Week 14: 1 April 2024

Welcome to 'Navigating GRC' your guide through the intricate landscape of Governance, Risk, and Compliance. Stay ahead of the curve with expert insights, practical strategies, and industry best practices.

Lifelong learning is not just a professional requirement but a strategic advantage in the dynamic world of GRC.

Unlock the power of effective GRC to drive business success and mitigate risks.

Acquisitive prescription

Cliffe Dekker Hofmeyr (CDH) reports in their Real Estate Law alert that acquisitive prescription is a legal doctrine that allows a person to obtain ownership of property by virtue of their possession and use of that property for a specific period of time. This is covered by the Prescription Act 18 of 1943 and the Prescription Act 68 of 1969.

The purpose of acquisitive prescription is to provide legal certainty and stability in property rights, ensuring that long-standing possession is rewarded with ownership.

The requirements of acquisitive prescription which are:

• Possession - refers to physical control and utilisation of the property as an owner would;
• Duration - for movable property this is three years, while for immovable property, is 30 years;
• Good faith - the claimant genuinely believes they are the rightful owner of the property and are unaware of any defects in their title.
• No interruption - possession must be uninterrupted for the required period.

Read the article here.

By meeting the legal requirements and following the prescribed timelines, individuals can gain recognition of their long-standing possession and obtain ownership rights through legal compliance.

Weeding out the fraudsters

CDH reports in their Employment Law alert that the SA employment landscape is littered with employees who have misrepresented their qualifications to achieve a higher status or make more money by being appointed to positions for which they would not have been eligible without those qualifications.

This is unfortunately all too common.

The ease with which these unscrupulous fraudsters get through the appointment process is worrying. The harsh reality is that most companies do not conduct a proper due diligence of candidates when appointing employees.

Section 32B(1)(c) of the National Qualifications Framework Act 67 of 2008 (NQF Act) makes it an offence to knowingly provide false or misleading information in any circumstances which the NQF Act requires the person to provide information or give notice to another person.

Section 32A(1) must however still be proclaimed by the President in the Government Gazette.

Read the full article here.

Employers should avoid these risks by making it clear to employees in their contracts of employment and in their policies that the misrepresentation of qualifications will not be tolerated. The consequences of such misconduct should be clearly stated.

What does the "R" in GRC stand for?

Risk is ubiquitous in all areas of life and we all manage these risks, consciously or intuitively, whether we are managing a large organization or simply crossing the road.

Risk management refers to a systematic approach to managing risks, and a general definition is that risk management consists of "coordinated activities to direct and control an organization with regard to risk.

In business terms, the aim of risk management is to assist companies in "setting strategy, achieving objectives and making informed decisions".

Read more about risks.

We all need to be more aware of the risks we face each day, particularly the risks our children face, remain very important.

Illicit cigarette trade impacts all of us

Ciaran Ryan reports in Moneyweb that the illicit cigarette trade shot up from about 5% in 2009 to more than 60% in 2021. The reasons are simple:

1. The five-month ban on tobacco sales in 2020 during Covid, which gifted the cigarette market to criminals as smokers switched to cheaper brands. People did not stop smoking.
2. The gutting of SARS under Tom Moyane during the Zuma reign reduced the capacity to collect excise on cigarettes.

The big players used the annual increase in excise to increase the retail prices of cigarettes, thereby increasing their profit per cigarette.

Read the full article here.

In 2022 alone, the government lost R15 billion in excise and R3 billion in value-added tax (Vat) from these illicit sales. These financial shortfalls come from our pockets.

Fragmentation of agricultural land

Ceciley Oates?and Raaheel?Bux?of CDH reports that South Africa’s agricultural sector is one of the cornerstones of its economy that has been intricately woven into the legal fabric of the country.

Despite its relatively small share of the total gross domestic product, agriculture remains a significant provider of employment in rural areas and is one of the major earners of foreign exchange in South Africa.

South African agriculture is, however, limited by the relative scarcity of arable land and water resources, thus resulting in the evolution of the legislative framework governing agricultural land, which encompasses the country’s commitment to sustainable agriculture and environmental conservation.

In Chapter 1 of the Expropriation Bill,?‘‘Expropriation’’?is defined as the compulsory gaining of property by an expropriating?authority or an organ of the state upon request to an expropriating authority.

The introduction of the Expropriation Bill should not be confused with the amendment of section 25 of the Constitution. The amendment seeks to allow expropriation without compensation whereas the Expropriation Bill seeks to outline how expropriation must be done i.e.?guide the processes and procedures for expropriation of property by organs of state.?

Read the full article here.

Expropriation of land could hold a significant risk to food production in future. Time will tell.

Unilateral decisions by business rescue practitioners

Belinda Scriba et al of CDH also reports that Mr Tayob, was one of two appointed business rescue practitioners (BRPs) in the business rescue of Shiva Uranium (Shiva). Mr Tayob filed a notice of termination of business rescue (notice) at the Companies and Intellectual Property Commission (CIPC).

Was this filing valid and therefore terminated the business rescue of Shiva?

Mr Januarie, the other BRP of Shiva, disputed the legality of the filing of the notice as it was a unilateral action taken by Tayob.

Section 132(2)(c) of the Companies Act specifies that BRPs conclude their role as BRPs by filing a notice of termination. Section 141(2)(b)(ii) of the Companies Act, provides that BRPs can file a notice of termination of business rescue at any time during business rescue proceedings, if the BRPs conclude that there are no longer reasonable grounds to believe that the company is financially distressed.

If the business rescue process was court-confirmed under section 130 or initiated through a court application under section 131, the practitioner must seek the court’s approval first.

BRPs appointed in a joint capacity must act jointly. The decision and actions taken by Tayob were unilateral, and not joint, indicating that the notice of termination and its filing at the CIPC were in fact invalid.

Read the article here.

Essential points highlighted in this judgment are that the lack of compliance with the Act leads to invalidity of actions and a decision:

(i) a business rescue process involving joint BRPs requires decisions to be made jointly, and not at the unilateral discretion of one of the BRPs. Unilateral actions in the presence of other duly appointed BRPs constitute an unlawful act;

(ii) CIPC directions and notices cannot override the provisions of the Companies Act; and

(iii) the court has certain discretions which it will exercise for the sake of a more efficient business rescue, and for the best interests of the company and its affected persons.

Guardianship of minor children

CELESTE SNYDERS writes in GoLegal that the High Court holds the position of supreme guardian over all minor children. This is in line with the foundational principle of the South African Constitution that emphasises the supreme importance of a child’s best interests.

Guardianship involves legally acquiring the authority to make decisions on behalf of another person, particularly a minor. The Children’s Act, specifically Section 18 thereof, governs how the guardianship of minors is to be handled.

Guardianship applications can be submitted by any individual who demonstrates a genuine interest in the welfare of a child. The following criteria are considered by the court:

• Child’s best interest: This is the primary consideration and is of paramount importance in any decision-making.
• Relationship with the minor: The court examines the nature and extent of the existing relationship between the child and the applicant.
• Contribution to care and maintenance: The degree to which the applicant has been involved in the child’s life, especially in terms of care and support.
• Other pertinent factors: Any additional factors that the court finds relevant to the application will be considered in the decision to grant guardianship.

Read the article here.

Compliance with this legal framework ensures that the interests of the child are protected.

E-toll’s official date of death announced

Hanno Labuschagne reports in MyBroadband that the official shutdown date for e-tolls in Gauteng has been confirmed, just more than a decade after the much-abhorred system first came into use.

The South African National Roads Agency (Sanral) has published a government gazette declaring that sections of the N1, N3, N4, N12, and R21 upgraded as part of the Gauteng Freeway Improvement Project (GFIP) will no longer be tolled.

“The date and time from which the above withdrawal off toll declarations will be effective, shall be 11 April 2024.

Read the article here.

The level of non-compliance by motorists leaves SANRAL with a staggering R47bn in arrears after about 10 years.

Boost property investments in South Africa

Billionaire businessman Christo Wiese said automatically approving building plans after three months if the municipality does not engage, is an excellent way to cut red tape. Wiese made this suggestion during a question-and-answer session at the BizNews Conference held in Hermanus, reported in Daily Investor.

Starting a business in South Africa is far more cumbersome than in a country like Rwanda, where it takes only three days.

Wiese said reducing red tape and making it easy to start a business has made Rwanda an African success story. In comparison, South Africa is steeped in bureaucratic processes, making it very difficult to start and run a business.

He added that inefficient local and national government systems play into corrupt officials’ hands. “Corruption exacerbates bureaucracy. It’s a vicious cycle. More rules mean more chances for corruption. We must tackle both with nuance and positivity,” he said.

Read the article here.

Corruption exacerbates bureaucracy - a vicious circle.

Talk to Us

We specialise in the provision of focused GRC consulting input on an informed basis, and in a manner that adds value to the enterprise.

Put succinctly: we can help; we know what has to be done.

Call us.

‘Navigating GRC’ is published as a weekly newsletter on LinkedIn.