.10 of 1997) will be amended in an effort to better govern the towing industry and promote professional business practices.
According to Gauteng MEC for Roads and Transport Ismail Vadi, the tow truck industry operates in an entirely unregulated environment and has come under increasing criticism from the public as operators constantly rush to accident scenes, disregarding road traffic laws and regulations.

There are cases of intimidation of accident victims by operators and allegations of clients being over charged or charged unfairly for services rendered.

Introducing the Bill in the provincial legislature on Thursday, 2 August 2018, Vadi said that the new policy will regulate the tow truck industry, promote road traffic safety and support economic growth and development of this transport sub-sector.

Gauteng has a population of over 13 million people who own over 4.6 million cars. With this, the risk of accidents and mechanical breakdowns on the roads has increased considerably.

“In the absence of an effective regulatory system, allegations of misconduct against tow truck operators have increased.

“These allegations include the bribing of police officers to get first notification on an accident occurrence, recommending panel beaters who pay commission to towing personnel, reckless driving and charging excessive towing charges,” the Gauteng Department for Roads and Transport said.

Vadi said the need for quick removal of vehicles damaged in accidents and mechanical breakdowns has given rise to a highly competitive tow truck industry that must regulated in the public interest.

“The proposed Bill provides for the MEC to prescribe requirements to be followed by an operator of a tow truck on a public road.

“It also provides an enabling mechanism for the appointment of an inspectorate of breakdown vehicle operators, which function ordinarily is carried out by the Gauteng Traffic Police,” the department said.

The department said tow truck operators will have to comply with the minimum requirements that are provided for in the National Road Traffic Act (No.93 of 1996) and those set by the South African National Standards (SANS), which apply to modified vehicles such as tow trucks before being permitted to operate as tow trucks.

“Tow truck operators will have to carry a card issued by Registering Authorities that shall have information on the trade name, type of business, postal and street address, contact details and an original Tax Clearance Certificate,” the department said.

Particulars of the tow truck operator and the driver must be printed on the Tow Truck Operator Card. These include full name, identity number, photograph of the person and contact details.

http://www.bizcommunity.com/Article/196/717/180235.html

Justice and Correctional Services Minister Michael Masutha says the unveiling of the United Nations Minimum Standard Rules for the Treatment of Prisoners will provide a useful guide of how offenders should be treated when in prison.
Masutha said this when speaking at Drakenstein Correctional Centre, formerly known as Victor Verster Prison, in the Western Cape on Tuesday, 24 July 2018. 

Drankenstein is the prison where the former President was put under house arrest after leaving Robben Island. It was a very politically sensitive era in the history of South African politics, which saw some of the negotiations to end apartheid being held at the facility where Mandela was incarcerated. 

In an interview with SAnews shortly after the launch, Masutha said the rules, which have come to be known as the Nelson Mandela Rules for the Treatment of Prisoners, come with several interventions that ensure prisoners are treated in a humane way. 

“The United Nations Minimum Standard Rules for the Treatment of Prisoners, which is the reason we are gathered here today, were adopted in December 2015 by the United Nations as a revised version of the 1955 rules.

“[They] set the minimum standards on how prisoners around the world should be treated in terms of their access to nutrition and healthcare; incarceration under humane conditions, and to access a whole lot of rights, which fortunately for us as country, are already covered in our law and in particular in our Constitution,” he said. 

The event was also attended by, among others, Corrections Deputy Minister Thabang Makwetla, the National Director of Public Prosecutions, Shaun Abrahams and Public Protector Busisiwe Mkhwebane. 

Earlier this year, Masutha announced that as part of commemorating the centenary of the world icon’s birthday, the department would launch the rules at the prison where Madiba was eventually released on 11 February 1990. 

Previously acknowledged as the Standard Minimum Rules (SMRs) for the Treatment of Prisoners, the rules were first adopted in 1955. In 2015, they were revised to accommodate recent advances in correctional services and best practices, and were adopted as the Nelson Mandela Rules. 

The United Nations Member States recognised that the SMRs were outdated and did not reflect major human rights and criminal justice developments since their adoption in 1955.

“As South Africa, we are pleased to have hosted the workshop that led to the revision on Robben Island [of the rules] under the leadership of Judge President Mlambo.

“We thank him for the leadership he played at the time and as government, we are committed across the security, peace and stability cluster, that even though they are non-binding, they provide a very useful guide on how to ensure that the standards we uphold in this country are compatible and comparable to international standards,” Masutha said.

http://www.bizcommunity.com/Article/196/546/179861.html

Has the almost simultaneous release of the National Health Insurance (NHI) Bill, the Medical Schemes Amendment Bill and the provisional findings of the Health Market Inquiry (HMI) created an information overload, where some of the insights from the inquiry could be lost in the noise?
"There is significant risk that the regulatory environment being created through the legislative amendment process currently underway could conflict with the lessons learned in the course of the HMI’s work, which will only be fully apparent on the release of its final report,” says Mark Arnold, principal officer of Resolution Health Medical Scheme.

A considerable amount of time, resources and expertise have been invested in the HMI, but with the final report due for release in November, however, there is a risk that the full benefit of these insights could be lost due to the timing of these inter-related developments, as the period for submissions on Medical Schemes Amendment Bill and the National Health Insurance Bill close in September, he says. 

“As it stands, the HMI findings might be considered when fine tuning the proposed amendments to medical schemes law. However, far greater value could be added if the final HMI findings and recommendations are embraced and incorporated as the foundation for the amendments in the creation of a fresh approach to healthcare for the country.

“Closing the submission period on the Medical Schemes Amendment Bill, which specifically deals with the private healthcare sector, before the HMI’s final report is available is analogous to putting the horse before the cart. 

“Such an approach squanders the opportunity to strengthen legislation with the full benefit of wisdom garnered during the lengthy and expensive inquiry and the best chance we have of making informed decisions that will shape the future of healthcare in South Africa for all.”
 

Significant political pressure

Acknowledging that there is significant political pressure for legislative certainty that will pave the way for the full implementation of the NHI Arnold notes that a better integrated process would be more likely to achieve a successful and sustainable new healthcare paradigm in the long run. 

“If we are to overcome the challenges facing private healthcare – some of which also threaten to derail the goals of universal health coverage – we need to develop a balanced and well-informed piece of legislation, and this is a process that should not be rushed,” he adds.

http://www.bizcommunity.com/Article/196/824/179763.html

Upon receiving legal advice, the City of Cape Town's city manager Lungelo Mbandazayo has taken the decision to cancel the Request for Proposals (RFP) for the development of the Foreshore Freeway Precinct.
The six bidders were notified of the decision in writing on Friday, 13 July.

The stage one bid evaluation process was concluded in February 2018. Several appeals and objections were lodged that contested the application of the evaluation criteria as set out in the RFP documentation. Having received legal advice, the city concluded that a lack of sufficient clarity in the RFP documentation rendered the evaluation criteria vague.
 

Weak economic outlook

"Procurement processes must be compliant with the rule of law, in particular with Section 217 of the Constitution which governs public procurement. There must be no doubt about the integrity of these processes and, as such, I have decided to cancel the RFP.

"Furthermore, the economic outlook for the country has become significantly weaker since the issuing of the RFP two years ago. This change, together with the additional burdens that the city, its ratepayers, and residents are facing at the moment, cannot be ignored. The city is, therefore, reconsidering the future of this project, and we will communicate further once a decision has been made.

"In the meantime, I want to express my sincere gratitude to all of the bidders who submitted proposals and representations," said Mbandazayo.

http://www.bizcommunity.com/Article/196/494/179596.html

The Grayston Drive pedestrian and cyclist structural bridge collapse inquiry has completed its work and is awaiting the submission of written heads of arguments by legal representatives by 14 August, said the Department of Labour on Friday, 13 July.
“This will be followed by written responses to the heads of argument, which are expected to be submitted by 17 September 2018,” the department said.

The Section 32 hearing was set up to investigate the 14 October 2015 incident, which led to the death of two people and 19 others being injured.

The inquiry, which resumed on 2 July following a nine-month lull, completed its work ahead of the 27 September target.

Stakeholders in the inquiry include Johannesburg Municipality as the client and the Johannesburg Development Agency (JDA) as the agent.

It also included Royal Haskoning DHV, an engineering company appointed by JDA as the engineering agent for the project and Murray & Roberts (MR) as the principal contractor appointed by JDA, among others.

Witnesses that have previously appeared before the inquiry include Professor Roelf J. Mostert, an expert witness representing Murray and Roberts.

Following the latest session, some of the witnesses that appeared before the inquiry included Roxana Le Roux, an environmental, health and safety officer from Nemai Consulting as well as Oliver Aadnesgaard, an employee of Murray & Roberts who worked as an assistant to construction manager during the collapse of the temporary works structure.

The Grayston inquiry had its first sitting in February 2016.

http://www.bizcommunity.com/Article/196/494/179475.html

You own a business and you put a sign up saying, "Park at your own risk" - which effectively amounts to a 'contract'. Simply put, you are saying that anyone can enter your premises on that basis - if they don't want to then they shouldn't enter - and that you are not liable for any damages howsoever arising, whether due to your negligence or anything else. In reality though, the sign actually means nothing and offers a business no protection against public liability claims.
This can be contested in terms of Section 48 of the Consumer Protection Act (CPA) on the basis that ‘a supplier must not offer to supply, supply, or enter into an agreement to supply any goods or services on terms that are unfair, unreasonable or unjust (and here’s the kicker), they cannot require a consumer or any other person to waive any rights or assume any obligation on terms which are unfair, unreasonable or unjust.’ 

PJ Veldhuizen, managing director of Gillan & Veldhuizen, says that when dealing with consumers, what businesses need to do is to ensure a contractually sound relationship between them and the consumer which promotes the objectives of the Consumer Protection Act. This includes fair and reasonable treatment of consumers by suppliers when supplying goods and services. 

There is a clear injunction in the legislation which requires a court or tribunal to interpret the provisions of the CPA purposively – by that, it means that a presiding officer, when attributing meaning to any part of the legislation, must do so in the light of the purpose which it seeks to achieve. “For example,” says Velhuizen, “any ambiguous provision in the act must be interpreted in favour of the consumer and although it may seem like an oversimplification of matters, the interests of consumers will generally win the day.”

When suppliers are wishing to consider the fairness of any provisions on which they seek to rely, they should consider who their consumers are, especially in relation to those consumers who could be considered vulnerable as result of poverty, illiteracy, age or any other vulnerability. 
At store level, suppliers need to ensure that their staff are adequately briefed on how to deal with the public, are aware of the CPA, and know to whom they should refer any complaints.

If you work with clients or customers in public spaces, have visitors to your premises, or manufacture products, suppliers are encouraged not to simply rely on so-called exclusionary clauses or signs which may have assisted them prior to the CPA and should now adequately insure themselves against claims. 

While claims made against you may be opportunistic and ultimately unsuccessful, the costs of defending even spurious claims can be debilitating and these defence costs should also be insured against all public liability claims. 

Veldhuizen adds that whilst it is often a David and Goliath game, there are many lawyers who are prepared to take on matters on contingency basis, i.e. a no-win-no-fee in circumstances where consumers have been injured and significant damages incurred. Veldhuizen, therefore, advises that when confronted by a public liability claim, one should always consider appointing a mediator to assess whether there is scope for alternative dispute resolution. 

Without necessarily admitting liability, the purpose of mediation is to explore whether it is not simply an apology that somebody wants – furthermore, mediation will see you as being a responsible and worthy supplier, and will ultimately save the business money and preserve its reputation.

http://www.bizcommunity.com/Article/196/737/177743.html
 

Business travel is part of the day-to-day job for a growing cohort of employees, from senior company executives to junior sales staff, across all company types and often across borders and continents. Travelling for business brings with it its own set of risks, demanding that organisations of all sizes exercise the utmost duty of care in managing and mitigating the risks to employees, operations, business continuity, reputation and profitability.
‘Duty of care’ refers to the legal and moral responsibility that employers have to ensure the health, safety and wellbeing of their employees in the workplace and while travelling for business. It helps to ensure business continuity and compliance, as well as protecting against reputational damage and potentially costly legal issues. Most fundamentally, it helps safeguard the primary business-critical assets of any organisation: its people. 

According to Claudia Lemon, accident and health underwriting manager at Chubb South Africa, duty of care is a complex risk that is difficult to quantify and manage and has the potential to create fundamental damage to a company’s reputation and bottom line if not addressed thoroughly. “The scope of business travel risks are truly global, which is why corporate responsibility and governance must work hand in hand with insurance risk management to protect employees, the business and the brand reputation,” says Lemon. 

A key challenge for those responsible for corporate stewardship is to ensure that the right insurance solution is chosen that enables the provision of duty of care. A good place to start is with a group personal accident as well as travel insurance for those employees who go away on business. 

“Besides the more obvious insurance cover for medical emergencies, political instability, on-the-ground expert response and even emergency extraction while travelling for business, many companies are unfamiliar with the additional technology support and tools that the insurance industry has developed, such as preventive information, country risk assessments, post-accident support, smartphone apps and guidance notes for staff travelling internationally for business,” says Lemon. 
“Technology can also allow the company to send alerts directly to employees in the middle of an event in addition to tracking and locating them using the GPS on their phones in case an extraction is required. Given the proliferation of smartphones and mobile devices, there is great potential for growth in digital services that can support employees when they travel for business, and these tools should be considered a standard offering for all companies that send their staff on business trips,” Lemon explains. 

It is also vitally important that the insurance partner chosen has the capacity and ability to cover all potential risks, no matter the complexity.

“With foresight, planning and expertise, insurance solutions can be designed to facilitate the organisation’s commitment to duty of care provision, mitigate reputational damage and legal repercussions, and demonstrate its absolute commitment to protecting employees in the execution of their work responsibilities,” says Lemon.

Companies can benefit from partnering with experienced insurers and brokers to protect their staff from unwanted business travel outcomes. At present, many companies appear to be undervaluing the support they can get from the insurance industry, but the range of available products and services can help companies to significantly upscale their duty of care. Insurance can offer more than just coverage and the range of tools and services that are often included can enhance significantly corporate duty of care procedures and responses.

http://www.bizcommunity.com/Article/196/796/178887.html

South Africa has very few examples of successfully implemented mine closure, despite having laws that compare with the best in the world. Instead, over 6,000 mines have been abandoned without adequate rehabilitation.

This situation is unlikely to endure; soon, mine closure will be regulated under the National Environmental Management Act (NEMA) which will require that provision is made for ongoing rehabilitation, closure and the management of residual environmental impacts," says Matthew Law, senior environmental management consultant and economist at SRK Consulting, 

“Too often, both mine owners and regulators overlook the importance of scientifically derived, realistic closure targets – with owners making over-ambitious, impracticable commitments which cannot be implemented, or are ignored during the life-of-mine."

The new regulations will also impose strict penalties for defaulters, including possible imprisonment – while stakeholders become increasingly vocal about inadequate closure. “In the past, failure to comply posed a limited risk. However, the risk profile is changing, and mines will soon need to have their financial provision for closure independently audited and subjected to stakeholder engagement.”

It is therefore becoming vital for mining operations to understand accurately what can be achieved with regard to rehabilitation, and the residual environmental impacts that are anticipated. Mines must also carefully define the measures that must be undertaken annually – and at closure – to achieve the closure vision, the cost to implement these measures, and the metrics against which to assess rehabilitation performance, so that reporting and adaptive management can be better facilitated.
 

Case study

Citing an example where SRK Consulting was recently appointed to assess the success of rehabilitation performance at a large opencast mine on the west coast of South Africa, Law saysthe owners wanted to establish the level of rehabilitation that could be achieved in the long-term using their current rehabilitation methods. 

“The owners required a robust system to monitor and measure ongoing rehabilitation performance at the mine, without the need for specialist supervision. Previous owners of the mine had committed to returning the site to baseline agricultural or ‘grazing’ potential, an end-use believed by the owners and regulator to be achievable, despite the intensive rehabilitation failing to deliver this goal.”

SRK sub-contracted a restoration ecologist to sample proximate sites and provide a pre-mining reference baseline. A customised grazing index for the region – a composite of topsoil cover, seedbanks and plant species composition – was developed to quantify agricultural potential and value; and the grazing value of sample or baseline sites was calculated using the index.

“The results provided the mine with the first quantitative measure of baseline grazing value, a metric against which the success of rehabilitation could be assessed. This represented a significant step forward in closure planning at the mine," he says.

Subsequently, rehabilitation performance at the mine was assessed by sampling, using the method developed for mine’s local ecological conditions during baseline sampling, and grazing values were calculated using the customised grazing index.

“This assessment revealed that, although significant vegetation cover had been achieved – in other words, there was sufficient biomass which ‘looked good’ – progress in returning the site to agricultural potential has been slow. This indicated that, at the historical trajectory of rehabilitation, residual liabilities would be high and closure would not be achieved; or that, additional or alternative interventions were required during the remaining life-of-mine," Law says.

Using baseline grazing value as a metric proved to be an innovative performance monitoring and measurement system and has helped the mine owner pilot new and enhanced rehabilitation techniques, accurately assess and report on rehabilitation, facilitate adaptive management of rehabilitated areas, and update annual and final financial provisions to accurately reflect rehabilitation costs. 

“This significantly reduces the risks to the owner at closure, in the face of more stringent closure regulations, strict penalties for non-compliance and increased private and public oversight in the sector,” Law says.

http://www.bizcommunity.com/Article/196/608/180356.html

The World Economic Forum's most recent Global Gender Gap Report concludes that the gender gap in pay, participation and leadership is widening for the first time since 2006 after a decade of slow but steady progress. Paradoxically, this trend is occurring even while many governments are doubling their efforts to narrow the gender pay gap.
According to Baker McKenzie’s report - The International Response to the Gender Pay Gap - it has long been unlawful to discriminate in respect of employment decisions or to pay women less than men for doing the same job in numerous jurisdictions around the world, including in South Africa. But since these equality laws have failed to close the gap in earnings between men and women, governments and NGOs are looking at new ways to drive change. 

The report notes that there is no single approach to regulation in this area. The UK and Australian governments have recently focused their efforts on representation and the gender pay gap, requiring employers to publish data about the difference in average pay between men and women. In the UK, gender pay gap data is made available for public use, whereas in Australia the government publishes aggregated pay gap data from which individual companies cannot be identified. 

There are no formal requirements in South Africa to publish gender pay information. However, section 27 of the Employment Equity Act requires designated employers, being employers who employ more than 50 employees or meet a certain annual turnover threshold specific to their threshold, to report income differentials across both race and gender groups. This, however, is a confidential document submitted to the Department of Labour in terms of which we have seen no action taken by the Department pursuant to any gender pay gaps.

The Employment Equity Act does cater for the prevention of unfair discrimination. However, only in recent years does it cater for inequities arising out of differential pay. 

Section 6(4) of the Employment Equity Act (EEA) outlaws differences in employment conditions that are based on any of the prohibited grounds of discrimination, including gender and sex, where the employees perform the same or similar work or work of equal value. The employer's ability to differentiate on employment conditions - notably salary and other contractual benefits - are not encumbered by the EAA. However, employers must be able to prove that any differentiation falls within the recognised justifications set out in Item 7 of the regulations published in terms of the EEA. For example, an employer is able to pay one Human Resources Manager more than another based on justifications such as experience, qualifications, job performance, competence, and/or scarcity of skills. In fact, as long as the differentiation is not discriminatory, an employer is justified in remunerating, or otherwise treating employees doing the same thing differently.

Regulation in this area is also expanding across North America, Europe and Latin America. While little regulation currently exists throughout APAC, Australia is a world leader in this area. In the last few months alone, Iceland (already ranked amongst the highest in the world for gender parity) has introduced new legislation requiring employers to certify that they pay employees equally for equal work, the French government has revealed plans to fine companies that do not close unjustified pay equity gaps within three years, Ontario has proposed new pay transparency legislation and Peru has introduced new equal pay legislation. 

The report outlines how the topic is gaining momentum, and the expectation is that regulation will continue to increase. It is particularly worth watching out for the more stringent types of regulation being introduced in jurisdictions which are already leading the field, as governments look to build on existing legislation and step up efforts to move the needle. Regulation is unlikely to be globally consistent, even within the EU, leading to a complex patchwork of regulatory requirements with which multinational employers need to comply. 

The report notes that beyond the need to comply with regulation and the desire to do the right thing, companies have other reasons to address their gender pay gap.

First, there is a recognised link between gender diversity and the bottom line. Several studies have demonstrated a correlation between a company’s performance and the gender diversity of its leadership teams. Correlation does not mean causation. Nevertheless, it is broadly accepted that the connection holds true. 

Second, there is a relationship between addressing the gender pay gap and winning the talent war. Workers (particularly millennials and generation Z) have made it clear they want to work for employers that are purpose-driven, value diversity and inclusion, and pay fairly.

http://www.bizcommunity.com/Article/196/717/180499.html

The fight against illicit trade in cigarettes and other tobacco products has received a boost with the South African Revenue Service (Sars), Tobacco Institute of Southern Africa (Tisa) and the Fair-trade Independent Tobacco Association (Fita) agreeing to work together.
“Fita and Tisa, which represent approximately 99% of the tobacco industry, have committed to taking action against any of their members that are found to be contravening the tax, customs and excise laws of the country, including but not limited to suspension and/or expulsion,” said Sars after the meeting.

The two associations also committed to ensuring that their members fully comply with the relevant legislation at all times.

Members, who may be in contravention of the laws, were also encouraged to take corrective action through the available avenues, including making full disclosure to Sars.

At the meeting, all parties acknowledged their shared responsibility in combatting illicit trade in cigarette and tobacco products, in the best interest of economic growth and compliance with tax, customs and excise laws.

Acting Sars commissioner, Mark Kingon, expressed his appreciation to both parties for their commitment towards improving compliance in the industry.

http://www.bizcommunity.com/Article/196/512/180698.html

The public has been invited to have their say on the draft regulations on the Governance and Composition of the Special Economic Zones Act.
“The Minister of Trade and Industry, Dr Rob Davies, invites members of the public to make inputs and comments on the draft Regulations on the Governance and Composition of the Special Economic Zones Act No. 16 of 2014 (the SEZ Act). Members of the public and interested parties have until the 14 September 2018 to comment on the draft Regulations,” said the Department of Trade and Industry (dti) on Tuesday.

The draft regulations, seek to provide for the management and operations of Industrial Development Zone (IDZ) entities not to be separated and for the existing SEZ operator or entity to hold a license and permit to function as both the management entity and state owned operator.

SEZs are geographically designated areas of a country that are set aside for specifically targeted economic activities.

The draft regulations also provide for the separation of the SEZ entity from the operator, where a private company is appointed to either operate the SEZ wholly or in part, in terms of section 32(2) of the SEZ Act, for purposes of proper implementation and administration of SEZs, in terms of section 41 of the SEZ Act.

The SEZ Act commenced by Presidential Proclamation on 9 February 2016 and introduced a new regulatory framework for the planning, design, development, management and operation of SEZs. This new regulatory framework replaces the old framework IDZs, which was based on the IDZ Regulations.

“The difference in the governance and institutional framework required in the new SEZ Act from the old IDZ regulatory framework is very significant and most IDZ operators, at the time of the enactment of the SEZ Act, would require time to comply. Recognising this need, the SEZ Act provided for a transitional period where the IDZs were given three years to amend their governance and institutional structures, to comply with the requirements of the SEZ Act. The most significant sections impacting on this transition is section 25, on the establishment of an SEZ entity,” said the dti.

Section 25 of the SEZ Act makes provision for the establishment of the SEZ entity and the appointment of the SEZ operator, whereas under the IDZ Regulations, the IDZ applicants would be issued with the IDZ operator permits, and effectively making them SEZ entities and operators at the same time.

The SEZ Act and the current regulations now require a new entity with a board to manage a state owned entity. In addition, the operator would have its own board.

“The introduction of the SEZ entity in addition to the SEZ operator has in some instances resulted in more implementation complexities. Additionally, there is really not much value being added by the introduction of the SEZ entity particularly if the operator is an existing state owned company.”

“In terms of the current arrangements, the licensee or the SEZ applicant must establish or appoint an existing state owned company as an SEZ entity with its own boards, to manage the SEZ, also appoint an operator to develop and manage the same zone.”

The gazette can be found on http://www.thedti.gov.za/gazzettes/41811.pdf.

Comments on the regulations can be sent by post to the Director–General’s office for attention: 
Mr Maoto Molefane 
Private Bag x 84 
Pretoria 
0001 

Else they can be hand delivered to the dti Campus, Block Al 77 Meintjies Street, Sunnyside, Pretoria.

Comments may be also emailed to: MMolefane@thedti.gov.za.

http://www.bizcommunity.com/Article/196/717/180416.html

Residents facing eviction from their homes in Bromwell Street, Woodstock, are entitled to challenge the City of Cape Town's housing plan, the Western Cape High Court has ruled.
The residents believe the city has gone against its own policy by excluding them and others from two sites near the CBD earmarked for transitional housing sites.

Advocate Sheldon Magardie, for the residents, said there had been a “change of course” on the part of the city to which the residents wanted to respond.

The nine Bromwell Street families, opposing their eviction by the Woodstock Hub, approached the High Court in September 2016 in an attempt to compel the city to provide them with emergency housing near Woodstock. At the time, the city said only transitional housing in Wolwerivier and Blikkiesdorp was available.

The eviction order was suspended and the matter was remanded on 14 September 2017 for mediation.
 

Inner city housing

Since then, the city has issued information on a plan to create more affordable and social housing close to the inner city. Eleven sites in and around the city centre have been earmarked for development. The Bromwell Road residents want to amend their initial arguments to take into account this information. They also plan to challenge the validity and fairness of the city’s implementation of the housing plan.

On Tuesday, the Western Cape High Court ruled in favour of the application brought by the residents.

In his argument, Magardie said two sites – in Pickwick Street, Woodstock and James Street, Salt River, earmarked by the city for transitional housing – were part of a list of sites identified and suggested by residents nearly two years ago.

The Woodstock Hospital site had been identified by residents in December 2016. On 16 January 2017, Magardie said the city had said the property “would not be viable or suitable for emergency accommodation”. But in November 2017 the city had filed additional papers stating it had bought the property and that it would be used for social and affordable housing.
 

Transitional housing access

Magadie argued that the Bromwell residents were prejudiced because only people living on city-owned property had been prioritised to benefit from the transitional housing.

“This raises a serious question about whether or not the city is implementing its policies reasonably,” said Magardie. He said that although the city claimed Wolwerivier was the only available site, people being removed from city-owned property were being relocated much nearer the city centre. “That is unconstitutional.”

Karrisha Pillay, for the city, said her clients would have to file a considerable amount of additional paperwork to respond to residents, which could result in an extended court trial.

She said the city also had “constitutional obligations to other poor people”.

“The purpose of those transitional housing sites is to facilitate the social housing programme. If there are any units left then it will be used for emergency housing.”
 

Addressing apartheid spatial planning

Acting Judge Mark Sher interjected: “I recall the city’s papers saying that they want to change apartheid spatial planning. And in fact we have now got sites in Woodstock and Salt River where they will be implementing this. Isn’t the [group of residents] then entitled to challenge this?”

Advocate Edward Fagan for the Woodstock Hub also opposed the application. He argued that his clients would suffer costs and their property rights would be prejudiced by a lengthy trial.

Fagan said his client had been unable to develop the property while residents remained in the homes. “There will be considerable costs and time for this matter. There is a possibility of further affidavits being filed and arguments being made,” he said.

Acting Judge Sher granted the application and ordered the parties to file papers to respond to the application. No court date has been set yet.

Outside court, some of the Bromwell Road residents celebrated their victory. One of the residents, Charnell Commando, said families were still opposed to moving to Wolwerivier.

Article originally published on GroundUp.

http://www.bizcommunity.com/Article/196/801/180690.html

Eskom has declared a dispute with its three trade unions over preconditions introduced in wage negotiations.
“Eskom has declared a dispute with trade unions the National Union of Mineworkers (NUM), National Union of Metal Workers of South Africa (NUMSA) and Solidarity over the precondition that NUM and NUMSA introduced as part of the wage negotiations,” said the power utility on Wednesday.

The Commission for Conciliation, Mediation and Arbitration (CCMA) on Wednesday closed the Labour Relations Act (LRA) Section 150 process as parties deadlocked during talks.

NUM and NUMSA demanded that irrespective of the outcome of the disciplinary process, no member should be dismissed.

At a meeting convened through the auspices of the CCMA last week, the three recognised unions all in principle agreed to Eskom’s three-year wage proposal and conditions of employment.

This would entail bargaining unit employees getting a salary adjustment of 7.5% in 2018/19 and 7% in 2019/20 and 7% in 2020/21, an annual cost of living (CPI) adjustment to their housing allowance as well as a once-off cash payment of R10,000.

However, at the time NUM and NUMSA introduced a precondition that Eskom should not discipline employees who took part in the July/August unprotected strike. The power utility could not agree to this precondition.

In June 2018, NUM and NUMSA defied the Labour Relations Act (LRA) and its essential service provisions and embarked on unprotected strike action.

“This strike action included various acts of criminality, including alleged acts of sabotage and destruction of property. The industrial action led to the power system being constrained and rotational load shedding for three days, negatively impacting the economy,” said Eskom.

Public Enterprises Minister Pravin Gordhan intervened in the matter and convened a meeting where all parties reached an understanding that the unions would end all unlawful industrial action and the company would not discipline employees who engaged in the June 2018 unlawful industrial action.

Following that, negotiations resumed in a peaceful and orderly fashion at the Eskom Central Bargaining Forum. However, no agreement was reached and at the end of July 2018, all parties commenced with the Section 150 mediation process in terms of the LRA.

In July, some employees embarked on further unprotected industrial action until 3 August 2018, despite a court interdict and company communication to staff reminding employees that Eskom is an essential service.

“These events again led to power system constraints and load shedding. The power system will take about 30 days to recover from the effects of the illegal strike and there is a risk of further load shedding during this period,” said Eskom.

The power utility said it reserves its right to follow the disciplinary process in line with the company’s Disciplinary Code and Procedure.

“In an effort to bring the process to a conclusion, Eskom has referred a mutual interest dispute to the CCMA. We remain positive that the process will be expeditiously resolved.”

Meanwhile, the power utility said there is a low probability of rotational load shedding on Thursday.

“We continue to encourage residents and businesses to please use electricity sparingly to ease the demand of electricity. Please switch off geysers as well as all non-essential lighting and electricity appliances to assist in reducing demand.”

http://www.bizcommunity.com/Article/196/607/180709.html

It's highly likely that an amendment will be made to South Africa's Constitution that will allow for land expropriation without compensation following a decision to do so by the ruling party the African National Congress (ANC).
But the government hasn’t got off to a good start in managing the process. It’s clear that narrow party political considerations are driving decisions and that the ANC’s political fortunes reign supreme. Principles and knowledge count for nothing in this game. 

This is clear from the way in which the ANC is mishandling the issue by flip flopping with ease on matters of principle. Four recent developments illustrate this. 

The first relates to the process of public consultation. On 14 March 2018, South Africa’s President Cyril Ramaphosa announced in Parliament that public consultations would be held so that citizens could have their say on the issue of land reform. But no sooner were the public hearings underway, than the president announced that in fact the ANC was preparing for a vote in parliament. This suggested that the consultation process was being declared null and void.

Matters then deteriorated further. Soon after the announcement about the parliamentary vote, it transpired that 139 farms have already been earmarked for expropriation without compensation. This suggested that the parliamentary process on public hearings was being short circuited.

The final flip flop has been the ANC’s position on how land reform will affect communal land under the administration of traditional leaders. Here it’s chopped and changed its position in a way that’s clearly informed by its narrow party political interests. The ANC is clearly more concerned about keeping traditional leaders as its electioneering agents for the 2019 national elections rather than any consideration for the equitable distribution of land for poor rural South Africans.

It’s clear that the process towards land expropriation without compensation is largely driven by the ANC political expediency. This could have devastating consequences for South Africa’s economy. Key stakeholders need to shift their focus towards ensuring that land reform happens in an orderly way. 

What’s happened so far

South Africans have been actively involved in public consultations on the issue of amending the property clause of the Constitution since the first sitting of a Parliamentary Committeechaired by Vincent Smith on 26 June 2018. 

The committee has been holding countrywide hearings. They have shown beyond doubt that land ownership is a highly charged subject. 

In addition to its hearings, the committee also received more than 700,000 written submissionson land expropriation.

Ramaphosa’s announcement that the ruling party had decided that land expropriation without compensation would be handled through a Parliamentary process threw everyone off balance.

Did this mean that the public hearings of Smith’s committee have no standing in the eyes of the ANC leaders? Has the ANC’s National Executive Committee and Ramaphosa already decided – without waiting for the parliamentary committee’s report – what land should be targeted and what process should be followed?

If the answer to these questions is yes, it makes a mockery of Ramaphosa’s claim that an inclusive and consultative process would be followed.
 

Traditional leaders

At its elective congress in December last year the ANC noted that it would leave no stone unturned in its land reform programme. This meant that even communal land controlled by traditional leaders would be earmarked for reform – including expropriation without compensation. 

But the prospect of expropriating land from traditional leaders has been met with remarkable hostility, mainly from the Zulu King, King Goodwill Zwelithini.

In the face of this hostility, Ramaphosa has made some important concessions. He has told the King, as well as other traditional leaders, that land redistribution without compensation would not include communal lands controlled by tribal chiefs. 

Objectively, there’s no justification for excluding this land which is estimated to account for 13% of all land in South Africa.

What it points to is pure opportunism. 

Dangers ahead

South Africans need look no further than Zimbabwe for an example of a land programme that can go badly wrong. Zimbabwe’s land expropriation without compensation policy ended up being a land grab in which powerful politicians, and other connected people, simply commandeered farms, including buildings, equipment, crops and livestock.

This should be avoided in South Africa. But that’s not to say that South Africa must duck the issue. What’s needed is an orderly process that’s widely debated and that doesn’t exclude politically sensitive issues. It should also include debate on issues like fixed structures and improvements on expropriated land, as well as movable property, crops and the like. Pressing questions about urban property ownership are also being raised as the debate has moved beyond farmland only.

If land reform is hijacked by the ANC for the purposes of winning the 2019 poll, South Africa could be on a slippery slope. There’s no guarantee that the ANC’s erratic behaviour won’t extend beyond the issue of land expropriation without compensation. What happens in the run up to the 2024 election if the ANC feels its electoral position is threatened?

This article was originally published on The Conversation. Read the original article.

http://www.bizcommunity.com/Article/196/368/180807.html

A landmark case to decide how banks should deal with home repossessions will be heard on 28 and 29 August in the South Gauteng High Court.

This follows a directive by Gauteng Judge President Dunstan Mlambo, who ordered a full bench of the court to sort out the tangle of inconsistent home repossession judgments. Mlambo also wants the court to establish under what circumstances judges should set reserve prices on repossessed homes.

Court rules were changed late last year to allow judges to set reserve prices when homes are sold at sheriff’s auctions to stop them being sold for a fraction of their worth. Despite this, some courts in Gauteng continue to authorise the auctioning of houses (known as “sale in execution”) without reserve prices. The forthcoming case will clarify how and when judges should set reserve prices.

GroundUp reported the court case of Given Nkwane, whose home, valued at R470,000, was sold for R40,000 at auction by Standard Bank after he defaulted on his home loan.
 

Social justice setback

This prompted former Public Protector Thuli Madonsela to tweet, “With due respect to the court, I consider this judgment to be grossly unjust and inequitable. It is a setback regarding social justice. Should this matter be taken on appeal, it would be great if all those concerned about social justice join in as amicus curiae (friend of the court).”

Lungelo Lethu Human Rights Foundation, represented by the Legal Resources Centre, has been admitted as a friend of the court (there is no applicant in this case, only friends of the court). Lungelo Lethu founder King Sibiya argues in an affidavit that there should be clearer directions for judges in setting reserve prices, and only in exceptional circumstances should a home be sold without a reserve price.

Lungelo Lethu wants the court to appoint an independent panel to advise on the matter. Sibiya cites several alleged abuses of the court process in his affidavit, including that of Mapule Molokomme whose home was sold at auction for only R10, and then on-sold by the new owner for a substantial profit. She was evicted from the home when she was eight months pregnant, and soon after the death of her husband. Lungelo Lethu says many of the 900 cases it has attended to over the years involve abuses of the court processes, where defaulting clients only discover judgment has been taken against them when the new owner arrives to assume possession of the property. This is because they were not properly notified of the legal action being taken against them by the banks.

Sibiya also states that while Lungelo Lethu educates borrowers on their obligations to repay loans, in hundreds of cases abuse of the court processes by lenders has affected the constitutional rights of the debtor to housing, dignity, safety and security, and access to adequate water and food. This abuse has also affected the rights of children. For many poor people, their home is their sole investment. “The current system, when the home is sold for nominal amounts of money, means that people do not get a cent from the sale of the house,” Sibiya says.

Lungelo Lethu’s arguments are supported by economist Dr Sean Muller, who disputes claims from the banks that the setting of reserve prices would reduce interest in the auction, and therefore make it less likely to find a buyer.

Absa says threat of sale of execution is necessary

Both Absa and Standard Bank, in their affidavits, say that sales in execution are a last resort, and describe the lengths to which they go to avoid home repossessions, including engagement with the borrower at the first sign of payment trouble. Absa offers its clients a “Help U Sell” programme to assist struggling borrowers to sell their homes privately at better prices than would be achieved at auction. The bank also employs professional valuers to determine the selling price of the property so as to cover as much as possible of the outstanding loan. Absa says it has cancelled an average of 70% of its scheduled sales in execution in the last two years due to alternative payment arrangements being agreed. The average time between the start of the legal collections process and sale in execution is 33 years for Absa, against an industry average of 27 months.

“It is the threat of a sale in execution that incentivises the average consumer to keep up with their repayments and to make a plan to repay the outstanding debt when they fall into arrears,” says Absa in its affidavit before the court.

Absa offers the court some advice in setting of reserve prices that the bank already applies internally. The bank establishes the market value of a property using professional valuers, using comparable sales in the area. It then applies a “distressed sale” discount factor and deducts any liabilities, such as outstanding water and lights. If the property is so heavily burdened by liabilities that there is no positive value, the bank advises selling the property at any value rather than leaving it in the debtor’s hands.

Standard Bank says litigation is never a strategy of first resort against defaulting customers. The bank says on average it takes 29 months from the date of a debtor’s default before Standard Bank sells a property in execution. The bank also offers customers in distress a variety of options to catch up on arrears, including loan rescheduling, the right to go under debt review, debt consolidation (rolling multiple debts into one to reduce monthly payments), and bank-assisted home sale programmes.

Legal Aid has joined the proceedings as a friend of the court. Its interest in the case is to fulfil its aim of ensuring that the “Constitution becomes a living document for the poor and vulnerable”. Part of its function is to provide legal assistance where vulnerable people fall behind on their bond payments, either before a court judgment has been obtained, or where judgment has been obtained and the house is sold on auction, which is a precursor to eviction by the new owner. Some of the cases Legal Aid handles involve households run by children whose deceased parents had outstanding bond payments.
Legal Aid mentions a case in which it is involved against Nedbank (Magdeline Ntsheleng Ramabitle vs Nedcor Bank Limited) where the bond repayments were deducted by the client’s employer and paid over to the bank. “The source of the arrears is therefore unclear and despite our client engaging with the bank directly they proceeded with the foreclosure and subsequent sale in execution where the new owner sought her eviction. The mortgage bond was for R85,000, though the property was sold at auction for R15,000, leaving a residual owing to the bank of R70,000.”
Legal Aid says it is also concerned at the high cost of foreclosure proceedings, resulting in nothing being left over after the auctions. It wants a period of at least six months after the sale in execution order has been granted to give the debtor time to reinstate the credit agreement. It also wants a reserve price to be set by judges so that debtors are not left with debt after their homes have been sold in execution.

Timing of execution orders

One of the questions before the judges is whether a judgment on the debt and an execution order against the property should be issued at the same time or separately. Absa says they should be issued together and that banks should be held to a high standard before approaching the courts, describing the extent of engagements with clients that lead up to the request for judgment.
Standard Bank argues that without the ability to sell a property in execution speedily, the security of a mortgage bond is futile. “For these reasons, subject to court oversight, as a general principle a judgment creditor is entitled to enforce its judgment by executing against the immovable property that is bonded as security,” it says in papers before the court.
Legal property expert Dr Reghard Brits argues in an affidavit supporting Legal Aid that these two orders should be heard at the same time, but that the courts could be given discretion to postpone the enforcement of the execution order.

http://www.bizcommunity.com/Article/196/568/180804.html
 

A dispute mechanism is a structured process  that addresses disputes or grievances that arise between two or more parties engaged in business, legal, or societal relationships. Dispute mechanisms are used in dispute resolution, and may incorporate conciliation, conflict resolution, mediation, and negotiation.
Otherwise known as grievance mechanisms, dispute mechanisms are typical non-judicial in nature, meaning that they are not resolved within the court of law. According to research produced by the non-judicial grievance mechanism task force of John Ruggie, Special Representative of Business and Human Rights to the United Nations, those who design and oversee non-judicial mechanisms should acknowledge core human rights processes defined by "all core UN human rights treaties.”
Dispute mechanisms comprise a way for socially responsible businesses to meet requirements of corporate responsibility-related agreements or pacts, reduce risk while capacity-building or developing internationally, and assist larger processes that create positive social change.
Dispute mechanisms are an increasingly effective tool for establishing communication channels between businesses and communities. When successful, they offer a trusted way for local peoples or communities to voice and resolve concerns related to development projects, while providing companies with transparent, effective ways to address community concerns. According to a publication by the Compliance Advisor/Ombudsman of the World Bank Group, "locally-based grievance resolution mechanism(s) provide a promising avenue by offering a reliable structure and set of approaches where local people and the company can find effective solutions together."

Generally, it is agreed that a well-functioning grievance mechanism should:

• Provides a predictable, transparent, and credible process to all parties, resulting in outcomes that are seen as fair, effective, and lasting
• Builds trust as an integral component of broader community relations activities
• Enables more systematic identification of emerging issues and trends, facilitating corrective action and preemptive engagement.

 

Characteristics

According to the Business and Human Rights SRSG, such mechanisms must at a minimum be:

• Legitimate: a mechanism must have clear, transparent and sufficiently independent governance structures to ensure that no party to a particular grievance process can interfere with the fair conduct of that process;
• Accessible: a mechanism must be publicized to those who may wish to access it and provide adequate assistance for aggrieved parties who may face barriers to access, including language, literacy, awareness, finance, distance, or fear of reprisal;
• Predictable: a mechanism must provide a clear and known procedure with a time frame for each stage and clarity on the types of process and outcome it can (and cannot) offer, as well as a means of monitoring the implementation of any outcome;
• Equitable: a mechanism must ensure that aggrieved parties have reasonable access to sources of information, advice and expertise necessary to engage in a grievance process on fair and equitable terms;
• Rights-compatible: a mechanism must ensure that its outcomes and remedies accord with internationally recognized human rights standards;
• Transparent: a mechanism must provide sufficient transparency of process and outcome to meet the public interest concerns at stake and should presume transparency wherever possible; non-State mechanisms in particular should be transparent about the receipt of complaints and the key elements of their outcomes.

Types

• Industry
• Company
• Legislative
• Government
• Non-Governmental
• Independent State-based
• International Organization
• Multi-Stakeholder

Uses

Well-designed grievance mechanisms have multiple and sometimes divergent points of application, but are typically used by monitoring, auditing, project oversight, supply chain management, and stakeholder engagement. Grievance mechanisms can deal with most kinds of grievances (bar those raising criminal liability), including – but by no means limited to – those that reflect substantive human/labour rights concerns. As such, rights-compatible mechanisms must work to integrate human rights norms and standards into their processes and are based on principles of non-discrimination, equity, accountability, empowerment and participation.

https://en.wikipedia.org/wiki/Dispute_mechanism

Dispute resolution is the process of resolving disputes between parties. The term dispute resolution may also be used interchangeably with conflict resolution, where conflict styles can be used for different scenarios.

Methods of dispute resolution include:

• lawsuits (litigation)
• arbitration
• collaborative law
• mediation
• conciliation
• negotiation
• facilitation

One could theoretically include violence or even war as part of this spectrum, but dispute resolution practitioners do not usually do so; violence rarely ends disputes effectively, and indeed, often only escalates them.

Dispute resolution processes fall into two major types:

Adjudicative processes, such as litigation or arbitration, in which a judge, jury or arbitrator determines the outcome. Consensual processes, such as collaborative law, mediation, conciliation, or negotiation, in which the parties attempt to reach agreement.

Not all disputes, even those in which skilled intervention occurs, end in resolution. Such intractable disputes form a special area in dispute resolution studies.
Dispute resolution is an important requirement in international trade, including negotiation, mediation, arbitration and litigation.

Legal dispute resolution
The legal system provides resolutions for many different types of disputes. Some disputants will not reach agreement through a collaborative process. Some disputes need the coercive power of the state to enforce a resolution. Perhaps more importantly, many people want a professional advocate when they become involved in a dispute, particularly if the dispute involves perceived legal rights, legal wrongdoing, or threat of legal action against them.
The most common form of judicial dispute resolution is litigation. Litigation is initiated when one party files suit against another. In the United States, litigation is facilitated by the government within federal, state, and municipal courts. The proceedings are very formal and are governed by rules, such as rules of evidence and procedure, which are established by the legislature. Outcomes are decided by an impartial judge and/or jury, based on the factual questions of the case and the application law. The verdict of the court is binding, not advisory; however, both parties have the right to appeal the judgment to a higher court. Judicial dispute resolution is typically adversarial in nature, for example, involving antagonistic parties or opposing interests seeking an outcome most favorable to their position.
Retired judges or private lawyers often become arbitrators or mediators; however, trained and qualified non-legal dispute resolution specialists form a growing body within the field of alternative dispute resolution (ADR). In the United States, many states now have mediation or other ADR programs annexed to the courts, to facilitate settlement of lawsuits.

Extrajudicial dispute resolution
Some use the term dispute resolution to refer only to alternative dispute resolution (ADR), that is, extrajudicial processes such as arbitration, collaborative law, and mediation used to resolve conflict and potential conflict between and among individuals, business entities, governmental agencies, and (in the public international law context) states. ADR generally depends on agreement by the parties to use ADR processes, either before or after a dispute has arisen. ADR has experienced steadily increasing acceptance and utilization because of a perception of greater flexibility, costs below those of traditional litigation, and speedy resolution of disputes, among other perceived advantages. However, some have criticized these methods as taking away the right to seek redress of grievances in the courts, suggesting that extrajudicial dispute resolution may not offer the fairest way for parties not in an equal bargaining relationship, for example in a dispute between a consumer and a large corporation. In addition, in some circumstances, arbitration and other ADR processes may become as expensive as litigation or more so.

https://en.wikipedia.org/wiki/Dispute_resolution

In German-language legal literature, there is an extensive discussion on the precise nature of the distinction between public law and private law.

Several theories have evolved, which are neither exhaustive, nor are they mutually exclusive or separate from each other.

The interest theory has been developed by the Roman jurist Ulpian: "Publicum ius est, quod ad statum rei Romanae spectat, privatum quod ad singulorum utilitatem. (Public law is that, which concerns Roman state, private law is concerned with the interests of citizens.)

The weak point of this theory is that many issues of private law also affect the public interest. Also, what exactly is this public interest?

The subjection theory focuses on explaining the distinction by emphasizing the subordination of private persons to the state.

Public law is supposed to govern this relationship, whereas private law is considered to govern relationships where the parties involved meet on a level playing field.

This theory fails in areas commonly considered private law which also imply subordination, such as employment law.

Also, the modern state knows relationships in which it appears as equal to a person.

The subject theory is concerned with the position of the subject of law in the legal relationship in question.

If it finds itself in a particular situation as a public person (due to membership in some public body, such as a state or a municipality), public law applies, otherwise it is private law.

A combination of the subjection theory and the subject theory arguably provides a workable distinction.

Under this approach, a field of law is considered public law where one actor is a public authority endowed with the power to act unilaterally (imperium) and this actor uses that imperium in the particular relationship.

In other words, all depends whether the public authority is acting as a public or a private entity, say when ordering office supplies.

This latest theory considers public law to be a special instance.

There are areas of law, which do not seem to fit into either public or private law, such as employment law – parts of it look like private law (the employment contract), other parts like public law (the activities of an employment inspectorate when investigating workplace safety).

The distinction between public and private law might seem to be a purely academic debate, but it also affects legal practice.

It has bearing on the delineation between competences of different courts and administrative bodies.

Under the Austrian constitution, for example, private law is among the exclusive competences of federal legislation, whereas public law is partly a matter of state legislation.

https://en.wikipedia.org/wiki/Public_law
 

Administrative law refers to the body of law which regulates bureaucratic managerial procedures and defines the powers of administrative agencies.

These laws are enforced by the executive branch of a government rather than the judicial or legislative branches (if they are different in that particular jurisdiction).

This body of law regulates international trade, manufacturing, pollution, taxation, and the like. This is sometimes seen as a subcategory of civil law and sometimes seen as public law as it deals with regulation and public institutions

https://en.wikipedia.org/wiki/Public_law

Rule of law, the idea that the administration of the state should be controlled by a set of laws, originated in Greek Antiquity and was revitalized by modern philosophers in France (Rousseau), Germany (Kant) and Austria in the 18th century.
It is related to the strong position of the central government in the era of enlightened absolutism, and was inspired by the French Revolution and enlightenment.
It developed hand in hand with the creation of civil codes and criminal codes.

https://en.wikipedia.org/wiki/Public_law

Public law is that part of law which governs relationships between individuals and the government, and those relationships between individuals which are of direct concern to society.

Public law comprises constitutional law, administrative law, tax law and criminal law, as well as all procedural law.

In public law, mandatory rules prevail.

Laws concerning relationships between individuals belong to private law.

The relationships public law governs are asymmetric and unequal – government bodies (central or local) can make decisions about the rights of individuals.

However, as a consequence of the rule of law doctrine, authorities may only act within the law (secundum et intra legem).

The government must obey the law.

For example, a citizen unhappy with a decision of an administrative authority can ask a court for judicial review.

Rights, too, can be divided into private rights and public rights.

A paragon of a public right is the right to welfare benefits – only a natural person can claim such payments, and they are awarded through an administrative decision out of the government budget.

The distinction between public law and private law dates back to Roman law.

It has been picked up in the countries of civil law tradition at the beginning of the nineteenth century, but since then spread to common law countries, too.

The borderline between public law and private law is not always clear in particular cases, giving rise to attempts of theoretical understanding of its basis.

https://en.wikipedia.org/wiki/Public_law
 

Delictual remedies offer the owner compensation or damages for interference with the exercise of his rights of ownership.
Most often the delict is a wrongful alienation resulting in financial loss.
Delictual remedies are appropriate where physical restoration of the property is impossible: that is, where the property has been lost or destroyed or damaged, in which case the owner is entitled to be compensated for his patrimonial loss.
Three Delictual remedies are relevant to the law of property: the condictio furtiva, the actio ad exhibendum and the actio legis Aquiliae.
They are all personal remedies rather than real ones.
Condictio furtiva
The condictio furtiva is used in cases where property has been stolen, in order to recover the patrimonial loss.
The action is available only against the thief, but it may be brought by all persons with a lawful interest in the property.
It is essential, however, that the claimant be the owner or have the lawful interest at all relevant times: that is, the interest must exist at the time of the theft and must still endure at the time the action is instituted.
Actio ad exhibendum
The actio ad exhibendum is a general personal action with a Delictual function.
It is instituted by the owner of the property against the person who wrongfully and deliberately disposed of it.
The claim is for the value of the property which cannot be recovered, and the basis for liability is bad faith (mala fide).
There are several requirements:

• ownership;
• bad faith; and
• patrimonial loss.

Actio legis Aquiliae
Whereas the condictio furtiva and the actio ad exhibendum each has its own particular application (theft and bad-faith disposal respectively), the actio legis Aquiliae is a general Delictual action to claim compensation in all cases where property has been destroyed or damaged by the defendant in a wrongful and culpable manner.
The usual requirements for Delictual liability pertain: There must be (i) an action or omission (ii) performed with a culpable disposition (intent or negligence) which (iii) results in damage or injury to the owner.

https://en.wikipedia.org/wiki/South_African_property_law

 

The Extension of Security of Tenure Act applies to occupiers

• who have the necessary consent to occupy;
• who do not use the occupied land for commercial purposes; and
• whose income is less than R5,000.

The Act distinguishes between occupiers as of 4 February, 1997, and occupiers after that date. 
The procedures for and limitations on eviction are set out in section 9: "Not less than two calendar months' written notice [must be given] of the intention to obtain an order for eviction, which notice shall contain the prescribed particulars and set out the grounds on which the eviction is based."
The "just and equitable" principle is invoked repeatedly.
The Land Reform (Labour Tenants) Act, which regulates the establishment of landownership by "labour tenants," also places certain limitations on eviction.
The procedures for eviction (which must, again, be just and equitable) are set out in sections 7 and 15.

https://en.wikipedia.org/wiki/South_African_property_law
 

There are two types of limitations, statutory and common-law, on the use of the rei vindicatio.
The effect of these limitations is to prevent the claimant from vindicating his rights.
The common-law limitation of estoppel may act as a defence, or it may vary or limit the effect of the rei vindicatio.
As a limitation on the action, estoppel blocks its vindicatory function.
Ownership is not disputed, but the owner may not regain possession for the duration of the estoppel.
This amounts to a suspension of the owner's entitlement to vindicate his property—he is estopped from vindicating it—but it is important to note that it does not vest that entitlement on the defendant.
Mostly estoppel is deployed in respect of movable property, but it may also be used for immovable property.
It is required for estoppel that the owner have negligently or culpably made a misrepresentation, through conduct or otherwise, that the property had been transferred to the controller, so that the controller had the power to transfer it in turn.
The person who raises the estoppel must have acted on that misrepresentation and suffered harm or loss as a result.
As for statutory limitations, the Insolvency Act provides that property sold and transferred after an insolvency action cannot be subject to the rei vindicatio, while, in terms of the Magistrates Courts Act, a sale in execution of property cannot be impeached against a good-faith purchaser in the absence of a defect.
There are several constitutional limitations on the application of the rei vindicatio to immovable property.
Constitutional intervention has resulted in legislation relating to eviction, redistribution and the regulation of tenure.
The Constitution holds that no-one may be evicted from his home without a court order.
The procedure to be followed is set out in the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act (PIE), which excludes the rei vindicatio and other common-law remedies.
It was decided in Ndlovu v Ngcobo; Bekker v Jika that PIE has application also where the occupation was lawful to begin with but became unlawful later.
Different procedures are set out under PIE for private owners, urgent applications and organs of state.
Notice must be given within fourteen days of the hearing and should include the following:

• notification that proceedings have been instituted;
• the date of the hearing;
• the grounds for the proceedings; and
• information as to the right of appearance.
• In the case of private owners, the court will consider the length of the occupation.
• If it has been less than six months, an eviction order will be made only if it is "just and equitable" to do so, "after considering all the relevant circumstances, including the rights and needs of the elderly, children, disabled persons and households headed by women."
  If it has been more than six months, the eviction order must still be just and equitable, but the circumstances to consider are compounded by the question of "whether land has been [...] or can reasonably be made available [...] for the relocation of the unlawful occupier."
  An exception to this is "where the land is sold in a sale of execution pursuant to a mortgage."
  Urgent applications are granted where harm is eminent "to any person or property if the unlawful occupier is not forthwith evicted from the land,",  where "the likely hardship to the owner or any other affected person [...] exceeds the likely hardship to the unlawful occupier," and where no other effective remedy is available.
  In Residents of Joe Slovo Community v Thubelisha Homes, an application was brought by the authorities in Cape Town seeking the eviction of persons in the Joe Slovo informal settlement under of PIE, arguing that the property was needed for the development of affordable housing for poor people.
  The High Court granted the order, and the residents appealed to the Constitutional Court on the grounds that they were not unlawful occupiers, having obtained the consent of the authorities, and therefore could not be evicted.
  The court granted the eviction but ordered that alternative accommodation be provided to the occupiers.
  In Port Elizabeth Municipality v Various Occupiers, the municipality sought an eviction order against unlawful occupiers of municipal land, at the behest of adjacent land owners.
  The High Court granted the order, but on appeal to the Supreme Court of Appeals the order was quashed.
  The Municipality, in turn, appealed to the Constitutional Court, which held that there is no unqualified constitutional duty on local government to provide alternative housing in terms of PIE. "In general terms, however," wrote Sachs J, "a court should be reluctant to grant an eviction against relatively settled occupiers unless it is satisfied that a reasonable alternative is available, even if only as an interim measure pending ultimate access to housing in the formal housing programme."
  In Blue Moonlight Properties v Occupiers of Saratoga Avenue, the respondent, a private landowner, served a notice of eviction on the occupiers.
  They resisted, claiming protection under PIE and alleging that they were entitled to continue their occupation until the City of Johannesburg Metropolitan Municipality provided alternative accommodation.
  The City disputed this duty; the respondents argued that its policy was arbitrary and discriminatory. The issue, then, was whether private landowners are obliged to provide alternative accommodation to unlawful occupiers in terms of PIE, or whether the burden should fall on the city.
  The court found that it should balance the rights of property owners under the Constitution with those of indigents and occupiers, and ruled that the landowners' right to equality would be infringed if the state were to burden them with providing alternative accommodation without compensation. The obligation to provide access was the City's, and the City could not transfer that obligation to private landowners.
  The court ordered compensatory relief to Blue Moonlight Properties and found that the City was in breach of its constitutional duty to provide adequate housing on a progressive basis.
• It was obliged to make monetary payment each month until such accommodation was found.

https://en.wikipedia.org/wiki/South_African_property_law

South African law "jealously protects the right of ownership and the correlative right of the owner in regard to his property, unless, of course, the possessor has some enforceable right against the owner."
There exists a variety of remedies for the protection of ownership.
They may be divided into three distinct categories: real, Delictual and unjustified-enrichment remedies.
Real remedies
Real remedies are concerned with physical control.
They give the owner the power to exclude others from access to and enjoyment of his property.
Real remedies either restore physical control of the property to the owner or prevent infringement of the owner's entitlements. (An interdict and a declaratory order are also available to owners and possessors of property.)
There are two real remedies used to protect the right of ownership: the rei vindicatio and the actio negatoria
Rei vindicatio
Ownership includes the entitlement of exclusive possession of res.
The rei vindicatio, or vindicatory action, is a remedy available to the owner to reclaim his property from wherever it is found and from whosoever is unlawfully holding it.
The remedy entitles him to "exclusive possession."
It is founded on the nemo plus iuris rule, which holds that one cannot transfer more rights than one has; more succinctly, that one cannot give what one does not have.
The remedy is available to the owner in respect of both movable and immovable property, taking, in the latter case, the form of an eviction order, and applying only to business or trade or industrial property.
It is important to note that the remedy merely restores proprietary interest; it does not award damages.
The decision in Mlombo v Fourie has been criticised, accordingly, for blurring the distinction between the rei vindicatio and the actio ad exhibendum.
The former is a restorative proprietary remedy, whereas the latter is a Delictual one.
Requirements
Three requirements must be met for a claim to be based on the rei vindicatio:
There must be proof of ownership on the part of the person instituting the action
the property must exist and be identifiable; and
the defendant must be in physical control of the property at the time the action is instituted.

In Chetty v Naidoo, Chetty brought a rei vindicatio action against Naidoo in respect of property occupied by Naidoo, who claimed, but could not prove, that she had bought the property.
The case sets out the following rules:

• The owner need not aver that the defendant is in unlawful control of his property.
• How the owner characterises the defendant's control is immaterial.
• The burden is on the defendant to prove a right: for example, a lien or a lease.
• If the owner concedes any right to the defendant, he must show that the right has been terminated if he still wishes the action to succeed.

Defences
The facta probanda may be challenged in defence against the rei vindicatio.
There are four main defences:
The claimant is not the owner of the property. This allegation would clearly require the defendant to produce documentary evidence. The property in question is no longer identifiable or does not exist; it has, for instance, been destroyed. The defendant's possession or physical control of the property is not unlawful. The defendant is in fact not, or no longer, in physical control of the property.

Good faith may not be used as a defence against the rei vindicatio.
Estoppel may be raised as a defence to the rei vindicatio only in certain circumstances; in others—see below—it may simply vary the effect of the action.
 
https://en.wikipedia.org/wiki/South_African_property_law

Until the Constitution was passed in 1994, South African property law was most heavily influenced by the reception of English property law and principles of civil law theory.
The Dutch East India Company had established the Cape colony from 1652.
Land was taken by European settlers from native African inhabitants.
As the British slowly assumed control from 1795 to 1806, and was pronounced the owner of the Cape Colony at the Congress of Vienna in 1815.
Descendants of the Dutch moved away into the interior to establish their own colonies, the Orange Free State and Transvaal Republic, taking land from native people.
Conflicts grew over the later half of the 19th century, as the rich mineral wealth of South Africa became evident.
In 1867, diamonds were discovered in the Kimberley and in 1886 gold was discovered in Johannesburg.
In 1889, the British South Africa Company was given a Royal Charter to further seek out and exploit areas across Southern Africa where mining could be profitable.
Meanwhile, some more simple property rules, such as streamlined land-registration system had been implemented under John Cradock, 1st Baron Howden, and in the early 20th-century registration practices were codified by the Deeds Registries Act.
In 1910, the Union of South Africa Act united the post Boer War British and Afrikaans communities, but excluded black South Africans from political involvement.
 Indian or "coloured" South Africans were also excluded, prompting a younger Mohandas Gandhi to leave in 1914.
From this point a series of laws secured white control of South African land and civic property. The Land Act 1913 reserved 92 percent of South Africa's territory for whites, and only 8 percent for blacks.
This was enlarged to around 13.6 percent by the Native Trust and Land Act, 1936, although the population of the country that was black stood around 61 percent.
In the Urban Areas Act 1923, it was decreed that blacks could only enter into towns to work.
In the 1930s, ideas of racial supremacy became stronger among many white South Africans, and after the war the Afrikaner National Party won a majority at the 1948 election.
From this point, the apartheid system was built up through legislation.
In the Group Areas Act 1950 the country was categorised into various race-based regions, leading to forced removals and evictions of black people from their homes.
The Group Areas Development Act, 1955 excluded non-white people from living in white areas altogether.
The Reservation of Separate Amenities Act 1953 stated that separate toilets, parks and beaches were allocated.
As the Apartheid regime continued, the Bantu Homelands Citizenship Act 1970 and the Bantu Homelands Constitution Act 1971 purported to "constitutionalise" the separate states within the South African state, where black South Africans had to live.
Through the 1980s, the world's condemnation of the regime, the slow recognition of its deep injustice unsustainability, and the mounting civil disobedience led to a referendum and new constitution.
By 1991 there had been approximately 17,000 statutory measures implemented to regulate land control and racial diversity.
The Discriminatory Legislation regarding Public Amenities Repeal Act, 1990 and the Abolition of Racially Based Land Measures Act, 1991 started a process leading to the constitution.
This "excessive law making and manipulation of existing notions of property resulted in the collapse of administrative and legal certainty and, moreover, massive underdevelopment," and left the post-1994 dispensation with "a severely compromised system of land rights."
The new constitution explicitly protects the right to property, including land, in section 25(1), under the Bill of Rights.
Section 25(2) and (3) states how property can be regulated and expropriated, with limited compensation from people who were dispossessed after 1913 by racial discrimination.
Under section 26, the Constitution created a fundamental right to housing.
In 2000, in Government of the Republic of South Africa v Grootboom, the Constitutional Court held that although there was a justiciable right under section 26 to housing, this had to be interpreted in the light of administrative difficulties of achieving social and economic rights in practice.
The claimant, Irene Grootboom, had been living temporarily in a shack on land that was being repossessed for redevelopment.
It was accepted in the course of argument that she would be given temporary housing, but the court did no more than state that the government should aim to fix the housing and slum crisis.
In political terms, the 1997 White Paper on Land Policy has been influential in setting up objectives. These were said to be to (1) redress apartheid-era inequities (2) nurture national reconciliation and stability (3) to support economic growth; and (4) to improve welfare and relieve poverty.
The new constitutional arrangement supports the regulation and protection of property, mandates the reform of land law, provides explicitly for basic rights like access to housing, and gives equal recognition to common- and customary-law principles.
A host of policies have been implemented, and statutory measures promulgated, in the fulfilment of this mandate, which "has already had a significant influence on property law."
 

https://en.wikipedia.org/wiki/South_African_property_law
 

 

Regulates the "rights of people in or over certain objects or things." 

It is concerned, in other words, with a person's ability to undertake certain actions with certain kinds of objects in accordance with South African law.

Among the formal functions of South African property law is the harmonisation of individual interests in property, the guarantee and protection of individual (and sometimes group) rights with respect to property, and the control of proprietary relationships between persons (both natural and juristic), as well as their rights and obligations.

The protective clause for property rights in the Constitution of South Africa stipulates those proprietary relationships which qualify for constitutional protection.

The most important social function of property law in South Africa is to manage the competing interests of those who acquire property rights and interests.

In recent times, restrictions on the use of and trade in private property have been on the rise.

Property law straddles private and public law, and hence "covers not only private law relations in respect of particular types of legal objects that are corporeal or incorporeal, but also public law relations with a proprietary character, and the resultant rights and interests."

Property in the private-law sense refers to patrimonial assets: those, that is, which comprise a person's estate.

The law of property defines and classifies proprietary rights (for instance, as either real or personal), and determines the methods whereby they are acquired, lost and protected, as well as the consequences of their exercise and the limitations imposed by factual proprietary relationships which do not qualify as rights

https://en.wikipedia.org/wiki/South_African_property_law

Cape Town property owners can learn from other regions like Johannesburg, where, earlier this year, residents were faced with property valuation increases – some ranging from 60% to 500%.   "Doing your homework now could make a real difference. Unwelcome surprises could have a very negative impact. If you don’t arm yourself with information now, you will struggle to defend your position next year. More importantly, you will be living with the consequences for the next four years," says Gary Palmer, CEO of Paragon Lending Solutions.
The municipal valuation increases in Johannesburg come into effect in July this year. They are expected to impact monthly rates bills, influencing the cost of services such as water, refuse removal and electricity.
"The logical knock-on effect of municipal rate increases is to raise the rentals on investment properties. If this is not possible, the owner’s net profit will decrease.
"The value of the property is also impacted in the eyes of lenders, who look closely at the net income of the property when determining the value of their security," explains Palmer.
"For owners hoping to use their property to raise capital for their business, municipal rates spikes – such as we have seen – can be a very serious obstacle in the path of their capital raising plans."
Not a simple process
Although property owners have the right to object to the valuation, the process is not as simple as some think, he adds.
"If the property owner is dissatisfied with the value, they can lodge an objection within 30 days of the date of notice – although the municipalities normally allow for a longer period. Should the outcome of the objection be unsatisfactory, the owner may appeal against the decision, within 30 days of the date of notice of the ruling," explains Natalie Ginsberg of Margin Property Valuation Services.
"An appeal board hearing is a formal hearing, and the owner will be given an opportunity to provide oral evidence, as well as an opportunity to cross-examine the municipal valuer.
"However, the onus is on the owner to prove the municipal valuation is wrong. The owner needs to, therefore, ensure that the appeal application is well prepared, with appropriate motivation."
Ginsberg warns that disputed valuations can delay sales of properties, since all outstanding rates, including those under dispute, need to be paid in full before a property can be transferred. What’s more, Ginsberg warns that the outcome of some objections, although successful, are not carried through to the next valuation roll, and an objection inevitably follows for the same reason when the process is conducted again in three or four years’ time.
She expects that Cape Town owners should receive notices in February 2019 of the new general market valuation of their properties by the City of Cape Town.
Objections will likely be lodged between March and April 2019. As in the past, no late objections will be accepted. It is critical that property owners who do not receive a notice take steps to ascertain the new valuation, Ginsberg says.
"The valuations will be based on market values as of 1 July 2018. Property owners need to be aware of their surroundings and the values of properties from now until the middle of the year. Ideally, residential owners should try to view show houses in their area, keep a note of sales, and note any alterations made to their properties during this time," she suggests.
"Having an arsenal of data at your disposal will make it easier when it comes time to object."
Palmer agrees that property owners, especially those who run properties as a business, should be keeping a close eye on valuations in their area.
"Re-assessing market-related rentals and overheads like rates and taxes allows you to optimise your property’s value. It also allows you to consider other uses for the property based on real data from your neighbourhood and is good accounting practice when it comes to assigning values to the structures on your balance sheet," says Palmer.
"All of these will be called for when applying for finance if you will be using the property as an asset."
Both Palmer and Ginsberg believe the lessons learnt from what happened in Johannesburg, could save Cape Town residents significant pain next year.

https://www.fin24.com/Money/Property/what-cape-town-property-owners-should-learn-from-johannesburg-valuation-hikes-experts-20180521

 

10km away in the Joburg CBD

• We went apartment hunting with a R10,000-per-month budget.
• Highly urbanised central districts appealed to us more as a young professional couple.
• The stark contrast in what we could afford between the Sandton and Johannesburg CBDs was surprising.

 
Sandton still reigns as Africa's richest square mile featuring luxurious real estate with price tags over R150 million – and that's just for residential properties.
Before the great commercial migration to Sandton though, the Johannesburg central business district was the continent's leading financial centre, featuring prime real estate from the 19th to 21st centuries.
The old Stuttafords building has now been converted into what its developers call "New York style" apartments:
As a young professional couple new to the City, a vibrant, socially conscious, diverse, creative, and urban environment was more appealing than living behind high complex walls in suburbia.
The search for an apartment using the Property24 app (downloaded for free in the App or Play stores) in the R10,000 monthly rent region, preferably in a highly urbanised area like the Sandton or the Joburg CBDs produced surprising current listings and discoveries.

https://www.businessinsider.co.za/this-is-what-r10000-will-get-you-in-sandton-and-10km-away-in-the-joburg-cbd-2018-7
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This article explains squatter and the rights they have in the South African Law of Landlord and Tenant.
Chantelle Gladwin, Partner, and Anja van Wijk, Associate at Schindlers Attorneys, share insight on what ‘squatter rights’ are in the context of the South African Law of Landlord and Tenant, in relation to both commercial and residential property.
What is a squatter?
A squatter is any person or organisation that continues to occupy a property when they have no legal right do so. This could include a person who whose lease has come to an end but refuses to move out, a person who has sold the property to another, but even after transfer has gone through refuses to vacate, or even persons who invade land that is owned by someone else and build their homes on this land without the permission of the owner.  
In the commercial context the use of the term ‘squatter’ is not very common. However, the same principles apply to a business or organisation that is occupying business premises without the permission of the owner, and so for the purposes of this article, we will regard business organisations occupying business premises without the permission of the owner as squatters as well.
The law does not allow persons to unlawfully occupy property. However, it does require that when unlawful occupiers are evicted from a property, the landlord act in a way that is fair and lawful and that the eviction happens only after an order of court authorising same is granted setting out how the eviction is to take place.
The myth
Many people think that squatters have a legal right to occupy a property indefinitely, and this may have resulted from the hype created by the media around how difficult it can be to evict squatters.  
Happily though, this is a misconception. Although it can in some situations be difficult to evict squatters, no person or organisation has any right in terms of our law to occupy property against the permission of the owner, unless this is sanctioned by a court.,
However, be they people or businesses, squatters have the right not to be forcibly removed from a property by the landowner without an order of court. This is to ensure that the constitutional rights of the squatter, to dignity, equality and the right to a home and to property, are not violated.
Our courts frown on ‘self-help’ (which is regarded as a form of vigilantism) and when a landlord ‘takes the law into  his own hands’ and forcibly removes an occupier from a property, this violates the rights of access to the courts of the occupiers, and their rights to ‘have their say’ in a court and bring any relevant considerations to light that might cause a court not to  grant the eviction, or to grant the eviction on certain terms that it otherwise would not have.” 
Squatter rights
The law does not allow persons to unlawfully occupy property. However, it does require that when unlawful occupiers are evicted from a property, the landlord act in a way that is fair and lawful and 

that the eviction happens only after an order of court authorising same is granted setting out how the eviction is to take place.

There are many laws that protect an unlawful occupier from being forcibly removed from a property in a manner that would offend the unlawful occupiers’ rights to property, family life, dignity and equality. Only some of the most important rights will be canvased in this article, as there are so many and a full exposition of these would require a thesis.

Insight on these important rights:

1. As explained above, removing a person forcibly without their consent or without a court order amounts to unlawful vigilantism (self-help), and is not protected by our law.

In the event that any person or organisation is unlawfully removed from a property, that person will be able to approach a court for an order to declare the removal unlawful, to declare that they are entitled to return to the property until such time as a court order sanctioning their removal has been obtained, and further obtaining a punitive cost order (for the legal fees incurred in having to bring the matter to court to protect their right).  

2. In relation to residential tenants, the law protects them even further. Various pieces of legislation make it unlawful for a landowner to remove doors on buildings, lock tenants out, turn off the supply of electricity or water to the property, or basically do anything that would violate the tenant’s ability to use and enjoy the property as the tenant sees fit (where any of these thing are done without the tenant’s consent or without an order of court).

This applies to business organisations that are squatting too, although to a lesser degree, to the extent that it is sometimes arguable that the deprivation of a certain service (e.g. cutting of electricity, telephone, internet, etc.) is lawful in certain circumstances.

5. The protection afforded to residential and business occupants (namely not to be forcibly removed from the property without a court order) extends to situations where the right to occupy the property once existed but no longer exists (for example where a lease has expired), and also to a situation where there never was a right to occupy given to the occupiers in the first place (such as where a land invasion occurs and people who are not authorised by the owner simply moved onto the land or into the building and occupy the property without permission of owner). 

6. In all of these cases, the landowner needs to approach a court for an order declaring that it is lawful to evict the unlawful occupier, and this order will not be granted by the court unless the court is satisfied that firstly, the unlawful occupier stands to be evicted in terms of our law and secondly, that the terms of the eviction will be just and equitable to the occupier.

7. What is just and equitable when it comes to an eviction is left up to the discretion of the court. In most cases, the courts are much more protective of the rights of individual human beings to dignity, equality, housing and property than they are to business organisations which are being evicted (obviously because business organisations don’t have human rights in a way that natural persons do). 

In conclusion

Although squatters do not have the right to unlawfully occupy property, they do have the right to be evicted only after an order of court has been granted, which sets out the terms upon which the eviction can take place in order to ensure that it is just and equitable. 

What is ‘just and equitable’ depends from one situation to the next, so consult with your attorney if you require advice on how to go about dealing with unlawful occupiers. 
- Chantelle Gladwin, Partner and Anja van Wijk, Associate at Schindlers Attorneys.

https://www.property24.com/articles/explained-squatter-versus-landowner-rights/25486
 

The positive sentiment after the election of President Cyril Ramaphosa - the so-called Ramaphoria - seems to be waning and not to have had the desired and anticipated effect on the economy and property market, according to Stuart Manning, CEO for the Seeff Property Group.
 
Analysts and the banks have recently downgraded their outlook for the year ahead with the property market expected to remain flat and possibly weaken further as the year progresses.
Amidst the slowdown in demand and prices, sellers may well be asking whether they should sell now, or rather wait it out.
 
Manning says there is no accurate way to predict the market. The economic challenges seem deeper than anticipated and investor confidence and concerns around land expropriation are impacting on the economic and property market recovery.
 
With a national election looming next year, political expediency also seems to dominate the political and economic discourse right now, he says.
 
For sellers of property, there are challenges. Demand and prices are flat while stock levels are rising. At the same time, while the banks are granting more home loans and there is a desire to buy, many buyers are taking a "wait and watch" approach.
No need to wait
In Manning's view, there is, however, no need to wait.
 
"The market is in a much better position than it was after 2007/2008. Economies and markets always go through up and down cycles at irregular intervals and now is as good a time to sell as any," he explains.
"Thousands of property transactions are being concluded on a monthly basis country wide, and finding a buyer in this market also means that you are likely to get a serious offer from someone who is serious about buying your property."
If, however, your aim is to make a hefty profit, then now is not the time. If you are serious about selling, then selling now also means that you can take advantage of the good buying conditions.
"There is plenty of stock and many motivated sellers," he says. "Remember, there is opportunity in every market, you just need to know where and what to look for."
 
Even in downmarket conditions, you can still make a quick sale and achieve a good price.
Seeff Atlantic Seaboard agent Debbie Koping, for example, sold a Green Point home for R7m within four days of listing it for R7.25m and a home in Ocean View Drive, Sea Point, for R9.5m within a day of listing it for R9.85m.
Manning offers 5 tips for sellers:

• Choose an estate agent who knows your area;
• Make sure your price is in the right range as the mid-market range is always active;
• Ensure your property is in tip-top selling shape. With more to choose from, buyers will choose the property which offers the best condition at the best price;
• Sell before the summer rush. Many buyers want to spend the summer in their new home, which means they would want to get their offers to purchase accepted over winter so that they can spend December in their new home;
• Consider all offers. Cash always trumps a subject-to-offer and provides a more secure sale.
• "If you are looking to test the market, then now is not the right time. Be mindful of turning down just any offer, it may be the only one you get for a while," says Manning
• https://www.fin24.com/Money/Property/should-you-sell-your-property-now-or-wait-20180711

The unchanged repo rate is good news for consumers and property owners, especially those with mortgage bonds, said a property expert.
Stuart Manning, CEO of the Seeff Property Group commented on the SA Reserve Bank's (SARB) Monetary Policy Committee (MPC) decision on Thursday to keep interest rates at 6.5%. The base home loan rate stays the same at 10%.
Manning said the MPC's move was largely anticipated by the market given the better than expected consumer inflation figure of 4.6% for June, despite the weaker exchange rate.
 
He added that aside from the economic pressure, the "political noise" and policy uncertainty around land expropriation remains a concern for the property market. It has made many buyers, especially at the top end of the market and those who do not have to buy right now, hesitant - both local and foreign buyers alike.
The property market is holding up well despite the economic challenges, and while slower, there is still price growth and plenty of reasons to buy, he explained. Many areas are seeing excellent trade with especially the lower to mid-market sectors being quite active.
"Many sellers are still making good deals as they adapt to the changing conditions. They may not be seeing stellar profits, but they are still making money," he said.
 
"When the sales side of the property market scale tips and finances are under pressure, the rental side of the market tends to go up with more demand for rental property."
Regional picture
According to the Pam Golding Residential Property Index, national house price inflation of 4.54% in June is up from 4.04% in January - marginally higher than the first six months of the year’s average house price inflation of 4.25%.
“With household finances under pressure and a young population, we have already seen the lower end of the housing market experience an uptick, particularly as the average price for first-time buyers is estimated by ooba at R939 000," commented Dr Andrew Golding, chief executive of the Pam Golding Property group.
“We are seeing countrywide in relation to Pam Golding Properties’ sales, that well-priced homes under approximately R2.5m are selling well to a cross-section of buyers, including investors," he said.
"There is more activity in the middle to lower price bands, with the luxury market still ticking over steadily.”
The housing market in Gauteng is showing signs of recovery, "particularly in the North" and in Pretoria, according to Golding.
As for Durban and the North Coast regions of KwaZulu-Natal (KZN) and the Eastern Cape coastal regions, he said Lightstone statistics reveal that the coastal metro housing markets – defined as being within 500m of the coastline - are continuing to outperform non-coastal markets.
As a region KZN is also benefiting from home buyers relocating from upcountry and because of its climate, from a growing retirement market.
“While the Cape Town metro market is slowing, this was to be expected as activity here has run ahead of the prevailing economic conditions and it makes sense for the market to consolidate after several years of above average price growth," said Golding.
"Certainly, the drought also impacted on the housing market and this is currently coupled with the fact that winter seasonal demand is traditionally slower in the Western Cape, but we believe these are temporary concerns."
 
People seem to be looking a little further out from the Cape Town Metro towards areas such as the Northern Suburbs, with its value-for-money homes, good schools and appealing environment. Homes in secure estates remain in demand.
“We expect the effect of the fuel price increases to further impact on consumers’ desire to reduce commutes and live as close to the workplace as possible, and with increasingly sophisticated digital technology and many employers offering flexible working hours, increasingly work from home," said Golding.
He also expects the trend of multi-generational living to gain further impetus.
In his view, there is an opportunity for developers in popular hubs and major centres to bring to market new, affordable stock particularly in the price band below R1.5m, and Pam Golding Properties is already noting the beginnings of this trend as developers respond to the growing demand for sectional title properties.
Right approach
Mike Greeff, CEO of Greeff Christies International Real Estate, is positive about the latest MPC decision.
“The prime lending rate sets the tone for the property industry and suggests that the government is satisfied with the current trajectory of the economy and is adopting a ‘wait and see’ approach with regard to global economic factors," said Greeff.
"With the correct attitude towards their finances and responsible credit management, there is no reason why individuals would not qualify for a bond or home finance as banks have eased conditions for granting bonds.”
Adrian Goslett, regional director and CEO of RE/MAX of Southern Africa, said a rate cut at this point would have done well to stimulate the SA economy and help struggling consumers.
He suggested that consumers pay off as much of their short-term debts as possible while interest rates remain stable, especially now that the MPC has announced that interest rates are likely to be raised by 25 basis points in subsequent meetings this year.
“Now is also the ideal time to enter the market and purchase property before interest rates on your home loan increases,” Goslett said.

https://www.fin24.com/Economy/sarb-rate-decision-good-news-for-property-market-expert-20180719

 

It now takes more than four months to sell a property

• South African residential property prices are dropping when adjusted for inflation, a new FNB report shows.
• It now takes on average 16 weeks and four days for a residential property to be sold. 
• The report indicates that there is possibly an oversupply of residential properties in the country. 

Residential property prices in South Africa are dropping when it is corrected for inflation, the FNB Property Barometer for July shows.
The report shows that while year-on-year residential properties grew by 4.1%, real property prices are decreasing. 
“While the growth accelerates mildly in nominal terms, price growth remains negative in ‘real’ terms, when adjusting for consumer price index (CPI) inflation,” John Loos, household and property sector strategist at FNB, said. 
As of June 2018, CPI stood at 4.6%.
Property prices have been experiencing a decline since 2016, and started showing signs of a slow-down in 2014 where it peaked at 2.4% growth, Loos says.
“[This was caused by] a broad growth slow-down [which] commenced on the back of interest rate hiking at the time, along with a broad economic growth stagnation from around 2012,” Loos said. 
According to FNB’s estate agent survey, the average time it takes for a residential property to be sold increased from 14 weeks and a day at the beginning of the year, to 16 weeks and four days in the second quarter. 
This means there could be a slight oversupply of residential properties in the market. 
Loos said the country’s forecast economic growth rates of between 1% and 1.5% will not be sufficient to create housing demand that could “mop-up” the oversupply in the market.
The slow economic growth makes it “increasingly likely” that year-on-year house price growth can be adjusted downward to 3.5% for 2018, compared to 2017’s 4.3%, Loos said. 

https://www.businessinsider.co.za/south-african-real-housing-prices-are-dropping-and-have-been-since-2016-2018-8
 

Situated on the mountains wrapped around Cape Town's city centre, Bo-Kaap is considered prime real estate and has investors and developers spending millions on property in the area.
But Bo-Kaap's community consists of many lifelong residents who have inherited valuable property, yet don't earn high enough incomes to comfortably make ends meet. And because rates are based on property sales, these residents have become more vulnerable, GroundUp reports.
"Investors are not interested in you and your history and your culture. All they want to do is buy the houses, renovate them and sell them for more a year later," says 66-year-old Shamil Jassiem, a lifelong Bo-Kaap resident.
"To them it's all money, but to those people who lived and died here, there is something else other than money attached to the place. That is the dilemma."
"I was born in Lion Street. We were like a family on that street. My aunty stayed next to us. My uncle also stayed there," says Faiza Larney, who is 68.
"I will never leave this place, because everybody knows everybody and it's a safe place to stay. If I fall sick in the road, they will know exactly where I stay and who to contact."
Larney owns her three-bedroom house on Jordaan Street, where she has lived for 36 years. She lives with her daughter, two sons and two grandchildren. Her husband bought the house and, when he passed away ten years ago, she inherited it. She says she wants her children to inherit the house.
But Larney says her rates account is "R6 000 in arrears". She used to work as an office assistant and retired two years ago.
She gets R1 300 from her government pension and R3 000 from her private pension. Her daughter works as a supermarket manager and supports her mother financially as well.
Property rates pay for all services provided by the City of Cape Town, excluding water and sanitation, electricity, and refuse collections. These include services like maintaining road infrastructure, traffic and street lights, and fire services.
As an example of how properties prices have risen in Bo-Kaap, consider Katherine (surname withheld). She bought a house further up on Jordaan Street for "just under R200 000" in 1999.
'I don't want to move to those dangerous places'
She said it was valued at R1.6 million in 2017, a return of over 12% per year, far above inflation. It has been a brilliant investment. She lived in it until 2003, before moving to Johannesburg for work. She kept the cottage and now rents it out to a couple for R9 000 per month. She says the property is 99m2, including the courtyard and front stoep.
Nabeweya Abdullah, 76, lives two streets away, on Lion Street and like Larney, was also born in Bo-Kaap.
She gets a R1 600 monthly pension. But her rates and water bill last month was R1 750.
"It's just getting worse," she says. Abdullah's father bought the house. It is dilapidated because she can't afford to maintain it. She inherited the house after her father passed away in 2010.
Abdullah says she has received many offers for her property from private individuals, but says she won't sell.
"We are a peaceful community and it is safe here. I don't want to move to those dangerous places. I don't know that life," says Abdulla. "I would rather get a job, work my fingers to the bone at my age of 76, and fix this house."
She says her daughter works for the police and lives with her, supporting her financially.
While GroundUp was speaking to Abdullah, another resident Shafiek Booley stopped to say hello.
"We grew up together on this street and we still get along," Abdullah said, pointing to Booley.
Booley, 55, also lives on Lion Street and says he "was born and raised in the Bo-Kaap". He says he bought the house he lives in from his parents 35 years ago for R70 000, and says it is now worth "about R3m", an increase in value of more than 11% per year.
"I was the second youngest, and my older siblings all had houses already, so we agreed that I would buy the house from my family… It has worked out lovely for us."
Booley says his rates are currently R1 300 a month.
"Five years ago, it was about R600. I am just keeping my head above water. As long as I put food on the table for the kids, that's it. But we are struggling."
He is self-employed, making a living from carpentry and welding. He has five children.
"I made a promise to my kids that this house must never be sold because it means selling our heritage, our religion, everything."
Bo-Kaap is one of the oldest Muslim communities in South Africa.
'Each time they tell me something different'
Ward councillor Brandon Golding says: "As the City, we understand that rates and service charges may place an additional financial burden on residents."
He encourages those who qualify to apply for the City's rebates, which provides relief for pensioners and indigent residents earning up to R15 000.
Golding says the city council took public comment into account when it "reduced the rates increase from 7.2% to 6.5%" for the 2018/19 budget. He says this "should provide relief to residents, specifically those in higher property valuation areas, such as Bo-Kaap."
But Larney says that she has had difficulty applying for the rebates.
"I went to the Civic Centre twice to try and pay my rates and to apply for rebates. Each time they tell me something different," she says.
"First they said I need my SARS papers and my ID. Then, when I went back with that, they told me I need a bank statement. The communication is terrible. It is very difficult for someone in my condition to get to and from the Civic Centre."
Abdullah says she is also currently in the process of applying for the rebates.
"Many lifelong residents have no choice but to sell their family homes, as their rates no longer reflect their incomes and historic disadvantages," says Mikail Baker of Bo-Kaap Rise, a social movement campaigning for the neighbourhood to be granted formal heritage protection.
"The City has shown little interest in aiding the blue collar people of Bo-Kaap with reasonable rates. If this does not change, more and more residents will be forced to move."
Golding says that the council will be looking at alternative ways of generating revenue for the City "to decrease the burden on ratepayers." He says this could be achieved, for example, by "ensuring that the City receives a more equitable share of external parking, trading space or property leases".
How the City calculates rates
"Rates are worked out on each rateable property (therefore properties above R200 000) across the metro. Properties below R200 000 are not eligible for rates payments. The first R200 000 of a property is exempted from rates," explains councillor Johan van der Merwe, the City's Mayoral Committee Member for Finance.
"The General Valuation values approximately 870 000 registered properties in Cape Town for the purpose of billing fair rates to each property owner."
Van der Merwe says that valuations are based on "actual property sales that have taken place in the open market over a period of two and a half years in a particular neighbourhood", and that "economic factors, as well as the geographical factors, are considered".
He says rates are not for profit and the City only collects what it requires for it to operate efficiently and sufficiently.
Osman Shaboodien, chairperson of Bo-Kaap Civic and Ratepayers Association, says: "Market value is a false formula that is not in the interest of the poor. Real value and market value are two different things.
"Property sales are spurned by marketing. Bo-Kaap for instance is sold as a quaint, historical place with cobblestone streets and old Dutch houses. Nothing is said about the makeup of the community, the noise, the limited space," says Shaboodien.
Other potential ways of charging rates
Shamil Jassiem suggests that residents be given the option of a 10-year period in which they pay lower rates, provided they don't sell the property in that period.
"If you sell your house within the 10 years, you could then afford to pay the extra balance of rates which has been in suspense," he explains. "After 10 years that liability must fall away, so you don't owe it anymore."
He says that, because rates are based on property sales, this could be a way to take the burden off residents who have no intention of selling their properties.
Baker says "a system of 'legacy rates'" could work. "This would see residents' rates remain in line with what they have historically paid, rather than in line with the rates of their foreign neighbours who have renovated homes into multi-million-rand luxury escapes."
But Van Der Merwe says the City is bound by the Property Rates Act when it comes to charging rates.
"Any special dispensation would have to be made by the minister of finance and this kind of proposal impacts on the revenue raising ability of any municipality, its financial viability and the services that can then be provided."
Igsaan Sirkhotte says he has been living in the Bo-Kaap since 1980. He worked as a financial consultant and is now retired. He says he is able to pay his rates because he is on a private pension.
"It doesn't seem like there are any morals involved in the decision making around housing in the city at the moment… It seems like they are running the city as a business.
"Eventually it's going to come to a point where my private pension is not going to be enough to pay the increase in rates," Sirkhotte says.
Jassiem says he will never leave Bo-Kaap.
"My whole history is here. I have got no interest in moving anywhere else. I want to live here and, when my time comes, I want to die here."
"Luckily for me, I manage to pay my rates, but there are lots of people who can't afford to. They are retired, the pension is very little. If they were to pay the rates, they won't have any food to eat."
He says that for many people who are struggling financially, "the lure of R2m for your house" is a tempting option.
"But you have to sacrifice your history and community in order to get financial comfort. And you may not have a choice."
Mardelia Engels' grandson stands at the door. When asked if she would ever consider selling, Engels replied: "Never. When I die, I want to be carried out of this house to my grave."

https://www.news24.com/SouthAfrica/News/how-bo-kaaps-rising-property-prices-are-threatening-a-community-20180709
 

The Inter-Ministerial Committee on Land Reform on Friday resolved that the approach to land reform must be based on three elements namely, increased security of tenure, land restitution and land redistribution.
“This would be pursued without undermining the productive use of land that is already restituted and redistributed, thereby ensuring that this process does not negatively affect economic growth and agricultural production,” said the Presidency.

The inaugural meeting of the IMC on Land Reform, chaired by Deputy President David Mabuza, was held at the Union Buildings in Pretoria.

President Cyril Ramaphosa established the IMC which comprises of the Ministers of Agriculture, Forestry and Fisheries; Cooperative Governance and Traditional Affairs; Environmental Affairs; Human Settlements; Justice and Correctional Services; Finance; Rural Development and Land Reform; Public Works; Public Enterprises; Water and Sanitation and the Minister in the Presidency for Planning, Monitoring and Evaluation.

The IMC is expected to provide political oversight and oversee the implementation of Cabinet decisions on land reform and anti-poverty interventions.

It will also coordinate, integrate and ensure accelerated implementation of the recommendations of the Joint Committee on Constitutional Review as well as the High Level Panel on Land Reform.

At the meeting on Friday afternoon, the IMC noted that the pace of land reform under the current legislative framework has been slow.

However, substantial progress has been made in ensuring that there is continued productive use of the land, while speeding up the process of redress.

The Deputy President called on the IMC to focus on the development and implementation of a package of post-settlement support measures to enhance productivity of restituted land, including communal land.

This, he said, would ensure that the productive capacity of the country is improved to respond to the challenge of unemployment and poverty.

The Deputy President further called on the Inter-Ministerial Committee to keep it in mind that the planting season is coming.

“In the meantime, we must therefore come with tangible programmes to support production in restituted and communal land,” said Deputy President Mabuza. 

Panel of experts

The IMC will be supported by a panel of experts to be appointed by the President.

The Presidency said the panel will assist in providing a unified perspective on expropriation of land in the wider context of persisting land inequities and unsatisfactory land and agrarian reform as well as urban land development and distribution achievements since 1994.

The panel of experts will also provide a diagnosis on challenges, and assess progress and limitations with laws, policies and their implementation to date, and develop recommendations and/or the identification of options for the way forward.


 

Public hearings

The Presidency said the IMC noted the successful on-going public hearings being held throughout the country that are overwhelmingly in support of this agenda.

It said the IMC encourages all South Africans to engage in national debates around the proposal for the expropriation of land without compensation. “This demonstrates and reinforces the deepening democratic culture of public participation in governance and legislative processes.”

Deputy President Mabuza said: “As part of enhancing the work of the Inter-Ministerial Committee on Land Reform, I will lead the process of engaging community sectors, traditional leaders, farmers and other civil society formations on the implementation of government programmes aimed at acceleration of land reform.”

Deputy President Mabuza will convene the Inter-Ministerial Committee on Land Reform on a monthly basis to ensure speedy processing of this important agenda of transformation, “given the importance of this matter and the growing anxiety in certain sections of our nation and the investor community”.

These meetings will be preceded by technical work of the Committee of Directors-General of relevant government departments to evaluate progress achieved in this important area of work.

http://www.bizcommunity.com/Article/196/637/180298.html
 

Johannesburg - The City of Johannesburg will revise its new property valuation process following a public outcry over the system unveiled last month, Mayor Herman Mashaba said on Wednesday.
In February the city published a new property valuation list, which was criticised by residents for overvaluing properties, with some facing drastic increases of over 100%. 
The increased valuations would have hiked the commercial value of properties and led to considerable increases in rates and taxes for property owners across SA's richest city.
According to the mayor’s office, a total of 8 000 new valuations have been identified as “potentially” overvalued. Owners will from next week be sent letters informing them about the changes.
“These 8 000 valuations, which have been identified as problematic, have experienced considerable increases, many over 100%, which have been profiled in the public since last week,” said Mashaba in a statement.
Over 4 000 property owners had lodged objections to the new valuations ahead of the April 6 deadline.
The valuation of properties is a legislated process that takes place every four years, and is used by the municipality to determine property rates.
“Following a public outcry over the valuation process, Mayor Mashaba was advised by the Independent Municipal Valuer to consider the valuation of some properties that may appear to have been over-valued,” City spokesperson Luyanda Mfeka told Fin24.
He insisted the property valuations were conducted by the Independent Municipal Valuer.
Residents associations across had criticised the increases as an attempt by the city to ramp up revenue collection, saying the hikes could potentially force landlords out of their properties and cause rentals for business and residential premises to rise sharply. 
The Parkhurst Village Residents and Business Owners Association had described the hikes as either “wrong to too high”. 
“Some residents whose valuations were too low, are now about right. Others, who were correctly valued or live in areas where the market is stagnant, will have received a valuation that is too high,” the association said.
The shambolic property valuation saga comes after the city was embroiled in a billing crisis which saw some residents receiving inflated invoices for services between 2015 and 2017.
The DA administration had blamed the billing crisis on the system inherited from the previous ANC-led council.
https://www.fin24.com/Economy/South-Africa/city-of-joburg-to-revise-8-000-property-valuations-20180308

 

• Remax Cape Town says Cape Town flats are remaining vacant, while rental rates are decreasing for the first time in seven years.
• Remax's Grant Rea believes the completion of several new developments has led to an oversupplied rental market in the city. 
• Cape Town property prices may also be set for a deterioration. 

For the first time in seven years, realtors have started to notice a shift to an oversupplied rental market in Cape Town, says Grant Rea, residential sales and letting specialist at Remax Cape Town.
“As a whole, we noticed a significant shift occur from around October 2017 that saw landlords facing vacancies for the first time in years,” Rea says.  
“Previously, the demand was always significant enough to ensure each property found a great tenant.” 
He says average gross yields for realtors have decreased from around 6% to between 4.5 and 5.5%.  
Rea believes the completion of several new developments within the Cape Town City Bowl led to an oversupplied rental market. 
“This problem will persist for the next two years or so as new developments are coming online now, with as many as 35 approved developments and blocks nearing completion.”

Cape Town property market feeling the strain 

John Loos, household and property sector strategist at FNB Home Finance, says Cape Town’s property market has shown signs of deterioration after outperforming the rest of South Africa for ten years.
“[Cape Town property prices] have slowed down especially at the very high-income level, with the slowest price growth on the Atlantic Seaboard Seaboard, while the City Bowl is slowing steadily too,” Loos told Business Insider South Africa. 

“Comparatively ‘affordable’ suburbs on the Cape Flats have seen major property price growth, while more affordable suburban areas to the North also hold up better, indicating a search for relatively affordable properties.” 

FNB’s latest property barometer, released in May, showed that Atlantic Seaboard property prices saw annual growth of 2.5% in the first quarter of 2018, compared to 27.5% in 2016. 

Prices in the City Bowl rose by 10% - down from a high of 23.6% in 2016. 

Loos believes that the next set of Cape Town’s property price data will reflect that the city’s property price growth has deteriorated or even depreciated.  

He blames a slowing in-migration from other parts of the country into the Western Cape - due in part to exorbitant property prices - for the market’s lacklustre performance. The drought, he believes, had a lesser impact on property prices aside from negatively impacting the Western Cape economy. 

“A correction was expected to happen. The Atlantic Seaboard and City Bowl showed a combined growth of over 111% the past five years, which is simply exceptional,” he says. 

https://www.businessinsider.co.za/cape-town-flats-are-staying-open-and-getting-cheaper-for-the-first-time-in-years-2018-6


 

Cape Town - The average building cost of new housing constructed in 2016 increased by 6.9% to an average of R6 614 per square metre compared with R6 185 per square metre in 2015, according to Jacques du Toit, property analyst at Absa Home Loans.

Average growth in building costs has been about 9% per annum in the past ten years compared with an average headline consumer price inflation rate of 6.3% per annum over the same period.

The average building cost and the year-on-year percentage change per square metre for houses smaller than 80m² was R4 436 (up by 14.7% from R3 869 in 2015); that of houses of 80m² or bigger was R6 683 (up by 4.7% from R6 383 in 2015); and that of flats and townhouses was R7 659 (up by 6.2% from R7 213 in 2015).

Residential building activity is expected to remain largely subdued in 2017, according to Du Toit.

He said this is against the background of the continued relatively low level of consumer and building confidence, as well as recent trends and the outlook for the economy and household finances.

"Levels of building activity in the SA market for new housing remained largely subdued in 2016, which were in line with trends since 2009 when the economy experienced recessionary conditions," said Du Toit.

"The planning phase of new housing, as reflected by the number of building plans approved by local government institutions, showed some contraction last year compared with 2015. The construction phase of new housing - that is the volume of housing units reported as completed - recorded growth of much in line with that of 2015."

The number of new housing units which gained building plan approval was down by 6.4%, or 3 836 units, to 56 143 units in the 12 months up to December last year compared with a year ago. This came to only 54.7% of a total of 102 691 plans approved ten years ago in 2007.

According to Du Toit, the drop in building plans approved in 2016 was largely the result of a combined decline of 16.5%, or 6 550 units, to a total of 33 214 units in the two segments of new houses. However, the number of plans approved for new flats and townhouses increased by 13.4%, or 2 714 units, in the 12-month period.

The volume of new housing units built increased by 4.6%, or 1 820 units, to 41 489 units in 2016 from 39 666 units constructed in 2015. This improvement in the construction phase was mainly the result of growth of around 19%, or 2 198 more units built in the segment for flats and townhouses to a total of 13 691 units last year. The two segments of houses showed a combined decline of only 1.3%, or 375 units, to 27 798 units in 2016.

The real value of plans approved for new residential buildings increased by R289.8m, or 0.6%, to R50.72bn in 2016, with the real value of new residential buildings reported as completed increasing by R629.5m, or 2%, to R32.79bn last year. These real values are calculated at constant 2015 prices.

https://www.fin24.com/Economy/average-cost-to-build-a-new-house-up-almost-7-20170217
 

• A shelf company with a single director is paying R150 million to buy a Cape Town city block that was valued at half that by its listed owners.
• The low-rise light-industrial building currently houses a Supa Quick fitment centre and a debt-management company.
• But it could shoot up to 20 storeys, with amazing – and expensive – views towards Signal Hill.

It has sold the city-block covering 142 Bree Street building in the Cape Town CBD for R150 million, the listed Spear Properties told investors on Tuesday – at what it described as "a substantial premium".
That is something of an understatement.
Until the sale, Spear had valued the single building on the property at R74 million. It currently houses a Supa Quick car fitment centre and a kitchen cupboard company, although the bulk of it is used by a debt management company.
All the tenants are due to leave the building by June, giving its new owner a vacant building – which it will almost certainly knock down as soon as decency allows.
"We were not, call it 'willing sellers' but at the price they offered we obviously had to explore it," Spear managing director Quintin Rossi told Business Insider South Africa.
Spear now plans to go shopping with the R150 million, happy with the return it achieved, while it waits to see what the new owners do with its erstwhile light-industrial building.
And that is still something of a mystery, as is the buyer itself.
The buyer is Arctigen, a shelf company registered in 2016 with no track record.
Arctigen has a single director, Russell Smith, and there is no indication where the company will get R150 million from. But Smith's history is highly suggestive. He was the chief financial officer of the mega Melrose Arch development in Johannesburg, and is currently involved in several property development companies planning glitzy, high-end buildings in Cape Town.
Smith did not respond to questions.
Spear does not know what Arctigen plans, Rossi says, but it is "more than likely some kind of redevelopment".
"They were quite adamant they wanted to acquire a high-profile CBD asset," he says.
At the approved floor size for the site, Rossi estimates that any new building could be at least 20 storeys high.
"The views would be spectacular," he says.

The average building cost of new housing completed increased by 5.5% year-on-year in the first four months of 2018, says ABSA property analyst Jacques du Toit.

The cost increased to R7 437/m², says Du Toit.

Building activity in the planning phase – that is, the number of building plans approved by local government institutions – also dropped on a year-on-year basis.

The number of building plans approved for new housing increased by 18.8% year-on-year to 19 423 plans for the period January to April 2018. The number of new housing units reported as completed, however, dropped by 22.7% year-on-year to 10 440 units for the first four months of the year.

Alterations and additions to existing houses remained under pressure, said Du Toit, with both the building area approved and the building area reported as completed contracting marginally year-on-year between January and April.

"In view of economic trends and expectations, levels of residential building activity are forecast to remain largely in line with those of the past few years," said Du Toit.

Lag

A lag between the number of building plans passed in April and the number of completions in the same month indicates that building activity could accelerate in the coming quarters, according to Lara Hodes of Investec.

However, Hodes added that advance indications provided by the FNB Building Confidence Index (BER) for the second quarter of 2018 point to a dip in confidence along the value chain.

Hodes also said that, while all the sub-sectors of the 'building plans passed' category experienced growth, the non-residential component was the best performer.

"Although [for] the second quarter of 2018, building confidence outcome is less than favourable, we are expecting economic growth to pick up for the remainder of 2018, which should propel an uptick in sentiment levels, driving fixed investment and therefore building activity," said Hodes.

https://www.fin24.com/Economy/55-pricier-to-build-a-house-than-a-year-ago-analyst-20180623

Property Law – Types of Title
Conventional land
Nature
Land (above and below the earth)
“cuius est solum eius est usque ad coelum” and “cuius est solum eius esse debet usque ad coelum”
– owner of land can (in principle) exercise ownership in air above and in ground below their property
Permanent improvements / attachments
“superficies solo cedit (omne quod inaedificatur solo cedit)”
– the owner of a parcel of land (principal) is also owner of everything permanently attached (accessory) to the land by accession (“accessio”)
Accessory objects permanently attached

Ownership
Conventional Title
- registered title to surveyed pieces of land
- Sectional Title (Fragmented property holding)
Sectional Titles Act 66 of 1971
- In operation from 1973
- Introduced horizontal strata (deviation from Common Law principles)
- Defines “land” as a sectional title unit “Section”; “Common Property”; “Body Corporate”; Exclusive Use Area”
Sectional Titles Act 95 of 1986 (in operation today)
 
Property Law – Land Tenure
Freehold / Full ownership
“Plena in re potestas”
– owner’s unlimited and unrestricted entitlements of use and control over their property
Most complete / absolute right that a person can have in respect of a piece of land
Restricted only in so far as the rights of the owner over the land are subject to limitations created by Common Law principles, statutory provisions and other Limited Real Rights
Quitrent / Erfpag
- Land granted to individuals by the state
Leasehold / Huurpag
-  Unlimited period or specified period

Property Law – Real Rights
Allocation, use and transfer of land
“Legal relationships between persons with respect to land” O
wnership – Case law: Gien v Gien 1979 (T)
Definition
-  The most complete real right a person can have with regard to a thing
Nature
-  Complete and absolute control over a thing, subject to limitations
Section 25 (1) Constitution of the Republic of South Africa 108 of 1996
-  Right to property
-  Limitations / Restrictions must be reasonable, justifiable, not permit arbitrary deprivation of property and property rights

Property Law – Limited Real Rights
Possession
-  Independent right in land
-  Lawful or unlawful?
Leases
-  Use and enjoyment of another’s land for a specified period
-  Lease Agreements 
- Rental Housing Act 50 of 1999  
Servitudes (“servitus”)
-  Limited Real Right burdening another’s property by restricting use and enjoyment of such owner in favour of another
Praedial Servitude
-  Dominant vs Servient land
-  Servitude of way
-  Servitude of water
Personal Servitude
-  Usufruct
-  Right of use (“usus”)
-  Right of habitation (“habitatio”)
Real Security Rights
-  Holder of limited real right in property of another to secure payment of a debt by the owner of land
-  Mortgage bond

Property Law – Ownership
Assumptions
-  Possession (“possessio”)
- Factual control (“corpus”) and will to possess (“animus possidendi”)
-  Use
-  Transfer
- Protection
Theoretical rights
- Occupation and Possession
- Use and Enjoyment
- Taking Fruits
-  Encumbrance and Alienation
-  Consumption and Destruction

Property Law – Limitations on Ownership
Other Real Rights
-  Conditions
-  Statute
-  Agreement
-  Succession (Last Will and Testament)
Personal Rights
Statutes
Neighbour Law
-  Nuisance
- “Sic utere tuo ut alienum non laedas”
– Land must be used in such a way that another person is not prejudiced or burdened
- Reciprocal obligations of reasonable use and reasonable tolerance
- Reasonable man – Prinsloo v Shaw 1938 (A)
– “normal man of sound and liberal tastes and habits”
Reasonableness – Rand Waterraad v Bothma 1997 (O)
-  Repetitive or continuous
-  Unusual activity
-  Considered nuisance to “normal person”
- Location, zoning, habits, effect on health
Encroachments
-  Types
-  Overhanging or protruding roofs and balconies and physically intruding/ encroaching buildings
-  Overhanging and encroaching trees
-  Encroachment on rights
Remedies
-  Removal of encroachment
-  Compensation to owner
-  Transfer to encroacher and compensation to owner
-  Termination of occupation by encroacher and compensation and compensation by owner to encroacher
Lateral Support
-  Owner of land entitled to have natural condition, position and typography of land preserved
-  Sectional Title – lateral and subjacent support
Natural flow of water
-  Allow water to flow naturally from one piece of land to another according to undisturbed topography of land ie: owner of lower land must allow water to drain or flow from neighbouring higher land
-  Avoidance of danger
Special Sectional Title restrictions
-  Sectional Titles Act 95 of 1986 and Regulations

Property Law – Removal of Restrictions
Immovable Property (Removal or Modification of Restrictions) Act 94 of 1965
-  Inheritance of property subject to restrictive condition
Removal of Restrictions Act 84 of 1967
-  Subdivision of land
-  Land use restrictions
-  Building restrictions
- National Building Regulations and Building Standards Act 103 of 1977

Property Law – Protection
Real remedies
-  High Court
-  Urgency
-  Prohibitory / Mandatory Interdict
-  Declaratory Order
-  Spoliation Order
Ejectment
-  Unlawful possession
-  The Prevention of Illegal Eviction from an Unlawful Occupation of Land Act 19 of 1998
Delictual remedies
-  Recovery of damages suffered
Enrichment remedies
-  Compensation for unjustified enrichment

Property Law – Certainty
Rights vesting in a person other than the registered owner
-  Prescription
-  Prescription Act 68 of 1969
-  Requirements
-  Possession of someone else’s property
-  Exercise of servitude
-  Continuously for more than 30 years Without force (“nec vi”) 
- Openly (“nec clam”)
-  Without owner’s consent (“nec precario”)
Expropriation
-  Expropriation Act 63 of 1975
-  Ownership of land vests in public interest in expropriator
-  Previous owner’s ownership terminated by consent
-  Payment of compensation
-  Statutory vesting
-  Marriage in community of property
-  Insolvency
-  Insolvency Act 24 of 1936
- Death
-  Abandonment

Property Law – Shared Ownership
Co-ownership (“communio”)
-  “Communio est mater rixarum”
– co-ownership is the mother of all disputes Rights to partition
-  No co-owner is obliged to remain a co-owner against their will
-  Agreement / Arbitrator / “actio communi dividundo”
Statement of co-owned shares
Common Law rules
-  Reasonable use of land
-  No interference or prevention of use of land by another
-  Third parties
-  Share of profits
-  Joint exercise of maintenance and proportional contribution to other costs
-  Undivided share
Marriage in community of property
-  Spousal consent “Marital power of husband” - abolished
-  Automatic vesting and dissolution
-  Property excluded from community
Partnership
-  Deeds
- Registry 
- Joint ventures
Time-sharing
-  Property Time-sharing Control Act 75 of 1983
-  Facilities, floating and pooling
-  Legal basis
-  Operation

Property Law – Indirect and Linked Ownership
Companies
-  Companies Act of 71 of 2008 
- Non-profit “NPC”
Profit
-  Public “Ltd”
-  Private “(Pty) Ltd”
-  Personal liability “Inc.”
-  Partnership
-  Trust
-  Sole Proprietorship 
- External / Foreign Cooperatives
-  State-owned “SOC Ltd”
Close Corporations
-  Close Corporations Act 69 of 1984
Trusts
-  Master of the High Court
Share block Companies
-  Share Block Control Act 59 of 1980
-  Shareholders
-  Personal Rights
Unincorporated Associations
Cluster and Homeowners’ Associations
-  Registered in terms of the Companies Act
-  Established in terms of the Land Use Planning Ordinance 15 of 1985 (Western Province)
Communal Property Associations
-  Communal Property Associations Act 28 of 1996
Time-sharing use rights
-  Property Time-sharing Control Act 75 of 1983

https://www.paddocks.co.za/wp-content/uploads/2015/05/Paddocks_EAAB_CPD_Property_Law_Presentation.pdf