Electronic Communications & Transactions Bill: formal deliberations

Meeting report

COMMUNICATIONS PORTFOLIO COMMITTEE
28 May 2002
ELECTRONIC COMMUNICATIONS AND TRANSACTIONS BILL: FORMAL DELIBERATIONS

Chairperson:

Electronic Communications and Transactions Bill [B8-2002]
Summary of Submissions
Democratic Party Proposed Amendments [See Appendix]
Document of Mr Wim Mostert, Senior Manager: E-Law at Deloitte & Touche and drafter for the Department [document awaited]

Other documents
Telkom Proposed Amendments [ see Telkom Submission ]
Layperson's Guide to Cryptographic Issues
IFP proposed amendments [email [email protected]]
Banking Council submission

SUMMARY
Morning session: The current formulations of Clauses 3, 6-9, 12, 14, and 16 were agreed to.

The objects of the Bill under Clause 2 were reworked slightly, and it was agreed that Clause 20 would be incorporated in Clause 4, subject to further consideration of this matter.

The "five-year" period in Clause 5 was reduced to a "three-year" period, and the Department was satisfied with this amendment. The phrase "and obligations" was deleted from Clause 5(3)(b).

Clause 10(5) was amended to include the development of innovative information systems and the growth of related industries.

It was proposed that Clause 11(3) be amended to include the hyperlink facility which deals with content incorporated in a data message, and the effects on the common law and possible codification of this requirement was discussed. It was decided that this clause would be reconsidered.

Clause 13 was amended to provide for the specific form of the signature as prescribed by the relevant statute. Clause 13(5) was deleted, and Clause 13(2) is to be retained.

The current formulation of Clause 15 was retained, subject to the opinion by the SLA on the possible repealing of the Computer Evidence Act.

Afternoon session: This session dealt with clause 17 until (and including) clause 42 of the Bill.
The following main concerns were raised:
Clause 17 allows for the use of email where the statute requires the use of registered mail
Clause 17 is duplicated in the e-government chapter
Clause 18 needs a new subclause (18(3)) which would deal with the reverse of 18(2) (certified copies)
Clause 19(2) should include the word "seal" as a recent due diligence indicated that several acts would be affected if this were not included in this section.
Clause 21 (c-e) dealt with natural persons when the clause dealt with automated transactions - this was inappropriate. These subclauses should either be deleted or restricted in scope
Clause 24 dealt with the provisions which were presumptions unless proved otherwise.
That the Post Office might have a monopoly if they were cited as the preferred Authentication Service Provider.
Clause 30 should allow for open source software to be used by the government.
Clause 31 may violate the World Trade Agreement
Clause 35 should insert SABS instead of the minister of communications
Face-to-face identification would not be practical and would prejudice foreign authentication service providers
If an accreditation authority were to go bankrupt, what would happen to the customers of the subscriber?
Medicines should be included in the consumer protection section.

The following points were clarified:
18(1) does not deal with certified copies
The Stamp Duty Act was expressly excluded from the operation of the Bill since the Department of Trade and Industry was not ready to amend that Act.
International practice included the word "seal" when dealing with a clause such as 19(2)
Clause 21(c-e) were included originally in order to allow for software that was designed to search the web and contract on the user's behalf. I has been shown that clauses such as these have not been successfully.
Clause 24 came about as a result of the example of a South African flying in a British airplane over international waters and concluding a contract by means of an email. I.e. there must be a place where the contractor is said to be contracting from.
International practice, including banks, require face-to-face identification for advanced digital signatures
The government strongly supports Open-source software, but feels that this should not be put in a Bill that is meant to be technology neutral
Clauses 30-33 would be dealt with after comment has been obtained from the Justice Portfolio Committee.

It was agreed that:
21(c-e) would be inserted in the consumer protection section if appropriate
Clause 22 was accepted
Clause 23 was accepted
Clause 25 would be inserted into s13.
Clause 26 would be accepted with the addition of "and such information system properly executed such program".
Clause 27 was accepted subject to the finalisation of a "notification" clause.
Clause 28 was accepted
Clause 29 was accepted with the addition that the Post Office be a preferred Authentication Service Provider
Clause 35 was accepted (DP dissenting)
Clause 36 was accepted
Clause 37 was accepted
Clause 38 was accepted
Clause 39 was accepted with the inclusion of face-to-face authentication (DP dissenting)
Clause 41 was accepted
Clause 42 was accepted subject to "accreditation" being placed before "authority"
The Computer Evidence Act should be repealed and a subsection 15(4) should be placed into the ECT Bill. The amendment would come from Wim Mostert's submissions on this day.
The Committee would return to s18, 19, 21.

MINUTES
The Chair noted the commencement of the formal stage of deliberations on the Bill, but that the proceedings would still encourage limited interaction with the Department of Communications and industry players present. It was suggested that formal deliberations on Clause 1 and Chapter X be left until 29 July but the remainder of the Bill would be covered during this sitting.

The Motion of Desirability was read by the Chair, and was duly considered and adopted. The Committee's attention was drawn to the amendments proposed by the Democratic Party.

Chapter 1: Interpretation, Objects and Application
Clause 2: Objects of Act
Mr A Maziya (ANC) reminded the Committee that during a previous sitting the State Law Advisor (SLA) was requested to compile a document containing all the amendments proposed by the submissions received, and this document will assist Members during this stage of deliberations as they move through the Bill on a clause-by-clause analysis. Yet this document has not yet been made available.

The Chair informed Mr Maziya that this Committee did not request the SLA to compile such a document.

Mr Otto Kellner, from the Office of the State Law Advisor, stated that the document has not been prepared but assured Members that the SLA team present is better prepared than they were during previous sittings.

Ms S Vos (IFP) informed the Chair that she has handed over the amendments proposed by the IFP to the SLA.

Mr Maziya proposed that Clause 2(1) be amended to include the word "communications" after "facilitate", because the current formulation creates the impression that the objects of this Bill deal only with electronic transactions and not electronic communications. This is especially important in view of the fact that the title of the Bill is the "Electronic Communications and Transactions Bill", and not merely the "Electronic Transactions Bill".

Mr V Gore (DP) suggested that the provision would probably read better should the word "communications" be inserted after "electronic", as this would properly reflect the title of the Bill.

The Chair noted that both the SLA and the Members agreed to this amendment.

Ms S Morutua (ANC) proposed that Clause 2(1)(b) is inadequate, and should be amended to include the phrase "primarily in under serviced areas" after the word "access".

The Chair noted that this amendment was agreed to.

Ms M Smuts (DP) recommended that the phrase "with public and private bodies and institutions" be deleted from Clause 2(1)(g), as the definitions of these bodies are not relevant to this Bill.

Mr J Dowry (NNP) disagreed with Ms Smuts and suggested that that phrase be retained, but that the phrase "individuals or citizens" be added after "institutions" in that clause.

Ms N Mtsweni (ANC) agreed with the amendment proposed by Mr Dowry, but suggested that the word "citizens" be inserted instead of "individuals".

Ms Smuts stated that the reason for the proposed DP amendment is that the current formulations does not clearly state which public body is being referred to in this clause.

The Chair informed Ms Smuts that the term "public body" has been defined in Clause 1 of the Bill, and requested the SLA to explain whether the Clause 2(1)(g) could contain the plural of this term, as contained in Clause 1.

Mr Kellner answered in the affirmative.

The Chair contended that this clause then "does not make sense".

Mr Kellner assured the Chair that it does make sense, because public bodies such as the Law Society could wish to communicate electronically with the government.

The Chair contended that this clause seems to exclude parastatals, such as Telkom.

Mr Kellner disagreed, as the definition of "public body" in Clause 1 includes parastatals.

The Chair agreed with Mr Kellner, and noted that all agreed to the inclusion of the word "citizens" in Clause 2(1)(g).

Ms Vos suggested that Clause 2(1)(h) is the motivation for Clause 2(1)(m) to be amended by the insertion of the word "international" after "technical".

The Chair noted that this amendment is agreed to.

Mr Gore suggested that the phrase "with specific reference to this Act" or "in terms of this Act" or "where this Act so requires" be inserted at the end of Clause 2(1)(m).

The Chair requested the SLA to explain whether this amendment is at all necessary.

Mr Kellner replied that it cannot do any harm, and is probably a "given".

The Chair questioned the need to add this phrase because Clause 2(1) expressly states the objects of "this Act", and this seems sufficient.

Mr Maziya contended that the inclusion of the phrase suggested by Mr Gore effectively implies that this Bill is performing a function or providing a service of another separate piece of legislation, but that this power of function also appears in this Bill. This cannot be entertained as it is not the case, and the proposed amendment should not be accepted.

The Chair noted that the proposed amendment is not carried.

Ms Smuts proposed that Clause 2(1)(r) be deleted in its entirety, as matters relating to national interest do not fall within the purview of the Department.

Ms Vos agreed, and added that such matters properly belong elsewhere.

The Chair questioned what the position of Ms Smuts and Ms Vos would be should the "I Love You" computer virus infect the database and information system of the Johannesburg Stock Exchange (JSE). Surely this would be both a matter of national security as well as relating to an electronic transaction, which falls within the scope of the Department.

Ms Mtsweni recommended that Clause 2(1)(r) be retained in the Bill, as it does no harm.

The Chair noted that Members agreed to the retention of Clause 2(1)(r), and requested the SLA to explain whether the word "communications" could be included in the phrase "electronic transactions", wherever the latter appears in the Bill.

Mr Kellner responded that this could be effected if so desired, but then the word "communications" should be inserted after "electronic" in Clause 2(1)(d) as well in the interests of consistency.

The Chair suggested that Members then identify areas where it would be appropriate to add the word "communications", rather than blindly add it wherever the phrase "electronic transactions" applies. Clause 2(1)(g) is thus agreed to.

Clause 3: Interpretation
The Chair noted that Members agreed to this clause.

Clause 4: Sphere of application
Ms Smuts requested clarification on the reason behind the exclusion of certain laws from Columns A and B of the Schedule to the Bill, such as the Sectional Titles Act. Furthermore, the Computer Evidence Act should be repealed in its entirety, and Clause 20 should be incorporated in Clause 4 because the former really deals with matters of applications, as suggested inn several submissions received during the public hearings stage.

Mr Kellner replied to the first concern by stating that some Acts have been excluded because those government departments responsible for those Acts were not ready at the time of drafting of this Bill.

The Chair informed Members that the Department did conduct a Due Diligence study on the list of laws consulted in this regard, and it includes the Sectional Titles Act. There is thus an assumption that if a particular Act has not been included, the relevant department was not ready at the time of drafting. Should the problem still persist, this Committee could always return and amend the Bill.

The Chair requested the SLA to explain whether any harm is done in keeping Clause 20 where it is currently located.

Mr Kellner replied that he "do[es] not mind" if it is moved, as it makes no material difference.

The Chair agreed, and called for Clause 20 to be incorporated in Clause 4.

Ms Mtsweni questioned the rationale for the move if it does not make a difference in any event.

The Chair responded that the move would provide an easier reading of the clause, and noted that the ANC now agrees to this amendment.

Mr Lance Michalson, representing the South African Post Office (SAPO), raised to concerns on behalf of Mr Wim Mostert, Senior Manager: E-Law at Deloitte & Touche and drafter for the Department. The first recommends the deletion of Clause 4(3) in its entirety, as the specific listing of Acts is cumbersome and should thus be deleted. Secondly, Clause 4(4) should be amended to include the phrase "signature, document or activity" after "any" in that provision.

The Chair contended that both Mr Mostert and the document containing the amendments have to be present before these proposed amendments are addressed. These matters would be returned to.

Clause 4 is agreed to, subject to the understanding that these matters would be reconsidered.

Chapter II: Maximising Benefits and Policy Framework
Clause 5: National e-strategy
Ms Mtsweni proposed that the "five-year" period in Clause 5(1) be changed to a "three-year" period, as this would bring the e-strategy in line with the Medium Term Expenditure Framework (MTEF).

Mr Gore suggested that the "24 months" in Clause 5(1) be reduced to "6 months", as this strategy should have been developed already.

The Chair inquired whether the Department would be able to deliver the e-strategy document within twelve months, in line with the national e-government strategy. He stated that he was sympathetic to the cause of Mr Gore, but six months would be "silly".

Ms Smuts recommended that Chapter II be deleted in its entirety because it infringes the doctrine of the separation of powers, as Parliament cannot legislate to encourage the executive to perform its duties.

Mr M Lekgoro (ANC) disagreed with Ms Smuts, as it is not unheard of for this Committee to provide the Department with guidelines to be followed in executing its mandate.

Mr Dowry agreed that Chapter II should be retained.

The Chair stated that the entire Chapter II cannot be deleted, and noted that the Committee agrees. Mr Enver Fraser, from the Department, is requested to explain whether the Department can deliver the e-strategy document within twelve months.

Mr Fraser replied that the original target of "24 months" was decided upon to allow sufficient time for extensive consultation because of the broad scope of the Bill. The twelve-month period will not be a problem.

Mr Lekgoro contended that this deadline merely serves to ensure that the strategy does not exceed the prescribed time period in being developed, as it could be fully developed before the expiration of that time frame as well.

Ms Vos suggested that this time frame is not favoured, as it would not give full effect to the inter-ministerial process envisaged in the chapter.

Mr R Pieterse (ANC) stated that the time frame is necessary, as it allows for the process to be "measurable", and ensures that the process does not take an indefinite period of time.

Ms Vos suggested, as a compromise, that the "five-year" time frame be removed from Clause 5(1), so that the new clause could provide for just "a national e-strategy".

The Chair requested clarity on the need for the inclusion of the "five-year" period.

Mr Fraser replied that this was decided upon as a reasonable time frame within which to achieve this process, and was also intended as a broad outline of the process that would be renewed annually. The Department does therefore not have a problem with reducing the time period to three years.

The Chair stated that the time frame would be reduced to three years so that it would comply with the MTEF, which makes sense. It is noted that Members agree to this amendment.

Ms Vos contended that strategies cannot create and impose obligations, as is being done in Clause 5(1), only the law can do this. It is therefore suggested that Clause 5(3)(b) be amended by the substitution of the word "determine" with the phrase "develop policies in respect of". The SLA is requested to comment on this proposed amendment.

Mr Kellner responded that this amendment does clarify matters, and the provision would be made more accurate by the incorporation of that phrase.

Mr Lekgoro suggested that this problem might be solved by replacing the word "must" with "may".

Ms Vos stated that this does not solve the problem, as the problem does not lie with the word "must" but rather with "determine".

The Chair contended that the amendment proposed by the IFP implies that the "roles and obligations of each person" falling outside the Department also have to be determined by the Minister.

Mr Kellner stated that this provision does not place an obligation on a person not affiliated to the Department to do anything, but it does create this impression. The proposal by Ms Vos that the word "obligations" be removed is a sound one.

The Chair questioned whether the deletion of the phrase "and obligations" from Clause 5(3)(b) would solve matters. He noted that Members answered in the affirmative and agreed to this amendment.

Mr Dowry stated that Clause 4(a) should be amended to include consultations with experts in the private sector as well.

The Chair informed Mr Dowry that his concern is covered in Clause 4(b).

Mr Dowry agreed.

Mr Lekgoro suggested that Clause 4(b)(ii) be amended to require the Minister to table an annual report to Parliament detailing the progress made in achieving the national e-strategy.

The Chair noted that Members agree to Clause 5, as amended.

Clause 6: Universal access
Ms Smuts contended that the Telecommunications Act already covers this aspect, adequately.

The Chair replied that it does not factor in the Internet.

Ms Smuts disagreed and suggested that it does, via universal service.

The Chair noted that the Committee agrees to the current version of Clause 6.

Clause 7: Previously disadvantaged persons and communities and Clause 8: Development of human resources
The Chair noted that Members agreed to these clauses.

Clause 9: SMMEs
Mr Gore contended that Sub clause (b) should be amended to grant Small, Medium and Micro Enterprises (SMME's) access to existing web sites and portals apart from those belonging to government, so that they may tap into the expertise of those businesses or institutions.

The Chair suggested that it would probably be of assistance to specify certain existing web sites that are in need of assistance, but Sub clause (c) does seem to cover this concern.

Mr Gore stated that the concern here is that the development of the new web sites and portals could lead to the unnecessary replication of existing web sites and portals.

Mr Lekgoro stated that he was under the impression that it is implied that the SMME's would be able to tap into such expertise.

The Chair contended that the beginning of Clause 9 does contain an evaluation process.

Mr A Maserumule (ANC) suggested that this provision be read with Clause 5(4)(b).

The Chair recommended that Clause 9 would remain as it currently stands in the Bill, as Mr Gore's concerns are covered.

Mr Gore agreed.

The Chair noted that Members agreed to the current version of Clause 9.

Clause 10: Electronic transactions policy
Ms Vos proposed that Clause 10(5) be added, which would read as follows:

In implementing this chapter the Minister must ensure the development of innovative information systems, the growth of related industries and promote the ease of electronic transactions in this regard.

It is suggested that this would make the intention of this clause "perfectly clear", as the current formulation does not specify which programmes, policies and strategies etc. are being referred to here.

Mr Maziya contended that this Committee not discuss the proposed Clause 10(5) before the removal of Clause 10(4) has been confirmed.

Ms Vos requested motivation for the removal of Clause 10(4).

Ms Mtsweni agreed with the amendment proposed by Ms Vos only until "… related industries", and contended that the remainder of the provision is unnecessary.

Ms Vos stated that it is important to show that the objectives of the Department in this chapter are in fact workable.

The Chair questioned whether the concern raised by Ms Vos is not already covered under Clause 2.

Ms Vos agreed that it could be covered under Clause 2(h).

The Chair recommended that the last portion of the proposed amendment be deleted, as suggested by Ms Mtsweni. He noted that Members agreed to this amendment.

Mr Maziya suggested that Clause 10(4) be deleted as it makes no sense, especially if it is compared with Clause 10(3).

Ms Vos replied that the two clauses are different, and policy cannot create and impose obligations.

The Chair stated that this is precisely the point he made earlier, and the SLA agreed that policy cannot create and impose obligations. This was the reason for the proposal to delete Clause 10(4). It is noted that Clause 10, as amended, is agreed to.

Chapter III: Facilitating electronic transactions
Clause 11: Legal recognition of data messages
Ms Vos contended that the term "public domain" in Clause 11(3) has not been defined in the Bill.

Ms Smuts stated that Clause 11(3) does pose several problems, and many have been raised in the submissions received during the public hearings phase. The DP read out a proposed new formulation that would "overtake" the problem highlighted by Ms Vos. She suggested that this formulation is preferred as it simplifies matters, and reads as follows:

The Chair stated that this formulation does, however, create an additional problem by introducing the term "hyperlink" into the Bill, which would then have to be defined and its impact on the rest of the provisions in the Bill is unsure and would thus have to be assessed. He was discomforted by this and asked if this term really has anything to do with Clause 11(3)?

Ms Smuts responded that the problem with this provision is that, as raised during a previous sitting of the Committee, when two contracting parties sign the agreement they very rarely, if at all, read the fine print. In the electronic world it cannot simply be assumed that the contracting parties have knowledge of the existence of or the content of the fine print, as this would essentially make electronic transactions more onerous than those concluded in the "paper world". This reformulation also requires the contracting party to prove that the fine print was not available on the web site, and that it had not been validly incorporated.

The Chair returned to the example of checking in at a foreign hotel, the same example he had used during a previous session, and stated that when people are tired and they "just want to go to bed" they sign without reading the fine print. In so doing they are consenting to the laws relating to the hotel and hospitality industry of that particular country and, should a dispute arise, they could request to be provided with a copy of the written law governing that hotel industry. It is thus contended that Clause 11(3) is merely attempting to replicate the position as it applies to the "paper world" to the electronic environment, where a party to the contract can request the written copy of the relevant law applicable.

Ms Vos referred to the proposed amendment contained in the Banking Council of South Africa (BCSA) submission that it has to be ensured that the critical content of the electronic contract is not only referred to but is also highlighted in the electronic data message.

Mr Lekgoro contended that he was under the impression that the BCSA concern is properly covered by Clause 11(3)(a) and (b).

The Chair suggested that the primary concern raised by the BCSA submission was with the fact that the term "public domain" has not been defined in the Bill. Yet the argument raised by Ms Vos deals with the situation where information is incorporated in the agreement in data form and that agreement is signed, as in Clause 11(3)(b), and the implication is that the reasonable person would have noticed the fine print. Is not Clause 11(3) then really addressing this matter if the decision is taken to instead define the term "public domain"?

Mr Kellner replied that it does address it, but the proposed amendment regarding the hyperlink could make matters easier, but that amendment has not yet been evaluated sufficiently.

Ms Smuts maintained that the DP formulation is stronger.

The Chair requested clarity on the precise meaning of the term "hyperlink".

Ms Smuts offered a definition by stating that it allows an Internet user to move from one document to another, but suggested that this term has to be defined.

Mr Mostert informed Members that that term has indeed been defined, and Clause 11(3) is based on the UNCITRAL model law which seeks to avoid any disparities between the electronic transactions and its paper counterpart. The former Clause 11(3) did create such a disparity in this regard, but the current formulation does not, as it deems that the fine print has been validly incorporated into the data message, unless the contrary is proven. The current formulation in fact seeks to encourage the use of hyperlink protocol.

The BCSA has a specific problem with this clause because its governing statute requires all contractual documents and related content to be contained in the same document, and is therefore averse to hyperlink technology. It is thus recommended that hyperlink technology not be employed in any electronic transactions or communications with banking institutions, yet electronic transactions and communications with all other bodies or institutions would be fine.

Clause 11(3) does provide that the common law still applies, and there is thus no such disparity. The use of hyperlink technology is thus encouraged.

The Chair contended that this does not assist matters, but it could resolve this concern if the phrase "and is not in the public domain" is removed from Clause 11(3), as it would achieve precisely what the DP amendment proposes.

Mr Mostert stated that the Chair's proposed formulation creates the additional problem that this matter would now be codified in statute, and would no longer be contained in the common law. This then creates difficulty with regard to the so-called "ticket cases", which is governed by the common law principle that the incorporated information has to be identical to that contained in the original document. It is preferred that such principles be left to the common law to develop over time, and the proposed amendment creates the further problem in that the common law is ignored in this matter and codification would succeed only in restricting the operation of the courts.

The Chair questioned whether the addition of the phrase "unless the contrary is proven" be added in a new Clause 11(3)(c) would solve this matter. He stated that he firmly believes in retaining the current provisions of a Bill, and that the necessary amendments would then be effected to "tweak" the existing provision to create the desired environment. The SLA is requested to explain whether it is possible to create a link to the common law without recourse to Clause 11(3).

Mr Kellner replied that Clause 3 should be removed in its entirety, but requested some time to consider this proposed amendment further.

The Chair stated that Clause 11 would be reconsidered later.

Clause 12: Writing
Ms Vos suggested that the phrase "statutory and common" be inserted before the word "law" at the beginning of Clause 12.

Ms Smuts suggested that that the word "statute" alone be inserted at that point.

The Chair requested the SLA to respond to these proposed amendments.

Mr Kellner replied that the common law does not require that a document or information be in writing, and it can therefore be argued that the word "law" in this clause refers only to those statutes that have this requirement. Clause 12 should thus remain as it is, but the word "statute" could be inserted if Members so desire.

The Chair stated that the current formulation of Clause 12 will be retained, and noted that Members agreed.

Clause 13: Signature
Ms Smuts contended that Clause 13(1) is crucial, and the two important factors here are "required by law" and the question of validation. Input is requested from those bodies who highlighted concerns with this clause.

The Chair stated that the two crucial issues here are the use of an Advanced Electronic Signature (AES) and "required by law", and the latter has already been resolved.

Ms Smuts suggested that the word "law" be replaced with "statute". The phrase "and such statute does not prescribe the form of the electronic signature" should be inserted after the word "that" in Clause 13(1). The proposed amendment also created a proviso, which reads as follows:

The Chair requested the SLA to explain whether Clause 20, which has now been incorporated into Clause 4, does not cover such instances in which the specific form of signature is not prescribed by the relevant statute.

Mr Kellner replied that the proposed amendment is a "good addition", because it cannot be said for certain what any future legislation may require as far as the form of the signature is concerned. It is requested that the SLA team be granted some time to fully consider the proviso, but it does seem to suggest that where a particular law is silent on the specific type of signature it requires, it is presumed that an AES is required. It thus expressly states that the AES would be used in such circumstances.

Adv Francois Slabbert, Manager: Legislation and Policy Development from Telkom, suggested that the word "only" be deleted from Clause 13(1) as it would not necessarily affect the invalidity of the data message if an AES is not used. A proper audit of the actual effect of invalidity in this regard was not done by the drafters of this Bill.

The Chair responded that if Telkom's amendment is effected, and AES has already been exempted from usage in terms of other law that prescribes it, this amendment would further "dampen" the use of the AES in data messages.

Mr Kellner recommended that the word "only" remain in Clause 13(1), because if it were to be deleted it would expose this clause "to any old thing".

The Chair noted that the Committee agreed to the retention of "only".

Ms Smuts reiterated her earlier proposal that the word "statute" replace "law" in Clause 13(1).

The Chair disagreed, as the SLA stated that "law" is sufficient here.

Mr Kellner responded that the proviso proposed by Ms Smuts essentially directs that one consider the particular law that requires the signature of the person, and this would then be used to discover what happens to such person should s/he not use the proper format of the signature, and this Bill should thus not prescribe such conditions. Yet the proviso is not necessary, as this is exactly what would happen in any event.

The Chair recommended that the proviso be "dropped".

Adv. Slabbert contended that this creates the impression that the intention in Clause 13(1) is to invalidate all data messages that do not use the AES in this situation. Could this be the case?

The Chair answered in the affirmative.

Mr Kellner informed Adv Slabbert that Clause 13(1) only applies to those cases where a signature is indeed required by law, and thus where none is required this clause would not operate. It does therefore not apply to "all" data messages, as contended by Adv Slabbert.

Mr Mostert stated that Clause 29 stipulates that any public body can specify which form of signature would be required.

The Chair agreed, and informed Members that a "major issue has been passed here".

Ms Mtsweni suggested that Clauses 13(4) and (5) are identical, and Clause 13(5) should therefore be deleted in its entirety as it is already covered by Clause 13(4).

Mr Kellner stated that, strictly speaking, there is a difference between the two clauses but they do achieve the same object. The deletion of Clause 13(5) would not be problematic, nor would its retention cause any difficulty.

Ms Mtsweni stated that the ANC requests that Clause 13(5) be deleted.

The Chair noted that Members agreed.

Ms Smuts suggested that the DP has devised a "cleaner" formulation of Clause 13(2), which reads as follows:

The Chair questioned the need for Clause 13(2) if it is clarified by Clause 13(1).

Ms Smuts contended that it is Clause 13(2) that it the crucial provision, whereas Clause 13(1) is merely "extra".

Mr Kellner contended that the DP formulation might be more elegant but it does not alter the meaning of that provision.

The Chair recommended that Clause 13(2) then be retained in its current form, as the amendment posed by the DP does not materially alter it.

Ms Smuts proposed that a new Clause 13(4) be inserted to replace Clause 25, because a submission received during the public hearings stage contended that Clause 25 is currently located at the end of the chapter, whereas it should properly be placed at the beginning in Clause 13(4). The formulation proposed by the DP reads as follows:

The aim of this amendment is to ensure that the common law is not turned on its head, and also avoids the creation of any disparity between the electronic and paper-based systems.

The Chair stated that the relevance of Clause 25, when read with Clause 13(4), is that is recognises the electronic agreement despite the fact that the signature requirement has not been properly complied with.

Mr Kellner contended that the new Clause 13(4)(b) proposed by Ms Smuts is better suited to house the issues raised by Clause 25, and should be incorporated in the new Clause 13(4).

Mr E Magashule (ANC) questioned whether this relocation would make any substantive difference.

Ms Smuts stated that the first line of the new Clause 13(4) is different.

The Chair recommended that the formulation of Clause 13 as it currently stands in the Bill be retained and agreed to by Members, without the amendments proposed. Clause 25 will be discussed further at a later stage if necessary. This Committee has to pass a law that is simple.

Clause 14: Original
Ms Mtsweni requested clarity on the terms "original" and "final" form.

The Chair reminded Members that this concern was raised by several submissions received during the public hearings stage.

Mr Kellner replied that this clause is unproblematic.

The Chair noted that Members agreed to the current formulation of this clause.

Clause 15: Admissibility and evidential weight of data messages
Ms Smuts recommended that the Computer Evidence Act be repealed in its entirety.

The Chair stated that this Committee first has to fully evaluate that law before entertaining any proposals to repeal it.

Mr Kellner stated that he would get back to this Committee on this issue, as he has not yet considered this issue.

Ms Smuts reminded Members that this proposal was made by the industry itself.

The noted that Members agreed to the current version of Clause 15, subject to the opinion of the SLA on the future of the Computer Evidence Act.

Clause 16: Retention
Ms Vos suggested that Clause 16(1)(c) be amended by the addition of the phrase "to the extent that it is required by such law" at the end of that clause.

The Chair contended that the date on which the data message was receive can be determined, and therefore questioned the need for this amendment.

Mr Mostert stated that "and" between Clause 16(1)(b) and (c) serves to include the latter, which means that it is not necessary, for the purposes of this clause, to ascertain the date and time as well. Indeed, if Clause 16(1)(c) were required together with Clause 16(1)(a) and (b), no-one would do electronic record retention because it would be impossible to fulfil the requirement in Clause 16(1)(c).

Mr Kellner suggested that the proposed amendment is not necessary, as it is inherent in the provision that the relevant statute has to be considered.

The Chair noted that Members agreed to the current formulation of Clause 16.

Afternoon session:
Clause 17
It was moved by an ANC member that the clause should be accepted in its current form.

Ms Vos (IFP) said that the Department of Trade and Industry had suggested that clause 17 deal with the concept of notification.

The Chair indicated that he did not understand why there needed to be such radical changes to clause 17. He did not equate notification with the production of documents. The Chair indicated that this would not be an amendment, but a replacement.

Wim Mostert took the floor and indicated that the egovernment chapter (Chapter 4) dealt with the production of documents and so having the two different documents could lead to confusion. He also pointed out that as the Bill currently stands if any statute were to require that notification be done by means of Registered Mail then this clause will allow the public to submit the documents by means of email, irrespective of whether it was appropriate or not. In short the section was overbroad.

The Chair indicated that if the clause has indeed been duplicated then clause 17 will be deleted when the egovernment section was contemplated. Thus at present clause 17 is accepted.

Clause 18
An ANC member took issue with Clause 18 which was seen as allowing for a electronic document to be printed out and certified as a true copy of the original, but did not allow for the reverse to occur (paper to electronic).

Lance Michalson (Post Office) supported this position and suggested that a new subclause, 18(3), be inserted to fill this gap. In addition he said that the electronically certified copy required a digital signature.

The Chair asked for clarification as to the certified copy in electronic form.

Wim Mostert clarified the issues by saying that a certified copy required two things, a statement and a signature.

Mr Lekgoro (ANC) enquired as to the relevance of the certified copy being in print or electronic form?

Mr Kellner (State Law Advisor) supported Mr Michalson's position saying that an 18(3) was necessary.

The Chair indicated that the committee would return to the point.

Clause 19
Ms Smuts (DP) asked for Clause 19(2) to be deleted as it contradicted Clause 20 and was overbroad.

The Chair wanted to know why the section was necessary in the first place, and Mr Kellner indicated that this clause existed so that other pieces of legislation would be certain that they would be able to submit/receive documents electronically, and not be contrary to an Act.

The Chair indicated that in which case it might be appropriate to add "write on" "instrument" and "on the prescribed form".

Wim Mostert stepped in once again in order to clarify the issues. He confirmed that the clause was drafted according to a question of style, and that the clause has the unforseen consequence of requiring a person to submit/receive a document electronically. In addition the word "seal" must be included so as to allow for various other pieces of legislation to be updated, to wit: the Companies Act, The Stamp Duties Act (although this is currently specifically excluded) the Copyright Act, the Patent Act and the Trademarks and Designs Act. In particular what would occur is that if "seal" were not included the electronic document would have to be converted into paper form at some point, and this effectively ends the lifecycle of the electronic document prematurely. Certificates with seals are prima facie evidence in court.

Ms Smuts supported Mr Mostert by pointing out that the JSE also thought the inclusion of "seal" would be a good idea. The Department of Trade and Industry also supports the inclusion of "seal".

The Chair indicated that the Stamp Duties Act had been specifically excluded from the operation of the ECT Bill as there was not enough time to contemplate the effect of this Bill on that Act. The DG of Communications (Andile Ncgaba) indicated that if the Department of Trade and Industry want this change they should be invited to speak at the committee.

Clause 20 was agreed.

Clause 21
Ms Smuts stated that she had a problem with this clause where the clause only provides for natural people to contract, and does not allow for an electronic agent to contract on a natural person's behalf.

Mr Mostert stepped in once again to clarify that there are various pieces of software that can act on a person's behalf automatically. In addition various contracts would be made by the JSE that would be automated, and should be respected. Thus 21 (c-e) should be removed so that section 21 only applies to the World Wide Web.

The Chair said that in the alternative Clause 21(c-e) should be inserted in the consumer protection section.

Clause 22 was accepted.

Clause 23 was accepted.

Clause 24
Ms Smuts took issue with this clause in that she suggested that the amendments as suggested by MIH should be included into this clause. Specifically that an email must be addressed properly, able to be retrieved, and be outside of the control of the sender or within the control of the addressee.

The Chair asked whether these facts were not obvious?

Mr Kellner was of the opinion that these sections only created presumptions, and did not prevent the adducing of the actual facts.

Mr Mostert gave the useful example of an aeroplane moving between two jurisdictions, with a person inside who was concluding contracts by means of email. In such a situation it was helpful to have a deemed address for the purposes of clarity of jurisdictional issues.

It was proposed that an amendment to Clause 24 would be passed, which included the words "habitual residence".

Clause 25
Ms Smuts suggested that this clause should be inserted into Clause 13 as Clause 13(5) (since the previous subsection 13(5) had been deleted).

The Chair agreed with this and suggested in addition that the words, "and such information system properly executed such programming.

Mr Kellner suggested that the onus be moved so that the clause would read: "unless it be proved that and such information system did not properly execute such programming." This was agreed.

Clause 28
Once again Ms Smuts proposed the insertion of "Government Department" instead of "Public Body". The Chair rejected this contention and Clause 28 was agreed to subject to the finalisation of the "notification" issue.

Clause 29
The Post Office moved that subclause 29(d) be varied to include the Post Office as the Preferred Authentication Service Provider. The effect of this would not be that other institutions would not be able to use other Authentication Service Providers, simply that government would use the Post Office for digital signatures. It was pointed out that specifically naming the Post Office in the Bill would not be unusual as this had been done in the Telecommunications Act with Sentech. The Post Office also indicated that the budget would not be a problem since it is at present already providing authentication services to various people.

Ms Vos supported the Post Offices' submission.

Mr Pieterse (ANC) indicated that he would like the Post Office to have a monopoly for three years. This was supported by Mr Dowry (NNP).

Ms Smuts was against this proposition and put forward that the Post Office should tender just like everyone else in order to win the right to be the government's preferred ASP. Mr Gore supported his colleague and indicated that a period of exclusivity would be a bad idea.

In the event it was agreed that the Post Office would be the preferred ASP, although it would not have an exclusive right to provide Authentication services and products.

There was no vote on the issue. Precise wording was to be provided later.

Clause 30

The Chair referred to the Linux Professionals Association's submission which preferred the Bill to be technology neutral about which software could provide cryptography services.

The DG of Communications indicated that while he was passionately in favour of open-source software he believed that it was more appropriate to implement it by means of policy, rather than in terms of the ECT Bill. In other words this would be part of e-strategy. He indicated that it was the department's intention to formally engage the Linux Professional's Association to help implement this policy.

Ms Smuts confronted the Chair about Clause 30 and stated that she was eagerly awaiting the results of the Justice Committee's comments on cryptography and asked the chair what the Justice Committee has said?
The Chair indicated that comment still needed to be obtained from the Justice Committee.

Although it was agreed to return to the chapter at a later date, Ms Vos did point out that it is possible that chapter ten violates the World Trade Organisation agreement, to which South Africa was a signatory.

Clause 34 was accepted.

Ms Smuts said that she had a problem with the Minister of Communications being the person who decided the standards in Clause 34, and said further that the SABS is far better suited to being able to take on this responsibility.

Mr Maziya (ANC) asked whether the SABS had the budget in order to be able to do this task.

Mr Gore suggested that there is a middle ground - ICASA would be able to consider accreditation of cryptography providers.

This proposal was not accepted by Mr Maziya and the ANC. The DP voted against this clause.

Clause 36 was accepted.

Moving to Clause 39 (4) the question was what was the difference between a Service Provider and an Accredited Service Provider?

The Post Office indicated that an Accredited Service Provider complied with certain minimum standards. Mr Kellner indicated that there was no clash between an Accredited Service Provider and a Service Provider.

The DG of Communications put forward that it was the government's intention that there should not be a niche market that was exploited, but rather that there should be an abundance of service providers.

Clause 37 was accepted.

Clause 38 was accepted.

Clause 39
Ms Vos stated that this clause should include the requirement of face-to-face accreditation. This was vigorously supported by the Post Office who indicated that this was already the practice with banks and currently existing service providers.

Ms Smuts disagreed with this proposal, and pointed out that this submission differed from the internationally accepted standards. It was her opinion that this requirement would make the Post Office a monopoly.

The Post Office disagreed with this contention and said that any store with reasonable reach around the country would also be able to provide face-to-face authentication.

While there was some disagreement it was finally accepted that the words "is based on the face-to-face identification of the user" be included as Clause 39(1)(e). (DP voted against this).

Clause 40
This clause was questioned by Mr Pieterse (ANC) who wanted to know what happened to an ASP's customers if it went bankrupt. Mr Kellner indicated that the customers will be like any customers of a business that went bankrupt.

Clause 41 was opposed by the DP. Mr Kellner indicated that the clause was legally sound, and the clause was accepted.

Clause 42 was also accepted with the addition of "accreditation" before "authority" as this could lead to some confusion.

Mr Mostert had proposed an amendment which would remove the Computer Evidence Act. This amendment is contained in a document that Mr Mostert submitted to the committee. All that was necessary to completely usurp the functions of the Computer Evidence Act was for a Clause 15(4) to be inserted.

The Chair indicated that Clauses 11(3), 18, 19, 21 will be dealt with again.

Clause 43
This was briefly considered and Ms Vos indicated that medicines should be included in this clause. Ms Smuts also wanted computer software and digital downloads to benefit from the cooling off period.

The Chair adjourned the meeting until the next day.

Appendix:
DA amendments to ECT Bill May 2002

Chapter 1
Delete definitions taken from Promotion of Access to Information Act i.e.
"personal information" - replace with EU definition for personal data "public body"- inappropriate
"private body"- inappropriate

Further amendments will follow from resolution of issues

Clause 2
On p 9 line 43,44 delete with public and private bodies and institutions
On p 1O delete lines 2and3

Chapter 2
Delete - disregards the separation of powers

Chapter 3
Clause 13 (1) amend as discussed
Clause 15 note: repeal Computer Evidence Act 1983 in Schedules
Clause 19 (2) delete for unintended consequences and overbroad application
Clause 20 move to application section
Clause 21 delete sub clauses d and e which conflict with the definition of automated transactions, move to consumer section
Clause 23 (2) move to Cl 24
Clause 24 substitute the whole with MIH proposal p11 to capture concerns of inter alia Banking Council Potchefstroom University etc
In lines 4 and 15 on page 17, delete public body and substitute government department

Chapter 5
Should be dealt with as part of Interception and Monitoring Bill

Chapter 6
Clause 35 In line 34 delete Director-General and substitute SABS
Delete sub (2)

Chapter 7
Clause 43 (2) delete
Clause 44 (1) (g) delete
Clause 45 delete
Clause 46 The DA would prefer an opt-in clause
Clause 48 Not workable

Chapter 8
Clause 52 (8) delete - impractical when consumer access and correction not yet required

Chapter 9
Delete for unconstitutionality, vagueness, conflict with Access to Information Act and general misdirection

Chapter 10
Retain existing 5 21 company and invite government on board (again)

Chapter 11
In clause 79, line 45, delete "for damages"
Clause 80 line 6 delete "for damages"
Clause 81 (c ) in line 25 before "right" insert "intellectual property"
In line 35 delete sub clause
After line 36 add:
81(2) Any person who lodges a notification of unlawful activity with a service provider knowing that it materially misrepresents the facts is
liable for damages for wrongful takedown
and (3) A service provider is not liable for wrongful takedown in response to a notification

Chapter 12
delete

Chapter 13
On page 35 in line 20 after program insert "or a component"
In line 37 delete "fake" and substitute "inauthentic"
Query: civil remedies?

Chapter 14
Clause 96 delete