Implementation & Review of DTIC legislation

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Trade, Industry and Competition

13 September 2022
Chairperson: Mr S Mbuyane (ANC); Mr Z Burns-Ncamashe (ANC)
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Meeting Summary

Video

The Portfolio Committee on Trade and Industry met on a virtual platform to receive a briefing from the Department of Trade, Industry, and Competition on the implementation and review of legislation. The Deputy Minister and department officials were accompanied by representatives from the relevant entities who provided specific details relating to the various pieces of legislation under discussion.

The Department reported on the progress made regarding implementing the Intellectual Property Laws Amendment Act, National Credit Amendment Act, Legal Metrology Act, and the Protection of Investment Act.  The Department reported on the status of the Consumer Protection Act and National Gambling Amendment Bill, both currently under review. The National Gambling Act is particularly difficult as gambling is a concurrent function of the national government and provincial governments. One of the difficulties is reaching a consensus on key matters. Currently, only three provinces support the proposed National Gambling Act. Mediation on the Bill was placed on the Parliamentary programme for 2022 and was scheduled for 7 June 2022. However, the mediation meeting was cancelled and the Bill was awaiting rescheduled dates by the Mediation Committee. The Intellectual Property Laws Amendment Act of 2013 was addressed in some detail. The challenge arose from the fact that both the Department of Trade, Industry and Competition and the Department of Science and Innovation is working on legislation relating to Indigenous Knowledge and there are overlaps. The Department of Trade, Industry, and Competition is currently considering handing the full mandate for implementing Indigenous Knowledge to the Department of Science and Innovation while it would focus on amending other Acts, such as the Trade Marks Act of 1993 and the Designs Act of 1993, which relate directly to the work of the Department and its entities, but which could also ensure the integration of Indigenous Knowledge in intellectual property law.

Members’ questions were wide-ranging and were not restricted to the implementation and development processes of the legislation. The National Gambling Amendment Bill raised concerns. Did it protect those who were gamblers because gambling was an exploitation of the poor? Did it protect the grandmothers who went to gamble at the casinos? Was there any control over the Fahfee game? When was the last review on gambling held? To what extent were the recommendations made by the 2011 Wiehahn Commission implemented? Was there anything in place to stop the proliferation of gambling sites? What was the logic behind the proposal that would give the Gambling Council powers to make decisions in a second meeting if the first meeting did not have a quorum? Why was online gambling not regulated? What enforcement measures were in place to prevent the overstimulation of latent gamblers, particularly children and young adults?

Members asked if the Intellectual Property Act benefitted humankind. Was there a clause that said the Intellectual Property rights could be relaxed for the benefit of humankind? Did the legislation allow government to expropriate Intellectual Property rights for the good of humankind? What interim measures were currently in place to prevent the abuse of indigenous knowledge and cultural/ indigenous knowledge art designs?  How did the Consumer Act protect the people? Did it ensure that poor people were not exploited? Why was there a need to extend the focus of the Consumer Protection Act? Why was the Consumer Protection Act not addressed in the recommendations? What was the timeframe for the regulatory impact assessment to be concluded? How did the National Credit Act correct the challenges of debt review faced by most working class people? What happened when the debt counsellor determined that the credit advanced to a debtor had been reckless? What was the recourse from the court once that was reported? In what ways could the National Credit Amendment Act impact the economy and have unintended consequences?

Members asked why there was one form of protection offered to countries where South Africa sought to install bilateral investment treaties while other countries were subjected to the Protection of Investment Act. Had the Protection of Investment Act positively impacted foreign direct investment in the country since its implementation? How different and efficient had that legislation proven to be, from a bilateral investment treaty perspective?

Meeting report

Opening Remarks
The Chairperson was absent. As a result, the Committee Secretary called for nominations for an Acting Chairperson. Mr S Mbuyane (ANC) was elected. The Committee Secretary, Mr Mbuyane, and the Deputy Minister of Trade, Industry and Competition, Deputy Minister Fikile Majola, expressed condolences on the passing of the Chairperson’s son over the weekend.

Opening remarks by the Deputy Minister of Trade, Industry, and Competition
Deputy Minister Majola stated that the team would be presenting in two parts; firstly, officials would report on the progress made regarding the implementation of legislation and the second part of the briefing would address the review of legislation. He added that the presentation was extremely long so he would request the Acting DG, Mr Shabeer Khan, to commence with the presentation immediately.

Presentation by the Department of Trade, Industry and Competition
Mr Khan introduced the delegation. Three officials would be briefing the Portfolio Committee: Dr Evelyn Masotja, DDG: Consumer and Corporate Regulation Branch would brief the Committee on the Intellectual Property Laws Amendment Act (IPLAA), the National Gambling Act, the Consumer Protection Act, and the National Credit Amendment Act. Ms Niki Kruger, Chief Director: Trade Policy and Negotiations Branch - Trade Policy and Negotiations, would present an update on the Protection of Investment Act, and Dr Tshenge Demana, Chief Director: Industrial Competitiveness and Growth Branch – Technical Infrastructure, would present the Legal Metrology Act.

He explained that the intention was to brief the Portfolio Committee on Trade and Industry on the status of implementation of the following legislation: Intellectual Property Laws Amendment Act; National Credit Amendment Act; Legal Metrology Act; and Protection of Investment Act; and the status of the review process concerning the Consumer Protection Act and the National Gambling Act (NGA).

Only Limpopo, Mpumalanga, and the Northern Cape supported the proposed NGA. The mediation on the Bill was placed on the Parliamentary programme for 2022 and was scheduled for the 7 June 2022; however, the mediation meeting was cancelled and the Bill was awaiting rescheduled dates by the Mediation Committee, and for the Parliamentary processes to unfold.

The dtic had commenced with the review of the Consumer Protection Act (CPA). The industry codes (motor industry and consumer goods codes) were being reviewed for further amendments in the near future. It was pointed out that the Timeshare legislation, currently under the dtic, had to be migrated to a more appropriate Department.

The Intellectual Property Laws Amendment Act (IPLAA) of 2013 was addressed in some detail. The challenge arose from the fact that both the dtic and the Department of Science and Innovation (DSI) were working on legislation relating to Indigenous Knowledge and there were overlaps. The dtic was currently considering handing the full mandate for implementing Indigenous Knowledge to DSI while the dtic would focus on amending other Acts such as the Trade Marks Act of 1993 and the Designs Act of 1993 which related directly to the work of the dtic and its entities, but which could also ensure integration of Indigenous Knowledge in the intellectual property laws.  Another consideration was to repeal the IPLAA or to conduct further consultations on the implementation of IPLAA with the aim of having draft regulations by March 2023- May 2024. The matter was still under consideration.

(See presentation)

Discussion
Dr M Tshwaku (EFF) stated that he had not received the presentation prior to the meeting. He asked about the Gambling Act. Whom did it protect? Did it protect those who were gamblers because gambling was an exploitation of the poor? Did it protect the grandmothers who went to gamble at the casinos? The casino owners were exploiting the poor and the working class; those who did not have anything. Were there stringent controls, in terms of ensuring that people did not go and waste their money because, in the end, the state must be able to protect the people out there? He asked about the game played in the ‘locations’, Fahfee? What was the Department’s view on the game? Was there any control over the game?

On the Intellectual Property (IP) Act, he asked if it benefitted humankind. Was there a clause that said the IP rights could be relaxed for the benefit of humankind? Did the legislation allow the government to expropriate IP rights for the good of humankind? Did the Department have anything anywhere that permitted the government to expropriate IP and use it for humankind, such as for medicine and all of that?

Dr Tshwaku asked how the Consumer Act protected people. The majority of the people were on the credit bureau list but debt companies abused the process by buying debt and then trying to collect it. Did the Consumer Act ensure that poor people were not exploited that way? Did the Act allow debt collectors to come to the house with guns? A consumer‘s debt was listed with a law firm – was that not exploitation of the poor people?

He asked when the last review on gambling was held. He was aware of the Gambling Review Commission of 2011. To what extent were the 2011 recommendations implemented? Have there been any other reviews since then?  Was there anything in place to stop the proliferation of gambling sites? What controls were there? He did not want to spend much time on the issue because he needed to familiarise himself with the legislation. Was there not a summary of the Acts somewhere that would give Members a history of what was there, what had been amended, and the proposals regarding the legislation? Such a summary would assist the Committee, especially those who were new to the Committee. Was there a summary of all legislation and processes to date?

Mr C Malematja (ANC) found it a very informative presentation which showed that the Department had done everything possible to show that it covered things. He noted that the provinces had a problem with the National Gambling Bill.  One of the reasons why the provinces had problems with the Amendment Bill was that it gave the Gambling Council powers to make decisions in a second meeting when the first meeting did not have a quorum. That was bound to create problems. What was the logic behind that proposal? One of the challenges identified in the Consumer Protection Act was the need to extend the focus of the Act. However, that was not addressed in the recommendations. Why was that the case? And how would the Department act to ensure the practicality of such additions?

Mr D Macpherson (DA) expressed his condolences to the Chairperson.  There was a wonderful saying that history had no blank pages. And luckily, he was young enough to have a fairly decent memory and could remember many of the contentious conversations that had taken place in the Committee, and with the Department, regarding legislation because much of the legislation that had been spoken about today, had been given very sound warnings over many years. However, those warnings were ignored by the Committee and by the Department. And when many of those concerns had been raised, and the many obvious problems with the Bills were pointed out, he and his colleagues had been simply told that they were politically grandstanding or scoring cheap political points or tap dancing to some masters or some other rubbish in defence of what was indefensible.


He started with the Gambling Amendment Bill. When that Bill had come to the Committee, he had told the ANC that its own provinces would not accept the Bill because it sought to take away from provinces the powers that had been concurrently legislated to them by the Constitution. Provinces only had two spaces to share national power: one was in liquor legislation, and the other one was in gambling. Members of the Committee had sought to take powers away from provinces and he had said that even the ANC provinces would reject the Bill when it reached the National Council of Provinces (NCOP). And historically, that was exactly what had occurred: ANC-run provinces had rejected a Bill from an ANC-run government. He asked Members to think about how historic that was. When he and his colleagues had warned the Committee, they had been dismissed, and they were ignored. And, now the problem was back before the Committee, and the Bill had never been dealt with. The Department had only been trying to scratch the surface and many issues had never been dealt with by the Review Commission and subsequent Amendments.


Mr Macpherson stated that one of the biggest issues was remote, online gambling, and that form of gambling continued to take place, unregulated, without any form of protection for consumers in South Africa. Because it was unregulated, there was no possibility of generating revenue, while the Department continued trying to save face for a failed Bill. The reason there was no mediation and meetings were being cancelled was that no province wanted to mediate the process because they simply did not want the Bill. That was another lesson; unfortunately, Members seemed to want to learn many lessons in the Committee. Maybe, for once, the Committee should listen to opposition MPs, listen to their concerns, and stop dismissing them just because they come from the opposition. He had warned the Committee that that was exactly what would happen. And that was exactly what had happened.  He had warned the Department in 2018, and it had chosen to steamroll the Amendment through because the officials had wanted something to be able to tick the boxes to justify their bonuses and to say that they were doing something in terms of legislation. It was garbage then and it was still garbage. The Department should be going back to the drawing board, but luckily, he had saved the Department some time and had formulated the Remote Gambling Bill which he planned to re-introduce into Parliament as a Private Member's Bill. He was sure that the Department and the Committee were going to support it because all of the ANC-run provinces supported the Bill.


Mr Macpherson turned his attention to the National Credit Amendment Bill. He said it was hilarious that on slide 41 of the presentation, the Department finally admitted that there were implementation problems with the Bill and its cost-effectiveness. A review was now taking place. The Bill had come to Parliament, again, just before the elections, and he had seen that it was nothing other than an election goal but not implementable, and the Department was never going to get the funding for it. Again, unfortunately, Members of the Committee chose to ignore him and his colleagues and called them all sorts of names while deciding to proceed with the Bill. Again, the Department ignored all of their concerns and proceeded with the Bill. Three years later, the Bill had not been implemented, because the Department had finally woken up to exactly what he had told them four years ago, i.e. that the Bill was not workable and there was no funding for it. He had very little sympathy for the Department that was effectively trying to dump Bills on the Committee’s desk 18 months before an election because it had very little to show for what it had done over the past three years.


Mr Macpherson said that the time had come when Committee Members had to deal with Bills as honest brokers and where Members decided to and wanted to listen to Members of the opposition, because those Members said things, not because they had nothing better to do, but because they had real concerns over the implementability and the effectiveness of the Bills. And those were just two examples of Bills where advice had been ignored and subsequently, the Bills had stalled and gone nowhere. It was a real shame on Members of the Committee that were in the Fifth Parliament, and the Department, that they found themselves in that position.


Turning to the Protection of Investment Act, he said that, ironically, it did neither of the two stated objectives.  Members had been told that it was necessary to have the Act as South Africa was going to stop concluding bilateral investment treaties, but the country had continued to sign bilateral investment treaties. Why was it that there was one form of protection offered to countries where SA sought to install bilateral investment treaties while other countries were subjected to the Protection of Investment Act, which did neither?


Mr Z Burns-Ncamashe (ANC) stated that Members all knew that access to finance in South Africa had always been predicated on the policy compendium that was entirely entrenched on capitalist propositions and over and above that, it had been a contentious matter, which had always been racialised and therefore as an Important transformational imperative, it had always been important to make sure that government developed a legislative regime that was able to redress that kind of historical injustice and begin to come up with the legislative instruments that placed the working class at the centre in terms of access to resources. That was how the government would change the socio-economic challenges of different households. How did the National Credit Act correct the challenges of debt review faced by most working class people? After being placed on debt review, many people struggled to get their names removed from debt review, which limited their ability to apply for credit in the future. It was very critical; it talked to the heart of what he had prefaced his comments with. 

Mr Burns-Ncamashe’s second question was linked: what happened when the debt counsellor determined that the credit advanced to a debtor was reckless? What would be the recourse or the remedy from the court once that was reported? There were credit providers that were unscrupulous and notorious in that respect.

Mr Burns-Ncamashe noted the recommendations of the regulatory impact assessment of the National Credit Amendment Act indicated that there were areas that could impact the economy and have unintended consequences. Could he get clarity on the specifics of how that would negatively impact the economy and vulnerable consumers? Parliament had a responsibility to ensure that the consumer was protected from the hawkish tendencies of those in control of the production which, by extension, meant they were in control of the value chains, which ultimately affected his people negatively.

Lastly, he asked about the Protection of Investment Act and how that had had positively impacted foreign direct investment in the country. How different and efficient had the legislation proven to be compared with bilateral investment treaties? That was also very critical because those treaties had to be able to respond to fundamental economic challenges as they related to investment opportunities.

Mr W Thring (ACDP) offered condolences and prayers to the Chairperson. Regarding the National Gambling Act, it was common knowledge that gambling had a devastating effect on families, particularly where a member or members of a family had become addicted to gambling and so certainly, one wished to put in place measures to limit the negative impacts that gambling has on families. What enforcement measures were in place to prevent the overstimulation of latent gamblers, particularly children and perhaps even young adults? Advertisements said, "Don't drink and drive” and then at prime time or family time, another advertisement would say, “Down a Lion, feel satisfied”. So, there were mixed messages, despite the talk of reducing overstimulation. Advertisements about gambling at prime family time could also target children and young adults. What measures were there, if any, to reduce the overstimulation of latent gamblers?

He asked what consideration had been given to combining the Lottery and the National Gambling Boards or Commissions into one entity. That recommendation had been laid on the table but had any thought been given to that particular consideration? And then with regards to the regulatory impact assessments on the Consumer Protection Act, what were the timeframes for the assessment to be concluded? Lastly, regarding the Intellectual Property Amendment Act, what interim measures were currently in place to prevent the abuse of indigenous knowledge and cultural/ indigenous knowledge art designs? Some of the designs could only be found in deep rural areas, but somehow those designs or the indigenous knowledge which belonged to indigenous communities, and local communities, were found in Paris, Milan, Tokyo, New York, London, and so on. What interim measures, if any, were in place to prevent the abuse or theft of indigenous knowledge?

Ms N Motaung (ANC) asked whether the Protection of Investment Act had positively impacted foreign direct investment in the country since its implementation. Secondly, how different and efficient had that legislation proven to be, from a bilateral investment treaty perspective?

Acting Chairperson Mbuyane thanked the presenters and requested the Deputy Minister to manage the responses to the questions. Where the officials did not have the answers, they were to respond in writing.

Deputy Minister Majola stated that he would like to respond to broad comments by Members. He suggested that the Acting DG could hand over to Dr Masotja. Representatives from the entities would be able to respond to some of the questions. He would then like to respond to the comments made by Mr Burns-Ncamashe and Mr Macpherson once the officials had responded to the questions.

Mr Khan stated that he would ask Dr Masotja and colleagues from the National Gambling Board on the platform to provide a lot more colour to explain exactly what was being done there. On the issue that Mr Tshwaku raised around intellectual property being used for humankind, he requested Miss Niki Kruger to also indicate the work that the team had done at the World Trade Organisation in terms of the TRIPS waiver in which vaccines were allowed to be produced in countries during the period of the pandemic. That was a very good example of how intellectual property could be addressed to assist humankind. Ms Kruger and her team had assisted in that process. The issues around the National Credit Amendment Bill, as well as remote and online gambling, as raised by Mr Macpherson, would be answered by Dr Masotja.  Concerning the Protection of Investment Act, Mr Khan indicated that quite a considerable bit of work had been done in that area. South Africa was in the process of terminating all bilateral treaties which would then expire on the expiration date. Obviously, with the introduction of the Act, all treaties could be terminated immediately but there was a considerable amount of work being done at the moment. For example, in the African Continental Free Trade Area negotiations, the team had already started negotiating a protocol on investment, which would then regulate how the investment would be dealt with on the continent. Ms Kruger would be able to expand on that.

Regarding the combination of the National Lotteries Commission and the National Gambling Board, Mr Khan pointed out that in the dtic 2022 Annual Performance Plan, the Minister had indicated that there were two areas in which the Department was looking to consolidate: the first one is reducing the number of programmes or branches within the Department and the second one was the area of the entities. So, research was currently being undertaken to understand exactly which areas could be consolidated and the area of lotteries and gaming was one specific area. But obviously, that work was still being undertaken. Once that was clear, the necessary regulatory processes would unfold.

Dr Masotja responded to the questions by Mr Tshwaku. She noted his concerns related to the protection of communities regarding gambling and the fact that vulnerable people ended up using their limited resources or finances to gamble at casinos. It was a concern, but the issue was not addressed directly in the National Gambling Amendment Bill, but with the National Gambling Act, the government and the National Gambling Board had a number of programmes to assist people, such as education and awareness programmes where they talked to communities about issues of gambling. The National Responsible Gambling Programme also looked at supporting persons affected by gambling-related issues, especially gambling addictions. That was one of the issues that required ongoing support and ongoing engagement with the communities because, although it could be legislated, it talked to human behaviour. When a parent received a grant for social welfare to assist with their livelihood, the money was sometimes spent on gambling. It might not necessarily be a legislative issue per se. Although it talked to protection, it also talked to behaviour and education about gambling and the fact that it was a harmful activity that could lead to addiction issues and have other consequences that were not anticipated. But the Department was always looking for other opportunities to reach out to communities to talk to them about the harmful effects of gambling, even though provinces saw it as an opportunity to make more income. Another gambling mode that had a potential for addiction in that manner was the lottery. The cost of those tickets did not seem like much, but it had a similar effect. It was a very important question.

On the question of fahfee, Dr Masotja explained that it was an illegal gambling activity. Fahfee was not legislated. The National Lottery Regulator looked at issues relating to fahfee as it was linked closely to the issues of the lotteries. The fahfee issue was being researched, but the dtic was also engaging with other regulators around these issues. It was viewed in the context of illegal activity and was one of the areas that the Department was grappling. However, the regulators were looking at it and monitoring the situation. There was always room for tightening legislation, and the issue of fahfee was noted.

Dr Masotja responded to Mr Malematja who also had a question on the issue of gambling but in respect of the legislation. Concerning the National Gambling Policy Council, one could look at it from an administrative perspective that it was only a meeting with a matter of a quorum. The main issue with a quorum was that it was necessary to make key policy decisions, and policy decisions had implications for how, for example, the structure of protection in the country was organised. One did need buy-in from provinces because of the concurrent nature of the function, and because of the mandate. So, norms and standards and having provinces agree on a way forward were critical. The challenge was that there had not been a quorum of five MECs and the Minister for many years, so decisions could not be taken; they were merely noted. Certain necessary changes had not happened because a uniform approach was required across provinces and national structures. The logic was that by making a strong point of imposing decision-making powers on the body even if in the first meeting there was no quorum, in the next meeting, a decision could be taken. She explained how MECs agreed to attend a Council meeting but regularly pulled out at the very last minute. The proposal had been put on the table to ensure harmonisation and control in regulating gambling in the country in the concurrent environment determined by the Constitution.

In terms of dealing with illicit goods under the Consumer Protection Act, Dr Masotja stated the recommendations made in the presentation were simply recommendations. The Department had not finalised the matter. The options were mainly those the research had identified for further consideration. The dtic would be looking at the different options presented in the regulatory impact assessment study. In respect of illicit goods, for example, dtic would look at the options of inspections, the role of the National Consumer Council, other regulators, and how it interrelated to other regulators that dealt with illicit goods. Those were just some of the issues from the research, but they were not cast in stone. There was a need for further public participation before getting to the final options that would be presented to the Committee. There had been a regulatory impact assessment study and the dtic was finalising it after consulting with stakeholders. The DG had spoken to the issue of the Patents Act when it came to human benefit, for instance, on medicine as related to the patents. Ms Kruger would speak to that issue. It was not an issue relating to the Intellectual Property Laws Amendment Act but an important point that she had noted regarding credit bureaux and the abuse that occurred when they bought a debt from other suppliers, and then put the burden on the consumer. This issue would be addressed by her colleague from the National Credit Regulator. She could talk about that from a practical implementation perspective of what they did about such incidences when they happened. Also, she would talk about the selling of debt, the implications, and the exploitation that sometimes occurred. That was one of the areas that the dtic was looking at strengthening in future amendments. But the regulator could be working more tangibly.

Dr Masotja thanked Mr Macpherson for his input. In terms of legislative development and policymaking, the Department needed to listen to all voices. It was correct to say that when there was criticism of what the Department had done, listening to the critique could help to improve the process. She noted the input Mr Macpherson had made, the journey he had taken the Committee through, what had happened with the Department, and the role of the Committee. There were always lessons to be learned. There were things that the Department could strengthen based on the wisdom received from persons like Mr Macpherson who knew the historical context of issues. The Department had noted the Private Member's Bill and it was something that the Department would engage with. Mr Macpherson asked why there were different forms of protection for countries when it came to investment legislation. Ms Kruger would talk to that point and respond to the question relating to the Protection of Investments Act and the differentiation between countries.

Acting Chairperson Mbuyane requested Mr Burns-Ncamashe to take over as Acting Chairperson as he was in transit.

Dr Masotja responded to the question of when the last review of the gambling legislation occurred. The last review was in 2011 and some of the recommendations in that review had been considered. It had looked at different modes of gambling, and at how the dtic needed to move forward, based on the new modes of gambling that had been identified. The Department had considered the different aspects of gambling and how best to move forward. The country had since moved to different areas of gambling. One of the main concerns was the new modes of gambling, the economic implications of the gambling situation in the country and also protection for gamblers and ensuring a clear and strengthened regulatory framework for gambling. In terms of protecting the public, the dtic continuously identified measures to look at how to protect the public against the harmful effects of gambling. Representatives from the National Gambling Board (NGB) would talk about some of the practical things that the NGB was dealing with in looking at the implementation of some of the programmes dealing with proper support to communities in respect of gambling. Also, the dtic did its own education, creating awareness, from time to time, by going into communities, especially rural communities, to talk about some of the issues around gambling because it was a societal issue, and also to talk about behaviours concerning gambling.

Dr Masotja noted Mr Burns-Ncamashe’s point on the role of credit in the transformation of the economy and uplifting society and changing the historical context by ensuring more benefits. She also noted the questions about consumers who struggled to get out of debt review and the role of Debt Counsellors when there was recklessness. She had noted those questions but would prefer that the National Consumer Regulator dealt with those issues and provided detail on a practical implementation level of how it dealt with some of the issues. On the regulatory impact assessment and the unintended consequences that were identified in the research, such as the cost to the government, those costs were expected because it was intervention legislation that was meant to be for free for the consumers and the costs included the role of the regulators, the administration of it and the processes. That was the cost to the fiscus.

She said another notable point raised was the cost of credit to vulnerable consumers. As much as the Act was intended to protect consumers, it was going to make them worse off because the financial services sector was going to have a challenge with consumers who were not able to meet the risk criteria. So, while it was intended to be a process that simplified things for consumers, rearranging their debts would also make them vulnerable because now the financial sector would avoid lending to that target group, and then some would exploit the situation. The research highlighted other issues around the costing of that process to the economy, and how it could even affect perceptions of the macroeconomy. The dtic had considered that and was aware of being prudent, given that the economy faced so many challenges, that were not there in 2019. Recent developments from COVID to the unrest and the floods have created greater implications for the country. The dtic had considered challenges.

On the issues around gambling, the advertisements, and the vulnerability of young children and teenagers, Dr Masotja would ask NGB to talk about this issue. That question did not require a theoretical legislative point of view. Regarding the National Gambling Board and the National Lotteries Commission, the dtic had started looking at that question and, as the DG had indicated, the Department was also looking for a fit-for-purpose structure, not only in terms of the Department itself but also for the entities as well. That debate was ongoing. The dtic had also undertaken a study on the lottery as stability was required in that area. Hopefully, quite soon, there would be more direction in the way forward. There has been no decision as yet.

On the Regulatory Impact Assessment for the Consumer Protection Act, the dtic did not have timelines, but it had started with looking at the policy options and would be engaging with experts and other stakeholders. The regulatory impact study was completed in March 2021, so her team was currently in the policy development process and looking into how to strengthen the current legislation. The Intellectual Property Laws Amendment Act was being considered to prevent the exploitation of traditional intellectual property which was sometimes found in places like Paris, Milan, and Tokyo. That was a concern. The dtic had come up with the legislative framework because measures had to be regulated in that type of industry. The Act was intended to ensure further protection, but it was an area of concern to the dtic and even the Department of Science and Innovation which was working on similar legislation. There were different roles that different departments were playing around IP but her colleagues would present the CIPC point of view on that issue.

Ms Kruger noted that the Acting DG had asked her to talk briefly about the TRIPS waiver at the World Trade Organisation (WTO) and then there were two questions on the Protection of Investment Act concerning the termination of bilateral investment treaties, and then the impact of the Protection of Investment Act. In terms of the TRIPS waiver, she pointed out that TRIPS was the agreement on trade-related aspects of intellectual property rights. It was an international legal agreement between all the members of the WTO. Last year, South Africa and India proposed a TRIPS waiver in the WTO for purposes of COVID. At the 12th WTO ministerial conference in June 2022, a decision was taken in terms of the waiver. Basically, what the waiver provided for was that it allowed governments to authorise local manufacturers to produce vaccines, or the ingredients, substances, or elements and utilise processes that were covered by patents without the permission of the patent holder during the pandemic. It also allowed for the export of those products that were then so manufactured. She added that the Department had prepared a Patent Bill and that Bill would shortly be presented to the Portfolio Committee for further consideration.

Concerning questions on the Protection of Investment Act, Ms Kruger informed Mr Macpherson that all investment, whether from any other country or domestic investment, was protected under the Protection of Investment Act. It was correct that there were still some bilateral investment treaties in place but the dtic had started the termination process of the bilateral investment treaties. Because they provided for fixed periods and were still in place or had been automatically renewed for another fixed term, they continued until terminated in line with the provisions of the specific bilateral investment treaty. So using the specific provisions in the different bilateral investment treaties, the termination process started for first-generation bilateral investment treaties. That process was still ongoing. South Africa did not treat countries differently. The first bilateral investment treaties entered into were mostly with European countries and were the first to be terminated in terms of the fixed term periods set out in those agreements. As the Acting DG had indicated concerning bilateral investment treaties with African countries, those were being dealt with in the current ongoing negotiations on the African Continental Free Trade Agreement, where SA had started to negotiate an investment protocol, noting the impact of the Protection of Investment Act and how it may be done, differently or better than the bilateral investment treaties.

She reminded Committee Members that it was not only the Protection of Investment Act that set the framework for investment. Global conditions and economic growth were also factors that affected investment flows. Investors wanted to know that there was a robust legal system protecting investments when they invested. South Africa provided that environment under the Protection of Investment Act under the Constitution. SA was a mature foreign direct investment economy and foreign investors were already well established across all the sectors of the economy. Importantly, it should be recalled that since the implementation of the Protection of Investment Act in 2018, and the start of the President's investment mobilisation drive, R1.1 trillion of investment has been attracted to South Africa. The dtic had not received any specific concerns from investors regarding the implementation of the Protection of Investment Act and they actively invested in South Africa. The Act also provided mediation provisions that investors could use when they had any concerns. Those provisions were implemented in close cooperation with InvestSA to ensure that investors’ concerns were addressed. It could be seen in the type of investment SA had attracted over the last four years and in the sectors where investment was taking place, that the Protection of Investment Act put in place a very attractive framework. Ms Kruger offered to add any further information required in writing. 

Ms Nthupang Magolego, Senior Legal Advisor, National Credit Regulator (NCR), stated that three questions related directly to the work of the NCR. Concerning the question of the settling of debts, legislation had already been introduced in 2015 to deal with exploitation. Some of the debt collectors exploited the provisions of the Act as essentially, those selling identified debts tended to sell debts that were over three years old, and in terms of the Act, they were essentially not allowed to collect those debts. So, to a certain extent, some of the exploitations relating to selling debt had already been dealt with under the current legislation. The second question related to exiting debt review. The challenges of exiting debt review have been dealt with under the current law. Firstly, local consumers who apply for debt review can exit that review once they pay all the debts related to the application. But secondly, the courts had already also granted some guidelines for consumers who believed they were no longer over-indebted. Those consumers could provide the court with evidence and then the court could declare them no longer over-indebted, and therefore they exited debt review. So, under the current legal framework, mechanisms were in place that allowed consumers to exit debt review. Consumers who were currently still owing money according to the debt application or were still over-indebted were the ones who were not able to exit currently, and they deserve to continue to be protected under the mechanism. Those who exhibited fraudulent behaviour, buyers or sellers, were dealt with in terms of the enforcement mandate of the National Credit Act, where the NCR was able to obtain orders that would prohibit the Debt Counsellors from cancelling. And lastly, redress was available to consumers whom Debt Counsellors had identified.

Acting Chairperson Burns-Ncamashe thanked her for an informative response. Members would agree with him when he said there was a strong necessity that outreach programmes should be the order of the day, to empower our people with information, especially where the people were taken for a ride by those who bought prescribed debt to illicitly gain out of those kinds of transactions. It was important to share that kind of information.

Dr Masotja added that the CIPC colleagues would talk about the issues of the IP law and how they were currently dealing with this even without the legislative framework that the dtic was trying to address.

Mr Nkoatse Mashamaite, Legal Director, NGB, said that the issues raised were mostly about the protection of the people. Firstly, he indicated that protection was built into the gambling policy and guided by the principles set by the Wiehahn Commission, as indicated in slide 7 of the presentation. It was mostly about protecting vulnerable people from the latent harm associated with gambling, and the NGB had to regulate gambling strictly to ensure the dignity and protection of the gamblers. So, in dealing with the issues of the vulnerable, Members would note that there were limited opportunities for gambling in the country. In terms of policy, there was a limited number of casinos permitted and 41 operators had been granted licenses to operate in the country, although not all 41 licenses were operational at the moment. The NGB also allowed limited power machines, which were slot machines that could be played outside casinos. Those machines were limited in that people could only gamble or bet with at least five friends at the time and could only win up to R500 per game. That limitation was because the slot machines were outside, and not under the supervision of casinos.

Mr Mashamaite said that provinces issued licenses to casinos and the conditions for those licenses. The NGB conducted compliance oversight. NGB officials regularly went to provinces to check that they followed the principles in the National Gambling Act, such as ensuring that they only allowed people over 18 to participate, and secondly, that there was help for people who might find themselves addicted to gambling.  Messages such as ‘winners know when to stop’ had to be displayed at the entrances. The NGB also engaged in dispute resolution processes. Dispute resolution information had to be displayed so that gamblers could see where to go to lodge a dispute. Disputes began at the licensed premises, and would, if necessary, go to the province. If a gambler was still not happy, it would be escalated to the NGB which would try to mediate to ensure that a proper resolution was found.

He explained that Members should recognise that in South Africa, the Constitution allows a number of freedoms and those freedoms included gambling, hence the legislation stated that if a gambler felt he or she was vulnerable and was getting addicted to gambling, the person could apply to have his or her name excluded from gambling for a certain period. He or she could apply to be re-admitted at a later stage. The process also allowed a third party to approach relevant authorities for that assistance if a family member was becoming addicted. At the moment, the process was applied informally, as the NGB was still finalising the process through regulations.  When the regulations were implemented, there would be a national register where all licensed operators would be able to see the names and photographs of people who had excluded themselves. Measures would be implemented to ensure those people were not allowed on the gambling floors. It was applicable at the moment, but only informally, and people would be excluded where they applied. That was one of the safeguards to try and prevent the issues of addictive gambling. The NGB had partnered with the South African Responsible Gambling Foundation, an organisation funded by licensed operators in the country through a 0.1% compulsory contribution of their gross gambling revenue. It provided free counselling and treatment service to addicted people who had problems with gambling and needed assistance. There was a toll-free line that people could contact to get assistance.

Mr Mashamaite said that it should also be noted, as indicated earlier, that the NGB conducted education and awareness programmes and it tried to educate people that it was wrong to gamble with illegal operators because they tended to get arrested. The provisions in the Act required that one be sentenced for a period not exceeding ten years or be fined up to R10 million. People were also alerted that if one gambled with an illegal operator, one’s winnings might not be paid out because when the banks received notification to pay, they would first notify the National Gambling Board, which would investigate in terms of section 16 of the Act. If that investigation found that the proceeds were from illegal activity, the money would be forfeited to the state through the court. Unfortunately, the gamblers would lose in the end, as their winnings would be confiscated and forfeited to the state. The banks did work with the NGB and notified the Board about that kind of thing. The other question was on advertising and there was a legislative provision nationally that required advertising to be responsible and that it must not extend to vulnerable people, so advertising in peak hours was something that the NGB would deal with. Part of NGB oversight was to engage with the provinces to be alert to such advertisements and to speak to licensees to stop.

He added that the NGB was responsible for assisting the provinces when dealing with enforcement against illegal gambling operations, including fahfee which was an illegal gambling activity that was not regulated in the country. Provinces engaged with the NGB to try and manage the issue of illegal gambling. The NGB was on a national drive to establish enforcement committees dealing with illegal gambling. The NGB was working with the police and setting up in every province with the National Prosecuting Authority, the Financial Intelligence Centre, and all other stakeholders relevant to the matter, including the National Lotteries Commission. There were positive results and a number of people were arrested for illegal gambling activities. With the support of the police in the initiative, he believed it would yield results and help to eliminate illegal operators even in the online gambling spaces.

Ms Nomonde Maimela, Executive Manager, Intellectual Property (Innovation & Creativity), Companies and Intellectual Property Commission (CIPC), addressed questions on intellectual property-related issues. The Intellectual Property Law Amendment Act provided and deepened the necessity for registering a copyright related to SA’s cultural and indigenous knowledge. Copyright also enabled CIPC to register and trademark digital designs. CIPC was working with the Department of Science and Innovation as well as the dtic to protect South African indigenous-related designs or copyright. CIPC believed that protecting them under IP would be more effective because the IP registration detailed who the owner was. That would enable communities to be identified as owners of those cultural designs. In the area of patents, CIPC forced those registering patents related to genetic resources to declare that the patents were not indigenous to South Africa. Many other steps related to IP registration were required for indigenous work to be completely protected. For instance, CIPC needed to decide how to get the community to give informed consent. BMW had used the Ndebele design on some of their cars and CIPC just wanted to ensure that the community also benefitted when their cultural design was used. When a registered South African design, trademark, copyright or cultural expression was used anywhere in the world, CIPC could do something about it, although there was still a lot of work to be done in that area. Another structure that was being put in place, especially in Africa, by WIPO (the World Intellectual Property Organization) related to a sharing mechanism, so that the community could share the benefits and not only one person who was clever enough to run with indigenous knowledge, or a cultural expression that belonged to the community. She requested her colleague to speak about patents which also related to indigenous knowledge.

Dr Thandanani Cwele, Senior Manager: Patents and Designs Registry, CIPC, explained that sometimes an invention was derived from traditional knowledge, or somehow the inventor had benefited from indigenous knowledge or traditional knowledge. CIPC had a requirement that, before a patent could be granted, the inventor or the applicant had to declare whether the invention was derived from indigenous knowledge or traditional knowledge. If that were the case, one had to prove that they had received it in an agreement with the community that had developed that traditional knowledge or which was the custodian of that knowledge. It was necessary to strengthen that area, but for now, while IP law was not yet operational, that was what CIPC was doing.

Closing Remarks
Acting Chairperson Burns-Ncamashe noted no further business and adjourned the meeting.

The meeting was adjourned.

 

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