PRIVATE PARCEL INDUSTRY ACTION GROUP
Submission on Postal Services Amendment Bill [B 40-2003]

CHAPTER 1: INTRODUCTION

1.1 Parliamentary Process

The Department of Communication has initiated the Postal Services Amendment Bill [B 40-2003] (the Bill) and imported it into the Parliamentary process on 20 August 2003 for debate and approval. The Parliamentary process is almost complete, as the Bill has been debated and approved by the National Assembly. Being a section 75 Bill, it has subsequently been referred to the NCOP for approval. In terms of the Constitution the NCOP may not debate the Bill again but it has an opportunity to refer it back to the National Assembly.

1.2 Purpose of this Submission

As a result of the Constitutional powers granted to the NCOP it has an opportunity to re-evaluate the Bill tabled, not in terms of amending the governmental policy underlying the Bill but objectively determining whether the amendments and the wording used, reflects the approved governmental policy.

The purpose of this submission is therefore to humbly request the NCOP to re-evaluate the Bill within the parameters defined above and to obtain clarity on which services will not form part of the reserved postal services or in the alternative to delay the Bill until due consultation with the stakeholders have taken place. The purpose of this submission is not to prevent the South African Post Office Limited (SAPO) from delivering in its mandate to supply a universal postal service or to prevent it from delivering this service exclusively.

1.3 Setting the Stage

In order to re-evaluate the Bill, it is necessary to recreate the backdrop that led to the drafting of the Bill. The Bill cannot be interpreted in a vacuum as there are several documents that have relevancy to the Bill and these have to be studied in order to give an accurate interpretation of the Bill.

The new postal environment was preceded by a research and policy process which culminated in the White Paper on Postal Policy (14 May 1998). Governments' vision for a new postal environment was entrenched in the Postal Services Act, 1998 (Act No. 33 of 1998) (the Principal Act). In terms of the Principal Act, the Minister of Communication issued a licence to the South African Post Office Limited which licence grants the SAPO exclusivity to perform certain functions in a certain arena. Subsequent to the promulgation of the Principal Act and the issuing of the SAPO licence, the Court has also had an opportunity to interpret the legislation in question. The Appeal Court, in Interlink Postal Courier SA (Pty) Ltd v The South African Post Office Ltd (Case 473/2001) gave both a minority and a majority judgement that differed substantially from each other in certain aspects. As a result of the judgement the Bill was drafted in an attempt to clarify the situation. After submission of the Bill to Parliament the Department of Communication issued communiqués in this regard as well in order to assist the stakeholders to ring-fence the services that the Bill attempts to address.

It is within the environment created by the documentation above that the Bill must be evaluated and each of the above documents referred to above will be briefly discussed in the following paragraphs.

CHAPTER 2: THE PAPER TRAIL

2.1 The White Paper on Postal Policy

2.2.1 Developing the White Paper on Postal Policy

The White Paper on Postal Policy (14 May 1998) (the White Paper) set policy objectives and principles for the restructuring and re-organisation of the postal sector. The overarching goal of this policy framework was to ensure a more accessible, equitable, efficient, and effective postal service.

The policy set out in the White Paper was the result of an extensive process of public consultation. A Technical Task Team was appointed in September 1996 to formulate the Postal Policy framework. This resulted in the drafting of a discussion document. A consultative conference was held and contributions and input arising from the conference led to the formulation of the Green Paper. Seventeen workshops were conducted nationwide. This stimulated responses from the public, which ultimately led to the formulation of the White Paper.2.2.2 Universal Postal Service

Although the White Paper addressed several issues such as the creation of a Regulator, international relationships, Postbank, postal security and philatelic service, the emphasis of this paragraph is on the Universal Postal Service as this is the pivotal issue under discussion.

Universal Postal Service suggests that all citizens regardless of race or gender have equal access to basic postal services (our emphasis). The Universal Service Obligation is placed on the monopoly provider (SAPO) to ensure such access, as well as rebalancing the postal network for equity, improvement of scale, scope and quality of service, and the elimination of cost inefficiencies.

Integral to national policy for the postal sector is the provision of a universal service. This ensures that all citizens have equal access to a basic letter service (our emphasis). In order to facilitate the effective delivery of a universal service, a set of reserved postal services (our emphasis) conferring exclusive rights to the monopoly provider (SAPO) have been established. The licence issued by the Minister of Communication to the monopoly provider will entitle the provider to exclusively operate a postal service (our emphasis) for 25 years and it also imposes a Universal Service Obligation on the monopoly provider. This stipulates various obligations through which universal service is achieved. This will ensure the provision of specified postal services (our emphasis) to the whole community, even though these services may not be commercially viable. Funding of the Universal Service Obligation will be derived primarily from profits earned on monopoly and non-monopoly activities. In order to achieve sustainable profit levels the Minister sets revenue and volume growth targets in the license conditions.

In terms of the White Paper delivery of the Universal Service Obligation by the SAPO requires inter alia delivery to postal addresses to all households on an equitable basis. Street delivery is to be initiated and expanded into areas where it is currently not rendered. The SAPO has exclusive responsibility for street delivery (our emphasis). Street delivery shall be provided to all citizens except where this is not commercially viable, in which case alternative means will be provided.

The White Paper also addresses the financing of its Universal Service Obligation by the SAPO. In terms of the White Paper it will be financed from profits earned from the competitive and non-competitive markets in which the SAPO is active. Potential income sources have been identified from agency income, lottery, pensions and Postbank and the SAPO is also encouraged to consider franchising opportunities to extend the postal network as required by the Universal Service Obligation.

2.2 The Postal Services Act, 1998

2.2.1 Introduction

The Principal Act was the vehicle whereby Government's stated policy objectives in the White Paper could be entrenched. The Principal Act contains various chapters addressing the different issues highlighted in the White Paper but the emphasis of this paragraph is again only on the issue of the Universal Postal Service.

The question is how did the legislature translate the policy objectives in the White Paper into legislation? In summary the objectives were to -

? ensure that all citizens have equal access to a basic letter service.? In order to facilitate the effective delivery of a universal service, a set of reserved postal services conferring exclusive rights to the monopoly provider (SAPO) must be established.? The licence issued by the Minister of Communication to the monopoly provider will entitle the provider to exclusively operate a postal service for 25 years.? The licence must also impose a Universal Service Obligation on the monopoly provider through which a universal service will be achieved. This will ensure the provision of specified postal services to the whole community.? The SAPO has exclusive responsibility for street delivery.

2.2.2 Chapter III of the Principal Act

In terms of section 15 no person may operate a reserved postal service except under and in accordance with a licence issued to that person by the Regulator in terms of the Act. The Post Office is deemed as having applied for a licence and the licence is valid for a period of 25 years. In terms of section 20, no person may operate an unreserved postal service unless that person is registered with the Regulator in terms of the Act.

Transitional provisions were included for persons who provided a courier service within the ambit of the reserved postal services before the commencement of the Principal Act. Those persons were regarded as being licensed to provide such a courier service provided that they applied to the Minister through the Regulator for such a licence within 90 days after the date of commencement of the section concerned or within such extended period as the Regulator may have allowed. The only requirements for these licences were that the business of the applicants were --? to receive, collect and deliver items contemplated in item 1(a) of Schedule 1; ? to track and trace the whereabouts of any item received or collected for delivery by such person's business undertaking; ? to deliver items within a definite time, in the case of deliveries across international borders; ? to deliver items within the Republic on the date of receipt thereof or at the latest by 13:00 on the next working day; or? to clear items through customs, where applicable.

The result of the transitional provisions were thus that a person who, at the time of the commencement of the Act, rendered a courier service that fell within the ambit of a reserved postal service, was deemed to be licenced if that person applied for such licence within 90 days after the commencement of the Act. A licence would not be issued however if the person did not undertake the services listed under the bullets above. A similar provision was created for the providers of unreserved postal services.

For market entrants after the commencement of the Principal Act, no application for a licence may be considered if that application is not lodged pursuant to and in accordance with an invitation issued by the Minister in the Gazette.

Chapter III further provides the necessary enablers naturally linked to any statutory system such as the application for licences, payment of fees, monitoring, renewal, suspension or cancellation of licences, production of books and records and the appointment and powers of inspectors.

2.2.3 Schedules 1 and 2 of the Principal Act

Schedules 1 and 2 of the Principal Act defines the reserved postal services and the unreserved postal services. The distinction between the two services is the following - ? If a person operates a service that falls within Schedule 1 it is a reserved service and that person must apply for a licence to so operate. A licence applied for in this manner is however subject the exclusive licence granted to the SAPO.? If a person operates a service that falls within Schedule 2 it is a non-reserved service and that person must apply for a registration certificate to so operate. The exclusive licence granted to the SAPO does not apply to these non-reserved services.

It is the reserved services in Schedule 1 that necessitates closer study. For ease of reference the Schedule, as amended by the Postal Services Amendment Act, 2001 (Act No. 33 of 2001), but not including the proposed amendment by the Bill, is quoted in its entirety

"The reserved postal services include - (a) all letters, postcards, printed matter, small parcels and other postal articles subject to the mass or size limitations set out in item 3; (b) issuing of postage stamps; and (c) the provision of roadside collection and address boxes.

2. For 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.

3. The reserved postal services include all items described in items 1(a) and 2 of a mass up to and including one kilogram or size which enables it to fit into a rectangular box with the following dimensions: length 458 mm width 324 mm thickness 100 mm Cylinders having a maximum length of 458 mm and 100 mm thickness or a mass of up to one kilogram are regarded as letters.

4. The following exemptions from letter mail apply and are not subject to licensing in terms of this Act: (a) Delivery by an employee of the sender exclusively for the private affairs of the sender; (b) unaddressed mail; (c) the exchange or service of legal process, proceedings, pleadings, affidavits or depositions; (d) letters exceeding the stipulated dimensions or mass; [DELETED](e) occasional letters delivered by an individual not in the business of delivering letters; (f) trade announcements, circulars, printed extracts from newspapers, or advertisements which are not addressed to any person; (g) newspapers and periodicals.

Any person providing a service as set out in Schedule 1 provides a reserved postal service and must be licensed as provided for in Chapter III of the Principal Act. The application for a licence to provide a reserved postal service is however subject to an invitation to be published by the Minister and the exclusive licence issued to the SAPO. The Minister has to date not published an invitation and it is foreseen that it may only be considered after the expiry of the SAPO licence or after the first 3-year review by the Regulator.

In order to obtain a complete picture of the regulatory environment that has been created by the Principal Act, it is necessary to briefly look at the contents of the licence granted to the SAPO.

2.3 THE LICENCE ISSUED TO THE SAPO IN TERMS OF SECTION 16 OF THE PRINCIPAL ACT

2.3.1 Introduction

The White Paper made provision for the granting of a licence to the SAPO granting it exclusive power to provide the reserved postal services defined in Schedule 1 of the Principal Act. The purpose of discussing the contents of the licence is to determine the parameters of the exclusivity in order to obtain clarity on which services do not form part of this exclusivity arrangement.

The licence was granted for a period of validity of 25 years from the 1 April 2000, subject to the terms and conditions set forth in such licence and subject to the obligations referred to in the Principal Act, to operate all or any of the reserved postal services (as defined). The licence was published in the Government Gazette on 17 August 2001 (Notice 1865 of 2001).

2.3.2 Exclusive Licence to Provide Reserved Postal Services

In terms of clause 2 of the licence, SAPO is granted a "licence giving it the right to provide reserved postal services to any person requiring such services within the Republic" for a period from 1 April 2000 until the day prior to the 25th (twenty fifth) anniversary of the above date. The right granted by the licence is subject to any licence issued in terms of section 16(5) of the Act (transitional provision),and is "exclusive to the Licensee for the period referred to in clause 3". The period referred to in clause 3 is a 3-year period calculated from 1 April 2000 and the extension of the licence is subject to review by the Regulator as determined in the Principal Act.

2.3.3 Universal Postal Service

In terms of section 8(1)(f) of the Principal Act the Regulator must promote a universal postal service that will ensure equal access for all citizens to a basic letter service. The Licence defines a basic letter as "a letter, postcard, printed matter, small parcel and other postal articles of the type covered from time to time in Schedule 1 of the Act". A basic letter service is defined as "the delivery of basic letters to households at their street letter boxes". Street letter boxes in turn is defined as "a receptacle provided and installed by any recipient of basic letters on the street frontage of his/her property, bearing the number of the house in question, and in which the postman places basic letters addressed to that street address". The further primary aim of the licence granted to SAPO is to ensure the extension of basic letter services to areas where it is not currently available, and in particular the underserviced areas

2.3.3 Conclusion

A licence has been granted to the SAPO for a period of 25 years, however the right contained in the licence is exclusive for a period of 3 years until it is reviewed by the Regulator. The first review therefore has taken place, but no information is available as to the outcome if this review. One can therefore accept that a further extension of the exclusivity has been granted to the SAPO. The contents of the licence again refers to the reserved postal service (which is defined as a basic letter in the licence) and as a result the Schedule needs to be exact in not only which services it includes but also in which services it excludes, other than the services referred to in Schedule 2.

2.4 INTERLINK POSTAL COURIER SA (PTY) LTD v THE SOUTH AFRICAN POST OFFICE LTD

2.4.1 Background

The Appeal Court, in Interlink Postal Courier SA (Pty) Ltd v The South African Post Office Ltd (Case 473/2001), had an opportunity to deliberate on section 16 and Schedule 1 of the Principal Act and the licence granted to the SAPO. There was a majority decision in favour of the South African Post Office (SAPO).

The issue in the appeal related to the appellant's right to conduct a 'courier service' in terms of the Principal Act. The court a quo (Fitzgerald AJ) interdicted and prohibited the appellant (Interlink), at the instance of the respondent (SAPO), from inter alia, providing any type of 'reserved postal service which entails street delivery of postal articles'.

2.4.2 JudgmentThe majority decision favoured the point of view that delivery to a street address did not constitute a courier service. Marais JA found that if a critical element of a courier service is lacking it cannot be classified as a courier service. He is of the opinion that actual delivery of an item to the named intended recipient or the intended recipient's authorised agent to accept delivery, as opposed to leaving it at his, her or its supposed address, is a critical element.

The Court furthermore commented that while the subsection does not define the nature of a courier service, it gives an indication of what the legislature meant by 'courier'. "Leaving an item in a postbox does not allow for meaningful tracking and tracing, and thus it cannot have been intended that that form of delivery would suffice to qualify the service as a courier service".

2.4.3 Conclusion

The judgment of the Court is only discussed briefly. However the judgment is one of the reasons that motivated the Department of Communication to clarify the position by means of an amendment Bill.

2.5 THE POSTAL SERVICES AMENDMENT BILL [B 40-2003]

2.5.1 Introduction

The Bill amends only two sections of the Principal Act, i.e. sections 16 and 22. Section 16 provides for the application and issuing of licences to provide reserved postal services and section 22 provides for the application and issuing of registration certificates to provide non-reserved postal services.

Section 16 is amended primarily by deleting subsection (5) which contained the transitional provisions for persons who provided reserved postal services at the time of commencement of the Principal Act. The result of this amendment is that persons who had provided a service at the commencement of the Principal Act now would have to apply for such a licence in terms of section 16(1) and (2). This licence is however subject to the exclusive right of the SAPO to provide that service.

Section 22 provides for a person who, before the commencement of the Principal Act provided a non-reserved postal service, including a courier service, is regarded a registered provided that the person applied for registration 90 days after commencement of the Principal Act.

2.5.2 Effect of the amendments

Both subsection (5) of section 16 and section 22 of the Principal Act attempts to regulate the existing rights of persons who were providing reserved or non-reserved postal services when the Principal Act commenced. The deletion of subsection (5) and the inclusion of certain parts thereof in section 22 does not clarify the position. If persons who were operating in the arena created by Schedules 1 and 2 had not exercised their rights within the 90 day period referred to in the sections respectively, their right to do so fell away. It is our submission that these particular amendments do not clarify the position of the service providers in this particular arena. In order to determine what the motivation for the amendments were it is necessary to study the explanatory memorandum that had accompanied the Bill as well as communiqués that were issued by the Department of Communication on request of certain stakeholders.

2.6 THE EXPLANATORY MEMORANDUM ON THE OBJECTS OF THE POSTAL SERVICES AMENDMENT BILL

The Memorandum that accompanied the Bill states that the primary objective of the Bill is to protect the exclusivity of SAPO to provide reserved postal services. A consequence of the amendment of section 16 is that courier services should only be licensed to provide unreserved services and not reserved services. The question is whether the policy, the Principal Act or the terms and conditions of the licence allow for such exclusion and whether the Department of Communication indeed want to exclude a courier service.

2.7. THE OFFICIAL POSITION OF THE DEPARTMENT OF COMMUNICATION

2.7.1 Background

On request of certain members of the courier industry, several communiqués were received from the Department of Communication in an attempt to clarify the contents of the Bill.

2.7.2 Contents of Communiqués

The first correspondence received from the Deputy Director-General: Postal Policy contained several statements that warrant a mention and these are listed below for the sake of completeness:

? The request to Parliament to amend the Act is to give clarity on what services fall under the reserved and unreserved areas and who is supposed to give which service.? SAPO was granted a licence in 2000 imposing on it a Universal Service Obligation in terms of section 16(3) of the Principal Act. The obligation is to ensure that all citizens of this country have equal access to a basic letter service and that the service is accessible irrespective of physical location, at a uniform affordable price whether this makes business sense or not. Such a licence was granted in April 2000 to allow for all stakeholders to know about it and its implications. The current Bill simply strengthens this position and clarifies what some said was confusing. Nothing new is being introduced.? The current Bill confirms the outcome of the Appeal Court judgment in Interlink Postal Courier SA (Pty) Ltd v The South African Post Office Ltd. It removes the ambiguity in the interpretation of section 16(5), and strengthens Government policy which is ensuring that universal service is achieved before any competition against SAPO is introduced. ? The Bill does not stop any courier service to do what it has been doing if that business was legal. ? It does not stop the delivery of items that cannot be delivered in a post box.? Anything that gets delivered personally is exempted in terms of the law.

2.7.2 Conclusion

From the above correspondence the position of the Department is that -

? the SAPO exclusivity is intended to relate to a basic letter service that can be delivered in a post box ? the Bill is not intended to stop the delivery of items that cannot be delivered in a post box? any item that is delivered personally is exempted form the provisions of the Principal Act.

CHAPTER 3: EVALUATION OF THE AMENDMENT BILL IN THE LIGHT OF PARAMETERS SET BY THE WHITE PAPER, THE PRINCIPAL ACT, THE EXCLUSIVE LICENCE AND THE DEPARTMENTAL COMMUNIQUES

3.1 Summary of the Policy and Legislation

3.1.1 The White Paper

? Universal Postal Service suggests that all citizens regardless of race or gender have equal access to basic postal services? Integral to national policy for the postal sector is the provision of a universal service. This ensures that all citizens have equal access to a basic letter service? In order to facilitate the effective delivery of a universal service, a set of reserved postal services must be identified? The SAPO has exclusive responsibility for street delivery

3.1.2 The Principal Act

? Section 16 creates a licensing system which allows for the application of licences to provide reserved postal services ? The applications are subject to an invitation by the Minister and the license of the SAPO? Section 16(5) also makes provision for a transitional period whereby existing rights can be protected if the holder of the right applies for a licence? Reserved postal services are defined in Schedule 1? Section 21 creates a registration system which allows for the application of registration certificates to provide unreserved postal services? Unreserved postal services are defined in Schedule 2? Section 22 provides for a transitional provision to obtain registration within a period of 90 days after commencement of the Act.

3.1.3 The Explanatory Memorandum on the Objects of the Postal Services Amendment Bill

? The primary objective of the Bill is to protect the exclusivity of SAPO to provide reserved postal services? A consequence of the amendment of section 16 is that courier services should only be licensed to provide unreserved services and not reserved services.

3.1.4 The Official Position of the Department of Communication

? the SAPO exclusivity is intended to relate to a basic letter service that can be delivered in a post box ? the Bill is not intended to stop the delivery of items that cannot be delivered in a post box? any item that can be delivered personally is exempted form the provisions of the Principal Act.

3.2 Interpretation of the Postal Services Amendment Bill, 2003

3.2.1 Introduction

Do the amendments proposed by the Bill achieve what is to be found in the documentation summarised above? In other words do the amendments make it clear that the reserved postal services relate to a basic letter service that can be delivered in a post box and that any item that is delivered personally is exempted from the legislation?

It is our submission that the amendments proposed in the Bill do not achieve clarity on the question posed above. The ambiguity that it is proposed to address remains for the following reasons:

3.2.2 The Deletion of Section 16(5)

Section 16(5) reads as follows:

"(5)(a) Any person who, immediately before the date of commencement of this section provided a courier service of a type contemplated in Schedule 1, must be regarded as being licensed to provide such a courier service, subject to paragraph (b). (b) A person may not be regarded as being licensed in terms of paragraph (a) if that person has failed to apply to the Minister through the Regulator for such a licence within 90 days after the date of commencement of this section or within such extended period as the Regulator may allow. (c) After receipt of an application in terms of paragraph (b) the Minister must, subject to paragraph (d), grant the application and thereafter the Regulator must issue a licence to the applicant. (d) A person may not be licensed to provide a courier service in terms of this subsection unless that person undertakes - (i) to receive, collect and deliver items contemplated in item 1(a) of Schedule 1; (ii) to track and trace the whereabouts of any item received or collected for delivery by such person's business undertaking; (iii) to deliver items within a definite time, in the case of deliveries across international borders; (iv) to deliver items within the Republic on the date of receipt thereof or at the latest by 13:00 on the next working day; or (v) to clear items through customs, where applicable. "

When this particular subsection is studied it is clear that it was included to protect the existing rights of service providers who had provided reserved postal services when that particular section commenced. The protection was granted automatically provided that such service provider -? applied to the Regulator for a licence to render the service; and? applied for the licence within 90 days after the commencement of the section or a longer period granted by the Regulator; and? undertook the services referred to in paragraph (d) of subsection (5).

A discussion with the Regulator revealed that since the commencement of the section no person had applied for a licence as provided for in the subsection in question and there has not been an extension of the period. The result of the deletion of section 16(5) is that it merely removes a right to apply for a licence, which right has already lapsed due to the elapse of a statutory period. A further result is that it removes the definition for a courier service from this section.

There are other amendments to section 16 but these are only added to remove any reference to section 16(5) in the section.

It is our submission that the deletion of section 16(5) does not clarify the position in any way and to achieve the necessary clarity section 16 cannot be amended without the amendment of Schedule 1. The amendment of section 16 only creates a lacuna that must be addressed.

3.2.3 The Amendment of Section 22

Section 22 currently reads as follows

Operators regarded as having been registered 22. (a) Any person who, immediately before the date of commencement of this section provided a postal service in respect of items contemplated in Schedule 2, including a courier service, must be regarded as being registered to provide an unreserved postal service or an unreserved courier service, as the case may be, subject to paragraph (b). (b) A person may not be regarded as being registered in terms of paragraph (a) if that person has failed to apply for registration to the Regulator within 90 days after the date of commencement of this section or within such extended period as the Regulator may allow. (c) After receipt of an application in terms of paragraph (b) the Regulator must, subject to paragraph (d), register the applicant and issue a registration certificate. (d) A person may not be registered to provide a courier service in terms of this section unless that person undertakes - (i) to receive, collect and deliver items contemplated in item 1(b) of Schedule 2; or (ii) to render any service contemplated in subparagraphs (ii) to (v) of section 16(5)(d), in respect of items contemplated in item 1(b) of Schedule 2.

The amendment to this section results in the deletion of subparagraph (ii) and the replacement thereof by the following subparagraphs:

(ii) to track and trace the whereabouts of any item received or collected for delivery by such person's business undertaking;(iii) to deliver items within a definite time, in the case of deliveries across international borders;(iv) to deliver items within the Republic by the latest by 13:00 on the first working day after receipt thereof; and(v) to clear items through customs, where applicable."..

The result of this amendment is that the definition of a courier service as contained in section 16(5) will be inserted into the registration system for service providers that render unreserved services. However section 22, like section 16(5), creates a temporary system of registration for service providers that rendered unreserved services at the time of commencement of section 22. The right contained in this section has elapsed.

It is our submission that the insertion of this definition in section 22 has not achieved the necessary clarity required in this regard.

3.3 Recommended Amendments

It is recommended that the proposed amendments be revisited to ensure - ? that the exclusive rights of the SAPO relating to a basic letter service, as defined in SAPO's licence, is demarcated clearly not only in section 16 but in Schedule 1 as well; ? that the services provided by couriers that are not reserved are clearly demarcated;? that the definition of a courier service, modeled on that provided by the Supreme Court of Appeal, be incorporated into the Bill in a suitable section after consultation with the stakeholders.

3.3 The Amendment of Section 16 and Schedule 1

In terms of the policy and the official position of the Department of Communication the exclusive right of the SAPO relates to the provision of a basic letter service and any item that gets delivered personally is exempted. However Schedule 1 determines that 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 ........any article conforming to the mass or size limitations set out in item 3.

The underlined wording means that a courier service of a basic letter less than 1 kg or of the size that fits into a letter box is not allowed. This does not conform to the official position of the Department of Communication. As a result it is recommended that - ? section 16 only be amended by the deletion of section 16(5)(d); and ? Schedule 1 be amended to exclude a courier service of the reserved items by inserting the following words in item 2 after the words "electronic means"

"or by means of a courier service"

3.4 The Amendment of Section 22 and the Definition of "courier service"

It is recommended that the proposed amendment of section 22(d)(ii) be as follows:

"(ii) to render any courier service in respect of items contemplated in item 1(a) of Schedule 2."

It is also necessary to redefine courier service in section 1 of the Principal Act as modeled on Interlink Postal Courier SA (Pty) Ltd v The South African Post Office Ltd. The current definition of "courier service" is "a service provided by a person licensed or registered to provide such a service in terms of this Act". It is recommended that this definition be amended as follows:

"courier service" means a service where a person who is licenced or registered in terms of Chapter III undertakes - (i) to track and trace the whereabouts of any item received or collected for delivery by such persons business undertaking;(ii) to deliver items within a definite time, in the case of deliveries across international borders;(iii) to deliver items within the Republic within a definite time but not later than 48 hours after receipt thereof; or (iv) to clear items through customs, where applicable,but does not include the depositing of any item in a street letter box.".

It will also be necessary to define a street letter box and the definition used in the SAPO licence may be considered.

A street letter box is defined in the licence as "a receptacle provided and installed by any recipient of basic letters on the street frontage of his/her property, bearing the number of the house in question, and in which the postman places basic letters addressed to that street address".

CHAPTER 4: CONSULTATION PROCESS

In the Memorandum that accompanied the Bill, SAPO is listed as the only institution that was consulted during the process of amendment.

The Department of Communication did however publish the draft Bill in the Government Gazette for general information. The Government Gazette in question became available to the public after 15 August 2003 and the proposed Bill was deliberated on by the Portfolio Committee on 20 August 2003 and adopted with no further discussion on 3 September 2003.

There is no information available as to the process that preceded the Bill. However, it would appear from the Memorandum referred to in paragraph 7.1 that no institutions, labour organisations or industry was consulted on the proposed amendments.

Although the publication of the proposed Bill by the Department of Communication is an indication of their commitment to transparency, the period allowed for comment cannot be accepted as a reasonable period.

There can be no doubt that the process with regard to consultation of the stakeholders was flawed.

If the NCOP will not consider the amendments as proposed in Chapter 3 of this submission, it is humbly requested to defer a decision on this matter until due consultation has taken place. The monopoly will be reviewed by the Regulator every three years. This exclusivity period should provide a time-frame for the Post Office to restructure and improve efficiency in preparation for competition in all areas, while achieving key government and sectoral objectives, particularly increasing availability and access of services to rural and disadvantaged areas.