Chamber of Mines of South Africa
DATE: 28 AUGUST 1998
PREVENTION OF ORGANISED CRIME BILL, 1998

I refer to your letter of 31 July 1998 requesting comments on the above Bill, copy of which was attached to your letter. In response to this request there is attached a copy of a document setting out the Chamber of Mines of South Africa's comments on the Bill. It would be appreciated if our comments could be submitted to the Portfolio Committee on Justice.

From the Chamber's comments you will see that although the Chamber does not specifically request an opportunity to give oral evidence to the Portfolio Committee on Justice regarding the Bill, it will be prepared to do so should the Portfolio Committee require.

M DILIZA
CHIEF EXECUTIVE

28 August 1998

COMMENTS BY THE CHAMBER OF MINES ON THE PREVENTION OF ORGANISED CRIME BILL, 1998

Introduction
The comments of the Chamber set out below on the Prevention of Organised Crime Bill are submitted in response to a request from the Department of Justice to the Chamber. The Chamber would like to place on record its appreciation for being given an opportunity to comment on the Bill.

Background to the Chamber's interest in the Bill
The theft of gold, platinum, copper and diamonds has taken on alarming proportions within the mining industry. In this regard there is attached a copy of an article that appeared in the October 1997 edition of Mining Mirror covering theft at gold mines. All evidence indicates that the theft of precious metals from mines is co-ordinated by, and part of the operations of local and international syndicates. This view is confirmed in the attached article.

The extent and effect of the problem is best illustrated by example. In respect of gold, it is conservatively estimated that in 1996 some 30 tons of gold to the value of approximately R1,58 billion was stolen. It is estimated that a loss of 30 tons of gold in 1996 equated to about 30,5% of the working profit of gold mines across the industry and about (63% of the available profit to shareholders, after capital expenditure. Gold revenue made up some 23% of South African foreign exchange earnings in 1995. If the gold had not been stolen, total dividends would have been increased by approximately 29,5%, total taxation paid by gold mines would have increased by approximately 37,1% and the number of marginal mines would have been reduced from 7 to 2. More importantly, the number of jobs at risk on marginal mines would have reduced from about 41 500 to about 10 000 (a difference of about -76%). It should be clear that the theft of precious metals holds substantial ramifications, not only for employers in the industry, but also for employees and the government.

Comments on the Bill
The Chamber, in principle, welcomes the initiative to introduce a Bill aimed at preventing organised crime. The Bill, if implemented, will hopefully assist in achieving this objective. The Chamber is, however, of the view that there are certain deficiencies in the Bill. These are dealt with below.

Clauses 4 and 17 to 23 deal with forfeiture to the State of (a) property concerned in the commission or suspected commission of an offence which forms part of a pattern of illegal conduct or of (b) property which is, or is part of, the proceeds of unlawful activities.

Although provision is made for persons who may be affected by a forfeiture order to apply to court for certain interests in property to be excluded from the forfeiture order, these provisions are unsatisfactory and should be broadened as indicated below. First, the primary focus for forfeiture to the State should be property acquired by a syndicate from the proceeds of criminal activity, such as farms, houses, cars, etc. purchased from such proceeds and not property belonging to third parties, but used by the syndicate, such as stolen vehicles or previous metals.

There should be a specific obligation on the State, and particularly the court, to return any property in the possession of, or under the control of, a syndicate member to any person who may otherwise be legally entitled thereto. (For example, where a syndicate uses stolen goods, such as cars or precious metals, they should be returned to their lawful owners.) Only where such lawful owner or holder cannot be located, should the property be forfeited to the State. Secondly, such lawful owner should not be required to assert its legal rights by bringing an application for the exclusion of interests in forfeited property as envisaged in the Bill. There should be an obligation on the State and the court to take reasonable measures to locate such persons with lawful interests and their rights should automatically be protected in addition to the right to apply to the court for protection as envisaged in the Bill.

(On a more detailed note it must be pointed out that clause 20(8) should not only refer to "interests in property" but also to "property". In addition, this sub-clause seems to deal only with those situations where property or an interest therein was acquired during or after its involvement in the commission of an offence and not prior to such involvement, such as where cars or unwrought, precious metals are stolen and then used by syndicates.)

Clause 5 makes provision for a judge or magistrate to issue an order notifying a person having an interest in or control over property that a reasonable suspicion exists that such property is concerned in syndicated criminal activity. A concern regarding this clause is that it is unclear what the purpose or effect of such an order by a judge or magistrate would be.

It is submitted that clause 36 should be amended so as to strike a balance between the use of the proposed Criminal Assets Recovery Fund for assisting law enforcement agencies on the one hand, and compensating victims on the other hand. These objectives are equally meritorious. Clause 36 should reflect this balance by deleting the words "the financial position of the Fund and" from sub-clause (c) In addition, clause 36 seems to envisage only assistance to natural persons and not businesses that may have suffered financial hardship or financial distress by illegal conduct or criminal activity. This discrimination cannot be justified and clause 36 should be amended to make it clear that it is not only natural persons who may qualify for assistance.

There are a number of provisions in the Bill that could be interpreted as possibly interfering with an accused person's right to a fair trial. The Bill should be referred back to the state law advisors with the specific request that it be checked for compliance with the Constitution so that the efficacy of the Bill is not neutralised by repeated constitutional challenges in court.

Conclusion
The Chamber supports the Prevention of Organised Crime Bill in principle, subject to the comments set out above. Although the Chamber does not specifically request an opportunity to give oral evidence to the Portfolio Committee on Justice regarding the Bill, it will be prepared to do so should the Portfolio Committee require.