0POSTAL SERVICES AMENDMENT BILL [B40-2003]

SELECT COMMITTEE ON LABOUR AND PUBLIC ENTERPRISES

SUBMISSIONS BY DHL

  1. Introduction
    1. DHL International (Proprietary) Limited ("DHL") wishes to thank the Honourable Members of the Select Committee on Labour and Public Enterprises (the "Committee") for inviting DHL’s attorneys, Sonnenberg Hoffmann Galombik (represented by Robert Wilson), to make submissions on its behalf in relation to the proposed amendments to the Postal Services Act, No. 124 of 1998, (as amended) ("the Act") in terms of the Postal Services Amendment Bill [B40-2003] ("the Bill").
    2. As reported recently in the media (Business Day, 16 October 2003), DHL is pleased that proactive steps have been taken by the Department of Communications (the "Department") to ensure that no miscommunication occurs regarding the interpretation of the Bill. Furthermore, DHL notes with appreciation the recent media article of the Department’s Deputy Director-General (Postal Policy), Ms Phumelele Ntombela-Nzimande (This Day, 17 October 2003).
    3. More particularly, DHL notes from the aforegoing article that the Bill is intended to have the effect that only the Post Office may deliver letters and other postal articles of 1 kilogram or less to a "street address or post box". DHL further notes that the Bill is not intended to render "illegal" the personal delivery of items of 1 kilogram or less. However, DHL does not, with respect, agree that the Bill will have the effect of removing ambiguity in the interpretation of the Act, but rather adds further ambiguity.
    4. DHL submits that in order to give effect to the Department’s stated intent further amendments are required. In particular, it is submitted that –
      1. the definition of "courier service" should be deleted; and
      2. the definition of "postal service" should be amended; and / or
      3. paragraph 2 of Schedule 1 should be amended; and
      4. paragraph 1(b) of Schedule 2 should be deleted; and
      5. all provisions in the Act in terms whereof a courier service is regulated, including without limitation section 22, should be deleted.

    5. In short, DHL submits that since the stated object of the Act is, in terms of section 2, to provide only for the regulation and control of postal (i.e. basic delivery) services in the public interest, there is no reason for the Act to furthermore provide for the regulation and control of express (i.e. value-added) delivery services, particularly given that the latter are regulated both by other laws as well as market forces.

  2. Are courier services part of postal services?
    1. The difference of interpretation in the majority and minority decisions of the Supreme Court of Appeal (the "SCA") in the case of Interlink Postal Courier SA (Pty) Ltd v The South African Post Office Limited (Case No. 473/2001) (the "IPC case") highlights the confusion surrounding the central issue, namely whether or not courier services are part of postal services.
    2. It is important to note that the majority of the SCA in the IPC case did not purport to define the term "courier service", which is circuitously defined in the Act. Rather, in deciding that the appellants had rendered postal services, the majority of the SCA merely noted that a critical element of a courier service was actual delivery of an item to a named intended recipient or the intended recipient’s authorised agent to accept delivery, as opposed to leaving the item at the named intended recipient’s supposed address.
    3. This distinction between value-added delivery services to a person, on the one hand, and basic delivery services to a place, on the other, appears to be the critical issue in determining which delivery services are intended to be regulated by the Act. Indeed, this conceptual distinction underlies the statement that the Bill is intended to have the effect that only the Post Office may deliver letters and other postal articles of 1 kilogram or less to a street address or post box and is not intended to render "illegal" the personal delivery of items of 1 kilogram or less.
    4. However, in order to determine whether or not the Bill sufficiently removes any confusion surrounding whether or not courier services are part of postal services, the minority decisions of the SCA in the IPC case are equally instructive. Both minority decisions note that section 16(5), when referring to a courier service, in turn refers to Schedules 1 and 2, which distinguish between reserved and unreserved postal services, respectively. Accordingly, the minority of the SCA were of the view that, in terms of the Act, courier services are part of postal services and that there was no basis, in terms of the Act, to find that courier services are not such a part. In other words, the Act does not distinguish between delivery of an item to a person, as opposed to delivery to a place.
    5. Although it would seem that the repeal of section 16(5) avoids the inclusionary reference to a courier service in relation to a postal service, it is submitted that even when read alone Schedules 1 and 2 remain ambiguous as to whether or not courier services are part of postal services.
    6. The clearest example of this is paragraph 1(b) of Schedule 2, which expressly provides that:
    7. "1. Unreserved postal services include

      (a) …………….;

      (b) courier services in respect of items mentioned in paragraph (a);" (emphasis added).

    8. Moreover, it is submitted that Schedule 1 impliedly provides that reserved postal services include courier services. Paragraph 1(a) of Schedule 2 refers to letters and other postal articles that fall outside the ambit of reserved services set out in Schedule 1 up to and including 30 kilograms and, as noted above, Schedule 1 refers to such articles of a mass up to and including 1 kilogram. Since paragraph 1(b) of Schedule 2 refers to courier services "in respect of" articles with a mass greater than 1 kilogram and less than or equal to 30 kilograms, it follows there are also courier services in respect of articles both less than or equal to 1 kilogram, as well as articles greater than 30 kilograms. Since Schedule 2 regulates postal services (including courier services) in relation to articles with a mass greater than 1 kilogram and less than or equal to 30 kilograms, and since Schedule 1 regulates postal services in relation to articles less than or equal to 1 kilogram, given the relationship between Schedules 1 and 2, it may be suggested that the term "reserved postal services" includes courier services.
    9. Whether or not the aforegoing is correct, it is further submitted that paragraph 2 of Schedule 1 refers to both value-added delivery services to a person, on the one hand, and basic delivery services to a place, on the other. Paragraph 2 provides as follows:
    10. "For the purposes of this Schedule, a letter means any form of written communication or other document, article or object that is directed to a specific person or persons or specific address and is to be conveyed other than by electronic means and includes a parcel, package or wrapper containing any such communication or article conforming to the mass or size limitations set out in item 3" (emphasis added).

      It is submitted that by using the word "directed", as opposed to "delivered", the aforegoing emphasised part of paragraph 2 includes both actual delivery of a letter (in the words of the majority of the SCA in the IPC case) to a named intended recipient (or the intended recipient’s authorised agent to accept delivery), as well as delivery of a letter at the named intended recipient’s supposed address. In other words, a letter directed (i.e. addressed) to a person can either be delivered to such person or delivered to such person’s address.

    11. In view of the recent statement that the Bill is not intended to render "illegal" the personal delivery of items of 1 kilogram or less, it is probably the case that in seeking to distinguish between value-added delivery services to a person, on the one hand, and basic delivery services to a place, on the other, through the repeal of section 16(5), insufficient attention was given to further amending Schedules 1 and 2. However, should Schedules 1 and 2 not be appropriately amended, the aforegoing drafting lacunae will continue to cause confusion surrounding whether or not courier services are part of postal services.
    12. Notwithstanding statements in the media purporting to clarify matters, as well as any submissions that might be made in Parliament, these cannot be taken into account by a court subsequently required to interpret the Act. Furthermore, should these lacunae be retained and the Bill be enacted, it is arguable that the import of the majority decision of the SCA in the IPC case will be diluted and the minority decision strengthened. In other words, by the Bill being enacted subsequent to the decision of the SCA, it could be argued, on the wording of the (amended) Act alone, that courier services are part of postal services.
    13. Should this be the case, then it is further arguable that the proposed deletion of section 16(5) is constitutionally suspect since, at the very least, it results in the arbitrary deprivation of property held by those participants who operated in the value-added delivery services market prior to the Act coming into effect.

  3. How to remedy the drafting lacuna?
    1. In order to remedy the aforegoing drafting lacunae it is submitted that the most obvious amendment should be the deletion of paragraph 1(b) of Schedule 2 so that it is not expressly provided that unreserved postal services includes courier services. However, it is further submitted that in view of the aforegoing possible interpretation of paragraph 2 of Schedule 1 (that reserved postal services includes courier services), notwithstanding the deletion of paragraph 1(b) of Schedule 2, courier services would remain regulated by paragraph 1(a) of Schedule 2. This is so given both the clear reference to Schedule 1 in paragraph 1(a) of Schedule 2, as well as the relationship between Schedules 1 and 2.
    2. Accordingly, it is submitted that in order to more clearly distinguish between value-added delivery services to a person, which are not intended to be regulated by the Act, and basic delivery services to a place, which are intended to be so regulated, this "critical element" identified by the majority of the SCA in the IPC case should be incorporated into paragraph 2 of Schedule 1 in the following terms:
    3. "For the purposes of this Schedule, a letter means any form of written communication or other document, article or object that is [directed to a specific person or persons or specific address] delivered to a specific address, whether or not directed to a specific person or persons, and is not delivered to a specific person or persons, and is to be conveyed other than by electronic means and includes a parcel, package or wrapper containing any such communication or article conforming to the mass or size limitations set out in item 3" (words in square brackets indicate omissions and words underlined indicate insertions).

    4. The aforegoing proposal has further merit in that it does not require the definition of a "postal service" to be amended since the term is defined with reference to Schedules 1 and 2. More particularly, since Schedule 2 takes its lead from Schedule 1 (see paragraph 1(a) of Schedule 2) and since paragraph 1(a) of Schedule 1 finds greater clarity in paragraph 2 of Schedule 1, the aforegoing proposal avoids further confusion surrounding whether or not courier services are part of postal services.
    5. However, in view of both the importance of the conceptual distinction between value-added delivery services to a person, on the one hand, and basic delivery services to a place, on the other, as well as the aforegoing confusion and possible further confusion regarding the use of the words "deliver" and "direct", the Committee may wish to consider whether it is not more appropriate to introduce this "critical element" at the outset in the definition of a "postal service".
    6. Since value-added delivery services to a person are not intended to be regulated by the Act, it is submitted that the definition of a "courier service" be deleted. Furthermore, all provisions in the Act in terms whereof a courier service is regulated, including without limitation section 22, should be deleted. This has the benefit of avoiding further confusion (not yet articulated but which remains highly likely) around which value-added delivery services should be regulated by what regulatory authority (and why this should be so). Stated differently, what determines (and explains), for example, that express delivery services should be regulated by a postal authority, road haulage delivery services by a transportation authority and freight forwarding / clearing delivery services by a revenue authority? Whereas the last two might appear obvious, the same cannot be said of the first.
    7. In this regard it is submitted that sight should not be lost of the fact that the stated object of the Act is, in terms of section 2, to provide for the regulation and control of postal (i.e. basic delivery) services in the public interest. There is no apparent reason for the Act to further provide for the regulation and control of express (i.e. value-added) delivery services, particularly given that the latter are regulated both by other laws as well as market forces.

  4. Conclusion
    1. In conclusion, whilst DHL welcomes the statement that the Bill is not intended to render "illegal" the personal delivery of items of 1 kilogram or less, DHL does not, with respect, agree that the Bill will have the effect of removing ambiguity in the interpretation of the Act.
    2. DHL submits that in order to avoid further confusion and give effect to the Department’s stated intent, the following further amendments are required:
      1. the definition of "courier service" should be deleted; and
      2. the definition of "postal service" should be amended; and / or
      3. paragraph 2 of Schedule 1 should be amended; and
      4. paragraph 1(b) of Schedule 2 should be deleted; and
      5. all provisions in the Act in terms whereof a courier service is regulated, including without limitation section 22, should be deleted.

    3. DHL wishes to thank the Honourable Members of the Committee for having granted it the opportunity to make the aforegoing submissions and trusts the aforegoing proposed amendments will assist in preventing legal disputes in the future.