EXPLANATORY MEMO

1. Amendment of the definition of “customer”

It is proposed that the definition of “customer” be amended to put it beyond doubt that a customer does not only mean a person to whom an electronic communication service provider provides an electronic communications service in kind but also includes an employee of the electronic communication service provider or any person who receives or received such service as a gift, reward, favour, benefit or donation.

2. Insertion of subsection (10) in section 40

It is proposed that subsection (10) be inserted to section 40 to determine an MCO must store the information recorded and stored in terms of section 40(2) and (6) for a period of 5 years after a customer has cancelled his or her contract with an MCO or an MCO has ended the services provided to the customer.

The purpose of the proposed amendment is to create certainty about the period for which the information recorded and stored in terms of section 40(2), must be kept. Its purpose is also to align the said period with the period determined by the Minister of Communications in terms of section 30(2)(a)(iii) of the Act relating to the manner in which communication-related information must be stored as envisaged in section 30 of the Act.

3. Amendment of section 51(3A)(b)

In order to ensure proper enforcement of the proposed section 40(10) (see paragraph 2), a contravention thereof is criminalised with a fine of R100 000 for each day on which such failure to comply continues.

4. Amendment of section 51(3D)

A grammatical error is being corrected. The phrase “provision” is substituted with the phrase “provisions”.

5. Amendment of section 62(6)(b)

The newly proposed section 40(10) is also made applicable to section 62(6) of the Act which provides for the recording and storing of information as is set out in the amended section 40 to historical customers. The effect of the proposed amendment would be that MCO’s must store the information recorded and stored in terms of section 40(2) and (6), for the purposes of section 62(6), for a period of 5 years after a customer has cancelled his or her contract with an MCO or an MCO has ended the services provided to the customer.

6. Amendment of section 62B(a)

The insertion of the reference to section 62C in section 62B(a) will ensure that MCO’s will have to inform juristic persons and persons who rent out cellular phones and SIM-cards of their obligations to comply with section 62C of the Act. Section 62C will be discussed directly hereafter.

7. Amendment of section 62C

Section 62C requires from juristic persons which provide cellular phones or SIM cards to their employees, to keep record of the particulars of these employees. It also requires persons who, for reward, hire out cellular phones or SIM-cards to record and store the particulars required in section 40(2) and verify the personal particulars of their clients. This information must be stored for a period of 5 years. Failure to comply is criminalised. The following amendments to the proposed section 62C are suggested to ensure that this section mirrors section 40 of the Act:

7.1 The proposed section 62C has been redrafted to provide that a juristic person who

provides a cellular phone or SIM-card to a person in its employment must -

(a) record the particulars required by section 40(2);

(b) record the date on which and the period for which the cellular phone or SIM-card is provided to a particular employee; and

(c) verify the particulars and address of the person by means of documentation contemplated in section 40(3)(b).

The suggested amendment will ensure that sufficient verified particulars are available

to identify and trace an employee, should the need occur, even after an employee has left

the service of the juristic person.

7.2 Proposed subsection (4) mirrors section 40(7) of the Bill and compels –

(a) a juristic person who provides a cellular phone or SIM-card to a person in its employment; and

(b) a person who rents a SIM-card or cellular phone to another person,

to provide certain information to a law enforcement agency, who wish to apply for a direction.

7.3 The proposed subsection (5) mirrors section 40(8) of the Bill and compels a juristic person who provides a cellular phone or SIM-card to a person in its employment and a person who rents a SIM-card or cellular phone to another person, to report any false information that has been submitted for verification purposes to a police official at a police station.