13 May 2002

Members of the British Chamber of Business in Southern Africa are deeply involved on a daily basis in matters involving financial transactions by e-commerce and electronic communications of all kind, affecting all general communications media in commerce and industry. The Chamber is also closely associated with many of the issues involved insofar as they affect the computer software and hardware industries.

The Chamber represents over 200 British-based companies and organisations operating in South Africa, either with control exercised in Britain and Europe or with total management control exercised here in South Africa. British Chamber members employ many hundreds of thousands of South Africans. Many of the companies forming part of BritCham membership are managed and run by South Africans.

British Chamber recognizes the importance of the parliamentary process and places great value upon its recent recognition by the Speaker of the monitoring status granted to them. This democratic process, supported by Parliament of South Africa, is perceived by the British Chamber to be an essential ingredient of the success being enjoyed by all South Africans in the development of this great country.

In the broader context, British Chamber totally agrees with both the necessity for and the manner in which this Bill has been formulated. With few exceptions, which are specifically mentioned, this Bill will undoubtedly assist in the important task of protecting consumers in the area of electronic financial communications and provide some benchmarks in many of the unchartered areas of future commercial communications and transactions.

Few countries have so far pioneered at all in the difficult ground of electronic messages and communications and South Africa is to be congratulated for having taken the high ground on a number of the issues involved. This is particularly important in a country such as South Africa, where communications through the Internet not only form part of a growth market but where so many entrants in the case of this country are new entrants to the economy and, in many cases, understandbly naïve in view of South Africa’s history, in the sphere of both computerised technology and its language, much of which is unspoken or conveyed in "buzzwords".

Also, it is important in the view of British Chamber members that South Africa is perceived as leader in sub-Sahara Africa on such a subject and sets an example as leader for Africa in global trading terms.

Chapters 5 and 6, in the view of the British Chamber, need serious review. The basics of any transaction must remain purely in the hands of those conducting such a transaction and the state, represented by the Government of South Africa, can have no rights, as we see it, in the decision making process nor can it demand to be party to such transactions. The purpose of this Bill is surely to protect its citizens and assist with the process of providing a trustworthy environment for conducting commerce electronically.

Whilst the Government must surely assist by providing certain rules and regulations governing authentication and identification for the benefit of all, the moves suggested by the proposed legislation in the area of registration of cryptology services and the supply of information regarding the application of codes is, in the view of British Chamber members, a clear breach of intellectual property rights. In many cases this will involve international investors and spread a message which is to the detriment of South Africa’s investment case.

Aside from this serious aspect, there is also the question of such registration process being clearly in breach of the atmosphere of trust, a factor that has to be created between parties to a transaction. This forms the basis of any contract, whether electronic or otherwise.

The Government, in the view of the British Chamber, cannot therefore be perceived as breaching the environment of financial security and trust and which it does, in our view, by demanding details from encryption services which are usually totally secret and which form the basis of the secure environment that they are designed to provide.

This proposed process of lodging private sector security matters with Government agencies will also, in the view of the British Chamber, lead to an environment of "over-regulation" which is not to be recommended in an industry where change and transformation occur daily.

It is axiomatic that whilst Government may be looking at the broader aspects of security, it should party to the breaking of security in the private sector in areas designed to protect its citizens. Furthermore, any definitions of encryptology will undoubtedly have to encompass whole software environments and which themselves will defy any regulator to regulate.

British Chamber of Business conveys with respect that the proposed legislation conveys no limitations as to the powers of the Minister insofar as the application of law is concerned. The wording, insofar as the Minister, the Department of Communications and its staff are concerned, appear unduly invasive, particularly bearing in mind that the Bill involves areas of private sector and private citizen trust.

Members of the British Chamber call for greater clarity in the application and definitions contained in many of the sections under Chapter 3, namely Signature, Retention and Production of Documents, which, frankly, had many confused.

Clear and precise regulations are needed that are both fair and reasonable to all if foreign investors, both present in South Africa and overseas, are to receive a simple and clear message that South Africa is doing all it can to encourage investment and make laws that both respect the rights of all persons and free trade principles at the same time.

The British Chamber of Business participated to the full when the Green Paper on E-Commerce was published, the Chamber supplying its comments with a full paper to the Ministry in April 2001. In this, the Chamber called for great clarity in regulations and we stated the following:

Finally, we take this opportunity of further congratulating the Ministry of Communications on having proceeded thus far in a difficult, challenging and most necessary area of legislation and call upon Parliament to take note of our reservations in small but important areas.

British Chamber of Business in Southern Africa.