TELKOM
27 NOVEMBER 1997

MEMORANDUM : DRAFT OPEN DEMOCRACY BILL, as published in Government
Gazette No.18381 of 18 November 1997 in Government Notice No 1514 of 1997
("the Draft Bill")

GENERAL COMMENTS BY TELKOM SA LIMITED ("TELKOM") TO THE OFFICE OF THE DEPUTY PRESIDENT
1 INTRODUCTION
1.1 Section 32(1) of the Constitution of the Republic of South Africa,
1996 grants everyone the right of access to:
"(a) any in formation held by the state; and
(b) any information that is held by another person and that is required for the exercise or protection of any rights (our italics).

1.2 Section 32(2) of the Constitution, read with item 23(1) of schedule 6 thereto, requires the enactment of national legislation to give effect to this right within 3 years of the commencement of the Constitution (i.e. within 3 years after 4 February 1997).

1.3 Item 23(2) of schedule 6 to the Constitution, provides that until national legislation of the nature referred to in 1.2 is enacted, section 32(1) must be regarded to read as follows:

"(7) Every person has the right of access to all information held by the state or any of its organs in any sphere of government insofar as that information is required for the exercise or protection of any of their rights." (our italics)

1.4 In view of the provisions of the Constitution, Telkom appreciates the need for the Draft Bill and in principle supports the promotion of transparency and accountability by all organs of state through the provision of timeous, accessible and accurate information.

1.5 Telkom also recognises that whilst the Draft Bill includes specific provisions for public access on request to information held by the state, it also includes exemptions necessary to protect good governance, personal privacy and commercial confidentiality.

1.6 Telkom is making this submission in the spirit of constructive cooperation so as to draw to the attention of the Office of the Deputy President:

1.6.1 potential constitutional arguments against some of the wording adopted in the Draft Bill;

1.6.2 that the limited protection of the principles of good governance, personal privacy and commercial confidentiality in the Draft Bill may result in a potential infringement of well protected immaterial property rights (in the form of trade secrets and confidential information) belonging to public enterprises;

1.6.3 the unique status of certain former "organs of state" which are in a transitional phase of commercialisation.

1.7 In making the aforesaid comments, Telkom appreciates the need for legislation which will:

1.7.1 give individuals access to information about themselves held by private persons;

1.7.2 allow the correction of personal information held by the state or private persons; and

1.7.3 protect individuals against abuse of their personal information by the state or other private persons; and

1.7.4 protect persons who make known evidence disclosing contraventions of the law, serious maladministration or corruption in governmental bodies.

1.8 Telkom also wishes to make specific submissions on specific provisions of the Draft Bill which need to be addressed in the interests of all stakeholders.

1.9 The motivation for Telkom's submissions and the details of its specific submissions, form the subject matter of a separate memorandum.

2 BASIS FOR SUBMISSIONS
Telkom is making these submissions in view of the general invitation to "all persons concerned" to do so contained in paragraph 2 of Government Notice 1514 of 1997, in Government Gazette No.18381 dated 18 October 1997.

3 GENERALCOMMENT
3.1 Constitutional Arguments
3.1.1 Section 32(1) of the Constitution makes a clear distinction between the right of access to information held by the state (subsection (a)) on the one hand and by another person (subsection (b)) on the other hand.

3.1.2 It is clear from section 32(1) that the right of access to information held by the state is of a general and broad nature, whereas the right to access information held by another person is limited to those instances where the information is "required for the exercise or protection of any rights".

3.1.3 This raises the following two issues:
3.1.3.1 the meaning to be attributed to "the state" in section 32(1)(a) of the Constitution and to "another person" in section 32(1)(b) of the Constitution; and

3.1.3.2 whether the introduction of the term "governmental body" in the Draft Bill seeks to extend the definition of "the state" in a manner which may make it unconstitutional.

3.2 Meaning of "the state"
3.2.1 The use of the phrase "the state" in section 32(1)(a) of the Constitution is unfortunate and confusing in view of section 8(1) of the Constitution.

3.2.2 Section 8(1) provides that the Bill of Rights applies to all law, and binds the legislature, the executive, the judiciary and "all organs of state".

3.2.3 Section 239 of the Constitution defines "organ of state" as:
"(a) any department of state or administration in the national, provincial or local sphere of government; or
(b) any other functionary or institution -
(i) exercising a power or performing a function in terms of the Constitution or a provincial constitution; or
(ii) exercising a public power or performing a public function in terms of any legislation, but does not include a court or a judicial officer."

3.2.4 Section 195(1) of the Constitution provides that public administration must be governed by certain democratic values and principles enshrined in the Constitution, including certain specific principles listed in that subsection.

3.2.5 Section 195(2) of the Constitution states that the principles in section 195(1) apply to:
"(a) administration in every sphere of government;
(b) organs of state; and
(c) public enterprises."

3.2.6 In addition, section 195(6) of the Constitution states that the nature and functions of different sectors, administrations or institutions of public administration are relevant factors to be taken into account in legislation regulating public administration.

3.2.7 It is trite law that the Constitution is required to be interpreted in a purposive fashion, so as to give full effect to the rights recognised in the Constitution (see S v Zuma & Ors 1995(2) SA 642(CC) at 650H - 653A and S v Mhlungu & Ors 1995(3) SA 867(CC) at 8961 - J).

3.2.8 Whilst the use of "the state" in section 32(1)(a) is unfortunate and confusing (see 3.2.1) that phrase, because of the required purposive interpretation of the Constitution, presumably includes the legislature, the executive, the judiciary and all organs of state.

3.2.9 In the recent decision of Tywala v Legal Aid Board 1997(1) SA
283(SEC), the applicant averred that the respondent is an organ of state for the following reasons:

"12.1 it is a statutory body and/or functionary;

12.2 it performs functions of state in providing legal aid in terms of the provisions of section 25(3)(e) of the Constitution;

72.3 respondent's employees are in fact employees of the state who are paid by the state;

12.4 respondent has been instituted as a corporate body by the state;

12.5 it forms part of some hierarchy of state authority and the state exercises control over its composition, internal functions and actions;

12.6 it is involved in the provision of public services;

12.7 it is the bearer of governmental authority;

12.8 it is under a duty to act in the public interest and not for its own private advantage;

12.9 it is a non-profit organisation carrying out functions for and on behalf of the state."

Whilst the legislature, executive, the judiciary and organs of state would fall in most of those categories, public enterprises such as Telkom would fall short of most of the reasons cited in the Legal Aid Board decision as motivation for the averment that the respondent was an "organ of state".

3.2.10 If so, the question arises in view of the express distinction between "organs and state" and "public enterprises" in section 195(2) of the Constitution (see 3.2.5) and the obligation in section 195(6) of the Constitution to take the nature and functions of different sectors, administrations or institutions of public administration into account in legislation regulating public administration (see 3.2.6), whether the reference to "the state" (in section 32(1)(a) of the Constitution) is wide enough to include not only:

3.2.10.1 "the legislature, the executive, the judiciary"; and
3.2.10.2 "all organs of state" (as contemplated in section 8(1); but also
3.2.10.3 "public enterprises" as contemplated in section 195(2) of the Constitution.

3.2.11 The concept "public enterprise" is not defined in the Constitution. Wade: Administrative Law 6th Edition at 153 et seq, a leading English authority on the subject, points out that public corporations (enterprises) are as subject to the ordinary law (e.g. as to corporate powers, taxation and liability in tort) (delict) as are other corporate bodies, unless they enjoy some statutory exemption. He points out that where the corporation has a sufficient degree of independence, neither the corporation nor its employees are legally servants of the Crown. He also states (op cit at 169) that:
"The Corporation's independence in law, precarious though it may be in fact, breaks the chain of command leading down from the Crown."

3.2.12 The legal relationship of master and servant demands that the master shall have complete control of what the servant does. This test in the opinion of Wade (op cit at 169) is not satisfied, in the case of a public corporation, merely because the Minister may appoint and dismiss the members, or give directions of a general character or (probably) because he can give any kind of directions. He points out that in one case, British Transport Commission claimed to be able to eject a tenant from the house on the grounds that the legislation protecting tenants did not apply to the Crown. But the Court of Appeal rejected the Commission's claim to Crown immunity (see Tamlin v Hannaford [1950] 1 KB 18) where Denning L J considered the Minister's various powers and said:
"These are great powers but still we cannot regard the corporation as being his agent, any more than a company is the agent of the shareholders, or even of a so/e shareholder In the eyes of the law, the corporation is its own master and is answerable as fully as any other person or corporation. It is not the Crown and has none of the immunities or privileges of the Crown. Its servants are not civil servants and its property is not Crown property."

3.2.13 Telkom was incorporated on 1 October 1991 when the Minister of Posts and Telecommunications determined that the transfer of the telecommunications enterprise to the telecommunications company would take place. It was incorporated as a public company with limited liability and is governed by its j' Memorandum and Articles of Association.

3.2.14 When the Minister for Posts, Telecommunications and Broadcasting issued Telkom with its licences, he was exercising a public power granted to him in terms of the Telecommunications Act, 1996. The exercise of a public administrative power (such as the issue of licences) is not equal to the exercise of ordinary company powers which cannot be administrative acts or public functions.

3.2.15 Moreover, in 1997, Thintana Communications LLC acquired a
30% equity interest in Telkom. In Telkom's Articles of
Association a "Significant Shareholder" is defined as the
Minister for Posts, Telecommunications and Broadcasting and
the SEP (strategic equity partner) namely Thintana
Communications LLC (a foreign company in which SBC
Corporation Inc. (USA) and Malaysia Telecom are shareholders).
The Articles, inter alia, provide as follows:

3.2.15.1 No business shall be transacted at any general meeting of Telkom unless a quorum of members is present provided that no action shall be taken unless each Significant Shareholder is present in person, by authorised representative or by proxy. (Article 8.2).

3.2.15.2 So long as the Minister and the SEP remain Significant Shareholders, no resolution of the members with regard to specific matters identified in Articles 8.8.2 and 8.8.3 (such as the approval of special resolutions, alterations of share capital, material changes in Telkom's business, the establishment of board committees and any merger or consolidation involving Telkom) is valid without the express approval of both the Minister and the SEP.

3.2.15.3 In addition, Article 17.2 provides that so long as the SEP or the Minister is a Significant Shareholder, no action shall be taken at any meeting of the board of directors of Telkom unless an SEP nominee or a Minister nominee (in his capacity as director) is present at such meeting.

3.2.16 In view of the aforegoing, we submit Telkom is a "public enterprise" within the meaning of section 195(2)(c) of the Constitution and not an "organ of state" within the meaning of section 195(2)(b). Further motivation for that conclusion is the following:

3.2.16.1 Telkom is a public company with limited liability incorporated under number 91/05476/06 in terms of the provisions of the Companies Act, 1973;

3.2.16.2 Telkom was incorporated in 1991 in accordance with the provisions of section 3 of the Post Office Act, 1958 as part of the process of its commercialisation and with a view to its future privatisation, whether in whole or in part;

3.2.16.3 prior to 1991, Telkom was not a public company and amounted to an "organ of state" in the true sense of the word;

3.2.16.4 during 1997, 30% of the shares in the issued share capital of Telkom was acquired by Thintana Communications LLC (see 3.2.14) as part of an endeavour to find a strategic equity partner and so as to enable Telkom to meet its commercial obligations in terms of the licence issued to it pursuant the Telecommunications Act, 1 996. Whilst the licence authorised Telkom to provide certain elements of the public switched telecommunication service (namely the national long distance telecommunication service, the international telecommunication service, the local access telecommunication service and the public pay-telephone service), on an exclusive basis, it also imposed the obligation to reach certain rollout targets with the sanction of financial penalties should Telkom fail to achieve these targets. These obligations include inter alia the need to establish during the period of the licence a cumulative 5 year Total Lines target of 3 000 000 new exchange lines. During 2001 (or if the exclusivity period is extended for a further and final year in respect of one or more elements of the public switched telecommunication service, during 2002) the exclusive rights granted to, and corresponding obligations imposed upon, Telkom in terms of its telecommunication licence will expire and Telkom will be obliged to compete with commercial entities insofar as public switched telecommunication services are concerned;

3.2.16.5 Telkom is not subject to audit by the Auditor General in terms of the Auditor General Act, 1989, and has its own commercial auditors like any other public company;

3.2.16.6 Telkom is exempt from the provisions of the State Tender Board Act, 1968 in terms of the provisions of section 4 thereof;

3.2.16.7 Telkom has its own pension fund and its employees do not have any claims against the state for their pension;

3.2.16.8 Telkom is a taxpaying entity in terms of the provisions of the Income Tax Act, 1962,

3.2.16.9 the rules of the Public Service Commission do not apply to Telkom.

3.2.17 If we are correct in our conclusion that Telkom is a "public enterprise" rather than an "organ of state" (within the meaning of those terms as used in the Constitution), the next question to be resolved is whether the reference to "the state" in section 32(1 )(a) of the Constitution includes not only an "organ of the state" but also a "public enterprise".

3.2.18 In analysing the definition of "organ of state" in section 239 of the Constitution, it is important to note that:

3.2.18.1 paragraph (a) of the definition includes all departments of state, i.e. all entities which form part of the main structure of government at national, provincial and local level. These organs of state can be regarded as such because they are part of the structure of government, irrespective of what they do ("structural organs of state");

3.2.18.2 paragraph (b) on the other hand includes other functionaries or institutions outside the main structure of government which either:

3.2.18.2.1 exercise a power or perform a function in terms of the Constitution or a provincial constitution; or

3.2.18.2.2 exercise a public power or perform a public function in terms of any legislation.

Together they can be referred to as "functional organs of state" in that they represent entities vested with constitutional or "public" powers and functions;

3.2.18.3 we submit that "structural organs of state" could never include public enterprises such as Telkom in which outside shareholders enjoy certain veto rights. Whether "functional organs of state" should include public enterprises such as Telkom,, would depend on the meaning of "public power" or "performing a public function";

3.2.18.4 to date, the South African courts have not pronounced on the meaning of the phrases "public power" or "performing a public function" within the meaning of the definition of "organ of state". (See however the guidelines in the Legal Aid Board decision referred to in 3.2.9).

3.2.19 Telkom wishes to point out that in view of the distinction in section 195(2) between "organs of state" and "public enterprises" and the obligation in section 195(6) to take cognisance of those differences:

3.2.19.1 Telkom, in the final analysis, is more likely to be regarded as a "public enterprise" rather than an "organ of state" at this time in its commercial development; and

3.2.19.2 the "state" in terms of section 32(1)(a) of the Constitution probably includes an "organ of state" but not a "public enterprise".

RECOMMENDATION NO.1
In view of the uncertainty as to whether the "state" in section 32(1)(a) of the Constitution includes both "organs of state" and "public enterprises", and the further confusion introduced by the use of the term "governmental body" in the Draft Bill, we recommend that the definition of "governmental body" in section 1(1) of the Draft Bill, if retained, should specifically exclude Telkom and any other public enterprise such as Telkom, which is in the process of being commercialised or privatised. (See proposed definition of "public enterprise" in recommendation 2).

3.3 The term "governmental body"
3.3.1 The distinction between the term "governmental body" and "private body" in the Draft Bill is fundamental, in that more onerous obligations are imposed on a "governmental body" and limited obligations are imposed on "private bodies".

3.3.2 In the definition of "governmental body", the legislature seeks to expand the definition of "state" beyond that of an "organ of state" within the meaning of section 239 of the Constitution but disregards the obligation in section 195(6) to take into account the nature and functions of different sectors, administrations or institutions of public administration. This may well result in entities (such as public enterprises like Telkom) which should fall within the broader definition of "another person" in section 32(1)(b) of the Constitution being treated as if they fall in the narrow definition of "state" in section 32(1)(a) of the Constitution. Such a consequence may well be unconstitutional, since an act of Parliament cannot override the Constitution.

3.3.3 For the aforegoing reasons, we believe that the definition of "governmental body" in the Draft Bill goes beyond the objectives which section 32 of the Constitution seeks to achieve in that it includes entities which are not necessarily "organs of state". For that reason, we recommend that the Draft Bill should be amended on the basis set out below.

RECOMMENDATION NO. 2
We recommend that the definition of "governmental body" in section 1(1) of the Draft Bill should be amended to specifically exclude Telkom and any other public enterprise such as Telkom, which is in the course of being commercialised or privatised.

Public enterprises such as Telkom could be specifically exempt by regulation published by the responsible Minister in the Government Gazette or be excluded generically in the Draft Bill. In the latter event, "public enterprise" should be defined as "a former organ of State carrying on business as a public company in which the government holds a substantial equity interest but which requires the express approval or direct involvement of an independent substantial shareholder in addition to Ministerial approval or any other administrative act for the day-to-day management of its operations".

3.4 Protection of immaterial property rights of public enterprises
3.4.1 As indicated above (3.2.16), we submit that Telkom is a public enterprise and not an organ of state. As such it currently competes with other private enterprises in the following respects:

3.4.1.1 customer premise equipment,

3.4.1.2 value added network services, and

3.4.1.3 cellular operators.

3.4.2 It is trite law that trade, business or industry information which has a particular economic value and which is not generally available to and therefore known by others, can be regarded as a trade secret (see HJO van Heerden & J Neethling : Unlawful Competition 1995 at 223). To qualify as a trade secret, and therefore as an immaterial property right which enjoys protection in terms of our competition law, information must comply with three requirements. It must:

3.4.2.1 not only relate to, but must also be capable of application in trade or industry;

3.4.2.2 be secret or confidential (i.e. not be public property or public knowledge); and

3.4.2.3 be of economic (business) value to the owner thereof (see Van Heerden & J Neethling op cit at 227).

3.4.3 It is also trite law that since a proprietor acquires an immaterial property right to the trade secret, he has exclusive powers of use, enjoyment and disposal of the secret. Consequently, any unauthorised conduct by another (competitor or non-competitor) in respect of the trade secret including:

3.4.3.1 the acquisition of or acquaintance with (Stellenbosch Wine Trust Ltd v Oude Meester Group Ltd, Oude Meester Group Ltd v Stellenbosch Wine Trust Ltd 1972(3) SA 152(C) 162);

3.4.3.2 use or appropriation of (see Van Heerden & Neethling op cit 228, footnote 37); and

3.4.3.3 revelation or publication of (see Van Heerden & Neethling op cit 228, footnote 38)

the confidential information, constitutes an infringement of that right and is therefore unlawful.

3.4.4 Whilst section 39(2)(a) of the Draft Bill allows the information officer of a governmental body to refuse a request for access to a record of the body containing inter alia trade secrets of the governmental body if the disclosure thereof could reasonably be expected to cause substantial harm to the commercial or financial interest of the governmental body concerned, that exemption does not, with respect, go far enough.

3.4.5 The question as to whether the harm suffered is substantial or not, is with respect, irrelevant in view of the resultant infringement of the immaterial property right of the owner of the confidential information concerned if such information is revealed without its permission. (see 3.4.3 above).

3.4.6 For the aforegoing reasons, we submit that the word "substantial" in the proposed section 39(2)(a) of the Draft Bill be deleted.

RECOMMENDATION NO.3
We recommend that the word "substantial" in section 39(2)(a) of the Draft Bill be deleted, so as to avoid an infringement of immaterial property rights of public enterprises, which are protected by common law.

4 SPECIFIC COMMENTS
Our specific comments on specific provisions of the Draft Bill are contained in a separate memorandum attached to this document, marked Schedule 1.

26 NOVEMBER 1997

SCHEDULE 1
MEMORANDUM DRAFT OPEN DEMOCRACY BILL, as published in Government Gazette No.18381of 18 November 1997 in Government Notice No.1514 of 1997 ("the Draft Bill")

SPECIFIC COMMENTS BY TELKOM SA LIMITED ("TELKOM") TO THE OFFICE OF THE DEPUTY PRESIDENT

1 Introduction and basis for submissions
1.1 The comments made under "Introduction" and "Basis for Submissions" in paragraphs 1 and 2 of Telkom's general comments on the Draft Bill, to which this document constitutes Schedule 1, apply to these specific comments on the Draft Bill as well.

1.2 If Telkom's recommendation that it be excluded expressly from the definition of "governmental body" in the Draft Bill or its recommendation that "public enterprises" be excluded from the definition of "governmental body" is accepted, then the need for this memorandum falls away partially. The recommendations in this memorandum are being made on the assumption that Telkom qualifies as a "governmental body" for purposes of the Draft Bill; and without taking cognisance of the recommendations made by us in our general comments on the Draft Bill insofar as the definition of "governmental body" is concerned.

2 Specific comments
2.1 Definition of "governmental body"
See paragraph 3.3 of our general comments and recommendations number 1 and 2 contained in that document. For the reasons set out in that document, we recommend that the definition of "governmental body" should be amended to specifically exclude Telkom and any other public enterprise of the nature of Telkom which is in the process of being commercialised or privatised. The term "public enterprise" should be defined as "a former organ of state carrying on business as a public company in which the government holds a substantial equity interest but which requires the express approval or direct involvement of an independent substantial shareholder in addition to ministerial approval or any other administrative act for the day to day management of its operations". For the sake of completeness and on the assumption (without conceding it) that Telkom falls within the ambit of the definitions in subparagraphs (iii), (v) and (vi) of the definition of 1'governmental body" in the Draft Bill, Telkom wishes to point out the following:

2.1.1 in view of Telkom's obligation to supply universal telecommunication services to all South Africans and the stringent roll-out targets and financial penalties contained in its public switched telecommunication services ("PSTS") Licence Conditions as well as the increasingly competitive environment in which it operates, it is submitted that the definition of "governmental body", as currently defined in the Draft Bill, does not accurately reflect Telkom's and other public enterprises' positions as commercial entities;

2.1.2 the creation of additional rules, regulations and the bureaucratic burden required to comply with all the requirements of the Draft Bill, could seriously encumber Telkom's ability to meet the rollout targets set out in its PSTS Licence Conditions. Adding substantial additional administrative requirements on top of Telkom's current obligations for installing 3 million new telecommunication lines within the next five years, would unnecessarily impede its business efficacy and vastly increase its operating costs;

2.1.3 the restrictions placed on Telkom's operations would not advance the interest of the general public in obtaining new telecommunication services;

2.1.4 Telkom is a taxpaying company, like any private enterprise and its Board of Directors and senior executives are obliged to earn an adequate return on investment for its shareholders. The additional expenditure brought about by adhering to some of the more costly and time-consuming procedures contemplated in the Draft Bill and the risk of losing competitive advantage due to the accessibility of records to competitors could fetter the return on investment required by Telkom's shareholders;

2.1.5 as more and more previously state owned public enterprises become privately owned and increasingly commercial in nature, account should be taken of the complexity of applying principles such as those contained in the Draft Bill to such public enterprises, which enjoy an unique transitional status. This unique nature of public commercial enterprises deserves to be recognised by the Draft Bill. In our view one cannot simply equate such entities with "organs of state";

2.1.6 it is not in the interest of the state or Telkom's strategic equity partner to impose obligations on Telkom which would oblige it as a public enterprise with commercial objectives to disclose confidential information, protected by common law. As a consequence, it may seriously diminish the value of their shareholding interests in Telkom if Telkom is compelled to disclose its proprietary information by statutory intervention. Once such information is disclosed it will fall within the public domain, and lose all commercial value.

2.2 Personal Information Bank
"Personal information bank", is currently defined in the Draft Bill as:
a collection or compilation of personal information that is organised or capable of being retrieved by using an individual's name, or an identifying number or other particular(s) (sic) assigned to the individual".

The proposed definition is wide enough to include information in respect of customers contained in Telkom's telephone directory. The information contained in Telkom's directories data bank is proprietary and has substantial commercial value. It is proposed that the scope of the definition be restricted in order to exclude information of a proprietary or commercial nature. (See paragraph 3.4 of Telkom's general comments for a summary of the law protecting proprietors of confidential information.)

2.3 Section 2 : Application of Act

2.3.1 It is not yet clear when the Open Democracy Act ("the Act") will come into operation and whether or not it would apply retrospectively.

2.3.2 Cognisance should be taken of the presumption against the retrospective operation of statues (see Pretorius v Minister of Defence, 1981(1) SA1174 (ZAD) at 117-118). Fieldsend CJ, observed that:
statutes will not be held to take away existing rights retrospectively, unless they so provide expressly or by necessary intendment."

2.3.3 Telkom assumes that the Act should not operate retrospectively.

2.4 Section 3 : Objects of Act
2.4.1 Generally speaking, Telkom is of the view that the objects of the Act must conform with the Constitution. In particular, reference is made to the arguments in paragraphs 3.1- 3.3 of Telkom's general comments on the Draft Bill.

2.4.2 Section 3(1)(a) of the Draft Bill provides for swift, inexpensive and effortless access by the public to information held by governmental bodies without jeopardising good governance, personal privacy and commercial confidentiality.

RECOMMENDATION 1
It is recommended that further limitations be included in section 3(1)(a) of the Draft Bill to the effect that access to such information should be provided without jeopardising the commercial and operational activities of governmental bodies.

2.5 Section 4 : Designation of information officers and delegation of powers by information officers and head of governmental body

2.5.1Section 4(1) of the Draft Bill places an obligation on a governmental body to designate a person as information officer of the body and such number of persons as deputy information officers as may be necessary.

2.5.2 Telkom has more than 58 000 employees and accordingly keeps a monolithic volume of records. In order to comply with section 4(1), an organisation the size of Telkom may need to employ numerous information officers to deal with requests for access to records as well as the compilation of the manual and reports referred to in sections 6 and 28, respectively.

2.5.3 Telkom's Human Resources Division operates a centralised information system with limited access that would require the appointment of several regional information officers. Complying with section 4(1) would add to Telkom's administrative costs and would adversely affect its business efficacy.

2.5.4 In our respectful view, the restraint which section 4(3) of the Draft Bill places on the head of a governmental body to delegate his/her powers to an official other than an information officer is not feasible. In practice it would be preferable to delegate such power and assign such duties to the information officers of the company who are specifically qualified to deal with the administration of the Act and who would probably be more familiar with the day to day application of the Act.

b PART II: GUIDE ON ACT AND MANUALS ABOUT FUNCTIONS OF GOVERNMENTAL BODIES

2.7 Section 6 : Manual on functions of, and index of records held by, governmental body
2.7.1Telkom is particularly concerned about the wide scope of this section. Telkom, being a public company, which is subject to the Companies Act 1973, generates a magnitude of records on every conceivable subject. Describing and compiling an index of these records and information banks may consume many valuable man hours. Due to the enormous amount of information that should be contained in the manual, it is submitted that it may require Telkom more than 12 months (after the commencement of this section) to compile such manual.

2.7.2 Telkom is extremely concerned that descriptions of its records and functions in a published manual may put Telkom at a substantial disadvantage in relation to its competitors such as Value-added Network Service providers, cellular operators and suppliers of Customer Premise Equipment who essentially operate as private bodies and do not fall within the ambit of the definition of "government body".

RECOMMENDATION 2
Telkom recommends that it would suffice to publish the information contemplated in section 6(1)(b) of the Draft Bill in Telkom's Annual Report.

2.8 Section 7 : Distribution of guide and manuals

RECOMMENDATION 3
Telkom recommends that the guide referred to in section 5 of the Draft Bill and the manuals referred to in section 6 of the Draft Bill should be combined in order to prevent the duplication of costs.

Alternatively, it is recommended that it would suffice if the manual is published by the Minister for Posts, Telecommunications and Broadcasting and that on such publication, Telkom be deemed to have complied with the requirements of the relevant sections.

2.9 Section 8 : Information in telephone directory
2.9.1 Condition 5 of Telkom's PSTS Licence deals with Telkom's obligations as far as its directory services are concerned. Any additional obligations in this respect will have to be imposed by the Minister for Posts, Telecommunications and Broadcasting by amending Telkom's PSTS Licence Conditions. As pointed out elsewhere, Telkom's exclusive licence will terminate in 2001/2002 insofar as public switched telecommunication services are concerned.

2.9.2 As the Draft Bill makes no specific reference to publication costs, it is assumed that the publication costs for the information contemplated in section 8(1) would be for the account of the Director-General : Communications or the Minister for Posts, Telecommunications and Broadcasting. Should this not be the position, Telkom would be compelled to object to bearing such additional costs in the strongest terms. Telkom's PSTS Licence Conditions make no reference to it carrying the additional costs for publication of the information contemplated in section 8(1). In our respectful view, there is no justification in allocating such costs to Telkom without due compensation.

2.9.3 Telkom is particularly concerned with the increased volume of information to be contained in the telephone directory. To include the details of a yet unqualified number of officers and deputy information officers in the telephone directory is simply not feasible. The purpose of a telephone directory is more fully explained in Annexure A attached hereto.

2.9.4 In particular, attention is drawn to Condition 3.4 on page 39 of the attached Annexure which expressly states one should keep in mind the need for brevity and simplicity when publishing telephone directories (our emphasis].

2.9.5 Telkom further wishes to draw attention to Conditions 5.1.3 and 5.1.4 of its PSTS Licence, which are quoted here for ease of reference. Condition 5.1.3 determines that:

" …. the licensee shall provide or make available to customers, free of charge, printed directories, the form and content of which shall be agreed between the ilcensee and the authority [SA TRA], providing a list of national, provincial and local government authorities, institutions and offices." (our emphasis)

2.9.6 In view of the above obligations Telkom is of the view that it should not be obliged to include the additional information contemplated in section 8, in its telephone directories without compensation. It must be borne in mind that the form and content of Telkom's directories must be agreed with the South African Telecommunications Regulatory Authority (SATRA).

2.9.7 Furthermore, Condition 5.1.4 of the Telkom's PSTS Licence provides that:

"The licensee shall provide .... a separate directory information service dedicated to enquiries concerning national provincial and local government authorities, institutions and officers. Such directory information shall be free from Public Paid-telephones."

2.9.8 Incidentally, Telkom also provides directory information services to blind or otherwise disabled persons (see Condition 5.1.5 of Telkom's PSTS Licence).

2.9.9 Telkom has very recently entered into a merger with Maister Directories (1981) {Pty) Ltd and ITT World Directories Inc. in respect of its directories' business which resulted in a subsidiary called Telkom Directory Services (Pty) Ltd being formed. The publication of additional information in the telephone directory may without due compensation directly affect the profit margins of Telkom's directories business.

2.9.10 The main business of Telkom Directory Services (Pty) Ltd is described in its Memorandum of Association as follows:

"Purpose Describing Main Business"
The main business which the Company is to carry on is to provide all the services required for the production of the Telkom Directories, including without being limited to the utilization of the Data, the sale of all advertising and the compilation, production, printing and distribution of the text directories. "Data" means Telkom's unprocessed database consisting of the names, addresses and telephone numbers of subscribers to Telkom's telecommunications service who consent to their personal data being included in Telkom's database of subscribers, irrespective of whether such information is recorded in Telkom's existing Comtel database, its future CBS database or any amendment or substitution thereof."

2.9.11 Section 8(2) of the Draft Bill requires the information contemplated in section 8(1) to be published 6 months after section 8(2)'s commencement and may thus involve the rescheduling of printing dates for Telkom's directories. The effective date may not coincide with Telkom's pre-scheduled publishing dates, and could give rise to increased costs or a delay in getting directories to customers on time, which in turn may result in numerous credit claims from advertisers.

RECOMMENDATION 4
We recommend that a specific exemption be introduced where it is objectively and practically not feasible for a governmental body to comply with the provisions of section 8(2) of the Draft Bill.

If our recommendation is unacceptable, then the obligation to so disclose should at least be subject to reasonable phasing in provisions.

2.10 PART Ill: ACCESS TO RECORDS OF GOVERNMENTAL BODIES

2.11 CHAPTER 1: RIGHT AND MANNER OF ACCESS

2.12 Section 10 Right of access to records of governmental bodies
2.12.1 As suggested earlier, the definition of a "governmental body" should be re-visited (see recommendations no.1 and 2 in our general comments on the Draft Bill).

2.13 Section 15 : Duty to assist requesters
2.13.1Generally, Telkom does not object to the aims of this subsection. However, placing such duties on public commercial enterprises by way of legislation may result in an unbearable administrative burden.

2.14 Section 16 : Transfer of requests
2.14.1Section 16(1)(c) of the Draft Bill refers to the transfer of a request for access to a record which contains commercial information, in which another governmental body has a greater commercial interest. As "greater commercial interest" is not defined, it is our view, that the concept may lead to difficulties in interpretation when applied in practice.

RECOMMENDATION 5
We recommend that the term "greater commercial interest" should be defined.

2.15 Section 20 : Decision on request and notice thereof
2.15.1 Section 20(2) of the Draft Bill sets out what the notice must contain in the event of a request for access to a record being refused. Section 20(1)(b)(i) requires that the notice must state the findings on all material questions of fact.

RECOMMENDATION 6
It is recommended that only relevant material questions of fact be included in the notice to the requester.

2.16 Section 21: Urgent requests
2.16.1 The same comments as applied to section 20(1)(b)(i) apply to section 21(3)(i) of the Draft Bill.

2.16.2 Section 21(4) of the Draft Bill does not cater for requesters who do not have a fax or a telephone.

RECOMMENDATION 7
It is recommended that section 21(4) of the Draft Bill should simply refer to any other appropriate means by which the requester may be informed.

2.17 Section 23 Deemed refusal of request

RECOMMENDATION 8
It is recommended that section 23(a) of the Draft Bill should include a reference to the extension period to deal with a request, as contemplated in section 22 of the Draft Bill.

2.18 Section 24 Severability
2.18.1 In our respectful view, the obligation to comply with section 24(2)(a) and (b} of the Draft Bill may be inordinately time consuming.

2.19 Section 25 Access fees
2.19.1 Section 25(3) of the Draft Bill determines that a personal requester must pay an access fee for the reproduction of the record only. Such a fee may not be sufficient to cover all costs such as telephone and fax calls, as well as the time required to search for the record.

RECOMMENDATION 9
Telkom recommends that the qualification "in excess of 24 hours" in section 25(4) of the Draft Bill be deleted.

2.20 Section 26 Access and form of access
2.20.1 In our respectful view section 26(9) of the Draft Bill necessitates a reference to appeal proceedings regarding High Court applications.

2.21 Section 28 Reports to Human Rights Commission
2.21.1 In Telkom's view, it would generally suffice if the Minister for Posts, Telecommunication and Broadcasting complied with the particular provisions of section 28 of the Draft Bill.

2.22 CHAPTER 2 GROUNDS FOR REFUSAL OF ACCESS TO RECORDS

2.23 Section 30 : Mandatory protection of personal privacy
2.23.1 Telkom has serious reservations about the scope of section 30(2)(e)(iii) of the Draft Bill insofar as the classification, salary scale or remuneration and responsibilities of the position held or services performed by an individual, may be disclosed. In effect, such disclosure would mean that employees (or any third party for that matter) may acquire information about an individual's salary and remuneration. Naturally this would have serious consequences for the confidentiality with which such information is usually treated.

2.24 Section 32 Mandatory protection of third party commercial
information

RECOMMENDATION 10
It is recommended that section 32(3) of the Draft Bill should be qualified to the extent that an information officer should be required to supply a written explanation of the methods used in conducting the test or other investigation in question, only if such information is available 1:0 or requested from the information officer.

2.25 Section 36 : Legal professional privilege
2.25.1 Section 36 of the Draft Bill as currently drafted, does not reflect the state of the law. See in this regard, the decision in Van der Heever v Die Meester en Andere 1997(3) SA 93 (T) where it was held that it was a fact of present day commercial life that a great number of qualified lawyers, who could have practised in private practice, advocates or attorneys, preferred to act as legal advisors in commercial corporate institutions and in the government. There was no difference in principle between their position vis-a-vis the person seeking their advice and the private practitioner.

RECOMMENDATION 11
It is recommended that section 36 of the Draft Bill should be amended to take into account that legal privilege also extends to legal advisors in commercial corporate institutions and in the government.

2.25.2 Section 36(b) of the Draft Bill provides for the disclosure of information that is legally privileged when the legal proceedings to which the record relates, have been finally determined.

2.25.3 In our view, such provision may make serious inroads into the legal professional privilege recognised by our legal system. In the event of legal professional privilege no longer applying to records after the determination of the legal proceedings, such privileged documents may be used for the purpose of further litigation.

RECOMMENDATION 12
Telkom recommends that that section 36(b) of the Draft Bill be deleted.

2.26 Section 39 Economic interests of Republic and commercial activities of governmental bodies

2.26.1 We wish to draw your attention to recommendation 3 in our general comments.

2.26.2 Section 39(2)(a)(ii) of the Draft Bill determines that an information officer may refuse access to a record if disclosure of the financial, commercial or other information held by a governmental body for the purpose of conducting a commercial activity, could reasonably be expected to cause substantial harm to the commercial or financial interests of the governmental body.

2.26.3 Section 39(2)(b) determines that access to information may be refused if the disclosure is likely to put the governmental body at a substantial and unfair disadvantage in contractual relationships or cause it substantial and unfair prejudice in commercial competition.

2.26.4 As discussed earlier, Telkom provides certain products and services in a free and competitive market. It does not have an absolute statutory monopoly on the provision of telecommunication services in the Republic. It is therefore essential that records pertaining to its financial, commercial and technical activities be protected from the scrutiny of its competitors. Telkom is of the view that such information is not sufficiently protected in section 39(2). In practice, it may be exceedingly difficult to prove that access to commercial and other records may cause substantial harm. In the commercial world, the cause of harm per se to commercial or financial interests could be significant.

2.26.5 Requiring governmental bodies to first prove substantial and unfair disadvantage or prejudice before access to a record is refused, may defeat the purpose of protecting such information from the scrutiny of competitors.

2.26.6 Our comments in respect of section 32(3) are repeated in respect of section 39(4) of the Draft Bill.

2.27 Section 40: Operations of governmental bodies

RECOMMENDATION 13
It is recommended that section 40(1)(a) of the Draft Bill which deals with the discretionary refusal of a request for access to a record of a governmental body, containing an opinion, advice or recommendation prepared for the purpose of assisting to formulate a policy or take a decision in the exercise
of a power, should not be limited to decision-making powers imposed by the law.

2.21.1 The exercise of a power and the formation of a policy may also be within the ambit of a body such as Telkom's normal commercial activities, and may not be imposed by the law.

2.27.2 In addition, access to records containing strategic planning, marketing strategies or documents of a similar nature should be refused as competitors would gain an unfair disadvantage in having access to such records.

2.27.3 Section 40(4)(b)(i) of the Draft Bill determines that subsection (1)(a) does not apply to a record insofar as it consists of factual material, In practice, it may be difficult to establish the meaning of "factual material".

RECOMMENDATION 14
It is recommended that the scope and application of section 40(4)(b) of the Draft Bill and in particular subsection (i) to subsection (v) thereof, be considerably restricted.

The comments made in regard to section 32(3) apply to section 40(5) of the Draft Bill as well.

2.28 Section 42 : Records that cannot be found or do not exist

RECOMMENDATION 15
Telkom recommends that the last part of section 42(2) of the Draft Bill containing the following wording:

" …. including all communications with every person conducting the search on behalf of the information officer"

should be deleted.

2.29 Section 43 : Published records and records to be published
2.29.1 It is submitted that the requirements of section 43(2)(b) of the Draft Bill are particularly onerous and involve an additional layer of administration requiring governmental bodies to obtain information not ordinarily available to it. These requirements may shackle the ordinary commercial activities of public commercial enterprises such as Telkom.

RECOMMENDATION 16
It is recommended that the requirements of section 43(2)(b) of the Draft Bill should be reconsidered.

2.30 Section 45 Mandatory disclosure in public interest
2.30.1 Sections 45(1) and 45(2) of the Draft Bill will make serious inroads into an individual's and third party's rights to privacy as well as that of professional legal privilege. Therefore, it is our considered opinion that the scope and ambit of the wide-reaching effects of this provision should be thoroughly recon:3idered. Public interest considerations should not override the rights which are protected in terms of Chapter 2 of the Bill of Rights contained in the Constitution.

RECOMMENDATION 17
Sections 45 (1) and 45(2) of the Draft Bill should be reconsidered in the light of their potential infringement of the Bill of Rights in the Constitution

2.31 CHAPTER 3 THIRD PARTY INTERVENTION

2.32 Section 46 : Notice to third parties

RECOMMENDATION 18
It is recommended that access to a record contemplated in section 30(1) or 32(1) of the Draft Bill should not be made available to a requester until such time as the party to whom the record relates, has had the opportunity to state his or her reasons why access to such a record should be denied.

2.32.1 In our view it is not clear to whom the words "on request" in section 46(3) relate.

2.33 Section 47 and section 48 Representations by third parties and decision on representations for refusal and notice thereof

2.33.1 In general, our comments are that the additional cost and time involved in complying with the requirements of section 47 and 48 of the Draft Bill may substantially interfere with Telkom's commercial activities and its generation of profits.

2.34 PART IV : CORRECTION AND PROTECTION OF PERSONAL INFORMATION HELD BY PRIVATE AND GOVERNMENTAL BODIES

2.35 Section 53 : Correction of personal information held by governmental bodies
2.35.1 Section 53(3)(a) of the Draft Bill deals with a request for correction of information held by a governmental body. Such request may be lodged orally. Telkom proposes that such body be allowed to request that an oral request for correction, be lodged by way of an application prescribed by a governmental body. It may not always be possible to establish from an oral request exactly what the nature of the inaccurate information may be.

2.35.2 Section 53(6)(a) to (d) generally add to the already onerous administrative burden than an organisation the size of Telkom would have to deal with.

RECOMMENDATION 19
It is recommended that the conditions in sections 53(6)(a) to (d) of the Draft Bill be reconsidered.

The comments made in regard to section 53(6) apply to sections 53(7) and 53(9) of the Draft Bill as well.

2.36 Section 57 Disclosure of personal information by governmental body
2.36.1 Section 57(1) of the Draft Bill does not make provision for the disclosure of personal information by a governmental body for the purposes of employment referencing procedures.

RECOMMENDATION 20
It is recommended that the disclosure of personal information by a governmental body for purposes of employment referencing procedures be included in section 57(1) of the Draft Bill

2.37 Section 60 : Register of uses and disclosure not in governmental body's manual
2.37.1 Section 60(1) of The Draft Bill requires the head of a governmental body to keep a register of any use by the body of personal information in a personal information bank or any use or purpose for which such information is disclosed by the body. It must again be pointed out that the administrative processes required to keep such register may seriously interfere with a body like Telkom's commercial activities.

2.38 Section 61: Collection of personal information by a governmental body
2.38.1 It is submitted that the requirements of section 61(3) of the Draft Bill are onerous as far as administrative procedure, cost and time are concerned.

2.39 PART V : PROTECTION OF WHISTLE-BLOWERS

2.40 Section 63 : Exclusion of liability if disclosing contravention of law, corruption or maladministration
2.40.1 In general, the requirements of section 63 of the Draft Bill may be irreconcilable with internal company policies and disciplinary procedures as far as the disclosure of information is concerned.

2.40.2 Serious consideration should be given to the scope and ambit of the circumstances in which such information may be disclosed. Serious harm could be done to a company if such information is disclosed to the news media, who may be inordinately eager to obtain such information, particularly where the accuracy of such information has not been established by objective methods (e.g. section 63(3)(b) of the Draft Bill only refers to the disclosing party's belief at the time of disclosure).

2.41 Section 66 : Notice to officials of provisions of part and other complaint procedure
2.41.1 Section 66 of the Draft Bill determines that the head of a governmental body must give a copy of a notice prepared and provided by the Human Rights Commission which explains inter alia the provisions of this part and section 85(b) of the Draft Bill to every official of the body.

RECOMMENDATION 21
It is recommended that the notice prepared by the Human Rights Commission be made available to employees through the official communication channels of the governmental body.

2.42 PART VI: APPEALS AGAINST DECISIONS

2.43 CHAPTER 1 : INTERNAL APPEALS
2.43.1 Generally our comments on section 67 to section 71 are that the administrative processes required to comply with these requirements are superfluous as Telkom has sufficient internal administrative and control measures in place to deal with internal appeals against any decisions of an information officer.

RECOMMENDATION 22
It is recommended that governmental bodies with existing internal administrative and control measures of the nature contemplated in sections 67 to 71 of the Draft Bill, should be exempt from the operation of those sections.

2.44 CHAPTER 2 : APPLICATIONS TO HIGH COURT

2.45 Section 73 : Manner of applications to High Court
2.45.1 Section 73(2) of the Draft Bill determines that all applications are deemed to be urgent without any supporting documents required to set out the reasons for the urgency.

2.45.2 It is respectfully submitted that section 73(2) may prevent genuinely urgent applications from reaching the High Court. The High Court should preferably be placed in a position to determine the genuine urgency of the application by supporting documents.

2.46 Section 78 : Production of records of governmental bodies to High Court
2.46.1 It is respectfully submitted that the ambit of section 78(1) is too wide insofar as it allows for records to be produced, which may be subject to professional legal privilege.

RECOMMENDATION 23
It is recommended that section 78(1) of the Draft Bill should be amended to exempt records which are subject to professional legal privilege from the ambit thereof.

2.47 Section 81: Costs

RECOMMENDATION 24
It is recommended that a section dealing with security for the costs of proceedings be included in section 81of the Draft Bill.

[Ed. note: Annexures A1 to A5 have not be included.]