BD Business Law & Tax (February 2023) by SundayTimesZA

LAW&TAX

Kenya sets tone for privacy

• Office breaks ground with ruling on personal data disclosure

Dennis Gathara ENSafrica

In January2023, the Office of the Data Protection Commissioner (DPC) delivered one of its first rulings under the Data ProtectionAct, 2019 since thecommencement of its operations.

Thecomplaint pittedthe partners of afirm, Allen WaiyakiGichuhi andCharles Wamae (theclaimants), against twoformer employees, Florence Mathenge and Ambrose Waigwa (the respondents), foralleged breach ofclients’ confidential information, includingpersonal data.

The claimants alleged that foralmost oneyear,while Mathenge was still working for the claimants, she leaked personal and sensitive personal datawithout authorisation fromher employersto Waigwa, whoat thetime was no longeran employeeat the firm.

Theclaimants provideda detailed list of the documents that had beenleaked by Mathenge, including the dates, the email addresses wherethe documentswere sentto andthenames ofthe documents. The claimants alleged thatthis disclosure

was contraryto theprovisions ofthe actbecause the documents werethe firm’s intellectualpropertyandcontainedtradesecretsthatcould not be disclosedwithout their authorisation.

The respondents,on their part, challenged the DPC’s jurisdictiontohearanddetermine the matter on the basis that thecomplaint relatedto the claimants’ intellectual property rights andnot personaldata. Theyalsoalleged that allthe documentsin question werepublic documentsand,as such,couldnot becovered bytheprovisions of the act.

The respondents also challengedthe jurisdictionof theDPCongroundsthatsimilarsuitswerependingbefore thehighcourt,theDirectorate of Criminal Investigations (DCI) and theLaw Society of Kenya(LSK)thusviolatingthe principle of resjudicata. The respondents alsostated that the complainants’ firm had notbeenregistered asadata controller or processorat the time they responded to the complaint. They alleged that, on thisbasis, thelaw could notbe appliedretrospectively.Theyurged theDPCto dismiss the complaint.

THIS RULING HAS MADE IT APPARENT THAT WHERE A REPRESENTATIVE IS APPOINTED, PROOF MUST BE PROVIDED TO THE DPC

The DPC,having consideredthe complaintandthe

response,cameupwiththree issues for determination:

● Jurisdiction;

● Whether therewas breach of the act; and

● Whether remedies were applicable under the act.

On thequestion ofjurisdiction, the DPC found that it had jurisdictionto hearand determine thecomplaint

since thematter inquestion involved the disclosure of personaldata andsensitive personal data. Itwent on to state thatquestions ofintellectual propertywere not withinthe itsjurisdiction since itsmandate only extended to personaldata as defined in the act. The DPC wasalso notpersuadedby

the respondents’ argument that thelack ofregistration as data controllersor dataprocessors precludedthe claimantsfrom lodginga complaint with the DPC.

Accordingto theDPC, registration and filing of complaints weremutually exclusive and theabsence of registration did not bar any-

THIS DECISION, BEING ONE OF THE FIRST DELIVERED BY THE DPC, WILL FORM THE FOUNDATION OF DATA PROTECTION JURISPRUDENCE

one from filing a complaint with the DPC.The DPC also distinguished the proceedingsbeforeitandthosebefore the high court, the DCI and the LSK,holding thateach of these proceedingscovered differentissuesunderKenyan law. There wastherefore no conflict between the issues in the complaintand those before the other bodies.

On whether the respondents breached the provisionsof theact, theDPC noted thatwhile anextensive list of documents was provided inthe complaint,most of the alleged documents

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BUSINESS

FEBRUARY 2023 WWW.BUSINESSLIVE.CO.ZA A REVIEW OF DEVELOPMENTS IN CORPORATE AND TAX LAW

KEEP IT TO YOURSELF

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Kenya sets tone for privacy

CONTINUED FROM PAGE 1

werenot providedfor inspection to assist in the investigation anddetermination ofthe complaint.In some cases, it was further noted that even if the documents hadbeenprovided,theywere part of documents that were readily availableon various public resources and there wastherefore nobreachof the act.

Inothercases,thepersons affectedbythediscloseddocuments werecorporate persons who arenot covered by the act sincethe definition of personal dataonly covers natural persons.

Ininstanceswherenatural persons were affected, the DPC found that they were third parties to the proceedings and theclaimant had not demonstrated that they had authorisationto actonbehalf of those third parties. For the above reasons,the DPC found that thecomplaint was without merit and consequently dismissed it.

This decision,being oneof the first delivered by the DPC, will form thefoundation of data protectionjurisprudence in Kenya.

Itwill actasa guideon howtoframeandsuccessfully litigate future complaints.

ESG in mining is a force that can’t be ignored

Susie Davies, Jo Hewitt & Isabel Carty Baker McKenzie London

Investorsin miningprojects(whether debtor equity) are increasingly focused on environmental,social &governance (ESG) factorswhen making investment decisions.

Thisis unsurprisinggiven that, according to a review undertaken byPwC Mine 2021: Greatexpectations, seizing tomorrow those miners withbetter ESG ratings havedelivered, on average, 10%higher shareholder returns than the wider market in recent years.

This meansthat to access meaningful capital,mining companies willincreasingly needto demonstratearobust commitment toaddressing and managing ESG risks and concerns, aswell asa strong track record of compliance.

The GlobalSustainable Investment Alliancestates in its most recent report Global Sustainable Investment Review2020 (July 2021) that atthe time of publication sustainable investment assetscomprised 35.9% of totalassets under management. Thistrend is expected tocontinue upwards, withmany investment managersmoving from ESG integration screening strategies (requiringa review of ESG factors aspart of their overall investment analysis) towards negativescreening strategies (whereby companiesthat donot upholdspecificESG principleswouldbe prima facieexcluded froma manager’s portfolio).

Itis apparentthatmaking an allegation is not enough. Rather, itmust beaccompaniedby evidencedemonstratingtheactualbreach.The DPC hasalso emphasised that the act only applies to natural personsmeaning legal persons are excluded.

While the act authorises datasubjects toexercisetheir rightsdirectly orthroughan appointed representative,this rulinghas madeitapparent that where a representative is appointed, proof must be provided to the DPC.

Finally, theprinciples of publicrecordshavebeendiscussed atgreat lengthin this ruling and future litigants will needtoensure thatthepersonaldata inquestion isnot part of the public record.

● Reviewed by Mahesh Acharya, an executive at the ENSafrica Kenya office.

particular ESGprinciples that acompany mustuphold to receive funding.This places scrutiny onminers’ operational managementplans and howthese willassista companyin meetingitskey performance indicators (and, indeed, theESG requirements set out by lenders).

Similarly, the International Financial Corporation’s Environmental andSocial Performance Standards definestandards thatapplyto investment andadvisory clients goingthrough IFS’s initial creditreview process, and AXA IM have proposed transition bondswhich provide anopportunity to finance brown companies with an ambitionto transition togreenin thefuturein industries suchas materials, extractives, chemicals and transport.

Incertain markets(such

FAILING TO ADDRESS ESG CONCERNS AT THE OUTSET OF A PROJECT CAN LEAD TO ISSUES FURTHER DOWN THE LINE

CARRYING THE LOAD

Anumber ofinstitutional investors havenow publicly committed totaking ESG factors intoaccount when making investmentdecisions, suchas HermesEOS and BMO. TheDutch pension fund ABPhas statedthat “responsible investmentis central toour investment philosophy” and similarly BlackRock hasstated that “we haveintegrated ESG considerations acrossour investment research,portfolio constructionand stewardship processes”

Taking thisone stepfurther, certaininvestment funds (for example,the Norwegian OilFund) have announced thatthey will actively exclude investment prospectsthat arethesubject of ESG noncompliance.

Alongside the increased equity investorfocus onESG, lenders arealso prescribing

as London), as well as technical, financial andlegal due diligence, the influence of ESG rating agencies has resultedin ESGbecominga majorfocus inrelationto larger mining initial public offerings Investor roadshows are fastbecoming aplatformat which investorscan andwill pose ESG-relatedquestions, including how a company’s initiatives align with relevant ESG codes and standards.

This means companies that have adopted a more transparent andadvanced ESG disclosure framework may bein abetter positionto attract investors seeking sustainable opportunities.

While certain ESG-related information will be available from public sources with respect to thelarger mining groups thatare subjectto relevant reportingobligations, there arealso indices and ratings agencies (such asFTSE4Good,DJSI,Sustainalytics, MSCI)that rankcompanies according to their actual or perceived ESG strengths.

Larger investorsmay well also retain in-house ESG specialists responsiblefor assessing these issues.

ACTIVISM

In additionto informinghow investors deploy their capital inthe firstplace, ESGfactors have become afeature of shareholder activism, whereby existing investors use their shareholding to seek to influence the relevant company’s ESGperformance. Inthe oiland gas industry, groups such as Follow This have been making themselves known at AGMs, often diverting attentionfrom otherkeystrategic messageswhichboardswish to communicate.

We anticipatethat the mining industry will soon followasa target.Forexample, theshareholders ofBHP Group submitted resolutions in 2022 regarding climate sensitivity analysis in financial statements, and advocated forBHP todeliver a consistent climate policy.

Other bodies,including the World Gold Council, are lobbying for insurers to become more involvedin the ESG movement, in particular by requiring mining companies to uphold ESG principles tobe eligibleforinsurance policies.

RECOMMENDATIONS

The mining sector continues to attract investment, including from those investors focused on ESGand, in particular, sustainability,not leastbecauseofitskeyrolein facilitating the accelerating energy transition (something which has not always been well understood by the wider investment community). In

our experience,preparing (and,in somecases,publishing)a clear,robustand deliverable ESG strategy will help toassuage investorconcerns regarding the mining industryandtopromotecontinued investment.

Such astrategy should carefully consider both the mandatory andvoluntary ESG frameworks and standards (and theextent to which those voluntary codes shouldapply toaparticular company’s operations),as wellas yourcompany’s specific corporate values and overall strategic priorities. It isclearly importanttooutline howthat strategywillbe implemented and to demonstrate, monitor and record compliance in practice.

It isalso possiblefor miners to obtain independent certification of their ESG performance from bodies such as the International Council for Mining and Metals or theInitiativefor Responsible MiningAssurance, which evaluate performance againstindustry accepted ESG (for example the InternationalFinancial Corporation). The independentnature oftheassessment (depending on the

INVESTOR

outcome) can provide welcome assurance for potential investors looking for sustainable investment targets.

Failing toaddress ESG concernsat theoutset ofa project can leadto issues further downthe line.We recommend thatcompanies actively engagewith investors to proactively identify ESG concerns from the startand explainhowthey proposeto mitigateoreliminate thoseESG risks.Having anopenandconstructivedialogue not onlyshows a company’s commitment to the ESG agenda but potentially dampens the ire of activist shareholders in theface of any future challenge.

LOOKING AHEAD

Fromaboardperspective,the “G” aspectof ESGis growing in prominence. Litigation risks arising from potential parent companyresponsibility for subsidiary actions (or inactions) in the ESG sphere are increasing. In addition, the volume and remitofrequiredESGreportingis growingin manykey jurisdictions, generating greater complianceobligations and openinga window for activiststo seekto hold companies to account for upholding the ESG claims they make.

Weanticipate thatitwill notbe longbeforemost investors expresslyinclude corporate governance, and verification ofclaims madein ESG reportingexercises, within theirinvestment assessment processes.

2 BusinessDay www.businessday.co.za February2023 BUSINESS LAW & TAX

THE DPC HAS ALSO EMPHASISED THAT THE ACT ONLY APPLIES TO NATURAL PERSONS MEANING LEGAL PERSONS ARE EXCLUDED

• Companies risk becoming pariahs unless they show a robust commitment to principles

ROADSHOWS ARE FAST BECOMING A PLATFORM AT WHICH INVESTORS CAN AND WILL POSE ESGRELATED QUESTIONS

/123RF SUNSHINESEEDS

African free trade and the mining sector

Virusha Subban Baker McKenzie

Africa isthe world’s top producer of numerous critical mineral commodities.

Withthe rapidincreasein the rateof theglobal energy transition, the continent’s miningindustry hasa roleto play in sourcing and supplying these criticalminerals for usein cleanenergyprojects, manufacturing capacity, electric vehiclesand other sustainable solutions.

The continentis alarge supplier ofbauxite, chromium, cobalt,copper, gold, iron ore,platinum group metals, lithium,rare earth metals and zinc,with most of them being exportedas ores, concentrates or metals.

Exporting thesecritical minerals asraw materials, however, reduces Africa’s trading position toone of price takerand subjectsthe continent’s miningsector to changes inglobal commodity markets. Addingto these challenges, thecurrent disruptions inglobal supply chains arehampering the tradeofthesecommoditiesin Africa, withmining companies now subjectto long delays and higher costs.

Thishigh levelofglobal and economicuncertainty

has the addedeffect of holding back investmentin new mining projects,placing more obstacles inthe way of a continentthat desperately needs to be able to capitalise on its mineral resource base.

Enterthe AfricanContinental FreeTrade Area (AfCFTA), whichis intended toact asastrong impetusfor governments toaddress their infrastructure gaps,boost their manufacturingcapacity, streamline their supply chains andoverhaul regulations relating to trade, crossborder initiatives, investment-friendly policies and capital flows.

For example, Tanzania’s construction of the Standard Gauge RailwayProject is expected toprovide asafe and reliablemeans forefficiently transportingpeople and cargo toand from the existing Dar es Salaam port.

Otherlargeprojectsunder way include the TransMaghreb Highway in North Africa, theNorth-South Multimodal Corridor, the Central Corridor project and the Abidjan-Lagos Corridor Highway project.

According tothe World EconomicForum’s(WEF)latest report, “AfCFTA: A New Era for GlobalBusiness and Investment in Africa”, investment in transportand logistics will be crucial to enable the tradeof goodsin Africa, including in the mining sector. Thereport notesthat AfCFTA is expected to increase trade demand by 28%, whichwill leadto a requirement for “2-million trucks, 100,000 rail wagons, 250 aircraft andmore than 100 vessels by 2030”

riers and facilitate investment from international firms”

The report goeson to say that “public-private collaboration can help remove obstaclesin thesupplychain, improve cross-border payments and access to trade finance, reduce the costs and delays of moving goods across borders, help to mainstream environmental sustainability, and tackle barriers to investment entry and expansion”

The intendedadvantages ofthesenewtoolsarealigned with the goals of the Africa Mining Vision (AMV), which was adopted by AU heads of state in 2009.

exchanges,and legaland regulatory support.

For theAMV tobe successful,Africa’scountriesand itsregional bodiesmust implement integrated resource-based development and industrialisation policies that take into account operationsthat benefitlocal workers and communities, and that produceresults that arenetpositivefortheregion. Also essentialis theability of African nations tobe able to successfully negotiate with globalmining companiesand stipulatethe importanceof local inputs.

that limitedproduction capabilitieswithin Africaare currently being compensated forthrough foreignimports. Thismanufacturing deficitis intended to be eventually satisfiedwithin thecontinent and enabled by AfCFTA.

The tradein mineralcommodities in Africais expected tobenefitfromthesereforms, but the extensive infrastructure development that is neededtofacilitatethemovementofgoodsacrossborders will clearly take time.

Projects arealready in progress to boost continentwide infrastructureneeds.

To assistwith muchneeded investment in the sector, the WEF notes in its report that it is working with the AfCFTA secretariat on trade and investment tools that align with the AfCFTA negotiation process. The tools are intendedto identifyareas “wherepublic-privatecollaboration can helpreduce bar-

Oneof theaims ofthe AMV is the “transparent, equitable and optimal exploitation ofmineral resources to underpin broadbasedsustainablegrowthand socioeconomic development”.Also listedasintended goalsoftheAMVaretheneed to facilitate and nurture human resources and skills, provide supporting infrastructure, encourageinstruments of collaboration, promote local beneficiation and value addition of minerals, establish an industrial base, ensure cross-border compliance with corporate governance and ESG, and establish enabling markets and platformsfor servicessuchas capital raising, commodity

Regionally, mining legislation must beintegrated with the continent’s industrialand trade policies. One of the intendedresultsofthesepolicies isthat Africancountries will beable tolaunch more lucrative value addition industries that are involved in thefinalproductmanufacturing of raw minerals.

Recent BakerMcKenzie research,compiled inconjunction with thereport from Oxford Economicstitled AfCFTA:A $3-trillionOpportunity,revealed thatmore than75%ofAfricanexportsto the restof theworld are heavilyfocused onnatural resources, primarilyraw materials.According tothis report, manufacturing represents on average only 10% of GDP in Africa. This means

AfCFTA is providing the opportunityforAfricancountriesto diversifytheir economies,scale upproductioncapacity, improvetheir trade in services and widen therange offinalproducts made inAfrica. Closerintegration ofneighbouring economies is also a potential avenue for creating scale and competitiveness through domestic market enlargement, thereby promoting development throughgreater efficiency. This relates to both intraregionaltrade andtrade with non-African nations. Taking a longer view, regional trade co-operation couldpotentially becomea successfulbridge forconnectingtheregion’swealthier andpoorer nations,promoting the growth of value chains and laying the foundationsfor more international exportsof thecontinent’s resourcesand itsmanufacturedproducts. Accordingto the goals of the AfCFTA and the AMV,the keybeneficiariesof improvedmanufacturing andtrade acrossthe continent areintendedto be Africa and its citizens.

Real pain of greylisting will be from global community

Gabriel Rybko & Ashlin Perumall Baker McKenzie

Dueto SA’s imminent greylisting, it’s importantto determinethe effects the country might face.

Greylisting does not impose many requirements onthe greylistedcountry. Instead,the realteeth come from the publicationof the greylistto theinternational community.The politicaland economicrisks ofdoing businesswith agreylisted country are high formany countries. The sameis true forprivate financialinstitutions,which incursignificant

regulatory and reputational costs due tomoney laundering and terrorist financing.

The IMF published a working paper The Impact of Grey-ListingOn Capital Flows in 2021 which used machine learning models Although theeffect of greylisting wasfound to vary acrossthe different forms of capital flow and from state to state, the IMF paper concludedthat the averageeffectisalossof7.6% ofcapitalflow intothecountry relative to its GDP. Thus,it ispossibleSA could experiencea similar decrease inthe flowof money into the country.

There is alsoa domestic cost involvedwith being greylisted, asthe urgencyof complying withthe Financial Action TaskForce (FATF) standards incursa nonnegligibleadministrativeburden.It cantakeanywhere fromtwo tofiveyears fora countryto getoff thegreylist, and theincreased scrutiny from the FATF and the international community could prove onerousfor SAover this period.

It’sdifficulttopredictwhat the effect of greylisting would be, but it wouldcertainly be a reason to not invest in SA.

Two countrieshave recently beenremoved from

the greylist, and they might provide uswith somekey lessons. Mauritiussuffered a lossof capitalinflowbut through persistentefforts by the stateand co-operation withtheFATF itescapedthe greylist earlier this year.

Similarly, Pakistan was givena27-point planbythe FATF to ameliorate its technical deficiencies in 2018, and it was removedfrom the greylist last month.

The NationalTreasury has faced thethreat ofgreylisting byurgingonabevyoflegislative changesthrough the General Laws (Anti-Money Laundering andCombating Terrorism Financing)

Amendment Bill.The Treasury is attempting to rush the bill into operationbefore the FATF presentsits follow-up report,but thismay notbe enough to deter greylisting.

The discussionaround the impending FATFinvestigation hasprimarily been around legislativereform, whichmissesthemarkofthe task force’sfindings. The FATFconcluded SAhasa “solid legalframework for combating money laundering” but needs to implement this systemmore effectively, through greaterpolicing by financial authorities, and international co-operation with other FATF-style

regional bodies.The report specifically referredto the erosion offinancial criminal prosecution and corruption, which hasplagued the implementation ofSA’s antimoney-laundering and combating offinancial terrorism (AML/CFT) laws. Bytaking anewapproach towards AML/CFTlaws through morespecific regulation andrigorous policing, SA would simultaneously implement theFATF recommendations andprosecute financial crimes.Doing so would certainlyimprove the country’s investment status, and the perceptionof that status among SA citizens.

4 BusinessDay www.businessday.co.za February2023 BUSINESS LAW & TAX

• AfCFTA is intended to help clear the way for the continent to capitalise on its mineral resources

ESSENTIAL IS THE ABILITY OF AFRICAN NATIONS TO BE ABLE TO SUCCESSFULLY NEGOTIATE WITH GLOBAL MINING COMPANIES

DIAMOND IN THE ROUGH /123RF BWYLEZICH

BUSINESS LAW & TAX

Major change ahead in the workplace

Jonathan Goldberg, John Botha & Grant Wilkinson Global Business Solutions

Exponential change is notthe domain of technologyonly.

Labour law is about to change the workplacelandscape, and disruptbusiness strategies and workforce models. Thisyear seeshuge amounts oflegislative changes that are going to affect thelabour market.

There areongoing negotiations at Nedlac in respect of labour relationsamendments and the BasicConditions of Employment Act.Although these maynot befinalised during the course of the year, they couldhave asignificant impact on the job market as well as the ability to absorb, create and retain jobs.

Dispute resolutionis getting out of hand

Thereisagrowingconsensus that dispute resolution is out oflinewith whatwasenvisaged bythe LabourRelations Act(LRA).Toomuchtimeand

moneyis beingwastedin resolution of,for instance, dismissal disputes.

Employment opportunities and skills deficiencies

The NationalLabour Migration Policy,the Employment Equity AmendmentAct and

need to be planned for. Sectorsthat aregoing tobe dramatically affectedare hospitality (including lodges, guesthouses and small hotels), restaurants and transport. This creates opportunities on the broadbased BEE (BBBEE) and employment equity fronts

The National Labour Migration Plan

The National Labour MigrationPlan andtheaccompanying amendments to the Employment Services Act (ESA)will meanthatabout 1-million foreignnationals whodonothavecriticalskills or validwork permitswill be displaced.

the platform determines the natureandextent ofworkas well as remunerating them. This will have cost and liability implications.

The Employment Equity Act

the scarceskills listshave huge consequences for all employers. For example, the 27,000 companies that submit employmentequity reports each year should reflect that there are more than a millionforeign nationals whomay bedisplaced andwhomaycreateemployment opportunities.

Thehuge skillsgapthat thisisgoingtocreatewillalso

This willcreate complex dynamicsthatemployerswill have todeal withsuch as conflict resolution, fair dismissal, skills-setreplacement and associated costs.

The ESA alsowill formalise the employment relationship created by digital platforms that provide work. Models such as Uber may now be designated as employers of their drivers if

The Employment Equity Act (EEA) willprobably bethe biggest-ticket item of all the amendments becauseit requires employers to achieve sub-race,sub-genderand disabilitytargetsby September 2028.

In manyinstances, this will mean thatthere is either under oroverrepresentation ofAfrican,Indian,colouredor white men orwomen as well as persons with disabilities. This willrequire designated employers consciously to plan across the entire human resources lifecycle recruitment, selection,training, promotions,retention

CONSUMER BILLS

and career as well as succession planning.

Cannabis for Private Purposes Bill

There are the pending amendments to existing cannabislaws andtheintroduction ofthe newCannabis for Private Purposes Bill. Thisbillwilldefinewhatis considered to bea public place, andthe quantitiesof dry cannabis and cannabis plants that constitute private and personal use.

Substance workplace policies willhave toconsider the impact ofthis in relation to thestandards ofconduct set for employees.

Opportunities ahead

Notwithstanding theabove, thereare anumber ofopportunities for employers who are prepared tosee this dis-

ruptionas anopportunityfor improvement andinnovation. For example, youth employment through Yes4Youth and the use of learnerships means that significant tax incentives and BBBEE advantages can be accessed.

Itallowsfor areviewof current workforcemodels andplanning aswell asthe acquisition of new skills sets. What is clear, however, is all organisations will require astrong foundationonwhich to address these challenges and opportunities. This foundationis tobuild deep trust relationships where employees trust the leadership and do not resist change.

Emotional intelligenceis a non-negotiablecapabilitythat willhaveto benurturedby managers and staff alike.

Friends, Romans, I’m not here to praise my rhino

Tigers, pitbulls ... Romans and therefore Roman law, understood something about damage by wild animals.

Lions, bears, cheetahs, elephants, tigers, rhinoceroses, crocodiles and hippopotamuses were used for public contests against other animals and gladiators and for hunts. When emperor Titus inaugurated the Colosseum in 80 CE, 5,000 beasts were killed in a single day.

The Romans understood the risk of the animals turning the tables. A famous sculptor working on the figure of a lion was attacked by a leopard that had escaped from a nearby cage. The Roman praetors (magistrates with lawmaking powers) developed a special action known as the actio de feris. A person who

PATRICK BRACHER

brought wild beasts into the vicinity of a public road, or kept them within that vicinity, was liable for any damage they did without the injured party having to prove negligence.

The person in charge of the animal did not have to be its owner to be liable. There has been a debate whether this strict liability is still part of our law but it seems to be a fair outcome for the victim of such an attack. Perhaps we can rather extend the actio de feris to self-drive

motor vehicles!

The law for domesticated animals is more nuanced. It is thought that the actio de feris originally referred to dogs and boars. Now dogs are seen as domesticated animals, although the extent to which some breeds of dogs are still wild animals will be debated furiously among owners and victims.

The praetors developed the actio de pauperie, which imposed strict liability for the misbehaviour of domesticated animals, because there are many ways in which they can constitute a constant source of danger. The 1927 leading case on liability for damage caused by domestic animals suggested that, where dogs are involved, the law refers to a vicious dog and not to a “lady’s lap dog”— a curious distinction.

Strict liability applies to the owner of a domestic animal that acts “contrary to its nature”. This implies that the animal acts viciously or perversely in a way not expected of such a domesticated animal. It is recognised that bulls gore, dogs bite and horses kick but if they do so perversely or viciously, unprovoked, the owner is liable for the consequences.

This strict liability, without proving negligence, does not apply to the person in charge of the domestic animal who is not the owner. In that case, negligence has to be proved.

Negligence is always a balance between the steps that can be taken to avoid the possible consequences and the seriousness of the consequences if they occur. It also refers to what the reasonable person would do

in the circumstances. Whether it is reasonable, having regard to the consequences, to keep a breed of animal that has a propensity for vicious behaviour will always be a question of fact regarding the circumstances under which the animal is kept and how the event occurred.

The courts are unlikely to apply the actio de feris to a dog but what is required of the reasonable person in charge of a dog will be strongly influenced by the known behaviour of the animal itself or its particular

A SCULPTOR WORKING ON THE FIGURE OF A LION WAS ATTACKED BY A LEOPARD THAT HAD ESCAPED

breed. Even the owner of a large boisterous dog, known to jump up and hug people, which injures a frail person may be liable for negligence even though they are not strictly liable as owner.

In both these actions, the difficulty is sometimes in proving ownership of the animal. There is often no law requiring registration as owner of a domestic animal nor of foreign breeds of wild animal. Which is why claims for strict liability are usually pursued together with alternative claims based on fault.

Either way, liability for the bad behaviour of wild or domestic animals is likely to fall on the owner or custodian of those animals.

● Patrick Bracher (@PBracher1) is a director at Norton Rose Fulbright.

5 BusinessDay www.businessday.co.za February2023

• About 1-million foreign nationals who do not have critical skills or valid work permits will be displaced

UP IN SMOKE

THE ESA ALSO WILL FORMALISE THE EMPLOYMENT RELATIONSHIP CREATED BY DIGITAL PLATFORMS THAT PROVIDE WORK

/123RF STEVANOVICIGOR

BUSINESS LAW & TAX

What this year may hold for taxpayers

Pieter Janse van Rensburg Director, AJM

So 2023 isin full swing and pundits in various industries are predicting how thenew calendar year will play out.

Tax is noexception, especially withthe 2023national budgetto bedeliveredby finance ministerEnoch Godongwana onWednesday, February 22.

Let’s take a moment to gaze into the tax crystal ball for the year ahead.

NATIONAL BUDGET

Thefocus in2023is likelyto bemore onbalancingthe books ratherthan legislative and technicaltax amendments.Whiletherehavebeen

some windfallsfor the Treasury recently,including additional revenue from increased commodity prices, the expenditure side of the budget, particularly interest spending andthe national wage bill, will remain under pressure.

Wemay seeadditional sources of income from:

● Limited bracketcreep adjustments;

● Higher sin taxes,which, by the way, also appear to be made beunder theguise of social issues;

● A phasingout of allowances (suchas learnership allowances, industrial development zone allowances andenergy efficiency allowances). They appearonly todistractfrom larger issues,and uptakein

the markethas notalways been at expected levels; and ● Controversially, could we seea specialenergylevy introduced tosupport Eskom?

Informal supportis also growing for introducing a wealthtax inthecountry. While many tax practitioners are doubtfulof itsimplementation,bothfromapolicyperspective and practical implementation,itwouldnotbethe first time political interference has driven tax policy.

COMPLIANCE

Sars has done extremely well in enforcing tax compliance recently,and thehope isthat it continuesto do so. The appointment of several skilled staff membersand the deployment of artificial intel-

REGULATION REQUIRED

ligence on itsplatforms has assisted thistremendously, and we hope to see this trend continue.

A SHIFT IN FOCUS

While compliance is important,a shiftin Sars’s focus fromlow-yieldingdisputesto matters of more substance is expected. Surely, deploying (limited) resources to complex cross-border transactions is worth significantly more than attacking Joe Soap’s small home office deduction. This focus on complex cross-bordermatters is particularly on the backofaminimumglobaltax rateof15% beingpuntedby many European countries.

OMBUD

Prof Thabo Legwaila,theacting tax ombud, is doing a sterlingjob inoffice. Wehope

VIEWPOINT AFRICA

to see his permanent appointment to the role confirmed.

THE

LION, THE WITCH AND THE CRYPTO ASSET

There needs tobe, and we expect, more interaction and guidance between Sars and the SAReserve Bankon regulatingcryptoassets,particularly in the arbitrage trading field. Taxpayers are currently caughtin themiddle ofinaction between these organisations, and this position needs to be revised.

LOOP DE LOOP

The Reserve Bank has backpedalled on its approval of (now allowed)loop structures (investment intoSA by SA exchange control residents,but throughanoffshore structure). We expectthat thiswill be

addressed sooner rather than later since legitimate transactions are beingheld up by administrative bureaucracy and lack ofclear policy, which cannot stand.

LET’S REWARD SUCCESS

Rassie and Jacquesteam up againcomeRugbyWorldCup time in September. Suppose Siyalifts theWebb-Ellistrophy again as he did back in 2019. Should the three of themnot berewardedwith the positions offinance minister, director-general in the National Treasury and Sars commissioner?

A clear track record of success on aglobal scale, with theoverwhelming supportof, Idare say,all South Africans, is more than we have now (tongue in cheek, of course).

Rwanda’s new laws add impetus to development

To achieve its long-term goal of sustainable development and economic transformation, Rwanda aims to increase private sector investment and foreign exchange earnings to enhance the nation’s balance of payment.

As a result, far-reaching business-related laws and regulations have been enacted, most of which came into force in 2021, with supporting regulations entering into force in 2022. These include new laws on companies, partnerships, insolvency, negotiable instruments, foundations, trusts, collective investment schemes, insurance business, deposit-taking microfinance institutions, payment systems, financial service consumer protection and a law establishing the Capital Market Authority of Rwanda.

Various ministerial orders and regulations, such as the regulation governing foreign exchange operations and instructions of the registrargeneral determining other requirements for a private company to request for conversion into a limited

liability partnership and modalities for such a conversion, came into force to contribute to the enforcement of the laws.

With Rwanda’s focus on becoming a regional headquarter jurisdiction and hub for various companies, 2023 is expected to bring further changes intended to accommodate alternative business structures.

On July 30 2022, Rwanda created a ministry of public investments privatisation, which may lead to increased government investment and the privatisation of some existing public companies.

REGULATORY DEVELOPMENTS

Corporate/commercial

On February 8 2021, the new Companies Act (Law No. 007/2021 of 05/02/2021 governing companies) was

gazetted, repealing and replacing its predecessor, (Law No 17/2018 of 13/04/2018).

The new act introduces various new corporate forms (such as a protected cell company and community benefit company), and provides clarity on a company limited by guarantee. Compliance obligations have been extended to include a requirement for all companies to maintain a register containing beneficial ownership information, but decrease the majority of shareholders required to approve a written resolution from 100% to 75%.

Rwanda enacted its first Law Governing Partnerships (Law No 0082021 of 16/02/2021), in February 2021. The law is aimed at providing alternative vehicles for investors using Rwanda as a holding jurisdiction within the ambit of the larger Kigali International Financial Centre (KIFC) project. For instance, it provides for the possibility of converting a private limited liability company into a limited

liability partnership. The Instructions of the Registrar General No 001/2022/RG of 23/05/2022, effective from May 30 2022, determine the requirements for a private company to request conversion into a limited liability partnership and provide the modalities for such a conversion.

Insolvency/bankruptcy Regulation No 52/2022 of 01/09/2022 governing trust and company service providers introduces the requirements for and process of applying for a licence as a trust and company service provider. A transitional period of one year is granted to trust and company service providers to comply with its provisions. Exchange control Regulation No 42/2022 of 13/04/2022 governing foreign exchange operations establishes rules for the management of foreign exchange transactions by licensed banks, foreign exchange bureaus and any other licensed intermediaries.

Investment

The Investment Code (Law

No 006/2021 of 05/02/2021 on investment promotion and facilitation), became effective on February 8 2021 and repeals law No 06/2015 of 28/03/2015. It provides for new priority economic sectors and a set of new investment incentives mainly geared at enhancing Rwanda’s competitiveness, attracting cross-border investment, new businesses and financial institutions operating across the African continent and beyond through the newly established KIFC.

Special incentives are also available to strategic investment projects which are of national importance and have a strategic impact on the development of the country, subject to certain requirements set out under the code.

Financial services

Regulation No 41/2022 of

13/04/2022 governing the regulatory sandbox, became effective on April 18 2022 and aims at:

● Enabling innovative financial products, services and solutions to be deployed and tested in a live environment prior to launch into the marketplace, within specified parameters and timeframes;

● Fostering responsible financial innovations that benefit financial consumers by improving the quality of access to and usage of the financial products and services; and

● Setting application eligibility requirements and appropriate safeguards to identify and manage potential risks.

Regulation No. 54/2022 of 01/09/2022 governing electronic money issuers, effective from September 19 2022, sets out the rules governing activities of electronic money issuers and the safeguarding of electronic money.

● Celia Becker is an Africa regulatory and business intelligence executive at ENSafrica.

6 BusinessDay www.businessday.co.za February2023

FAR-REACHING BUSINESS-RELATED LAWS AND REGULATIONS HAVE BEEN ENACTED

• February budget likely to focus more on balancing the books than legislative and technical tax tweaks

CELIA BECKER

/123RF DZMITRYSKAZAU

BUSINESS LAW & TAX

What this year may hold for taxpayers

Pieter Janse van Rensburg Director, AJM

So 2023 isin full swing and pundits in various industries are predicting how thenew calendar year will play out.

Tax is noexception, especially withthe 2023national budgetto bedeliveredby finance ministerEnoch Godongwana onWednesday, February 22.

Let’s take a moment to gaze into the tax crystal ball for the year ahead.

NATIONAL BUDGET

Thefocus in2023is likelyto bemore onbalancingthe books ratherthan legislative and technicaltax amendments.Whiletherehavebeen

Wemay seeadditional sources of income from:

● Limited bracketcreep adjustments;

● Higher sin taxes,which, by the way, also appear to be made beunder theguise of social issues;

● A phasingout of allowances (suchas learnership allowances, industrial development zone allowances andenergy efficiency allowances). They appearonly todistractfrom larger issues,and uptakein

the markethas notalways been at expected levels; and ● Controversially, could we seea specialenergylevy introduced tosupport Eskom?

COMPLIANCE

Sars has done extremely well in enforcing tax compliance recently,and thehope isthat it continuesto do so. The appointment of several skilled staff membersand the deployment of artificial intel-

REGULATION REQUIRED

ligence on itsplatforms has assisted thistremendously, and we hope to see this trend continue.

A SHIFT IN FOCUS

OMBUD

Prof Thabo Legwaila,theacting tax ombud, is doing a sterlingjob inoffice. Wehope

VIEWPOINT AFRICA

to see his permanent appointment to the role confirmed.

THE

LION, THE WITCH AND THE CRYPTO ASSET

LOOP DE LOOP

The Reserve Bank has backpedalled on its approval of (now allowed)loop structures (investment intoSA by SA exchange control residents,but throughanoffshore structure). We expectthat thiswill be

addressed sooner rather than later since legitimate transactions are beingheld up by administrative bureaucracy and lack ofclear policy, which cannot stand.

LET’S REWARD SUCCESS

A clear track record of success on aglobal scale, with theoverwhelming supportof, Idare say,all South Africans, is more than we have now (tongue in cheek, of course).

Rwanda’s new laws add impetus to development

liability partnership and modalities for such a conversion, came into force to contribute to the enforcement of the laws.

With Rwanda’s focus on becoming a regional headquarter jurisdiction and hub for various companies, 2023 is expected to bring further changes intended to accommodate alternative business structures.

On July 30 2022, Rwanda created a ministry of public investments privatisation, which may lead to increased government investment and the privatisation of some existing public companies.

REGULATORY DEVELOPMENTS

Corporate/commercial

On February 8 2021, the new Companies Act (Law No. 007/2021 of 05/02/2021 governing companies) was

gazetted, repealing and replacing its predecessor, (Law No 17/2018 of 13/04/2018).

Investment

The Investment Code (Law

Financial services

Regulation No 41/2022 of

13/04/2022 governing the regulatory sandbox, became effective on April 18 2022 and aims at:

● Enabling innovative financial products, services and solutions to be deployed and tested in a live environment prior to launch into the marketplace, within specified parameters and timeframes;

● Fostering responsible financial innovations that benefit financial consumers by improving the quality of access to and usage of the financial products and services; and

● Setting application eligibility requirements and appropriate safeguards to identify and manage potential risks.

● Celia Becker is an Africa regulatory and business intelligence executive at ENSafrica.

6 BusinessDay www.businessday.co.za February2023

FAR-REACHING BUSINESS-RELATED LAWS AND REGULATIONS HAVE BEEN ENACTED

• February budget likely to focus more on balancing the books than legislative and technical tax tweaks

CELIA BECKER

/123RF DZMITRYSKAZAU

Construction mafia face two new laws

TheCritical Infrastructure Protection Act, 8of 2019 (Cipa) and the National Infrastructure Plan(NIP), tobe gazetted underthe National Infrastructure Development Act,23 of2014,are twolaws that couldbe essentialin the fight against,and prevention of, constructionsite extortion syndicates,alsoknownasthe “construction mafia”

Ciparepeals theNational KeyPoints Act,102of 1980in its entirety andwhile not being fully operational as yet, the majority of its provisions came into effect on April 30 2022 with the fullact to be proclaimed lawin due course. Unlikeits predecessor, Cipadoes notfocus merely onsecuring aselect list oflandmarks, butrather aims to secure sites, projects and developmentsin the interest of the economy, public safetyand continuous basic public services.

To furtherits aims,Cipa fallswithinthepurviewofthe police department,not the defence department.

Whilethe policeminister stillhasadiscretionindeclaringa sitecriticalinfrastructure (asdefined inCipa), Cipa provides forinterested partiestoapplyfor asitetobe declared critical infrastructure anda multidisciplinary

council (theCritical Infrastructure Council)to advise and make recommendations to the minister.

The ownerof thecritical infrastructure, in most instances the state, is responsible forensuring necessary measures are in place to protectandsecurecriticalinfrastructure, butthe policecommissioner can andshould (in the event thatthe owner fails tosecure thesite) takethis responsibilityon itself,atthe cost of the owner. The ministerpublished,forpubliccomment, theInterim Critical

ment and enforce Cipa. Cipa contemplates that the Critical Infrastructure Council should be madeup of,inter alia,variousdelegates fromtheJustice, Crime Prevention and Security Cluster aswell as the department of public works. Accordingly, consideringalloftheaboveandseeing that Cipa envisions a more transparent process for the identification and declaration of critical infrastructure andpunishment byfine and/or imprisonment of a breach ofthe provisionsof Cipa by, inter alia:

● Hindering, obstructing or disobeying a person in control ofa criticalinfrastructure in taking in relation to the security of any critical infrastructure;

● Gaining access to critical infrastructure without the consent of thesecurity manageror personin controlof that critical infrastructure;

ment ofCipa andthe regulationsthereunderashighlightedabove, couldassistin staving off construction site extortion.

Thepublicworksminister gazetted phase 2 of the Draft National Infrastructure Plan (DraftNIP 2050Phase 2)for public comment by December 9 2022.

In theDraft NIP2050 Phase 2, it is submitted that the challenges posed by infrastructure relatedcrime in SA appearsto be more severe than in other jurisdictions; therefore, the continued reassessment of risks and strategic responses becomes a necessity.

Four typesof infrastructure-related threats are identified, as follows:

Infrastructure Regulationsin April 2022 (Interim Regulations). In terms of the Interim Regulations, theminister, inter alia establishes the Critical Infrastructure Council andsets outits functions and procedures; and establishesand setsout thefunctions of theCritical InfrastructureProtectionRegulator, a bodythat isto ensurethe maintenance of the administrative systems and procedures necessary to imple-

● Damaging, endangering or disrupting critical infrastructure or threatening the safety or security atcritical infrastructure or part thereof;

● Threatening todamage Critical Infrastructure; or

● Colluding with or assisting anotherperson inthecommission, performance or carrying out ofan activity referred to above.

Itis possibleforcontractorsand/or thestate toapply to have aspecific construction project orsite declared critical infrastructure.

If successful,the enforce-

CURBING CORRUPTION

● Crime affecting the provision of infrastructure, especially corruption in the procurement process andin the extortion ofservice providers;

● Crime directed at infrastructure itself, especially theft of copper and steel;

● Theft of infrastructure services, such as nonpayment of electricity or water; and

● Crime directedat usersof infrastructure.

That theinterestd and incentives ofstate-owned enterprises (SOEs) are not aligned with that of the public

is highlighted asa factor that contributes to the high levels of infrastructure-related crime.The DraftNIP2050 Phase2 stipulatesthatthe cost ofthese crimesare borne by thepublic rather that thestate asthe ownerof the infrastructure and because SOEs arenot costminimising businesses,they tend to underinvest in the protection of their assets.

The draft NIP 2050 Phase 2 also makes no secret of the fact that extortion usually occurs at the point of delivery and this could lead to delays, nondelivery of products and higher project costs.

The DraftNIP 2050Phase 2proposes, interalia,that there mustbe ademonstrated capacity to successfully identify, arrest and prosecute offenders, there must be integrity of internal controls in institutions that own or provide infrastructure to reduce corruption and complicity with criminality and infrastructure must be physi-

CIPA FALLS WITHIN THE PURVIEW OF THE POLICE DEPARTMENT, NOT THE DEFENCE DEPARTMENT

cally secured and protected fromviolence,vandalismand theft.

It isenvisioned thatby enforcement ofthe NIP,the aforegoing will be achieved as follows:

● Stateinfrastructureentities will beheld toaccount in having robust internal controlstoreducetheopportunity forcorruption andcollusion between syndicates and rogue state representatives;

● Owners of infrastructure will be requiredto protect it from theft and destruction; and

● More technologically advanced strategies to protect infrastructure will be implemented.

There isclear synergy between Cipaand theNIP as ventilated bythe DraftNIP 2050 Phase 2.

The ever-growing threat posed by construction site extortion syndicateswill continue to negatively affect the economy and endanger public safety unlessit is subdued with the appropriate countermeasures.

Inthis articlewehighlightedhowCipa andtheNIP, inits currentform, couldbe used as the appropriate countermeasures but,like many otherthings, itwill all depend on the resilience and strength of state institutions.

Christo Wiese case gives clarity on tax debts

Kyle Fyfe Werksmans

In a judgment of the high court ina claimfor declaratory reliefagainst Christo Wiese to declare him liable to pay an amountof R216.6m, the courtinterpreted the meaningof theterm “tax debt” whenused inthe contextofthe provisionsforthe recovery of taxdebts from third parties inPart D of Chapter 11 of the Tax Administration Act, 2011 (TAA). The taxpayer,Energy

Africa, was acompany that was ultimatelyowned by Titan Premier Investments (TPI).Itsonlyassetwasaloan claim of R216.6mowing by another company in the Titan group, TitanShare Dealers, which EnergyAfrica distributed to itsshareholder in anticipation ofEnergy Africa being assessedby theSA Revenue Service(Sars) for capitalgains taxandsecondary taxon companies, which assessmentswere not disputed beyondthe objection stage and became final.

Themain issueindispute betweenSars and Wiese was that, at thetime that Energy Africa distributedthe loan claimofR216.6mtoitsshareholder, noassessment had been made bySars and there was no “tax debt” in existence. A “tax debt” is defined in section 169(1) ofthe TAA as an amount which is due or payable to Sars interms of a taxact. Putdifferently,he arguedthat ataxdebt becomes due only once an assessment hasbeen made by Sars.

The courtrejected this argument, holdingthat the term “tax debt” carries a different meaningwhen considered in the context of section 183 ofthe TAA. When referredto insection 183of the TAA, a tax debt could include an amount which the taxpayer anticipates will become duebecause ofan assessment thatwill be issued bySars. Subsequent events (eg the assessment or a decision of thetax court if there isa dispute)would establish thatthe taxpayer

paidless thanthe fullamount oftaxthatwasdueatthetime when the return was filed.

The court heldthat a contrary interpretationwould also frustratethe intended purpose of section183 of the TAA, whichis toprevent taxpayers fromdissipating their assets to obstructthecollection oftax bySars, because taxpayers would then be free torid themselvesoftheir assetsrightuptothedatethat Sars makesan additional assessment for tax.

Ontheotherhand,itcould

be argued that the proper approach, whichis intended bythe TAA,isfor Sarsto applyforapreservationorder interms ofsection163 ofthe TAA to preventthedissipation ofassets onthe grounds thatsuchan ordermaybe obtained ifSarshas reasonablegrounds tobelieve thata tax debt may be due.

The judgmenthas been appealed tothe Supreme Courtof Appeal,but itseems unlikely to succeed considering thecompelling points made by the high court.

8 BusinessDay www.businessday.co.za February2023 BUSINESS LAW & TAX

Jennifer Smit & Kyle Grootboom Werksmans

• Countermeasures to stop the extortion syndicates harming the economy and endangering public safety

/123RF RCJ1UK

THE EVER-GROWING THREAT POSED BY CONSTRUCTION SITE EXTORTION SYNDICATES WILL CONTINUE TO NEGATIVELY AFFECT THE ECONOMY

Balancing Paia and Popia

Ahmore Burger-Smidt

Werksmans

The rightof access to informationis a unique rightin the constitution as it places an obligationonboth publicandprivate bodies to allow access to records held by them.

To this end, the Promotion of Accessto Information of 2000 (Paia) was enacted to give effectto theright of access toinformation and foster a culture of transparency andaccountability in public and private bodies.

However,Paia cannotbe considered in isolation.

TheProtection ofPersonal Information Act 4 of 2013 (Popia), on theother hand, is long inform, broadin scope andpowerfulinitseffect so much so thatwhen requests for access torecords are made in terms of Paia, Popia must beconsidered aswell, especially when the record in question containspersonal information of third parties.

Thehigh courtrecently had the occasionto deal with thesituationof howtodeal witha Paiarequestwhich contains personal information of thirdparties in Smuts

NO and Othersv Member of the ExecutiveCouncil: Eastern CapeDepartment of Economic Development Environmental Affairs and Tourism and Others (1199/2021) [2022]

ZAECMKHC 42(July 26 2022) (Smuts case).

In thiscase, arequest was made tothe information officerof theEasternCape department of economic development, environmental affairs &tourism to provide access toall applications received andpermits issued bythedepartmenttotrap,kill,

hunt ortranslocate anyleopards inor fromthe Eastern Cape from 2017 to 2019.

The informationrequest was refusedby thedepartment on theground that it would entailthe unreasonable disclosureof personal information ofthird parties and in terms ofsection 34 of Paia,which providesforthe mandatory protectionof the personal informationof third parties wheresuch disclosure wouldinvolve the unreasonable disclosure of personal informationabout that third party.

The personalinformation sought includednames, identity numbers,residential andpostal addressesofthe applicants and theidentity of the partyfrom wherethe leopards are to be captured

directly linked tothe cultivationof anaccountable, responsiveand opensociety, and this wasrecognised by the court.

Also recognised by the court was that privacy is not an absoluteright andaccess to information canbe limited in instances where the limitation is aimed at the reasonable protection of privacy.

Thecourt heldthatan information officer must determinewhether thedisclosureof theinformation involves the “unreasonable” disclosureof personalinformation about a third party.

Ifso,the requestmustbe refused. It was held that this interpretationgives effectto the careful balance to be struckbetween therightof access to information and the right to privacy.

RESTRICTED ACTIVITY

orcontrolled. However,in opposition, it was argued that there can beno reasonable expectation of privacyon the part of thethird parties concernedwhen consideringthe natureof theinformation requested. Therefore,disclosure on thisbasis would not be unreasonable.

Thecrux ofthedispute came down to a proper interpretationof themeaning of “unreasonable disclosure ofpersonal information” as contemplatedin section34of Paia.

The importance of the rightto accessinformationis

In relation tothe possible application ofPopia, thecourt found thatthe relevantprovisionsofPopia maybeinterpreted to accordwith or supplement section 34 of Paia. If thiswasnotthecase,thenthe word “unreasonable” would not beincluded insection 34 of Paia. However,this does notmeanthat wemustoverlook the importance of Popia. Personal information must neverthelessbe lawfullyprocessed in terms of Popia.

Thecourtultimatelyfound that therewas noreasonable expectationof privacyin relation to the request for a permittoperformarestricted activityas theapplication process inand ofitself “acquireda socialdimension outside the private domain”

In coming to this decision, thecourt importantlynoted thatthe refusalofaccess must itself be reasonable. The mere say-so ofthe informa-

tion officer or rectification of the words of Paia to justify refusalis insufficient.Therefore,sufficient evidencejustifyinga refusalof accessmust be put forward.

Accordingly,it washeld thatthe disclosureofthe informationin questiondoes notinvolve theunreasonable disclosureof personalinformation about athird party and is notunlawful in terms of Popia.To this end,it was heldthat “the personal informationcontained inthe applicationsand permitsfalls outside the legal realm of privacy,does notenjoy constitutional protection from disclosure and may be reasonablydisclosed tothe applicantsin thecircumstances.

“That also puts paid to any suggestionthat theinformationshould bedisclosed ina redacted fashion.

“Putdifferently, theobjectionagainstdisclosurecannot be said tobe on reasonable groundsgiven thelegitimate pursuitof informationlinked toconservation andmanagementof avulnerablespecies and theconstitutional rightto a healthy environment.”

The Smuts case is importantasit shedslightonhow information officers, particularly of publicbodies, should processrequests foraccess to records.

Accessrequests mustbe properlyconsidered andbal-

anced in terms of Paia and Popia. Even thoughPaia and Popia are related,they cover different areasof thelaw; therefore,a delicatebalance mustbe struckto giveeffect totheright ofaccesstoinformation and right to privacy.

Thejudgment isalso important forrequesters, whomust appreciatethat when requestsfor accessare madeto publicbodies,such requestsenjoy lesserprotection of privacy given the nature of publicbodies in the public realm.

Information officers are urged to take note. An informationofficer maybe heldpersonallyliable forthe failuretoadequately perform his or her responsibilities and/or duties in terms ofPaia and/orPopia.The penalties that can be levied in this regard couldbe a fine and/or imprisonment.

Factors behind forfeiture of assets in divorce

Shani van Niekerk Adams & Adams

In most divorces,one of or both theparties feels wronged andaggrieved by either having toshare their assets or having any assets included in thecalculation of the accrual.

The Pretoriahigh court recentlyruledthatawoman’s infidelity amountedto substantial misconductand, as such,sheforfeitedherrightto share inher husband’s pension fund.The judgment received extensivemedia

coverage, anddivorce attorneys are nowinundated with queries regarding forfeiture.

It is quitecorrect that our lawallowsacourttomakean orderthat onepartyforfeits thepatrimonial benefitsofa marriage.This meansthata specific assetor evenall benefits canbe forfeited, regardless of the content of the parties’ antenuptial agreement.Thislegalposition is,however, nothingnewand has existed for years.

Prior to the introduction of theDivorce Act,aforfeiture orderwas basedonthe

principlethat noone oughtto benefit financiallyfrom a marriage that he/she wrecked. Underour current Divorce Act,conduct ofthe partiesis onlyone ofthe factors acourt willconsider whendeciding togrant afor-

THE FACT YOUR SPOUSE ENGAGED IN AN EXTRAMARITAL AFFAIR DOES NOT SIMPLY RESULT IN FORFEITURE

feiture order.

Intermsofsection9ofthe DivorceAct, acourtmay makean orderthatthe patrimonial benefitsof the marriagebe forfeitedbyone partyinfavour oftheother, eitherwholly orinpart, ifthe court,having regardtothe duration ofthe marriage,the circumstances which gave rise tothe breakdown and any substantialmisconduct onthe partofeither ofthe parties,issatisfied that,ifthe order for forfeitureis not made,the oneparty willin relationto theotherbe

unduly benefited.

The law doesnot favour eithera manora woman any spousecan claimforfeiture.It should,however,be kept in mind that each matter willbeconsidered onitsown merit. Thefact thatyour spouse engaged inan extramaritalaffair doesnotsimply resultin forfeiture.Thecourt willtakeinto accountall the factors that ledto the breakdown ofthe marriage, whether it resultedin substantial misconduct,as well asthe durationof themarriage.Thecourtmaywellfind

that the infidelitywas merely a symptom of a poor marital relationship, which was actually the causeof the divorcerather thantheinfidelity itself.

In arecent appealcase (M

V M) theappellant’s appeal fora forfeitureof assetswas dismissed. Thecourt, inter alia, found that theonus is on thepartywho seeksaforfeitureordertoprovethenature and the ambit of the benefit to beforfeited.Aforfeitureorder is not simply forthe taking. A claim mustbe properly pleaded and proved.

9 BusinessDay www.businessday.co.za February2023 BUSINESS LAW & TAX

• Case sheds light on how information officers should process requests for access to records

FOR THE RECORD /123RF NIALOWWA

THE SAY-SO OF THE INFORMATION OFFICER OR RECTIFICATION OF THE WORDS OF PAIA TO JUSTIFY REFUSAL IS INSUFFICIENT

A BALANCE MUST BE STRUCK TO GIVE EFFECT TO THE RIGHT OF ACCESS TO INFORMATION AND RIGHT TO PRIVACY

Peeling back the layers of a market inquiry

Heather Irvine Bowmans

As SA’s ongoing power crisis, rising inflation andglobalsupply chain disruptions continueto impact onthe pricesSAconsumers pay for food,the Competition Commission isabout to commence amarket inquiry into the state of competition in the local fresh produce value chain.

Theterms ofreferencefor the inquiry,which werepublished in 2022,indicate that thecommission’sConcentration Trackerhas identified that “whilelarge farmsmake upjust6.5%ofallfarmsinSA, theyaccounted for67%of total income in 2017/18”

The commission accordingly intendsto examinea number ofdifferent fresh (unprocessed) fruitand vegetable markets, including apples, bananas,oranges and other citrus,pears, avocados, grapes, potatoes,onions, tomatoes, carrotsand cabbages. The inquiry will assess market conditionsin important input markets,such as fertiliser and pesticides.

The commissionhas already identifiedthat certain ofthese marketsmayfeature too fewcompetitors, high barriers toentry and/or limited participationby small businesses and historically disadvantaged persons.

Themarket inquiryprovisions in the Competition Act allow thecommission to investigate whetherthere is any “feature ofa market” which “impedes,distorts or restricts” competition.

The commissionhas extensive powersunder section43A-Gof theactto undertake awide-ranging investigation intothe general state of competition in a market, withoutnecessarily focusing on the conduct of particular firms.The commission neednot establish thatthe CompetitionActhas been contravened(for exam-

a market inquiry can potentially relateto supplyor customer relationships, new product development and strategy, pricing, capacity planning or future proofing, as wellas corporatesocial investment, supplychain development and broadbased BEE strategy.

In several market inquiries to date, the commission has requested that companies attend sessions whichareopen tothepublic (and broadcast on social media), and answer questions about their business operations and strategy.

Although theact allows companies to file a confidentiality claimin relationto any information ordocuments which are supplied to the commission if they contain “confidentialinformation”,the commission tends totake a restrictive approach to these claims andfrequently requests companiesto review and reduce their confidentiality claims.

ple,bya cartelfixingprices, or a dominant supplier or buyerabusing itsdominance).The commissioncan issuesummons tocompel companiesto producedocumentsand/or data,andmay callwitnesses toattend questioning under oath

Givenhowwidetheterms ofreference forthese inquiriestypically are,the informationordatarequested by the commission as part of

Submissions aregenerally published on the commission’s website andwill form part ofthe recordof themarket inquiry in the event of any appeals being lodged.

Accordingly, themarket inquiry process presents a risk that highly sensitive business informationmay find itsway intothe handsof competitors, other regulators, government departments or tradeunions.Thisneedstobe

carefully managedthroughout,while ensuringthatthe company fully co-operates with the commission.

At the end of a market inquiry, the commission can recommend “new or amended policy, legislation or regulations”. In the context of the grocery market inquiry, for example, thecommission recommended thatnational supermarket chainsshould phase outclauses inshopping centre lease agreements which granted them exclusiverights tosellproducts such asmeat orliquor inthe shopping centre or, failing voluntary compliance, that government should introduce new legislation, in the formofa statuteorregulations orcode ofpractice to compel them to do so.

The commissioncan also initiate newinvestigations into complaints about anticompetitive conduct which contravenes the act,or even refer complaints about this directly to thetribunal for adjudication.

Amendments tothe Competition Act whichtook effect in 2019 empower the commission to “take action” to “remedy, mitigate or prevent” anyadverseeffectoncompetitionit hasidentified,which can include a recommendation to theCompetition Tribunal toorder afirm todivest

of “shares, interest or other assets”.Thelimitsofthecommission’s new powers in this regardhaveyettobetestedin litigation before the tribunal and the higher courts.

Itis importantto bearin mind the Competition Act requiresthat whenthecommission takesa decisionon whetheranyfeatureofarelevant marketimpedes, restricts or distorts competition, it mustconsider the impactof thisadverseeffect on small and medium businesses and firms controlled orowned byhistoricallydisadvantaged persons.

In the context of the commission’s market inquiry last yearintoonlineplatforms,the commission’s provisional report included extensive recommendations that technology companies that were identified as “leading” platforms should “offset the cumulative disadvantages” faced bybusiness ownedby “historically disadvantaged persons ” and accordingly the

commission recommended that these companies should all be “required” to “institute an HDP programme targeted at overcoming barriers to participation”

It is importantfor companies to anticipatedemands of this kindarising fromthe inquiry, since these may potentially impose complex and/or costlylong-term obligations. Itis advisableto give consideration early in the processto whetherthere are opportunities to proactively engage with the commission onappropriate measures to support participation by small businesses and promote transformation in a manner which aligns with the company’s strategy as well as its budget. The marketinquiry processis intendedto lastno longerthan 18months,and may involve several rounds of extensive information requests and opportunities to comment on the commission’s provisional findings and proposals for remedies. Companies inthe fresh producevaluechain particularly in theproduct lines already identified by the commission as potentially sufferingfroma lackofcompetition should accordingly begin preparation of their legal and economic submissions as soon as possible.

Japan shows the way in global tax reform

Francis Mayebe & Virusha Subban Baker McKenzie

Thedebatearoundtheimplementation of Pillar 2 has been wagedintheinternationaltax sphere for a few years now.

Essentially, Pillar 2 is a principal rule ofthe Organisation ofEconomic Cooperation and Development's (OECD) 15%global minimum tax proposal.As partof dealingwith thetaxchallenges arising fromdigitisation, as well as baseerosion and profitshifting, theOECDpro-

posed theimplementation of a 15% globalminimum tax in 2019. The importanceof this proposal froman international taxperspective, which originatedin theinitialOECD BEPS (base erosion and profit shifting) project, is that it aims toend thedebate ondisparitiesin domestictaxrates between variousglobal jurisdictions.In essence,itensures multinational companiespay aminimumeffective corporate tax rate of 15% irrespective ofthe localtax rate or base, which may be less.

Japan’srulingcoalitionhas outlined its2023 taxreform package, whichincludes the implementation ofthe OECD’s 15%global minimum tax proposal.

The taxreform package includeslegislativeoutlinesof a globalminimum corporate taxbasedonPillar2.Itfurther introduces anincome inclusionrule(IIR) that,inbroad terms, aligns with the Global Anti-Base Erosion (GloBE) Model Rules.

This particulardraft legislation wastobesubmitted to the Diet (thenational legisla-

tureofJapan)inJanuary2023 and, if passed,will become effective fromthe fiscalyear beginning in or after April 2024.

The incomeinclusion rule would applyto Japaneseheadquartered multinational enterprises and Japanese subsidiaries of foreignheadquartered multinational enterprises, ifthe worldwide gross revenueof theultimate parent entity intwo or more ofthe fourprecedingfiscal years is €750m or higher.

Together withthe EU, Japanhas beenone ofthe

biggest advocatingstates for the implementationof Pillar 2. Ithas, onnumerous occasions, demonstratedits commitment tothe implementation of the GloBErules and, in our view,this stepby Japan moves the discussion on Pillar 2 to its next phase.

Itis possiblethatthis move by Japanmay further prompt theimplementation of Pillar 2among EU states, makingit morelikely thatthe Global Anti-BaseErosion rules willbe implemented across other states.

States that have signed up

to,and committedtothe adoption of, theGloBE rules, which include SA and the US, willnow beundermore pressure toimplement them. Japan’s rulingcoalition has indeed shifted thePillar 2 debate towardsaffirming its global adoptionand confirms Japan’s intention tolead the implementation ofPillar 2as it gears up tohost the Group of Seven summit in October. Asthe Pillar1and Pillar2 debates continue,Japan has takena firmposition andwe expect thatother stateswill follow suit.

10 BusinessDay www.businessday.co.za February2023 BUSINESS LAW & TAX

• Prepare now if Competition Commission’s fresh produce value chain inquiry will affect

your business

THE INQUIRY WILL ASSESS MARKET CONDITIONS IN IMPORTANT INPUT MARKETS, SUCH AS FERTILISER AND PESTICIDES

AT THE END OF A MARKET INQUIRY, THE COMMISSION CAN RECOMMEND 'NEW OR AMENDED POLICY, LEGISLATION OR REGULATIONS'

FARM FRESH /123RF ANUTA

When’s it time to ride off into the sunset?

Kerry Fredericks Werksmans

There isno specified retirementage for employeesin terms ofSA law.

Employers are, however,entitled torely ona consistent, agreed upon retirementage,whichisoften specified ineither an employee’s contract of employmentorintermsofan employer’s internal policies.

Theusual retirementage may also beestablished with reference tothe retirement benefit schemethat employeesjoinwhen theytakeup employment withtheir employer.Ifthe rulesofthe schemestipulatearetirement age, this mayalso set the retirement agefor the employer’s workplace.

In practice, determining and enforcingthe workplace retirement ageusually involves consideringtwo sources oflegal rightsand protections affordedto employees.

Thefirst arisesfrom section 187(1)(f) ofthe Labour Relations Act No66 of 1995 (LRA), whichspecifies that where an employee has been dismissedonthe basisofage alone, such dismissal is considered automatically unfair

andcarries,interalia,apossible maximum compensation award equivalentto 24 months’ remuneration.

Section187(2)(b) ofthe LRA, however, statesthat a dismissal based onage is fair if theemployee hasreached the normal oragreed retirement agefor persons employed in that capacity.

Notwithstanding section 187(2)(b),our courtshavehad todetermine thequestionof whether ornot thetermination of anemployee on the

written agreementbetween the parties. The question whicharises inthesecircumstances is: can an employer anytimethereafter terminate such an employee’semploymentonthebasis that the employee has reached the agreed retirement age. In other words, does the employerlose the right to terminatebased on retirementagebyfailingtodo so on theemployee’s attainment of retirement age.

The LabourAppeal Court dealt with boththese issues in the caseof Motor Industry Staff Association and Another vGreat SouthAutobodyCC t/a GreatSouth PanelBeaters (JA68/2021) [2022]ZALAC

103.

basis thatthey havereached retirement age constitutes an automatically unfair dismissalfor thepurposesof section 187(1)(f) of the LRA.

The second,practical issue arises when an employee who has reached and surpassed the agreed retirementageispermittedto continue working without the conclusion of any further

In theGreat SouthCase, the employee and employer entered into a written employment agreement which, among other things, provided that the employee’s retirement agewould be60 years of age.On March 15 2018, the employee turned 60. However, the employer did notterminate hiscontract of employment and allowed him to continue working.

On January14 2019,the employer informedthe employee that his services would terminate with effect from February 12 2019 as he

had reached the agreed retirementage of60. Atthis time,ninemonthshadpassed since the employee turned 60.Theemployeereferredan automatically unfair dismissal disputeto theLabour Court in termsof section 187(1)(f) of the LRA. The LabourCourt dismissed the dispute and the employee subsequently appealed to the Labour Appeal Court.

The LabourAppeal Court upheld the Labour Court’s decision and found that:

● In terms of section 187(2)(b) ofthe LRA,an employer has the right to dismiss an employee who has reachedtheagreedornormal retirement age. This right accrues toboth theemployer and employeeimmediately after the employee’s retirementdateand canbeexercised at anytime after this date; and

● Section 187(2)(b) does not prescribeatimeframewithin which the dismissal should take place,provided itis after the employee has reached

the agreed retirement date. This section affords an employer the right to fairly dismiss an employee based on ageat anytime afterthe employee hasreached his/her agreed retirement age. Allowing anemployee to work beyond the agreed retirement agedoes notconstituteawaiverofthisrightby the employer.

IntheGreatSouthcasethe Labour Appeal Court provides much-needed certainty to the questionswhich arise inrespectoftheapplicationof anagreed retirementagein SAlaw. Specifically,thiscase settles the position that a dismissal basedon anagreed retirement age does not amount to an automatically

unfair dismissal.An employer may fairly terminate an employee who has worked beyond his/her retirement ageat anytime afterthe attainment of such age.

Employers shouldtake carefulnote ofthisjudgment to terminate the service of employees who have reached their retirement age and who have continued working, by simply giving the required amount of notice.

ENTITLEMENT

Ofcourse,if anewfixedterm contract or indefinite contract has been entered into withthe employee,the termsof suchcontractmust be honoured.

Asalways, acarefulconsideration of the rights and entitlementofallpartiesmust be undertaken before the employee isallowed tocontinue workingwithout anew contract, or isallowed to workwithaspecificcontract, or if theemployer compels theemployeetoleaveservice on reaching the retirement age.

Second try is OK but res judicata still applies

Mpumelelo Nxumalo & Kalene Watson Webber Wentzel

In a recentjudgment, the Labour Courthas confirmed that instituting a claim for unlawful terminationmay follow anunsuccessful claim for unfair dismissal at the Commission for Conciliation, Mediation and Arbitration (CCMA).

However, theprinciple of res judicatastill applies where litigantsformulate such a claimon the grounds of fairness.

In 2017,Motlaung was dismissed fromhis position at the health department for misconduct related to offencesofdishonesty,which

included stealingdiesel and the unauthorised useof a state vehicle.Following his dismissal, Motlaungreferred an unfair dismissaldispute to thePublic HealthandSocial Development Sectoral Bargaining Council(PHSDSBC) and, after hearingthe matter, the arbitratorfound thathis dismissal was fair.

In 2021,Motlaung became aware of the Labour Appeal Court (LAC)judgment in Archer vPinelands High School (theArcher matter) and decided topursue an unlawful dismissal dispute (asopposed toan unfairdismissal) in the Labour Court.

In summary,after Archer was dismissed from his position as businessmanager, he

referred anunfair dismissal disputeto theCCMA.The CCMA foundthat Archer’s dismissal wasboth procedurally andsubstantively fair. Instead ofinstituting review proceedings inthe Labour Court againstthe arbitrator's award, Archerinstituted civil proceedings inthe Labour Court interms ofsection 77(3) of theBasic Conditions of EmploymentAct (BCEA), claiming specific performance. Archerclaimed that his removal bythe school governing bodyconstituted a breach of contract, as it did nothave theauthority todo so. The LabourCourt dismissed theapplication and, onappeal,the LAChadto consider whether an

employee is entitled to refer a breach ofcontract disputeto the Labour Court after an applicant isunsuccessful in pursuing aclaim forunfair dismissal at the CCMA.

The LAC held that despite theadverse findinginthe CCMA,Archerwasentitledto pursue hiscontractual claim intheLabourCourt,asithasa different cause of action from his unfairdismissal claim under theLabour Relations Act (LRA).

When institutinghis claim intheLabourCourt,Motlaung setout thefactson whichhis claimwas foundedin amanner that was essentially the sameas thecase hehad placedbeforethearbitratorin his unfairdismissal dispute

broughtin thePHSDSBC the misconductwith which he had been charged was not proven. TheLabour Court held it mustbeclear fromthe pleaded cause ofaction that thereisaproperseparationof claims based onthe fairness standardsunder theLRA and claims basedpurely on contract.

Motlaung firstdid not plead any relianceon section 77(3)ofthe BCEA;second,he didnotrefer toanyprovision of his contractof employment and what terms were breached;and third,thefactualbasisofhispleadedclaim didnot makeouta casefor breach of contract. Instead, it was akin to acase based on fair dealingas contemplated

by the LRA. Litigantswhoconsiderthe options availableto them when pursuinglabour disputes should bemindful that where theessence ofthe disputeremains thesame,the cause isthe same,what is ultimately demandedas consequentialrelief isthesame, andthe cruxofthe disputeis basedonthe samefacts,then it is acase squarely impacted bytheprincipleofresjudicata (a matter already judged cannot bepursued bythe same parties).

Labelling a disputeas an unlawful dismissalrather than anunfair dismissal would changenothing and that is not what was envisaged in the Archer matter.

11 BusinessDay www.businessday.co.za February2023 BUSINESS LAW & TAX

• The Labour Appeal Court has settled questions on retirement age and fair dismissals

RETIREMENT AGE IS OFTEN SPECIFIED IN AN EMPLOYEE’S CONTRACT OF EMPLOYMENT OR IN AN EMPLOYER’S INTERNAL POLICIES

CHECK THE SPECIFICS /123RF VANAMILIC

AS ALWAYS, A CAREFUL CONSIDERATION OF THE RIGHTS AND ENTITLEMENT OF ALL PARTIES MUST BE UNDERTAKEN

Turning tables on corruption

TO THE CORE

Nonhlanhla Sithole PKF Octagon

SA isrunning outof time toprevent being greylistedby the globalFinancial Action Task Force (FATF)afteritsFebruary2023 plenary meeting.

However, whateverthe decision is,major new requirementstotightenupon corruption arecoming and companies, state-owned entities, nonprofitorganisations andindividuals needto beprepared fora seachange of toughernew standards from 2023.

This all comesafter the FATFvisited SAin 2019and found that SA had solid legal frameworks andpolicies but significantly lacked effective systems totackle financial crime and money laundering.

In November,the cabinet moved quicklyto approve the national strategy on antimoney laundering, terrorist financing andproliferation of financing, togetherwith the National Risk Assessment.

The strategy wasdevelopedasaresponsetotherisk assessment preparedby all the relevantsecurity and finance agencies.

The impact will be broader than many realise as the operationalisation of this strategy which provides threehigh-level goalswith13 strategic objectives will involve lawenforcement agencies, intelligenceagencies, financialand nonfinancial institutionsand private sector representatives, among others.

Theimplementation ofthe strategy willensure the

country strengthens its financial systemsto support economic growth interventions by reducing levels of finance-related crimes.The strategy alsoresponds to some of the 40 recommendations madeafter SAwas assessed by the FATF.

The government has drafted manypieces oflegislationtoplug theholes,with themost importantbeingthe Anti-Money Laundering and Combating Terrorism Financing bills.A General Laws AmendmentBill has also beenintroduced toparliament and,among others, will requirecompanies doing

nies and Intellectual Property Commission can keep accurate and updated beneficial ownership information.

Acompany willhaveto keepa recordof anatural personwhoownsorcontrols the company in terms of the definition of ‘‘beneficial owner’’ or “ultimate beneficial owner”, and timelineswill be specified within which the company must record any changes in this information.

Records ofany natural personwhoownsorcontrols the company in terms of the definition of ‘‘beneficial owner’’ willalso haveto befiled with the commission.

Meanwhile, personswho are convicted of offences relating to money laundering, terroristfinancingorproliferation financing activities are prohibitedfromregisteringas company directors.

business inSA tobeef up their compliance.

It is important to remember thatalthough thepublic sector isat theforefront as witnessed in “state capture”, thisis notjust agovernment issue. All companies in SA will from nextyear have to enacted improvedcompliance standards.

TheCompaniesAct,2008, subject to approval/adoption of the proposed amendment(s) for instancemay be amendedby insertingadefinition of ‘‘beneficial owner’’ Itwillalso providefora comprehensive mechanism through which the Compa-

Businessesalsoneedtobe aware that the Financial Sector Regulation Act, 2017 has a new chapter dealing with beneficial owners, whichprovidesadefinitionof ‘‘beneficial owner’’, and empowers standardsand regulator’s directives to be made in relation to beneficial owners.

REQUIREMENTS

Trusts andtrustees arealso going toface changesto improve accountabilityand transparency. TheTrust Property Control Act, 1988 will be changed by inserting definitions of ‘‘accountable institution’’ and ‘‘beneficial owner’’; by imposing certain requirements on trustees; by specifyingmattersthatwould disqualify a person from being appointed or continu-

ing to act asa trustee; by providing for theremoval of a trustee who becomes disqualifiedto continueto actas a trustee;by specifyinginformation thatmust bekept by trustees in relation to beneficial owners inrelation to trusts;by requiringthemaster tomaintain aregister containing informationrelating to beneficial ownership of trusts, and providing for accesstoinformationregarding beneficial ownership; and by specifying certain offences.

Then thereare newfunctions of theFinancial Intelligence Centreto includethe provision of forensic information; by empowering the centre to request information held byother organsof state;

by providing for additional and ongoing due diligence measures, and by amending the process followed when there are doubts about the veracity of information.

Certain provisions and schedules3Aand3Bwillalso be aligned to appropriately refer to domestic and foreign “politically exposedpersons”, as distinct from ‘‘politically influential persons’’, who will

be dealt with in a new schedule 3C. Thismayallseemlikealot to take in, but it is all necessary. Thereality isif wedo notgetthis right,thensome investors may not want to deal with SA entities.

At a minimum, much stricter compliance and due diligence will beon the table, someofwhich couldbedeal breakers.

HEED MEASURES

Those doing business with SA willalso haveto heed supplementary measuresof their own to avoid falling foul of their ownregulators. The best answer is for SA to avoid the greylistingearly in2023 as the economic consequences could be severe. While webelieve thereis a strong possibility greylisting can be avoided, based on all the above changes it will meanfastaction earlyinthe yearand allpartiesimproving their compliance levels and measures.

THOROUGH REVIEW

The ongoingimplementation oftherules willbemonitored and so there will be no room to hide.

Ourbestadvice willbefor companies todo athorough review of theCompanies Act, Financial IntelligenceCentre Act, exchange control regulations and other changes and ensuretheirgovernanceprotocolsand codesare updated to ensure compliance.

There is little doubt the prosecuting serviceis improving co-operation and oversight, so thereis a growing risk that companies that fail to meetstandards and participate in financial crimes in SA or overseas will comein forfargreater scrutiny and face criminal sanction.

12 BusinessDay www.businessday.co.za February2023 BUSINESS LAW & TAX

• Companies, trusts and even individuals need to prepare for a sea change of tough new measures

TRUSTS AND TRUSTEES ARE ALSO GOING TO FACE CHANGES TO IMPROVE ACCOUNTABILITY AND TRANSPARENCY

THE REALITY IS IF WE DO NOT GET THIS RIGHT, THEN SOME INVESTORS MAY NOT WANT TO DEAL WITH SA ENTITIES

BAD

123RF FREERLAW

BD Business Law & Tax (February 2023)

LAW&TAX

Kenya sets tone for privacy

• Office breaks ground with ruling on personal data disclosure

Kenya sets tone for privacy

ESG in mining is a force that can’t be ignored

CARRYING THE LOAD

ACTIVISM

RECOMMENDATIONS

INVESTOR

LOOKING AHEAD

African free trade and the mining sector

Real pain of greylisting will be from global community

BUSINESS LAW & TAX

Major change ahead in the workplace

Employment opportunities and skills deficiencies

CONSUMER BILLS

Friends, Romans, I’m not here to praise my rhino

PATRICK BRACHER

BUSINESS LAW & TAX

What this year may hold for taxpayers

REGULATION REQUIRED

A SHIFT IN FOCUS

VIEWPOINT AFRICA

LION, THE WITCH AND THE CRYPTO ASSET

Rwanda’s new laws add impetus to development

REGULATORY DEVELOPMENTS

BUSINESS LAW & TAX

What this year may hold for taxpayers

REGULATION REQUIRED

A SHIFT IN FOCUS

VIEWPOINT AFRICA

LION, THE WITCH AND THE CRYPTO ASSET

Rwanda’s new laws add impetus to development

REGULATORY DEVELOPMENTS

Construction mafia face two new laws

CURBING CORRUPTION

CIPA FALLS WITHIN THE PURVIEW OF THE POLICE DEPARTMENT, NOT THE DEFENCE DEPARTMENT

Christo Wiese case gives clarity on tax debts

Balancing Paia and Popia

Ahmore Burger-Smidt

RESTRICTED ACTIVITY

Factors behind forfeiture of assets in divorce

Peeling back the layers of a market inquiry

Japan shows the way in global tax reform

When’s it time to ride off into the sunset?

Second try is OK but res judicata still applies

Turning tables on corruption

TO THE CORE

REQUIREMENTS

HEED MEASURES

Articles inside

Second try is OK but res judicata still applies

When’s it time to ride off into the sunset?

Japan shows the way in global tax reform

Peeling back the layers of a market inquiry

Factors behind forfeiture of assets in divorce

Balancing Paia and Popia

Christo Wiese case gives clarity on tax debts

Construction mafia face two new laws

Rwanda’s new laws add impetus to development

BUSINESS LAW & TAX What this year may hold for taxpayers

Rwanda’s new laws add impetus to development

BUSINESS LAW & TAX What this year may hold for taxpayers

Friends, Romans, I’m not here to praise my rhino

BUSINESS LAW & TAX Major change ahead in the workplace

Real pain of greylisting will be from global community

African free trade and the mining sector

ESG in mining is a force that can’t be ignored

LAW&TAX Kenya sets tone for privacy