Dear Subscribers,
Below are the latest Gazette happenings,
Please see the attached link to a more detailed PDF version of the weekly Gazette and Newsflash for 16 – 22 May 2025:
Gazette Newsflash 16-22 May 2025
Dear Subscribers,
Below are the latest Compliance happenings,
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AGRICULTURE
Fertilizer, Farm Feeds, Agricultural Remedies and Stock Remedies Act: Application for derogation for the restricted use of agricultural remedies identified as substances of concern: Comments invited
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ENERGY
Mineral Resources Development Bill: Draft
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ENGINEERING
Engineering Profession Act: Guideline Scope of Services and Professional Fees
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HEALTH AND SAFETY
Compensation for Occupational Injuries and Diseases Act: 2024 Return of Earnings (ROE) filing season and extension of Letters of Good Standing (LOG) validity
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ENVIRONMENTAL
National Environmental Management: Waste Act: Regulations: Exclusion from definition of waste stream: Extension of deadline for comments National Environmental Management Act: Intention to adopt a substation exclusion norm and to exclude development and expansion of transmission and distribution substations from requirement to obtain environmental authorisation: Comments invited National Environmental Management Act: Adoption and Implementation of the Sandveld Environmental Management Framework Standard, 2025 and the exclusion of Identified Activities from Requirement to obtain Environmental Authorisation
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INTERNATIONAL TRADE
International Trade Administration Act: Ban and Trade Policy Directive on importation of blank guns: Comments invited International Trade Administration Act: Administrative Fees Guidelines |
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LATEST’S ARTICLES
Q&A: contract formation in Egypt King V and the future of Corporate Governance in South Africa: Advancing ESG and Business and Human Rights Q&A: the legal framework for corporate reorganisations in Egypt Updates on Customs and Excise Rules and Treasury’s Budget Facility for Infrastructure Environmental, social, and governance (ESG) and data protection: a nexus Legal Consequences Under the UAE’s Cybercrimes Law Electricity Transmission Infrastructure Regulations: What You Need to Know SARS System Error A general introduction to Banking Regulation in Nigeria Long-awaited DOJ guidance on white collar enforcement priorities and policies: Key takeaways Think Compliance Got Easier? Think Again—DOJ’s New Era in White-Collar Enforcement (Part 2) Food and Beverage News and Trends – May 16, 2025 All eyes on the Pretoria High Court: The DA’s challenge to Employment Equity Act amendments heads to court New Labour Law issued in Egypt Insurance Company Incorporation and Licensing Guidelines Aspen v Adcock: High court upholds trade mark rights The AI Crossroads: Navigating the Ethical and Legal Maze of IP Copyright in the age of artificial intelligence (AI): legal implications and emerging issues President Trump signs Executive Order aimed at reducing prescription drug prices Mine health and safety: amendments to regulations on machinery – winding equipment Part 1 | Mine health and safety: amendments to rescue, first aid and emergency preparedness and response regulations Part 2 | Mine health and safety: amendments to rescue, first aid and emergency preparedness and response regulations Can new technology improve case outcomes? Personhood credentials: Safeguarding human identity in the age of AI Understanding Agentic AI and Generative AI: Legal and ethical considerations Block exemption regulations for ports, rail and key feeder road corridors now in place |
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Alison and The Legal Team
CONTENTS
National Qualifications Framework Further Amendment Bill: Draft
Mineral Resources Development Bill: Draft
Engineering Profession Act: Guideline Scope of Services and Professional Fees
International Trade Administration Act: Administrative Fees Guidelines.
Pharmacy Act: Fees payable to the Council
Dental Technicians Act: South African Dental Technicians Council: Appointments and elections
Q&A: contract formation in Egypt
Q&A: the legal framework for corporate reorganisations in Egypt
Updates on Customs and Excise Rules and Treasury’s Budget Facility for Infrastructure
Environmental, social, and governance (ESG) and data protection: a nexus
DATA PROTECTION AND CYBERCRIMES ARTICLES
Legal Consequences Under the UAE’s Cybercrimes Law
Electricity Transmission Infrastructure Regulations: What You Need to Know
A general introduction to Banking Regulation in Nigeria
Long-awaited DOJ guidance on white collar enforcement priorities and policies: Key takeaways
Think Compliance Got Easier? Think Again—DOJ’s New Era in White-Collar Enforcement (Part 2)
Food and Beverage News and Trends – May 16, 2025
New Labour Law issued in Egypt
Insurance Company Incorporation and Licensing Guidelines
INTELLECTUAL PROPERTY ARTICLES
Aspen v Adcock: High court upholds trade mark rights
The AI Crossroads: Navigating the Ethical and Legal Maze of IP
Copyright in the age of artificial intelligence (AI): legal implications and emerging issues
President Trump signs Executive Order aimed at reducing prescription drug prices
MINE HEALTH AND SAFETY ARTICLES
Mine health and safety: amendments to regulations on machinery – winding equipment
Can new technology improve case outcomes?
Personhood credentials: Safeguarding human identity in the age of AI
Understanding Agentic AI and Generative AI: Legal and ethical considerations
Block exemption regulations for ports, rail and key feeder road corridors now in place
AGRICULTURE |
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LAW AND TYPE OF NOTICE
Fertilizer, Farm Feeds, Agricultural Remedies and Stock Remedies Act:
Application for derogation for the restricted use of agricultural remedies identified as substances of concern: Comments invited
G 52691 GeN 3193
– Comment by 15 Jun 2025
16 May 2025
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APPLIES TO:
Agricultural and Farming Sector
Industrial and Commercial Facilities
Residential and Public Health Services
Retail and Distribution
Health and Environmental Organizations
Regulatory and Legal Bodies
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FULL TEXT |
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DETAILS
DEPARTMENT OF AGRICULTURE, LAND REFORM AND RURAL DEVELOPMENT
NOTICE 3193 OF 2025
PUBLIC NOTICE
Application for derogation for the restricted use of agricultural remedies identified as substance of concern
This notice is to inform the public of administrative action being taken in relation to the approval of agricultural remedies under the Fertilizer, Farm Feeds, Agricultural Remedies and Stock Remedies Act (Act No.36 of 1947)
Growing Manufacturers cc hereby informs the public of its intention to submit an application for derogation for the registered agricultural remedy Muti Igundane Reg. L5718 containing coumatetralyl with an active load 0.36g/kg identified as a substance of concern due to its classification as a (mutagen/carcinogen/ reproductive toxin category 1A or 1B according to the Globally Harmonised System of Classification and Labelling of Chemicals; or other), for the following uses in South Africa; rodenticide used in the home, industrial, public health, home garden and farming community.
As per the requirements of the “Regulations relating to agricultural remedies” of August 2023, a risk assessment was conducted for the proposed end uses the public is hereby invited to review the risk assessment report and submit comments in relation to the proposed application. This report can be accessed online via the following website: https://growingmnfc.com/or in hard copy at the Department Of Agriculture, Land Reform and Rural Development (Agriculture Building, 20 Steve Biko Street, Arcadia, Pretoria, 0002) during office hours (8:00 to 16:00 on Mondays to Fridays, excluding public holidays)
Interested parties must submit comments or objections in connection with the proposed application in writing to:
Mr. Maluta Mudzunga The Registrar: Fertilizer, Farm Feeds, Agriculture Remedies and Stock Remedies, 1947 (Act no. 36 of 1947)
Department of Agriculture, Land Reform and Rural Development Private Bag X343, Pretotia,0001 30 Hamilton Street, Harvest House Building, Office 417, Arcadia, Pretoria, 0002 Tel No: 012 319 6530 Email to MalutaM@dalrrd.gov.za
Interested parties must submit comments or objections in relation to this application within 30 days of the publication of this notice. Comments received after this date need not be considered.
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LINK TO FULL NOTICE
Fertilizer, Farm Feeds, Agricultural Remedies and Stock Remedies Act: Application for derogation for the restricted use of agricultural remedies identified as substances of concern: Comments invitedG 52691 GeN 3193 – Comment by 15 Jun 2025 16 May 2025
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ACTION
Interested Parties to submit their comments before 15 June 2025
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EDUCATION
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LAW AND TYPE OF NOTICE
National Qualifications Framework Further Amendment Bill: Draft
G 52688 RG 11833 GoN 6187
16 May 2025
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APPLIES TO:
Government Departments and Authorities
1. Department of Higher Education and Training (DHET) – Primary driver of the amendments and responsible for oversight. 2. Department of Basic Education – Involved in coordination and articulation across education levels. 3. Department of Employment and Labour – Consulted on matters related to skills development and employment pathways.
Regulatory and Quality Assurance Bodies
1. SAQA (South African Qualifications Authority) – Central authority for: · Managing the NQF · Verifying and evaluating qualifications (especially foreign ones) · Maintaining the National Learners’ Records Database (NNRD) 2. Quality Councils (QCs): · CHE (Council on Higher Education) · Umalusi (General and Further Education and Training) · QCTO (Quality Council for Trades and Occupations)
These bodies are responsible for quality assurance, accreditation, and verification of qualifications within their respective sub-frameworks.
Education and Training Institutions
1. Public and Private Higher Education Institutions 2. TVET Colleges and Community Colleges 3. Skills Development Providers – Both public and private, especially those offering occupational qualifications. 4. Foreign Education Institutions – Particularly those offering qualifications online or in partnership with local institutions.
Professional and Industry Bodies
1. Professional Bodies – Statutory and non-statutory bodies that regulate professions and issue designations. 2. SETA CEO Committee – Representing Sector Education and Training Authorities (SETAs). 3. NEDLAC (National Economic Development and Labour Council) – Representing organized labour and business.
Data and Information Systems
1. HETMIS (Higher Education and Training Management Information System) 2. EMIS (Education Management Information System)
These systems will need to integrate with the NNRD for data sharing and verification.
Learners, Students, and Graduates
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SUMMED UP
Key Highlights from the Document:
Purpose of the Amendment Bill The bill aims to:
Major Amendments Include:
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FULL TEXT |
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DETAILS
Please click on the link provided below to view the full Amendment Bill.
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LINK TO FULL NOTICE
National Qualifications Framework Further Amendment Bill: DraftG 52688 RG 11833 GoN 6187 16 May 2025
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ACTION
Education and Training Institutions (Public & Private)
Actions Required:
1. Registration & Accreditation · Ensure registration with the Department of Higher Education and Training (DHET) or QCTO. · Obtain accreditation from the relevant Quality Council (QC) for each qualification or part-qualification offered.
2. Compliance with NQF Requirements · Align all qualifications with the National Qualifications Framework (NQF). · Use correct nomenclature and credit values as per the new definitions.
3. Data Submission · Submit learner achievement data to the National Learners’ Records Database (NNRD) within 30 days of quality assurance completion.
4. Verification Obligations · Verify the authenticity of qualifications before admitting students or hiring staff. · Refer unverified qualifications to SAQA for evaluation.
Foreign Institutions & Online Programme Providers
Actions Required:
1. Registration or Recognition · Register foreign qualifications under the relevant NQF sub-framework or ensure recognition by SAQA.
2. Compliance for Online Delivery · Ensure that any online or distance learning programme offered in South Africa complies with the Act and SAQA policies.
Quality Councils (CHE, Umalusi, QCTO)
Actions Required:
1. Verification · Verify qualifications on request (except CHE, which is exempt). · Maintain and integrate databases with the NNRD.
2. Accreditation · Accredit institutions and providers offering qualifications under their sub-frameworks.
3. Monitoring & Reporting · Monitor implementation of sub-frameworks and report to the Minister.
Professional Bodies
Actions Required:
1. Recognition & Regulation · Ensure professional designations are aligned with the NQF. · Cooperate with SAQA in cases of misrepresented or fraudulent qualifications.
Government Departments
Actions Required:
1. Policy Implementation · Implement and align departmental policies with the amended Act. · Participate in the system of collaboration with SAQA and QCs.
2. Verification Before Appointments · Verify qualifications of prospective employees before hiring.
Employers & Recruitment Agencies
Actions Required:
1. Qualification Checks · Verify all qualifications presented by job applicants. · Refer any unverified or foreign qualifications to SAQA.
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ELECTRONIC COMMUNICATIONS
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LAW AND TYPE OF NOTICE
Electronic Communications Act: Policy Direction on Inquiry into need for applications for Individual Electronic Communications Network Services Licences: Comments invited
G 52711 GoN 6213
– Comment by 21 Jun 2025
21 May 2025
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APPLIES TO:
Primary Industry Affected
Telecommunications and Digital Infrastructure
Secondary and Related Industries
1. Technology and Digital Services
2. Media and Broadcasting
3. E-Commerce and Fintech
4. Education and E-Learning
5. Public Sector and Smart Cities
Why It Matters
The policy direction aims to:
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SUMMED UP
Purpose of the Notice
The Minister intends to issue a policy direction to the Independent Communications Authority of South Africa (ICASA) to conduct an inquiry into whether there is a need to invite applications for new individual electronic communications network services (IECNS) licences.
Background Context
Policy Direction Summary
ICASA is directed to: 1. Assess demand for new IECNS licences.
2. Evaluate if new licences would: · Improve market competition. · Enhance universal access to communications services. · Justify the costs and environmental impact.
3. Submit a report within six months to inform further policy decisions.
Public Participation
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FULL TEXT |
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DETAILS
SCHEDULE
PROPOSED POLICY DIRECTION TO THE INDEPENDENT COMMUNICATIONS AUTHORITY OF SOUTH AFRICA ON APPLICATIONS FOR INDIVIDUAL ELECTRONIC COMMUNICATIONS NETWORK SERVICES LICENCES
1. Background
1.1 The Competition Commission issued a Data Services Market Inquiry (DSMI) Report on 2 December 2019. Amongst others, the DSMI Report observed that “high prices may also be caused by hindrances to effective competition, regardless of the cost level”. The report highlights that “where competition is inadequate or non-existent, firms have more market power and a greater ability to increase prices above the competitive level”. The report also states that high levels of profitability and mark ups, as demonstrated in the report, are indicators of market power and a lack of effective competitive constraints on pricing levels.
The report concludes that “it is the lack of competition in the market that appears to be of the greatest impediment to lower prices for consumers”.
1.2 The DSMI Report also pronounced on inadequate universal access to electronic communications services in the country. The report cited Stats SA General Household Survey of 2018, which indicated that 35% of South African households do not have access to Internet in any form (including Internet cafes) and that just 10% of households have Internet at home.
By 2021, the percentage of South African households that did not have access to Internet in any form decreased to 22,5% while access to Internet at home only increased to 10,4% of households. The DSMI Report recommended that interventions ought not only to be focused on driving down data costs but also on ways to promote universal access.
1.3 Section 5(6) of the Electronic Communications Act, 2005 (Act No. 36 of 2005) (the Act) provides that – ‘The Authority may only accept and consider applications for individual electronic communications network services licences in terms of a policy direction issued by the Minister in terms of section 3’.
1.4 Section 5(6) was included in the Act in the context of liberalisation but has been overtaken by market developments. On the one hand, about 490 individual electronic communications network services licences already exist (and about 2228 class electronic communications network services licences) . On the other hand, it is not possible to apply for new individual electronic communications network services licences, since a policy direction as contemplated in section 5(6) of the Act, is required. This has resulted in the trade of individual electronic communications network services licences, where the role of the Authority is limited to considering applications for licence transfers.
1.5 Industry stakeholders requested that a policy direction be issued to the Authority under section 5(6) of the Act, to enable the Authority to invite applications for new individual electronic communications network services licences.
1.6 The DSMI Report observed a lack of competition in the market, but the hindrances to effective competition did not include an insufficient number of individual electronic communications network services licensees. Since a high number of individual electronic communications network services licences have already been granted and may be transferred subject to the Authority’s approval, the Authority should determine whether new individual electronic communications network services licences will promote the objects of the Act including without limitation, improved competition and the universal provision of electronic communications networks and electronic communications services.
2. Policy Direction
2.1 The Authority is hereby directed, in terms of section 3 of the Act, to undertake an inquiry in terms of section 4B of the Independent Communications Authority of South Africa Act, 2000 (Act No. 13 of 2000). The inquiry should consider:
2.1.1 the demand for and need to invite, accept and consider applications for new individual electronic communications network services licences;
2.1.2 whether new individual electronic communications network service licences will promote the objects of the Act and specifically improve competition in the market for individual electronic communications network services;
2.1.3 whether or not and how new individual electronic communications network service licences will contribute to universal provision of electronic communications networks; and
2.1.4 whether the benefits of new individual electronic communications network service licences outweigh the costs including the cost to the Authority of monitoring and enforcing compliance with any such licences, and the burden on the environment.
2.2 The Authority is directed to submit a report to the Minister in respect of such matters within a period of no longer than six (6) months to enable the Minister to consider whether or not to issue a further policy direction in terms of section 3 read with section 5(6) of the Act.
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LINK TO FULL NOTICE
Electronic Communications Act: Policy Direction on Inquiry into need for applications for Individual Electronic Communications Network Services Licences: Comments invitedG 52711 GoN 6213 – Comment by 21 Jun 2025 21 May 2025
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ACTION
Ensure that you submit your comments before 21 June 2025
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ENERGY
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LAW AND TYPE OF NOTICE
Mineral Resources Development Bill: Draft
G 52704 GoN 6210
– Comment by 13 Aug 2025
20 May 2025
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APPLIES TO:
Mining and Exploration Companies
Impact: Stricter environmental and social compliance, new rules for associated minerals, and enhanced penalties for non-compliance.
Artisanal and Small-Scale Miners (ASM)
Impact: Introduction of artisanal mining permits and designated areas for ASM, offering legal recognition and support but also regulatory oversight.
Government Departments and Agencies
Impact: Expanded roles in enforcement, environmental oversight, and advisory functions (e.g., new Ministerial Advisory Council and Regional Committees).
Communities and Landowners
Impact: Stronger emphasis on meaningful consultation, community development, and social and labour plans.
Financial Institutions and Investors
Impact: New rules on mortgaging rights, transfer restrictions, and liability for environmental compliance may affect investment risk assessments.
Legal and Consulting Firms
Impact: Increased demand for legal advice on compliance, permitting, and appeals under the revised framework.
Academic and Research Institutions
Impact: Opportunities to contribute to policy development, especially around beneficiation, sustainability, and ASM support.
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| SUMMED UP
Key Highlights of the Draft Bill:
1. New Definitions and Terminology Updates: · Introduces terms like “artisanal mining”, “associated mineral”, “small-scale mining permit”, and “meaningful consultation”. · Updates definitions to align with current legal and socio-economic frameworks, including references to the Broad-Based Black Economic Empowerment Act.
2. Artisanal and Small-Scale Mining: · Establishes clear frameworks for artisanal mining permits and small-scale mining permits, including application procedures, duration, and renewal conditions. · Designates areas specifically for small-scale and artisanal mining to promote inclusive participation.
3. Beneficiation and Local Development: · Strengthens provisions for local beneficiation of minerals to support national development. · Requires producers to make minerals available for local beneficiation.
4. Environmental and Social Responsibility: · Tightens environmental compliance, requiring environmental authorisations and social and labour plans. · Introduces closure certificates and long-term liability for environmental damage.
5. Governance and Oversight: · Establishes the Regional Mining Development and Environmental Committee and the Ministerial Advisory Council to oversee mining activities and advise the Minister. · Enhances powers of the Minister and authorised persons for enforcement and compliance.
6. Penalties and Enforcement: · Increases fines and penalties for non-compliance, including administrative fines up to 10% of annual turnover. · Introduces new offences such as assisting illegal mining and unauthorised possession or transport of minerals.
7. Repeals and Revisions: · Repeals outdated sections and aligns the Act with other legislation like the National Environmental Management Act.
COMPARISION
1. Definitions and Terminology
2. Artisanal and Small-Scale Mining
3. Environmental and Social Compliance
4. Governance and Oversight
5. Rights and Permits
6. Penalties and Enforcement
7. Repeals and Streamlining
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DETAILS
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LINK TO FULL NOTICE
Mineral Resources Development Bill: Draft
G 52704 GoN 6210 – Comment by 13 Aug 2025 20 May 2025
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ACTION
Ensure that you submit your comments before 13 August 2025.
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ENGINEERING |
| LAW AND TYPE OF NOTICE
Engineering Profession Act: Guideline Scope of Services and Professional Fees
G 52691 BN 783
16 May 2025 |
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APPLIES TO:
Public Sector Entities
These are often the clients commissioning engineering services:
These bodies must ensure that engineering services are procured fairly and in line with the guideline’s principles.
Private Sector Clients
They use the guideline to understand fair market rates and scope expectations when hiring consulting engineers.
Consulting Engineering Firms
These firms use the guideline to structure their service offerings, fee proposals, and contracts.
Professional Service Providers
They often collaborate with engineers and must align their scopes and fees accordingly.
Professional and Regulatory Bodies
These bodies ensure compliance, professional standards, and ethical practice. |
| SUMMED UP
Purpose and Legal Basis
Structure of the Document
1. Preamble and Definitions · Clarifies terms like “consulting engineer,” “client,” “cost of works,” etc. · Emphasizes that the guideline is for guidance only, not for price fixing.
2. General Provisions · Repeals previous guidelines (e.g., Board Notice 22 of 2021). · Explains the generality of terms and the document’s short title.
3. Guideline Scope of Services · 3.1 Specialist Services & Feasibility Studies: Typically time-based. · 3.2 Normal Services: Divided into six stages from inception to close-out. · 3.3 Additional Services: Includes construction monitoring, dispute resolution, BIM compliance, etc.
4. Guideline Fees · 4.1 General: Discusses risk assessment, influencing factors, and application of fees. · 4.2 Percentage Fees: Based on cost of works, with detailed tables for various engineering disciplines. · 4.3 Additional Services Fees: Typically time-based or negotiated. · 4.4 Time-Based Fees: Categorized by staff level (A–D) and calculated based on total annual cost of employment. · 4.5 Expenses and Costs: Reimbursable with a 10% markup.
Fee Calculation Examples
Use Cases
This document is essential for:
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FULL TEXT |
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DETAILS
ENGINEERING COUNCIL OF SOUTH AFRICA
Guideline Scope of Services and Professional Fees
(Scope of Services and Professional Fees for Persons Registered in terms of the Engineering Profession Act, 46 of 2000)
The Engineering Council of South Africa has, under Section 34(2) of the Engineering Profession Act. 2000 (Act No. 46 of 2000), determined the guideline scope of services and professional fees as set out in this document.
Any amount mentioned in or fee calculated in terms of this Guideline Scope of Services and Professional Fees is exclusive of Value Added Tax.
The commencement date of this Guideline Scope of Services and Professional Fees shall be 02 April 2025
TABLE OF CONTENTS
1 PREAMBLE AND DEFINITIONS
1.1 PREAMBLE 1.2 DEFINITIONS
2 GENERAL PROVISIONS
2.1 REPEAL AND TRANSITION 2.2 GENERALITY OF TERMS 2.3 SHORT TITLE
3 GUIDELINE SCOPE OF SERVICES
3.1 SPECIALIST ENGINEERING SERVICES AND STUDIES, AND FEASIBILITY STUDIES 3.2 NORMAL SERVICES 3.2.1 Introduction 3.2.2 Stage 1 – Inception 3.2.3 Stage 2 – Concept and Viability (or Preliminary Design) 3.2.4 Stage 3 – Design Development (or Detailed Design) 3.2.5 Stage 4 – Documentation and Procurement 3.2.6 Stage 5 – Contract Administration and Inspection 3.2.7 Stage 6 – Close-Out
3.3 ADDITIONAL SERVICES
3.3.1 General 3.3.2 Construction monitoring 3.3.3 Quality assurance system 3.3.4 Lead consulting engineer 3.3.5 Engineering management services (principal consultant) 3.3.6 Dispute resolution, litigation proceedings and similar services 3.3.7 Principal agent of the client
4 GUIDELINE FEES
4.1 GENERAL
4.1.1 Introduction 4.1.2 Risk assessment 4.1.3 Risk Management 4.1.4 Influencing factors 4.1.5 Application of the fee guidelines
4.2 PERCENTAGE FEES BASED ON COST OF WORK FEES FOR NORMAL SERVICES
4.2.1 Introduction 4.2.2 Civil and structural engineering services pertaining to engineering projects 4.2.3 Civil engineering services pertaining to building projects 4.2.4 Structural engineering services pertaining to building projects 4.2.5 Mechanical engineering services pertaining to engineering projects 4.2.6 Electrical engineering services pertaining to engineering projects 4.2.7 Mechanical engineering pertaining to building projects 4.2.8 Electrical engineering services pertaining to building projects 4.2.9 Electronic engineering services 4.2.10 Services provided partially or in stages 4.2.11 Postponement, cancellation or abandonment
4.3 FEES FOR ADDITIONAL SERVICES
4.3.1 Basis for the calculation of fees for additional services 4.3.2 Construction monitoring 4.3.3 Lead consulting engineer 4.3.4 Engineering management services (principal consultant) 4.3.5 Principal agent
4.4 TIME-BASED FEES
4.4.1 Introduction 4.4.2 Category of person 4.4.3 Time based fee rates 4.4.4 Total annual cost of employment
4.5 EXPENSES AND COSTS
GUIDELINE SCOPE OF SERVICES AND PROFESSIONAL FEES
1 PREAMBLE AND DEFINITIONS
1.1 PREAMBLE
This Guideline Scope of Services and Professional Fees is published by the Engineering Council of SA (ECSA) in terms of Section 34 of the Engineering Professions Act of 2000, which requires ECSA to annually review and publish guideline professional fees.
The guidelines for determining fees for consulting engineering services are in accordance with the Council for the Built Environment (CBE) Policy Framework on Professional Fees following principles which are intended to promote competition in the market place based on both quality and price.
The Guideline is for guidance purposes only and follows the arm’s length principles of fair market value, being competitive not prescriptive, and therefore does not amount to direct or indirect price fixing.
The Guideline comprises three main sections:
• Clause 1 and Clause 2: General information, including the Preamble, Definitions and General Provisions
• Clause 3: Guideline Scope of Services which describes the typical services performed by a consulting engineer as part of a professional services contract, and includes specialist engineering services and studies, normal services which the consulting engineer is expected to perform, and additional services which are services not normally part of the responsibility of the consulting engineer and which require special agreement between the client and consulting engineer.
• Clause 4: Guideline Fees which provides general guidance on how to calculate the fees for consulting engineering services. The guideline fees describe four aspects of remuneration, namely:
The professional fees applicable for a project may be determined either by a process of direct negotiation between the client and consulting engineer or following a process of procuring competitive bids from different consulting engineers. Whatever process is used, the guideline scope of services described in Clause 3 and the guideline fees described in Clause 4 of this Guideline form a useful baseline for the determination of the scope of services and the fees.
The client may expect the consulting engineering fees for a project to vary widely according to a number of factors, the most significant being the project size (monetary value), type (building or engineering project), and engineering discipline (civil, structural, electrical, mechanical, etc) and it is for this reason that a number of different fee tables, together with different complexity factors, are presented in Clause 4. The typical broad range of percentage fees applicable to different size projects and services provided is shown in the graph below.
The graph is provided as a pictorial representation which illustrates how the fee may vary over a broad range depending on construction value and must not be used to try to determine an actual fee percentage. The fee should generally fall within the broad band as indicated on the graph, but it may also fall outside the band depending on the competitive procurement process followed as well as the project size, type, engineering discipline and the many other factors which may influence the magnitude of the fee. There is no upper (maximum) or lower (minimum) limit to the fee. As stated above, the fees determined in accordance with this Guideline are not prescriptive and are provided for guidance only.
The process of appointing a consulting engineer should commence with the drafting and signing of a formal agreement which stipulates items such as the agreed services, professional fees as agreed to, commercial terms such as duration of agreement, responsibility of parties, limit of professional liability, payment terms, breach, termination and dispute resolution, etc.
The commercial terms of the appointment should be based on a standard form of professional services contract of which several different options are available, or a bespoke agreement to be drawn up between the client and the consulting engineer. The agreement will also include the specific contract data applicable to the project under consideration as well the scope of the project work and the scope of services required of the consulting engineer.
This guideline is not prescriptive but has been produced as an aid to assist a client and the consulting engineer in reaching an equitable agreement on fees for services offered based on both the quality of the service provided as well as the price.
In the event that the client and the consulting engineer are unable to reach agreement on the fees, either party may conclude the negotiations and provided that there is no contractual relationship between the parties, the client is then free to initiate negotiations on fees with another consulting engineer. Once a professional services agreement has been concluded between the client and the consulting engineer, then the right of recourse which either party may have against the other will be in accordance with the provisions of the agreed contract.
1.2 DEFINITIONS
In this Guideline Scope of Services and Professional Fees any word or expression defined in the Act has that meaning, unless the context otherwise indicates:
1.2.1 Authority means any statutory body or organ of the State established in terms of any legislation, regulations or bylaws in South Africa, including local, provincial and national government departments and public authorities who have legislated authority over the project or site. In the context of this Guideline, authority does not include any private entity such as an insurer unless specified in writing in the Agreement.
1.2.2 Building Project or Multi-Disciplinary Project means a project comprising building work or multi-disciplinary work, together with its associated engineering work, where the engineer may be subject to the authority of another professional acting as the Principal Agent or Principal Consultant while financial and administrative matters may be dealt with by another professional, and where the engineer is only paid a fee based on the costs of a portion of the works.
1.2.3 Client means any juristic person, entity, or organ of the State who enters into an agreement with a consulting engineer for the performance of services on a project. Depending on the form of agreement applicable, the term “employer’’ has the same meaning as “client’’.
1.2.4 Consulting Engineer or Consultant, for the purposes of these rules only, means any professional person registered in terms of the Act, or a juristic person or entity who employs such professional person or persons, who enters into an agreement with a client for the performance of services on a project.
1.2.5 Construction Monitoring means the process of administering the construction contract and over-seeing and/or inspecting the works, to the extent of the Agreement, for the purpose of determining whether the works are being completed in accordance with the requirements of the contract, that the consulting engineer’s designs are being correctly interpreted and that appropriate construction techniques are being utilised. Construction monitoring, to whatever extent, does not diminish the contractor’s responsibility for executing and completing the works in accordance with his contract.
1.2.6 Contractor means any person or a juristic person under contract to a client to perform the works or part of it on a project, including a subcontractor under contract to such contractor.
1.2.7 Cost of the Works means the total final amount (or a fair estimate thereof), exclusive of value added tax, certified or which would, normally, be certifiable for payment to Contractors (irrespective of who actually carries out the works) in respect of the works designed, specified or administered by the consulting engineer, before deduction of liquidated damages or penalties, including the following:
1. Escalation, assuming continuity of the project through to final completion. Where delays occur in the project cycle the client and consultant should come to an agreement on the escalation that will be applicable to various stages of services. 2. A pro-rata portion of all costs related to the Contractor’s general obligations and overhead (preliminary and general) items, including contractor’s profit, applicable to the works (irrespective of who actually carries out the works). 3. The costs of new materials, goods or equipment, or a fair evaluation of such material, goods or equipment as if new, whether supplied new or otherwise by or to the client and including the cost or a fair evaluation of the cost of installation (the sourcing, inspection and testing of such comprise additional services by the consulting engineer).
1.2.8 Electronic and Mechatronic Engineering Services means services related to programming, coding and design of complex control and instrumentation installations and purpose designed electronic circuitry and equipment (low voltage < 48V). It may also include detailing the terminations, signals and interconnections of electronic components as distinct from proprietary designed and commercially available electronic equipment and systems and conventional electrical HV, MV and LV systems and related reticulation. Electronic engineering services are not considered part of the normal services performed by a consulting engineer.
1.2.9 Engineering Project means a project comprising mainly engineering work where normally only one consulting engineering firm is appointed to perform consulting engineering services or, if other professional service providers are involved, a consulting engineer is appointed as the principal consultant or principal agent and the other professional service providers perform mainly engineering services.
1.2.10 Fees and/or tariff of fees means payment made to a consultant or consulting engineer in exchange for advice or services.
1.2.11 Lead Consulting Engineer means the consulting engineer or consultant who assumes leadership of a joint venture or consortium either on the instruction of the client or by agreement among the members of the joint venture or consortium.
1.2.12 Normal Services means the services set out in clause 3.2.
1.2.13 Principal Consultant means the consulting engineer or consultant appointed by the client to provide engineering and/or project management services to manage and administer the services of all consultants on a multi-disciplinary project, where more than one professional service provider is appointed.
1.2.14 Principal Agent means the entity, person, consulting engineer or consultant named or appointed with full authority and obligation to act in terms of the contract between the client and the contractor. Depending on the standard form of construction contract applicable, the term “agent”, or “employer’s agent”, or “engineer”, or “project manager” have the same meaning as “principal agent”.
1.2.15 Project means any total scheme envisaged by a client, including all the works and services concerned.
1.2.16 Quality Assurance Plan is the plan that is put in place that represents the total of the contractor’s quality control processes as well as other inspections and acceptance testing processes and related activities that are associated with assuring the client that the works will meet acceptable standards.
1.2.17 Scope of Work means the portion of the works for which the consulting engineer is engaged.
1.2.18 Scope of Services and/or Services means the services contemplated in clause 3 on a project for which a consulting engineer is engaged.
1.2.19 Stage means a stage of normal services set out in clause 3.2.
1.2.20 the Act means the Engineering Profession Act, 46 of 2000.
1.2.21 the Agreement means the agreement signed by the client and consulting engineer that defines their relationship and obligations as well as the scope of work and services to be provided by the consulting engineer and the remuneration of the consulting engineer and related commercial terms.
1.2.22 Total Annual Cost of Employment means the total annual cost of employment as defined in clause 4.4.4.
1.2.23 Works means the activities on a project for which contractors are under contract to the client to perform or are intended to be performed, including the supply of goods and equipment.
2 GENERAL PROVISIONS
2.1 REPEAL AND TRANSITION
2.1.1 Subject to clause 2.1.2, the Scope of Services and Tariff of Fees for Persons Registered in terms of the Engineering Profession Act, 46 of 2000, published under Government Gazette No. 44333, Board Notice 22 of 26 March 2021, is hereby repealed.
2.1.2 The provisions of previous Board Notices, including subsequent amendments, still apply in respect of services rendered during a stage which has not yet been completed by the date of commencement of this Guideline.
2.2 GENERALITY OF TERMS
In this document, except where the context otherwise requires or indicates: • the masculine includes the feminine • the singular includes the plural • any reference to a natural person includes a juristic person.
2.3 SHORT TITLE
This document is called the Guideline Scope of Services and Professional Fees.
3 GUIDELINE SCOPE OFSERVICES
This section of the Guideline provides a description of the services which are typically performed by the consulting engineer in terms of the professional services agreement between the client and the consulting engineer. The services are described under three distinctly different headings:
3.1 Specialist Engineering Services and Studies, and Feasibility Studies 3.2 Normal Services 3.3 Additional Services
3.1 SPECIALIST ENGINEERING SERVICES AND STUDIES, AND FEASIBILITY STUDIES
These typical services as listed below relate to carrying out planning, studies, investigations, assessments as well as the preparation and submission of reports embodying proposals or feasibility studies and will normally be remunerated on a time and cost basis.
1. Consultation with the client or client’s authorised representative.
2. Inspection of the project site.
3. Developing and defining the scope of work where required.
4. Preliminary investigation, route location, planning and a level of design appropriate to allow decisions on feasibility.
5. Assessment of existing infrastructural elements with the view of informing the project on options of how to integrate existing works with proposed new works.
6. Consultation with authorities and other entities having rights or powers of sanction as well as consultation with the public and stakeholder groups.
7. Advice to the client as to regulatory and statutory requirements, including environmental management and the need for surveys, analyses, tests and site or other investigations, as well as approvals, where these are required for completion of the services, and arranging for these to be carried out at the client’s expense.
8. Searching for, obtaining, investigating and collating available data, drawings and plans relating to the works.
9. Where applicable, investigating financial and economic implications relating to the proposals or feasibility studies.
10. Assist the client to develop timeframes for next stages of the project where required. Deliverables will typically include:
a) collation of information b) reports on technical and financial feasibility and related implications c) list of consents and approval d) schedule of required surveys, tests, analyses, site and other investigations e) time frames for upcoming deliverables.
3.2 NORMAL SERVICES
3.2.1 Introduction
1. Normal services, as described hereunder, are applicable to projects where the scope of work, the cost, and the timeframe of the project have all been defined through previous investigations and reports, undertaken by the client or by other persons, in sufficient detail to determine the scope of the services with reasonable accuracy, and the consulting engineering services are required to proceed with the subsequent stages of the project in accordance with the client’s instructions.
2. In the case where only a single/discipline specific consulting engineer is appointed on a project, the services and deliverables of a principal consultant and/or a principal agent are included as normal services and must be agreed between the parties to see the project through all stages. The services and deliverables of a principal consultant and/or principal agent are only considered to be additional services where agreed in writing prior to the commencement of any work and as further described in clause 3.3.5 and 3.3.7.
3. Unless otherwise agreed in writing prior to the commencement of any work, part of the normal services of the consulting engineer on all projects includes the provision of services related to all financial matters as further described in clauses 3.2.2 to 3.2.7 such as the calculation of quantities, cost estimates, cost control and the procurement process. The only exceptions, where financial services do not form part of the normal services of the consulting engineer are as follows:
a) Structural and civil engineering services related to building and multi-disciplinary projects, and where such services form part of the quantity surveyor’s scope of services. Where the civil and structural consulting engineer is required to give assistance with such services, these shall be treated as an additional service remunerated on a time and cost basis. b) In the case of building and multi-disciplinary projects where the scope of works forms part of the principal building contract (for example a domestic subcontract) and where such financial administration services form part of the quantity surveyor’s scope of services.
4. A client may appoint an independent Construction Health and Safety Agent to represent him/her on matters of health and safety related to a construction project. In terms of the OHS Act 85 of 1993 Construction Regulations, such person may not simultaneously perform the professional services described in this Guideline Scope of Services and Professional Fees and for this reason, all reference to the services performed in respect of the abovementioned Act have been deleted from this document.
3.2.2 Stage 1 – Inception
Defined as: Refine client requirements and preferences, assess user needs and options, appointment of necessary consultants, finalise the project brief including project objectives, priorities, constraints, assumptions, aspirations and strategies.
1. Assist in finalising a clear project brief.
2. Attend project initiation meetings fortnightly (or as recorded in the client/consultant agreement) .
3. Advise on procurement policy for the project.
4. Advise on the rights, constraints, consents and approvals.
5. Finalise the scope of services and scope of work required.
6. Conclude the terms of the agreement with the client.
7. Inspect the site and advise on the necessary surveys, analyses, tests and site or other investigations where such information will be required for Stage 2 including the availability and location of infrastructure and services.
8. Determine the availability of data, drawings and plans relating to the project.
9. Advise on criteria that could influence the project life cycle cost significantly.
10. Provide necessary information within the agreed scope of the project to other consultants involved.
Deliverables will typically include:
a) agreed scope of services and scope of work b) signed agreement c) report on project, site and functional requirements d) schedule of required surveys, tests, analyses, site and other investigations e) schedule of consents and approvals and related timeframes.
3.2.3 Stage 2 – Concept and Viability (or Preliminary Design)
Defined as: Prepare and finalise the project concept in accordance with the brief, including project scope, scale, character, form and function, plus preliminary programme and viability of the project.
1. Agree the documentation programme with the client, principal agent or principal consultant, and other consultants involved.
2. Attend design and consultants’ meetings fortnightly (or as recorded in the client/consultant agreement).
3. Establish the concept design criteria.
4. Prepare initial concept design and related documentation.
5. Advise the client regarding further surveys, analyses, tests and investigations that may be required.
6. Establish regulatory authorities’ requirements and incorporate into the design.
7. Refine and assess the concept design to ensure conformance with all regulatory requirements and consents.
8. Establish access, utilities, services and connections required for the design.
9. Coordinate design interfaces with other consultants involved.
10. Prepare process designs (where required), concept designs, and related documentation, which are suitable for costing, for approval by authorities and client.
11. Liaise, co-operate and provide necessary information to the client, principal consultant, principal agent and other consultants involved.
The following financial administration services form part of the normal services except as described in clause 3.2.1.3 (a) and (b):
12. Provide cost estimates and life cycle costs, as required.
Deliverables will typically include: a) concept design b) schedule of required surveys, tests and other investigations and related reports c) process design, if applicable d) cost estimates, subject to clause 3.2.1.3 (a) and (b) .
3.2.4 Stage 3 – Design Development (or Detailed Design)
Defined as: Develop the approved concept design to finalise the design, outline specifications, cost plan, financial viability and programme for the project.
1. Review documentation programme with client, principal agent or principal consultant, and other consultants involved.
2. Attend design and consultants’ meetings fortnightly (or as recorded in the client/consultant agreement).
3. Incorporate client’s and authorities’ detailed requirements into the design.
4. Incorporate other consultants’ designs and requirements into the design.
5. Prepare design development drawings including draft technical details and specifications.
6. Carry out design and value (cost) engineering reviews and evaluate design and outline specification for quality and cost control
7. Liaise, co-operate and provide necessary information to the client, principal agent or principal consultant and other consultants involved.
8. Submit the necessary design documentation to local and other authorities for approval.
The following financial administration services form part of the normal services except as described in clause 3.2.1.3 (a) and (b):
9. Prepare detailed estimates of construction cost.
Deliverables will typically include: a) design development drawings b) outline technical specifications
c) local and other authority submission drawings and reports d) detailed estimates of construction costs, subject to clause 3.2.1.3 (a) and (b).
3.2.5 Stage 4 – Documentation and Procurement
Defined as: Prepare procurement and construction documentation, confirm and implement the procurement strategies and procedures for effective and timeous procurement of necessary resources for execution of the project.
1. Attend design and consultants’ meetings fortnightly (or as recorded in the client/consultant agreement).
2. Prepare specifications and preambles for the works.
3. Accommodate services design.
4. Undertake value (cost) engineering reviews, review and adjust design, drawings, schedules and documents, if necessary, to remain within budget.
5. Liaise, co-operate and provide necessary information to the client, principal agent, principal consultant and the other consultants as required.
6. Assess samples and products for compliance with design intent.
7. Assist in pricing, documentation and tender evaluation as required when the detailed services for these activities are provided by others.
The following financial administration services form part of the normal services except as described in clause 3.2.1.3 (a) and (b):
8. Review and adjust cost estimates to align with approved budget.
9. Formulate the procurement strategy for contractors or assist the principal agent or principal consultant where relevant.
10. Prepare documentation for contractor procurement.
11. Review designs, drawings and schedules for compliance with approved budget.
12. Call for tenders and/or negotiation of prices and/or assist the principal agent or principal consultant or quantity surveyor where relevant.
13. Evaluate tenders.
14. Prepare contract documentation for signature.
Deliverables will typically include:
a) specifications b) services co-ordination c) working drawings d) budget construction cost, subject to clause 3.2.1.3 (a) and (b) e) tender documentation, subject to clause 3.2.1.3 (a) and (b) f) tender evaluation report, subject to clause 3.2.1.3 (a) and (b) g) tender recommendations, subject to clause 3.2.1.3 (a) and (b) h) priced contract documentation, subject to clause 3.2.1.3 (a) and (b)
3.2.6 Stage 5 – Contract Administration and Inspection
Defined as: Manage, administer and monitor the construction contracts and processes including preparation and coordination of procedures and documentation to facilitate practical completion of the works.
1. Facilitate and attend site handover, as applicable
2. Issue construction documentation in accordance with the documentation schedule including, in the case of structural engineering, reinforcing bending schedules and detailing, and specifications of structural steel sections and connections.
3. Carry out contract administration procedures in terms of the contract.
4. Facilitate and attend site, technical and progress meetings fortnightly (or as recorded in the client/consultant agreement).
5. Inspect the works for conformity to contract documentation as described under clause 3.3.2 and as agreed with the client. If the Level of Construction Monitoring is not defined in the Agreement, Level 1 will apply as described in clause 3.3.2 with an average frequency of one visit to site every two weeks for the duration of the works.
6. Review the outputs of quality assurance procedures and advise the contractor and client on adequacy and need for additional controls, inspections and testing.
7. Assist in the resolution of contractual claims by the contractor.
8. Clarify details and descriptions during construction as required.
9. Witness and review all tests and mock-ups carried out on site.
10. Check and approve contractor drawings for compliance with contract documents.
11. Update and issue drawings register.
12. Issue contract instructions as and when required.
13. Review and comment on operation and maintenance manuals, guarantee certificates and warranties.
14. Inspect the works and issue practical completion certificates and defects lists as appropriate.
15. Arrange for the delivery of all test certificates, including any Certificates of Compliance, statutory and other approvals, record drawings and operating manuals.
The following financial administration services form part of the normal services except as described in clause 3.2.1.3 (a) and (b):
16. Prepare schedules of predicted cash flow.
17. Prepare pro-active cost estimates for proposed variations for client decision-making.
18. Adjudicate and resolve financial claims by contractors.
19. Establish and maintain a financial control system.
20. Prepare valuations for payment certificates to be issued by the principal agent.
Deliverables will typically include:
a) schedules of predicted cash flow, subject to clause 3.2.1.3 (a) and (b) b) construction documentation c) drawing register d) cost estimates for proposed variations, subject to clause 3.2.1.3 (a) and (b) e) contract instructions f) financial control reports, subject to clause 3.2.1.3 (a) and (b) g) valuations for payment certificates, subject to clause 3.2.1.3 (a) and (b) h) progressive and draft final accounts, subject to clause 3.2.1.3 (a) and (b) i) practical completion certificates and defects lists j) all statutory certification and certificates of compliance as required by the local and other statutory authorities and as relevant.
3.2.7 Stage 6 – Close-Out
Defined as: Fulfil and complete the project close-out, including necessary documentation to facilitate effective completion, handover and operation of the project.
1. Inspect and verify the rectification of defects.
2. Compile and/or procure operations and maintenance manuals, guarantees and warranties.
3. Compile and/or procure Record and/or As-built drawings and documentation.
4. Issue all final completion certificates in accordance with the applicable contract.
The following financial administration services form part of the normal services except as described in clause 3.2.1.3 (a) and (b):
5. Receive, comment and approve relevant payment valuations.
6. Conclude the final accounts where relevant.
Deliverables will typically include:
a) valuations for payment certificates, subject to clause 3.2.1.3 (a) and (b) b) works and final completion lists c) operation and maintenance manuals, guarantees and warranties as relevant. d) Record and/or As-built drawings and documentation e) final accounts, subject to clause 3.2.1.3 (a) and (b)
3.3 ADDITIONAL SERVICES
The following services do not form part of, and are additional to, the normal services provided by the consulting engineer in terms of clause 3.2, unless specifically agreed otherwise between the consulting engineer and the client. The agreement on the scope of services and remuneration must be in writing and should, if at all possible, be concluded before the services are performed.
3.3.1 General
1. Where the project brief, including defining the scope of work, the cost, timeframe and scope of services have not been provided by the client or through previous investigations and reports in sufficient detail to determine the scope, timing and cost of the services with reasonable accuracy, and where these services are performed by the consulting engineer as part of a separate initial feasibility, planning or similar study in terms of clause 3.1, then such services related to defining the scope of work and scope of services are regarded as additional services and the remuneration would normally be time-based plus expenses and costs.
2. Enquiries not directly concerned with the works and its subsequent utilisation.
3. Valuation for purchase, sale or leasing of plant, equipment, material, systems, land or buildings or arranging for such valuation.
4. Making arrangements for way leaves, servitudes or expropriations.
5. Negotiating and arranging for the provision or diversion of services and or infrastructure not forming part of the works.
6. Additional work in obtaining formal approval from the appropriate statutory authorities, including the making of such revisions as may be required as a result of decisions of such authorities arising out of changes in policy, undue delay, or other causes beyond the consulting engineer’s control.
7. Additional work related to monitoring as required by any government departments or authorities to facilitate regulatory approvals and certification (e.g. Mines Health and Safety Act, 29 of 1996).
8. Topographical and environmental surveys, analyses, tests and site or foundation or other investigations, model tests, laboratory tests and analyses carried out on behalf of the client.
9. Setting out or staking out the works and indicating any boundary beacons and other reference marks.
10. Preparation of drawings for manufacture and installation or detailed checking of such for erection or installation fit.
11. Detailed inspection, reviewing and checking of designs and drawings not prepared by the consulting engineer and submitted by any contractor, or potential contractor, as alternative to those embodied in tender or similar documents prepared by the consulting engineer.
12. Inspection and testing, other than on site, of materials and plant, including inspection and testing during manufacture.
13. Preparing and setting out particulars and calculations in a form required by any relevant statutory authority or any other authority having jurisdiction over the project.
14. Abnormal additional services by, or costs incurred by the consulting engineer due to the failure of a contractor or others to perform their required duties adequately and on time, for example:
a) When the works Contract is extended beyond the awarded contract period due to poor contractor performance or any other circumstances not caused by any action or inaction of the consulting engineer, then the additional work resulting from attendance at additional meetings, related inspections and additional administrative work are considered as additional services for which the consulting engineer must be remunerated on a time and cost basis, or as agreed between the parties. Alternatively, the portion of the fee due for Stage 5, Contract Administration and Inspection, is adjusted pro-rata to the extended works contract duration versus the originally expected works contract duration. b) Suspension and/or termination of contracts and reappointment of contractors, if applicable. c) Where more frequent inspections are required due to poor contractor performance or other extraneous factors beyond the control of the consulting engineer, these are normally considered to be additional services d) Dealing with excessive, unreasonable and spurious claims by the Contractor e) Late issue of information, late decisions and instructions and payment delays by the client and/or other consultants.
15. Executing or arranging for the monitoring and adjustment of the works after final handover and completion of construction and commissioning to optimise or maintain proper functioning of any process or system.
16. Investigating or reporting on tariffs or charges leviable by or to the client.
17. Advance ordering or reservation of materials and obtaining of licences and permits. 18. Compiling detailed operating, operation and maintenance manuals for plant, equipment, systems and installations.
19. Compiling record drawings related to designs done by others or related to alterations to existing works.
20. Additional services, duties and/or work resulting from project scope changes, alterations and/or instructions by the client, or his/her duly authorised agents, requiring the consulting engineer to advise upon, review, adapt and/or alter his/her completed designs and/or any other documentation and/or change the scope of his/her services and/or duties. Such additional services are subject to agreement in writing between the consulting engineer and the client prior to the performance thereof.
21. Work, and/or services related to targeted procurement of contractors and subcontractors, that could entail, but is not necessarily limited to, any or all of the following:
a) Incorporation of any targeted participation goals, the measuring of key participation indicators. b) The selection, appointment and administration of participating contractors and subcontractors. c) Auditing compliance to the above by any contractors and/or professional consultant.
22. Exceptional arrangements, communication, facilitation and agreements with any stakeholders other than the client and contractors appointed for the works for which the consulting engineer provides services. Software compliance: where Building Information Modelling (BIM) or similar client specified technology is a project requirement the additional effort over conventional projects in order to meet client requirements is regarded as an additional service. In the case of BIM compliance this may involve the appointment of a BIM manager, and the preparation and approval by the client of the BIM Execution Plan to set up the project to be fully BIM compliant. Other client specified technology may also result in additional work.
23. Condition assessment of existing facilities, structures and infrastructure or forensic investigations into defects of buildings and structures.
24. Electronic and/or mechatronic engineering services are regarded as additional services for which the consulting engineer must be remunerated, normally on a time and cost basis or as agreed in writing between the parties. Electronic engineering services are described in 1.2.10 and will only be regarded as an additional service where the consulting engineer actually carries out the programming, coding and design of control and instrumentation installations and purpose designed electronic circuitry and equipment (low voltage < 48V). Where the abovementioned work is undertaken by a supplier or works contractor the consulting engineer will not be remunerated for additional services. The selection and inspection of proprietary designed and commercially available electronic equipment and systems and conventional electrical HV, MV and LV systems and related reticulation are not regarded as electronic or mechatronic engineering services.
25. Additional services arising out of specific requirements by the client to achieve sustainability goals on matters such as alternative energy systems, clean energy, specific Green Star ratings and similar situations which must be agreed in writing between the consulting engineer and the client.
26. Any other additional services, of whatever nature, specifically agreed to in writing between the consulting engineer and the client.
3.3.2 Construction monitoring
Quality assurance during construction refers to the engineering activities that are implemented to reduce the risk of non-conformance of the construction processes. This is achieved through a combination of the quality control processes that are put in place by the contractor (who carries the ultimate responsibility for quality and conformance to the contract) in order to control its outputs, and the inspection and acceptance testing that is carried out by the consulting engineer to confirm conformance prior to certification. This means that the client and consulting engineer must agree a satisfactory arrangement in respect of construction monitoring that suits the type of work, the project location and the duration of the critical aspects of the works. Any decision regarding the required level of construction monitoring should not be taken lightly and the parties should carefully consider the consequences of noncompliance and related responsibilities, bearing in mind that the consulting engineer has a duty of care, while the client should aim to reduce risk, ensure quality, and minimise life-cycle costs.
The level of construction monitoring and the frequency and duration of the site visits must be agreed with the client prior to commencement of the works and recorded in the Agreement.
The level of construction monitoring and activities related to the quality assurance plan may change during the course of the works to reduce quality related risks. This will require an amendment of the Agreement.
Aspects that need to be considered when determining the degree to which additional construction monitoring services are required are:
a) the type of work b) the discipline of the work (civil, structural, mechanical, electrical etc) c) the competency of the contractor and its related quality control system d) the speed with which critical elements of the work are covered up
e) the consequences of non-compliance f) the timing and ease of subsequent detection and rectification of non-compliance.
Arising from the above, three levels of construction monitoring may be defined and described as follows:
1. Level 1: Periodic Construction Monitoring
The consulting engineer’s staff must:
a) subject to the note below, visit the works at a frequency agreed with the client or at an on-call basis at a notice time agreed with the contractor and the client, with extra visits for works completion inspections, provision of design/technical clarifications an inspections for works defects lists. The frequency and duration of site visits must be agreed in writing between the client and between the client and the consulting engineer prior to commencement of the services b) review random samples of material and work procedures, for conformity to contract documentation, and review random samples of important completed work prior to covering up where possible, or on completion, as appropriate.
Note: Visits at an average frequency of one visit every two weeks over the duration of the project are part of the normal services and no additional payments are applicable. Where Level 1 construction monitoring is applied on a project and, for reasons beyond the control of the consulting engineer, additional site visits in excess of the frequency initially agreed with the client or are on-call basis, these must be undertaken by the consulting engineer after agreement with the client and will be regarded as an additional service for which payment must be made in accordance with clause 4.3.2.
Level 1 construction monitoring is considered to be a basic level of service and is only suitable for the most simple, routine projects where regular inspections are not required. The client carries the risk associated with Level 1 construction monitoring because the consulting engineer is often unable to witness or inspect work prior to its being covered up and is not liable for hidden defects. On any project where a significant portion of the work is rapidly covered, such as projects involving underground services and building projects like secondary healthcare, tourism and leisure, industrial, commercial, retail and office buildings with complex electrical and mechanical works, Level 2 or Level 3 construction monitoring is required to offset risks.
2. Level 2: Part-time Construction Monitoring
The consulting engineer’s staff, or part-time construction monitoring staff must:
a) regularly visit the site at a frequency that may vary during the course of the project, and such visits may be daily or weekly, according to the project demands. The frequency and duration of site visits must be agreed in writing between the client and the consulting engineer prior to commencement of the services b) review regular samples of materials and work procedures, for conformity to contract documentation, provide design/technical clarifications where required and review regular samples of important completed work prior to covering up, or on completion, as appropriate c) where the consulting engineer is the sole professional service provider or principal agent, carry out such administration of the project as is necessary on behalf of the client.
Level 2 Construction Monitoring is an additional service for which the consulting engineer must be paid as described in clause 4.3.2(2).
Most engineering work typically requires at least Level 2 monitoring to enable the engineer to inspect work prior to it being covered up. Examples may include witnessing material and equipment preparation, the position of reinforcing steel and services such as electrical conduits and sleeves prior to pouring concrete, underground installations or installations above false ceilings, in walls, under floors, etc. The consulting engineer may also require acceptance inspection and testing of various elements on a regular basis depending on the quality controls instituted by the contractor as part of the quality assurance plan.
Level 2 construction monitoring does not allow for a full-time presence on site and as a result the consulting engineer and construction monitoring staff are unable to witness/inspect all work prior to its being covered up.
3. Level 3: Full-time Construction Monitoring
The full-time construction monitoring staff must:
a) maintain a full-time presence on site to constantly review samples of materials and work procedures, for conformity to contract documentation, provide design/ technical clarifications and review completed work prior to covering up, or on completion, as appropriate b) assist with the compilation of Record and/or As-built records and drawings to the extent required in the agreement with the client c) where the consulting engineer is the sole professional service provider or principal agent, carry out such administration of the project as is necessary on behalf of the client
Level 3 Construction Monitoring is an additional service for which the consulting engineer must be paid as described in clause 4.3.2(1).
In the case of most civil works where all materials and elements are generally regarded as being critical, and are covered on a daily basis, work is monitored on a continuous basis for the duration of the works and Level 3 monitoring usually applies. This level is also applied to the structural works that are included in such projects.
In some instances, staff members are made available by the client to assist in construction monitoring, in which cases, these persons should report to, and take instructions from, the consulting engineer or an authorised representative of the consulting engineer to avoid mixed messages being passed to the contractor.
3.3.3 Quality assurance system
The requirement by the client for a formal quality management system or quality assurance services to be applied to the project, over and above the construction monitoring services described in clause 3.3.2, is an addition to normal services provided by the consulting engineer and must be specifically defined and separately agreed in writing prior to commencement thereof.
3.3.4 Lead consulting engineer
If the client requires the consulting engineer to assume the leadership of a joint venture, consortium or team of consulting engineers of the same discipline, which is prescribed or requested by the client, this will be regarded as an additional service which may include the following:
1. Responsibility for the overall administration of all sections of the services, including those portions of the services, which fall within the ambit of the other consulting engineers. 2. Responsibility for the overall co-ordination, programming of design and financial control of all the works included in the services. 3. Processing certificates or recommendations for payment of contractors.
3.3.5 Engineering management services (principal consultant)
Should the client require the consulting engineer to undertake duties of an engineering management nature on behalf of the client, the additional services will include the following:
Stage 1 Services – Inception
1. Facilitate development of a clear project brief.
2. Establish the procurement policy for the project.
3. Assist the client in the procurement of necessary and appropriate other consultants including the clear definition of their roles and responsibilities.
4. Establish, in conjunction with the client, other consultants and all relevant authorities, the site characteristics, rights and constraints for the proper design of the intended project.
5. Define the consultant’s scope of work and services.
6. Conclude the terms of the agreement with the client.
7. Facilitate a schedule of the required consents and approvals.
8. Prepare, co-ordinate and monitor a project initiation programme.
9. Facilitate client approval of all Stage 1 documentation.
Typical deliverables:
a) Project brief b) Agreed scope of work c) Agreed services d) Project procurement policy e) Signed agreements f) Integrated schedule of consents and approvals g) Project initiation programme h) Record of all meetings.
Stage 2 services – Concept and Viability
1. Assist the client to procure the other consultants.
2. Advise the client on the requirement to appoint a health and safety consultant.
3. Communicate the project brief to the other consultants and monitor the development of the concept and viability.
4. Agree format and procedures for cost control and reporting by the other consultants.
5. Prepare a documentation programme and indicative construction programme
6. Manage and integrate the concept and viability documentation for presentation to the client for approval.
7. Facilitate approval of the concept and viability by the client.
8. Facilitate approval of the concept and viability by statutory authorities.
9. Facilitate input required from health and safety consultant
Typical deliverables:
a) Signed consultant/client agreements b) Indicative documentation programme and construction programme c) Approval by the client to proceed to Stage 3.
Stage 3 Services – Design Development
1. Agree and implement communication processes and procedures for the design development of the project.
2. Assist the client to procure the necessary other consultants including the clear definition of their roles and responsibilities.
3. Prepare, co-ordinate, agree and monitor a detailed design and documentation programme.
4. Conduct and record consultants’ and management meetings.
5. Facilitate input required by health and safety consultant.
6. Facilitate design reviews for compliance and cost control.
7. Facilitate timeous technical co-ordination.
8. Facilitate client approval of all Stage 3 documentation.
Typical deliverables:
a) Additional signed client/consultant agreements b) Documentation programme c) Record of all meetings d) Approval by the client to proceed to Stage 4.
Stage 4 services – Documentation and Procurement
1. Recommend and agree procurement strategy for contractors, subcontractors and suppliers with the client and the other consultants.
2. Prepare and agree the procurement programme.
3. Advise the client, in conjunction with the other consultants, on the appropriate insurance.
4. Co-ordinate and monitor preparation of procurement documentation by consultants in accordance with the project procurement programme.
5. Manage procurement process and recommend contractors for approval by the client.
6. Agree the format and procedures for monitoring and control by the quantity surveyor of the cost of the works.
7. Co-ordinate and assemble the contract documentation for signature.
Typical deliverables:
a) Procurement programme b) Tender/contract conditions c) Record of all meetings d) Obtain approval by the client of tender recommendation(s) e) Contract documentation for signature.
Stage 5 services – Contract Administration and Inspection
1. Arrange site handover to the contractor.
2. Establish construction documentation issue process.
3. Agree and monitor issue and distribution of construction documentation.
4. Instruct the contractor on behalf of the client to appoint subcontractors.
5. Conduct and record regular site meetings.
6. Monitor, review and approve the preparation of the construction programme by the contractor.
7. Regularly monitor performance of the contractor against the construction programme.
8. Adjudicate entitlements that arise from changes required to the construction programme.
9. Receive, co-ordinate and monitor approval of all contract documentation provided by contractors.
10. Agree quality assurance procedures and monitor implementation thereof by the other consultants and the contractors.
11. Monitor preparation and auditing of the contractor’s health and safety plan and approval thereof by the health and safety consultant.
12. Monitor preparation of the environmental management plan by the consultant.
13. Establish procedures for monitoring scope and cost variations.
14. Monitor, review, approve and issue payment certificates.
15. Receive, review and adjudicate any contractual claims.
16. Monitor preparation of financial control reports by the other consultants.
17. Prepare and submit progress reports.
18. Co-ordinate, monitor and issue practical completion lists and the certificate of practical completion.
19. Facilitate and expedite receipt of the occupation certificate where relevant.
20. Manage the review and approval of all necessary shop details and product propriety information.
Typical deliverables: a) Signed contracts b) Approved construction programme c) Construction documentation d) Payment certificates e) Progress reports f) Record of meetings g) Certificates of practical completion.
Stage 6 services – Close-Out
1. Co-ordinate and monitor rectification of defects.
2. Manage procurement of operation and maintenance manuals, guarantees and warranties.
3. Manage preparation of as-built drawings and documentation.
4. Manage procurement of outstanding statutory certificates.
5. Monitor, review and issue payment certificates.
6. Issue completion certificates.
7. Manage agreement of final accounts.
8. Prepare and present the project close-out report.
Typical deliverables: a) Completion certificates b) Record of necessary meetings c) Project close-out report.
3.3.6 Dispute resolution, litigation proceedings and similar services
Where the client requires the consulting engineer to, on his or her behalf, perform the services listed hereunder or similar work, the extent thereof and remuneration are subject to agreement between the client and the consulting engineer:
1. Dealing with matters of law, obtaining parliamentary or other statutory approval, licenses or permits.
2. Assisting with or participating in contemplated or actual mediation, adjudication, arbitration or litigation proceedings.
3. Officiating at or attending courts and commissions of enquiry, select committees and similar bodies convened by statute, regulation or decree.
3.3.7 Principal agent of the client
Subject to Clause 3.2.1(2), when a consulting engineer is, in addition to his normal functions as consulting engineer, appointed as the client’s principal agent for the purposes of procurement and construction on a multi-disciplinary project, the consulting engineer is also responsible for the following:
Stage 3 services – Design Development
1. Prepare, co-ordinate, agree and monitor a detailed design and documentation programme.
Typical deliverables:
a) Detailed design and documentation programme.
Stage 4 services – Documentation and Procurement
1. Recommend and agree procurement strategy for contractors, subcontractors and suppliers with the client and the other consultants.
2. Prepare and agree the procurement programme.
3. Advise the client, in conjunction with the other consultants on appropriate insurance.
4. Manage procurement process and recommend contractors for approval by the client.
5. Agree the format and procedures for monitoring and control by the quantity surveyor and/or other consultants of the cost of the works.
6. Co-ordinate and assemble the contract documentation for signature.
Typical deliverables:
a) Procurement programme b) Tender/contract conditions c) Contract documentation for signature.
Stage 5 services – Construction Administration
1. Arrange site handover to the contractor.
2. Establish construction documentation issue process.
3. Agree and monitor issue and distribution of construction documentation.
4. Instruct the contractor, on behalf of the client, to appoint subcontractors.
5. Conduct and record regular site meetings.
6. Review, approve and monitor the preparation of the construction programme by the contractor.
7. Regularly monitor performance of the contractor against the construction programme.
8. Adjudicate entitlements that arise from changes required to the construction programme.
9. Receive, co-ordinate and monitor approval of all contract documentation provided by contractors.
10. Agree quality assurance procedures and monitor implementation thereof by the other consultants and the contractors
11. Monitor preparation and auditing of the contractor’s health and safety plan, and approval thereof, by the health and safety consultant.
12. Monitor preparation of the environmental management plan by the environmental consultant.
13. Establish procedures for monitoring scope and cost variations.
14. Monitor, review, approve and issue certificates.
15. Receive, review and adjudicate any contractual claims.
16. Monitor preparation of financial control reports by the other consultants.
17. Prepare and submit progress reports.
18. Coordinate, monitor and issue practical completion lists and the certificate of practical completion.
Typical deliverables: a) Signed contracts b) Approved construction programme c) Construction documentation d) Payment certificates e) Progress reports f) Record of meetings g) Certificates of practical completion h) Facilitate and expedite receipt of occupation certificates.
Stage 6 services – Close-Out
1. Co-ordinate and monitor rectification of defects.
2. Manage procurement of operations and maintenance manuals, guarantees and warranties.
3. Manage preparation of as-built drawings and documentation.
4. Manage procurement of outstanding statutory certificates.
5. Monitor, review and issue payment certificates.
6. Issue completion certificates.
7. Manage agreement of final accounts.
8. Prepare and present the project close-out report.
Typical deliverables:
a) Completion certificates b) Record of necessary meetings c) Project close-out report.
4 GUIDELINE FEES
4.1 GENERAL
4.1.1 Introduction
This section of the Guideline provides guidance on how to determine the fee for consulting engineering services, starting with this Clause 4.1 which provides general comments explaining the need for a careful appraisal of the project and the risks involved, and a description of various factors which may influence the determination of the fee. Clause 4.2 explains the recommended method for calculating a fee based on a percentage of the cost of the works for normal services, and includes worked examples to show how the percentage fee calculation should be carried out.
Clause 4.3 describes the method for calculating fees for additional services which are not part of the normal services.
Clause 4.4 describes different methods for calculating time based fees.
Clause 4.5 provides guidance regarding the reimbursement of the consulting engineer for expenses and costs incurred by the consulting engineer when performing consulting engineering services.
The guideline fees described hereinafter are not prescriptive but are presented to assist a client and a consulting engineer to reach an equitable agreement on the fees for the services performed based on both quality and price.
The recommended method for the procurement of a consulting engineer is through a selection process based either on direct negotiation, or via a competitive bidding process where proven competence, qualifications, resources, experience, preferencing and developmental criteria are the primary selection factors and price is a secondary factor. During this process, the procuring organisation will receive offers with widely ranging scope and related costs or prices.
The range of prices that will be received is largely a function of the definition and perception of the scope of work and related services that are required.
The cost of consulting engineering services only constitutes approximately 1 to 2% of the total life-cycle costs of the facility being designed. The client needs to be aware that professional fees that are too low can lead to:
1. Consultants using inexperienced staff on projects, which compromises the quality of the output
2. Consultants not completing the project, resulting in time and cost delays for client
3. Consultants being forced to take short cuts in order to reduce expenditure, resulting in reduced project quality and costs
4. Significantly increased costs of the works and long-term operations and maintenance costs that will likely overshadow any savings made in the cost of the professional services.
4.1.2 Risk assessment
The guidelines described in this document for the determination of a fee are based on processes and values which have been in use for many years and which have proved to be fair to all parties. The fee should be arrived at by applying these guidelines and agreeing a fee as a simple percentage of the cost of the works, or as a lump sum, or time based.
Expenses and costs are additional and apply to all three alternatives.
The client and the consulting engineer may use any other method for determining the fee, including pricing the services from first principles, either to allow for competitive pricing, or for any other reason. In such instances the client must carry out a proper risk assessment of the offer by the consulting engineer in order to determine its acceptability. The risk assessment should, as a minimum, include an analysis of the following:
1. Comparison of the fee offered with a fee based on the guidelines described in this document.
2. Services offered as well as services excluded which may become additional services
3. Numbers, qualifications and experience of staff to be employed on the project
4. Firm’s resources
5. Firm’s experience with similar projects
6. Compliance with client preferencing and developmental criteria
7. Any other criteria which may impact on the consulting engineer’s ability to perform the services in the manner required by the client.
4.1.3 Risk Management
While the guidelines support responsible competitive bidding where price and quality are the key determining factors, risk management should be the overriding consideration. The practice of procuring consulting engineering services on the basis of the magnitude of a financial discount on published fee tables, or fees determined by any other party, is not supported and is counter-productive to good engineering and life-cycle costs. The practice is contrary to all accepted best practice methods of competitive tendering, and, because discounts are typically determined on an arbitrary basis without any consideration of actual costs, fee discounting eventually results in declining standards of quality and service which are the cornerstones of the engineering profession. Reckless fee discounting has a significant negative impact on the industry and poses a serious threat to infrastructure development in the country.
4.1.4 Influencing factors
While the tables of fees contained in this guideline can be applied to many projects, the factors that influence the fees to be paid for consulting engineering services on a project are complex and depend on a number of contributing factors. The contributing factors that should be taken into account may include, among others, all or any of the following:
1. Project complexity: Projects may range from relatively simple projects where the designs are based on well-established common practices to more complex projects where the works call for the application of new, unusual or untried techniques, designs, systems or applications.
2. Monetary value of the works: This may range from a situation where the value of the work is very high relative to the services being performed to a project where the value of the works is abnormally low relative to the services required from the consulting engineer.
3. Time duration: This may involve projects where the works are executed over appreciably shorter or longer periods than would normally be expected.
4. Level of responsibility, liability and risk: These may range from relatively low levels of responsibility and/or risks to projects with unusually high responsibilities and/or risks that are expected to be carried by the consulting engineer.
5. Level of expertise, qualifications, skills and experience: Some works do not require a high degree of expertise while other works may require more specialised expertise or substantial skills and experience that cost more to develop and retain.
6. Level of technology required and changes in technology that may influence the costs of the services provided.
7. Whether aspects related to labour intensive works need to be considered in the design.
8. Level of effort: Some projects do not call for substantial effort as the works can be designed without extensive investigations or field measurements while others may call for unusually high effort on the part of the consulting engineer because of, for example, research required or integration with existing works or repairs to existing infrastructure where the status quo needs to be investigated in considerable detail and these need to be accommodated within the design.
9. Potential value added: In some instances, the design, no matter how sophisticated will not add much value to the overall project while in other cases greater design optimisation can lead to considerable savings in capital, maintenance or operations costs, or add value to the final project.
10. Client requirements: Some clients have relatively few requirements and/or many standard details and the consulting engineer’s designs are accepted at face value. Other clients require considerable details to be investigated during design development to satisfy their own, often complex, internal processes.
11. Project definition: In some projects, the design concept and scope are self-evident and requires little further investigation or analysis of options, while in other projects, the design development requires extensive analysis and testing of various options. Combinations of one or more of the above factors may result in a substantial adjustment of the fee that is required to fairly compensate the consulting engineer and this adjustment factor should be negotiated in good faith by both parties.
4.1.5 Application of the fee guidelines
1. The client shall remunerate the consulting engineer, for the services performed, on the basis of clauses 4.2 to 4.5 or as stated in the Agreement.
2. The guideline professional fees described in this guideline apply in respect of the services set out in clause 3.
3. The client shall reimburse the consulting engineer for all expenses and costs incurred in terms of clause 4.5 in performing the services, irrespective of whether fees are charged in terms of clauses 4.2, 4.3 or 4.4, as well as for all costs incurred on behalf, and with the approval, of the client.
4. Agreement on any method of adjustment of, or special fees, should be reached at the time of the consulting engineer’s engagement or as soon after as circumstances warrant, such as is practically possible, but in all cases, prior to the consulting engineer performing services that may be affected.
5. The fee is determined on the information provided at the time of procurement, particularly in respect of the scope of work, scope of services, works budget and expected project duration. Any subsequent changes, including unforeseen changes to the project situation and engineering effort, and changes to the project costs, should be regarded as a trigger for an adjustment of the fee.
6. The fee may be expressed as a lump sum, in which case, the amount will be subject to adjustment where the final cost of the works varies by more than 15% from the value on which the fee is determined.
7. For certain project types the scope of work may include full services for some elements of the work and limited services for other elements. For example, in some situations the consulting engineer may be asked to provide advice, design review and construction monitoring related to elements designed and detailed by others. The fees for such limited services are subject to agreement between the client and consulting engineer and may be determined on the basis of time and cost or by reducing the normal full fee for such elements by applying a factor of between 0,10 and 1,00 depending on the work involved, the degree of responsibility, and related liabilities that could accrue. In the case of structural systems, some examples of limited services include advice related to nonload bearing brickwork, pre-cast slabs, timber or LGSF roof trusses, sheeting and cladding, glazing and facade systems, proprietary timber roof trusses, sundry steelworks subjected to loads such as balustrades, bulkhead supports, etc., and precast concrete decorations, lintels over openings and windows, Other situations involving limited services and reduced responsibility are explained in more detail in clauses 4.1.5.8 and 4.1.5.9 below.
8. Subject to 4.1.5.9 below, where the consulting engineer is appointed as the competent person in terms of the National Building Regulations and SANS 10400 on building projects, the consulting engineer is entitled to a full fee for all elements of the work where he/she is appointed as the competent person in terms of SANS 10400 and/or he/she assumes responsibility for and/or is required to certify and sign off the design, inspection, and/or completion, regardless of who actually designs and details elements of the work. Examples of this include piling, lateral support, load bearing brickwork, precast concrete supports, fire protection, artificial ventilation, stormwater disposal, nonwater- borne sanitary disposal or drainage systems.
9. Under certain circumstances the consulting engineer is appointed as the competent person in terms of the National Building Regulations and SANS 10400 to assume responsibility for an overall system of a building, but certain elements of the structure are designed, inspected and certified by another competent person who assumes responsibility for the design and construction inspection of such elements. Examples of these elements may include structural, fire protection, artificial ventilation, stormwater disposal or non-water-borne sanitary disposal, fire installations or drainage installation systems. In all such instances the consulting engineer appointed as the competent person in terms of the National Building Regulations and SANS 10400 has to ensure overall functionality and compatibility of these elements with the primary structure as part of his duties. The consulting engineer may also have to coordinate obtaining separate design certificates for these elements to ensure that the responsibility for the elemental designs will rest with other professionals. The consulting engineer who is appointed as the competent person responsible for the overall system is entitled to the full fee for all elements which are designed, inspected and signed off by him/her and a factor of 0,33 of the full fee should be applied to the elements which are designed, inspected and signed off by other competent persons.
10. Where the normal services relate to more than one of the disciplines of consulting engineering contemplated in clauses 4.2.2 to 4.2.8, namely civil, structural, mechanical, or electrical engineering services, a separate fee for services in each discipline should be calculated in accordance with the relevant clause.
11. Where at the instance of, and with the consent of the client, the works are undertaken on separate non-contiguous sites, continuity is interrupted or the works are unusually fragmented or constructed as separately documented phases or sections, the fee for normal services is:
a) the sum of the fees calculated separately for each site, contract, phase or section as if they were separate works; or b) a fee agreed to between the client and the consulting engineer and which fee lies between the fee calculated on the total cost of the works and the sum of the fees contemplated in clause (a) above.
12. Although financial administration services are normally part of normal services as described in Clause 3.2, there are instances where these services are excluded and are provided by others, such as quantity surveyors, in which case a factor of 0,85 should be applied to the basic fee. In such instances, where the consulting engineer is required to assist, then such assistance can be treated as an additional service and the remuneration to the consulting engineer should be time based plus expenses and costs.
13. Where the scope of the work involves alterations to existing facilities with extensive reuse of existing facilities, installations and/or structures, detailed condition assessments and surveys may be required to facilitate good integration of new work with existing work and the percentage fee should be increased by applying a factor of up to 1,25 to the basic fee for that portion of the works. The additional fee for alteration work must be applied judiciously and fairly by both parties and must only apply to the altered portion of the works. Where an existing installation, structure or building is simply abandoned and/or demolished and replaced by a new installation, structure or building the adjustment factor should not apply and the remuneration to the consulting engineer should be time based plus expenses and costs for any additional services such as site surveys and inspections related to the existing installation, structure or building.
14. Tables 2A to 8A in Clause 4.2 below include a factor to be applied in the case of duplication of works. The factor is only to be applied to the design stages of the services (Stages 1 to 4) where designs for a complete unit (such as a complete building or a bridge) can be duplicated and applied to a different project or site without alteration to the drawings and/or specification. The duplication factor is not applicable where a number of identical components form part of a complete unit. If alteration is required to the drawings and/or specifications for different complete units then the duplication factor must be adjusted by written agreement between the client and consulting engineer. No duplication factor is applicable where different drawings and/or specification are required for each unit. No duplication factor is applicable to the construction stages of the services (Stages 5 and 6) where the consulting engineer is appointed for Stages 5 and/or 6 of the services.
15. The fees for specialist engineering services and studies, including feasibility studies, are calculated separately from the fees for normal services, additional services and expenses and costs, and are normally calculated on a time and cost basis or as a lump sum.
4.1. 6 Timing of fee claims
Unless otherwise agreed between the consulting engineer and the client, the fees may be claimed monthly or after each stage of services or based on an agreed cash flow schedule
1. Percentage fees are determined on the basis of the cost of the works prevailing at the time when the fee is calculated for preparation of the fee claim. Note that it is expected that where the consulting engineer is responsible for financial administration services as described in 3.2.1 the consulting engineer must regularly review, update and submit cost estimates for the works at each stage of the normal services.
2. Unless otherwise agreed in writing, fees are normally claimed monthly and must be based on deliverables completed in terms of 3.2 and delivered to the client, and pro-rata to the completed services.
3. The fees for Stage 5 are normally claimed monthly based pro rata on the amounts certified to construction contractor(s).
4. The fees for Stage 6 may only be claimed after completion of the Stage 6 services, including issue of the final construction account.
5. Where fees are claimed after completion of the stages the fee due shall be a portion of the total fee based on completion of the stages as set out in 4.2.10.
6. Time based fees calculated in accordance with 4.4 are based on the rates applicable when the services are performed and may be claimed monthly
7. Expenses and costs as set out in 4.1.5.3 and 4.5 may be claimed monthly.
PERCENTAGE FEES BASED ON COST OF WORK FEES FOR NORMAL SERVICES
4.2.1 Introduction and worked example fee calculations
In Tables 1 to 8 which follow, the fee guidelines consist of the sum of a primary and secondary fee depending on the cost of the works. The calculation method is explained in a note below each of Tables 1 to 8 and as follows: the appropriate table is selected, then the applicable fee bracket is determined from Columns A and B in the tables. The secondary fee is the percentage (from Column D of the table) of the amount by which the cost of the works exceeds the applicable amount in Column A of the tables. The primary and secondary fees are added together to arrive at the basic fee.
Refer also to the following worked examples:
Example A
Assume a relatively simple rural road project with an estimated cost of the works of R24 million, then the procedure to calculate the fee using the tables would be:
1. Percentage fee is based on Clause 4.2.2, Table 1
2. Cost of the works exceeds R21 000 000 (Column A) but does not exceed R52 500 000 (Column B)
3. Primary fee = R 2 488 500 (Column C)
4. Secondary fee = (R24 000 000 – R21 000 000) x 9,0% (Column D)= R 270 000
5. Therefore basic fee = R2 488 500 + R 270 000 = R2 758 500 R
6. Multiplied by a complexity factor of 0.85 from Table 2A for rural roads = R 2 344 725 .
7. The resultant fee may be expressed as a percentage of R 2 344 725 / R24 000 000 = 9.77 %.
Assume a civil engineering project involving some new roadworks as well as alterations to an existing concrete bridge structure and an estimated cost of the works of R110 million, then the procedure to calculate the fee using the tables would be:
1. Percentage fee is based on Clause 4.2.1, Table 1
2. Cost of the works exceeds R105 000 000 (Column A) but does not exceed R630 000 000 (Column B)
3. Primary fee = R9 523 500 (Column C)
4. Secondary fee = (R110 000 000 – R105 000 000 ) x 7,0% (Column D) = R350 000
5. Therefore basic fee = R9 523 500 + R350 000= R9 873 500
6. If it is further assumed that portion of the total works involves reinforced concrete and structural steel work with a value of R52 400 000 (i.e. 40% of the total works value), then, from Clause 4.2.1, Table 2, the additional design fee on the reinforced concrete and structural steel is calculated as follows:
7. Additional primary fee (Column C) = R1 092 000
8. Additional secondary design fee for structural work = (R52 400 000 – R21 000 000) x 3,5% (Column D) = R1 099 000
9. Therefore additional basic design fee = R1 092 000 + R1 099 000= R 2 191 000
10. Adjustment factor for alterations to existing structure, from Clause 4.2.2, Table 2A is 1,25, only applicable to the fee for the structural work, i.e. 1,25 x R2 191 000 = R2 738 750 .
11. The total fee is thus R9 873 500 + R2 738 750 = R12 612 250which may be expressed as a percentage or as a lump sum or as agreed between the client and the consulting engineer.
Assume an electrical subcontract on a building project with an estimated cost of the electrical works of R8 million. The consulting engineer is responsible for all financial administration services and the project involves a new building, then the procedure to calculate the fee using the tables would be:
1. Percentage fee is based on clause 4.2.8, Table 8
2. Cost of the works exceeds R2 100 000 (Column A) but does not exceed R10 500 000 (Column B)
3. Primary fee = R399 000 (Column C)
4. Secondary fee = (R8 000 000 – R 2 100 000) x 15,0% (Column D) = R 885 000
5. Therefore basic fee = R399 000 + R 885 000 = R 1 284 000 R380 000 + R900 000 = R1 280 000.
6. The resultant fee may be expressed as a percentage of R 1 284 000 / R8 000 000 = 16,05 %.
Fee negotiations would typically commence using these starting values and judgement regarding project complexity to arrive at a finally agreed percentage fee. The fee amount to be paid will generally be based upon the final cost of works or any other suitably agreed arrangement.
The timing of fee claims should be as described in 4.1.6
4.2.2 Civil and structural engineering services pertaining to engineering projects
1. The basic fee for normal services in the disciplines of civil and structural engineering, pertaining to Engineering Projects, is determined from Table 1 below. The fee is the sum of the primary fee and the secondary fee applicable to the specific cost of the works in respect of which the services were performed on the project excluding feasibility and similar studies described in clause 3.1, which is normally reimbursed on a time basis in terms of clause 4.4.
Table 1: Civil and Structural Engineering Services pertaining to Engineering Projects
NOTE: Determine the applicable fee bracket (Columns A and B), then determine the primary fee in Column C. The secondary fee is the percentage (from Column D) of the amount by which the cost of the works exceeds the applicable amount in Column A. The primary and secondary fees are added together to arrive at the basic fee. Refer to the worked examples in clause 4.2.1.
2. The following additional fee is typically applicable to the value of the reinforced concrete and structural steel portions of the works, inclusive of the costs of concrete, reinforcing, formwork, structural steel work and any pro-rata preliminary and general amounts. Where structures of identical design are repeated on the same project, the combined cost is normally cumulated for the determination of the cost of the reinforced concrete and structural steel works. In cases where structures require individual design, a separate additional fee is normally calculated for each structure based on the cost of the reinforced concrete and/or structural steel work for that particular structure. The additional fee is the sum of the primary fee and the secondary fee applicable to the specific cost of the works in respect of which the services were rendered on the project as shown below.
Table 2: Additional design fee on reinforced concrete and structural steel pertaining to Engineering Projects
NOTE: Determine the applicable fee bracket (Columns A and B), then determine the primary fee in Column C. The secondary fee is the percentage (from Column D) of the amount by which the cost of the works exceeds the applicable amount in Column A. The primary and secondary fees are added together to arrive at the basic fee. Refer to the worked examples in clause 4.2.1.
3. To calculate the fee for railway track work in terms of this item, 50 per cent of the cost of the permanent way materials is normally excluded from the cost of the works in view of the limited design input normally required for these elements, but the full cost of ballast and equipment specially designed by the consultant is normally included in the cost of the works.
4. For normal services relating to a description of the works mentioned in the first column of the following table, the proportion of the basic fee relating to the specific item calculated in terms of clause 4.2.2.1 and 4.2.2.2 is normally multiplied by the category factors mentioned against that description in the second column of the table. In cases more than one of the descriptions below applies, the effective factor will typically be the product of the factors involved. These factors do not apply when fees are a lump sum or on a time basis.
In the case of road works, where the road traverses both rural and urban areas, an adjustment pro-rata to the length of road in rural and urban areas is normally made. In the case of road rehabilitation, a combination of factors applies, depending on the situation of the road (rural or urban), and the category factor for alterations to existing works.
4.2.3 Civil engineering services pertaining to building projects
1. The basic fee for normal services in the discipline of civil engineering pertaining to building projects is determined from Table 3 below. The fee is the sum of the primary fee and the secondary fee applicable to the specific cost of the works in respect of which the services were performed on the project, excluding feasibility and similar studies described in clause 3.1 which is normally reimbursed on a time basis in terms of clause 4.4.
Table 3: Civil engineering services pertaining to building projects
NOTE: Determine the applicable fee bracket (Columns A and B), then determine the primary fee in Column C. The secondary fee is the percentage (from Column D) of the amount by which the cost of the works exceeds the applicable amount in Column A. The primary and secondary fees are added together to arrive at the basic fee. Refer to the worked examples in clause 4.2.1.
2. For normal services relating to a description of the works mentioned in the first column of Table 3A, the proportion of the basic fee relating to the specific item calculated in terms of clause 4.2.3.1 is normally multiplied by the category factor mentioned against that description in the second column of the table. In case more than one of the descriptions below applies, the effective factor will typically be the product of the factors involved. These factors do not apply when fees are a lump sum or on a time basis.
4.2.4 Structural engineering services pertaining to building projects
1. The basic fee for normal services in the discipline of structural engineering pertaining to building projects is determined from Table 4 below. The fee is the sum of the primary fee and the secondary fee applicable to the specific cost of the works in respect of which the services were performed on the project excluding feasibility and similar studies described in clause 3.1 which shall be reimbursed on a time basis in terms of clause 4.4.
Table 4: Structural engineering services pertaining to building projects
NOTE: Determine the applicable fee bracket (Columns A and B), then determine the primary fee in Column C. The secondary fee is the percentage (from Column D) of the amount by which the cost of the works exceeds the applicable amount in Column A. The primary and secondary fees are added together to arrive at the basic fee. Refer to the worked examples in clause 4.2.1.
2. For normal services relating to a description of the works mentioned in the first column of Table 4A, the proportion of the basic fee relating to the specific item calculated in terms of clause 4.2.4.1 is normally multiplied by the category factor mentioned against that description in the second column of the table. In case more than one of the descriptions below applies, the effective factor will typically be the product of the factors involved. These factors do not apply when fees are a lump sum or on a time basis.
Table 4A: Typical factor by which basic fee is multiplied
4.2.5 Mechanical engineering services pertaining to engineering projects
1. The basic fee for normal services in the discipline of mechanical engineering, pertaining to Engineering Projects, is determined from the table below. The fee is the sum of the primary fee and the secondary fee applicable to the specific cost of the works in respect of which the services were performed on the project excluding feasibility and similar studies described in clause 3.1 which shall be reimbursed on a time basis in terms of clause 4.4.
NOTE: Determine the applicable fee bracket (Columns A and B), then determine the primary fee in Column C. The secondary fee is the percentage (from Column D) of the amount by which the cost of the works exceeds the applicable amount in Column A. The primary and secondary fees are added together to arrive at the basic fee. Refer to the worked examples in clause 4.2.1.
2. For normal services relating to a description of the works mentioned in the first column of Table 5A, the proportion of the basic fee relating to the specific item calculated in terms of clause 4.2.5.1 is normally multiplied by the category factor mentioned against that description in the second column of the table. In case more than one of the descriptions below applies, the effective factor will typically be the product of the factors involved. These factors do not apply when fees are a lump sum or on a time basis.
Table 5A: Typical factor by which basic fee is multiplied
4.2.6 Electrical engineering services pertaining to engineering projects
1. The basic fee for normal services in the discipline of electrical engineering pertaining to engineering projects is determined from Table 6 below. The fee is the sum of the primary fee and the secondary fee applicable to the specific cost of the works in respect of which the services were performed on the project excluding feasibility and similar studies described in clause 3.1 which shall be reimbursed on a time basis in terms of clause 4.4.
Table 6: Electrical engineering services pertaining to engineering projects
NOTE: Determine the applicable fee bracket (Columns A and B), then determine the primary fee in Column C. The secondary fee is the percentage (from Column D) of the amount by which the cost of the works exceeds the applicable amount in Column A. The primary and secondary fees are added together to arrive at the basic fee. Refer to the worked examples in clause 4.2.1.
2. For normal services relating to a description of the works mentioned in the first column of Table 6A, the proportion of the basic fee relating to the specific item calculated in terms of clause 4.2.6.1 is normally multiplied by the category factor mentioned against that description in the second column of the table. In case more than one of the descriptions below applies, the effective factor will typically be the product of the factors involved. These factors do not apply when fees are a lump sum or on a time basis.
Table 6A: Electrical Engineering Services pertaining to Engineering Projects
4.2.7 Mechanical engineering pertaining to building projects
1. The basic fee for normal services in the discipline of mechanical engineering or wet services pertaining to building projects is determined from Table 7 below. The fee is the sum of the primary fee and the secondary fee applicable to the specific cost of the works in respect of which the services were performed on the project excluding feasibility and similar studies described in clause 3.1 which shall be reimbursed on a time basis in terms of clause 4.4.
Table 7: Mechanical engineering services pertaining to building projects
NOTE: Determine the applicable fee bracket (Columns A and B), then determine the primary fee in Column C. The secondary fee is the percentage (from Column D) of the amount by which the cost of the works exceeds the applicable amount in Column A. The primary and secondary fees are added together to arrive at the basic fee. Refer to the worked examples in clause 4.2.1.
2. For normal services relating to a description of the works mentioned in the first column of Table 7A, the proportion of the basic fee relating to the specific item calculated in terms of clause 4.2.7.1 is normally multiplied by the category factor mentioned against that description in the second column of the table. In case more than one of the descriptions below applies, the effective factor will typically be the product of the factors involved. These factors do not apply when fees are a lump sum or on a time basis.
Table 7A: Mechanical engineering services pertaining to building projects
4.2.8 Electrical engineering services pertaining to building projects
1. The basic fee for normal services in the discipline of electrical engineering pertaining to building projects is determined from Table 8 below. The fee is the sum of the primary fee and the secondary fee applicable to the specific cost of the works in respect of which the services were performed on the project excluding feasibility and similar studies described in clause 3.1 which shall be reimbursed on a time basis in terms of clause 4.4.
NOTE: Determine the applicable fee bracket (Columns A and B), then determine the primary fee in Column C. The secondary fee is the percentage (from Column D) of the amount by which the cost of the works exceeds the applicable amount in Column A. The primary and secondary fees are added together to arrive at the basic fee. Refer to the worked examples in clause 4.2.1.
2. For normal services relating to a description of the works mentioned in the first column of Table 8A, the proportion of the basic fee relating to the specific item calculated in terms of clause 4.2.8.1 is normally multiplied by the category factor mentioned against that description in the second column of the table. In case more than one of the descriptions below applies, the effective factor will typically be the product of the factors involved. These factors do not apply when fees are a lump sum or on a time basis.
Table 8A: Typical factor by which basic fee is multiplied
4.2.9 Services provided partially or in stages
Table 9 shows typical percentages that are typically used for proportioning the basic fee for normal services over the various stages of the services. The actual percentage used should be adjusted for individual projects through negotiation and depending on the work involved in each stage, the value that can be added in each stage and any commercial considerations that may be applicable:
Table 9: Typical percentage points for each stage
Where not all the stages of the normal services are provided by the consulting engineer, the fee is, subject to clause 4.2 calculated as a percentage of the total fee calculated in terms of this clause, which percentage is the sum of the percentage points appropriate to each stage as set out in the above table against those stages of the services provided by the consulting engineer, typically plus 10 percentage points.
4.2.10 Postponement, cancellation or abandonment
Should instructions have been given by the client to the consulting engineer to proceed with any of the stages of services set out in clause 3 and the whole or part of the works is cancelled or abandoned or postponed for a period of more than six months, the consulting engineer must be remunerated for services performed, plus a surcharge of one tenth of the full fee which would have been payable to the consulting engineer had his or her services been completed in terms of the engagement.
4.3 FEES FOR ADDITIONAL SERVICES
The fees for additional services, contemplated in clause 3.3, are agreed to between the client and the consulting engineer as described in clause 4.1 and as set out hereunder.
4.3.1 Basis for the calculation of fees for additional services
Unless otherwise agreed in writing, the fees for additional services contemplated in clauses 3.3.1, 3.3.3 and 3.3.6 are calculated on the basis of time as set out in clause 4.4 and actual costs as set out in 4.5.
4.3.2 Construction monitoring
For the provision of construction monitoring services, as contemplated in clause 3.3.2, the consulting engineer is typically entitled to recover from the client:
1. For Level 3, full time construction monitoring involving monthly site staff costs, the total annual cost of employment of such staff (as described in clause 4.4.4), divided by 12 and multiplied by one of the following:
a) Case 1: Where payment is only made for actual time on site and site allowances are not paid separately: 2.1 times total cost of employment. b) Case 2: Where payment is only made for actual time on site and site allowances are paid separately: 2.0 times total cost of employment. c) Case 3: Where payment is made for leave and non-working days and site allowances are paid separately: 1.8 times total cost of employment.
2. For Level 2, part time monitoring staff costs, the amount payable to such staff at the hourly rates contemplated in clause 4.4. 3. For all other expenses and costs incurred as part of construction monitoring services, as set out in clause 4.5.
4.3.3 Lead consulting engineer
For services as lead consulting engineer, as contemplated in clause 3.3.3, the lead consulting engineer is typically entitled to an additional fee of 10 percent (10%) of the total fees payable for the services performed by the joint venture, consortium, or team.
4.3.4 Engineering management services (principal consultant)
For engineering management services or services as the principal consultant, as contemplated in clause 3.3.5, the consulting engineer will typically be remunerated as follows:
1. The basic fee for services in the discipline of engineering management services, including work pertaining to Building Projects, is determined from the table below. The fee is the sum of the primary fee and the secondary fee applicable to the specific cost of the works in respect of which the services were performed on the project.
Table 10: Engineering Management Services (Principal Consultant)
NOTE: Determine the applicable fee bracket (Columns A and B), then determine the primary fee in Column C. The secondary fee is the percentage (from Column D) of the amount by which the cost of the works exceeds the applicable amount in Column A. The primary and secondary fees are added together to arrive at the basic fee.
For normal services relating to a description of the works mentioned in the first column of Table 11A, the proportion of the basic fee relating to the specific item calculated in terms of clause 4.3.3.1 is normally multiplied by the category factor mentioned against that description in the second column of the table. In case more than one of the descriptions below applies, the effective factor will typically be the product of the factors involved. These factors do not apply when fees are a lump sum or on a time basis.
Table 11A: Typical factor by which basic fee is multiplied
2. Table 11 is typically used to proportion the basic fee over the various stages of the services:
Table 11: Typical percentage points for each stage
4.3.5 Principal agent
For services as principal agent of the client, as contemplated in clause 3.3.7, the consulting engineer is typically entitled to an additional fee calculated at one percentage point (1%) of the total cost of the works comprising the project. The consulting engineer is not entitled to any fees for principal agent if he or she is not explicitly appointed as such.
4.4 TIME-BASED FEES
4.4.1 Introduction
Time-based fees are all-inclusive and include allowances for overhead charges incurred by the consulting engineer as part of normal business operations, including the cost of management, as well as payments to administrative, clerical and secretarial staff used to support professional and technical staff in general and not on a specific project only.
Time-based fees are calculated by multiplying the hourly rate contemplated in clause 4.4, which is applicable to the consulting engineer or any other technical staff employed by the consulting engineer, with the actual time spent by such technical staff in performing the services required by the client.
Technical staff include all staff performing work directly related to the execution of the services and does not include any administrative, clerical and secretarial staff who may support professional and technical staff in general and not on a specific project only.
4.4.2 Category of person
To determine the time-based fee rates, the persons concerned are divided into:
1. Category A, in respect of a private consulting engineering firm, means a top practitioner whose expertise and relevant experience is nationally or internationally recognised and who provides advice at a level of specialisation where such advice is recognised as that of an expert.
2. Category B, in respect of a private consulting engineering firm means a partner, a sole proprietor, a director, or a member who, jointly or severally with other partners, codirectors or co-members, bears the risks of the business, or takes responsibility for the projects and related liabilities of the firm and where his/her level of expertise and relevant experience is commensurate with the position, performs work of a conceptual nature in engineering design and development, provides strategic guidance in planning and executing a project and/or carries responsibility for quality management pertaining to a project.
3. Category C, in respect of a private consulting engineering firm means all salaried staff who are professionally registered in terms of the Act with adequate expertise and relevant experience performing work of an engineering nature and who carry the direct technical responsibility for one or more specific activities related to a project. A person referred to in Category A or B will fall in this category if such person performs work of an engineering nature at this Category C level.
4. Category D, in respect of a private consulting engineering firm means all other salaried technical staff with adequate expertise and relevant experience performing work of an engineering nature with direction and control provided by any person contemplated in categories A, B or C.
4.4.3 Time based fee rates
The time-based fee rates are:
1. Calculated for a person in category – a) A and B at 22.00 cents per hour b) C at 17.5 cents per hour; and c) D at 16.5 cents per hour
for each R100 or part thereof of the total annual cost of employment of the person concerned, as contemplated in sub-clause (4); or
2. Alternatively time-based fee rates may be based on such indicative time based fee rates as are determined from time to time by various bodies such as the Department of Public Service and Administration (DPSA).
3. Provided that in all cases the client and consulting engineer may agree on a more appropriate fee to take account of the specific services to be rendered or expertise to be applied.
4.4.4 Total annual cost of employment
For the purposes of clause 4.4, the total annual cost of employment of a person means the total amount borne by an employer in respect of the employment of such a person per year, calculated at the amounts applicable to such a person at the time when the services are rendered, including:
1. Basic salary or a nominal market-related salary, excluding profit share and asset growth.
2. Fringe benefits not reflected in the basic salary, including:
a) Normal annual bonus b) Employer’s contribution to medical aid c) Group life insurance premiums borne by the employer d) Employer’s contribution to a pension or provident fund e) All other benefits or allowances payable in terms of a letter of appointment, including any transportation allowance or company vehicle benefit, telephone and/or computer allowances, etc
3. Statutory amounts payable, including: a) Contributions to the Compensation Fund in terms of the Compensation for Occupational Injuries and Diseases Act, 130 of 1993 b) Contributions to unemployment insurance in terms of the Unemployment Insurance Fund Act, 63 of 2001 c) Levies in terms of the Skills Development Levy Act 9 of 1999 d) Recoverable levies to all spheres of government.
4.5 EXPENSES AND COSTS
4.5.1 In accordance with Clause 4.1.5 (3), the consulting engineer may recover from the client all expenses and costs incurred on behalf of and with the approval of the client, plus a mark up of 10 per cent of such expenses and costs.
4.5.2 Recoverable expenses include:
1. Travelling expenses for the conveyance of the consulting engineer or a member of the consulting engineer’s staff by means of:
a) private motor transport, including any parking charges, toll fees and related expenses b) a scheduled airline or a train, bus, taxi or hired car; or c) non-scheduled or privately owned air transport.
2. Travelling time on the basis of the rate set out in clause 4.4, for all time spent in travelling by the consulting engineer or members of his or her staff
3. Accommodation and subsistence expenses incurred by the consulting engineer or a member of his/her staff.
4. Agreed costs of typing, production, copying and binding of contract documents, prequalification documents, feasibility reports, preliminary design reports, final reports and manuals, excluding general correspondence, minor reports, contractual reports, progress reports, etc.
5. Expenses on special reproductions, copying, printing, artwork, binding and photography, etc. requested by the client.
4.5.3 Alternatively, a lump sum or percentage of the cost of the works may be determined and agreed between the consulting engineer and the client to cater for all or any of the above. Costs that shall be recovered under clause 4.5.1.2 above include, but are not limited to:
a) Site traffic surveys b) Geotechnical investigations c) Sampling and Laboratory testing d) Topographical and land surveys e) Supply of specific equipment f) Specialist sub-consultants g) Environmental investigations and studies, and management plans h) Institutional service delivery and social consultants i) Land acquisitions, expropriation, way leaves and servitudes j) Power supply applications.
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LINK TO FULL NOTICE
Engineering Profession Act: Guideline Scope of Services and Professional FeesG 52691 BN 783 16 May 2025
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ACTION
Public Sector Entities (e.g., municipalities, SOEs, government departments)
Actions Required:
1. Procurement Alignment: · Use the guideline to structure Requests for Proposals (RFPs) and Terms of Reference (ToRs). · Ensure procurement processes reflect fair market value and are not based solely on lowest price.
2. Fee Evaluation: · Evaluate consulting engineering bids using the guideline as a benchmark. · Conduct risk assessments when fees deviate significantly from guideline norms.
3. Contract Management: · Include appropriate scopes of services and fee structures in contracts. · Monitor deliverables across the six project stages (Inception to Close-Out).
4. Budget Planning: · Use the guideline to estimate engineering service costs during project budgeting.
Private Sector Clients (e.g., developers, industrial firms)
Actions Required:
1. Fee Negotiation: · Use the guideline to negotiate equitable fees with consulting engineers. · Understand when additional services (e.g., BIM, dispute resolution) require separate agreements.
2. Scope Definition: · Clearly define project scope and expectations to avoid disputes or scope creep.
3. Contractual Clarity: · Ensure contracts reflect the agreed stages of service and fee structure.
Consulting Engineering Firms
Actions Required:
1. Proposal Preparation: · Use the guideline to prepare fee proposals and define service stages. · Justify deviations from the guideline with clear reasoning (e.g., project complexity).
2. Service Delivery: · Deliver services according to the defined stages (e.g., Stage 1: Inception, Stage 5: Contract Administration). · Track and document deliverables for each stage.
3. Fee Claims: · Submit fee claims based on completed deliverables or agreed milestones. · Adjust fees if project scope, cost, or duration changes significantly.
4. Compliance: · Ensure staff qualifications and roles align with time-based fee categories (A–D).
Other Professional Service Providers (e.g., quantity surveyors, project managers)
Actions Required:
1. Coordination: · Align scopes and deliverables with those of consulting engineers. · Avoid duplication of services (e.g., cost control roles).
2. Fee Integration: · Ensure that their own fee structures and responsibilities are clearly delineated in multi-disciplinary projects.
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ENVIRONMENTAL
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LAW AND TYPE OF NOTICE
National Environmental Management: Waste Act:
Regulations: Exclusion from definition of waste stream: Extension of deadline for comments
G 52710 GoN 6212
– Comment by 20 Jun 2025
21 May 2025
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APPLIES TO:
Industries and Sectors Most Affected
1. Waste Generators: · Any company or entity that produces waste streams—especially those seeking to reuse or repurpose waste—must now comply with stricter application and monitoring requirements. · This includes manufacturing, mining, chemical, agricultural, and construction sectors
2. Recycling and Waste Recovery Companies: · Organizations involved in processing waste into usable products will be directly impacted by the new criteria for exclusion and the need for risk assessments and compliance reporting.
3. Mining Sector: · The amendments clarify that mining residue stockpiles or deposits are excluded from certain regulations, but this also means mining companies must carefully assess which parts of their waste streams qualify
4. Environmental Consultants and Legal Advisors: · These professionals will be increasingly engaged to help companies navigate the new application process, conduct risk assessments, and ensure regulatory compliance.
5. Municipalities and Local Governments: · As facilitators of waste management infrastructure, they may need to update local waste management plans and coordinate with affected industries.
6. Extended Producer Responsibility (EPR) Schemes: · Producers under EPR obligations may need to reassess their waste streams and determine whether exclusions apply or if new compliance steps are needed
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SUMMED UP
Key Highlights of the Proposed Amendments
1. Expanded Criteria for Exclusion: · The draft regulations propose more detailed criteria for when a waste stream or portion thereof can be excluded from the definition of “waste”. · This includes demonstrating that the material is used for a specific purpose, meets product standards, and poses no unacceptable risk to health or the environment.
2. Application and Approval Process: · A more structured application process is introduced for entities seeking exclusion. · Applicants must submit comprehensive documentation, including risk assessments and evidence of beneficial use.
3. Monitoring and Compliance: · Entities granted exclusion must implement ongoing monitoring and reporting obligations. · The Department may revoke exclusions if conditions are not met or if new risks emerge.
4. Public Participation: · The draft regulations emphasize transparency, requiring public consultation before exclusions are granted. · This aligns with broader environmental governance principles in South Africa.
5. Transitional Provisions: · Existing exclusions under the 2018 regulations will remain valid for a specified period, after which reapplication under the new framework may be required.
These changes aim to tighten oversight, encourage responsible reuse, and prevent environmental harm from materials improperly excluded from waste classification. |
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FULL TEXT |
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DETAILS
ORIGINAL GAZETTE |
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LINK TO FULL NOTICE
National Environmental Management: Waste Act: Regulations: Exclusion from definition of waste stream: Extension of deadline for commentsG 52710 GoN 6212 – Comment by 20 Jun 2025 21 May 2025
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ACTION
Ensure you submit your comments before 20 June 2025.
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LAW AND TYPE OF NOTICE
National Environmental Management Act:
Intention to adopt a substation exclusion norm and to exclude development and expansion of transmission and distribution substations from requirement to obtain environmental authorisation: Comments invited
G 52691 GoN 6201
– Comment by 16 Jun 2025
16 May 2025
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APPLIES TO:
1. Electricity Transmission and Distribution Companies
2. Environmental Consulting Firms
3. Developers of Renewable Energy Projects
4. Government Departments and Agencies
5. Landowners and Farmers
6. Conservation and Biodiversity NGOs
7. Local Municipalities and Planning Authorities
8. Heritage Resource Authorities
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SUMMED UP
Purpose of the Notice
The Minister is consulting on the intention to:
Scope of the Norm
Environmental Sensitivity Themes Considered
Activities Covered
Screening Tool
Registration Process
Re-registration
Legal and Compliance
Comparison with Existing Regulations
Key Innovations in the 2025 Norm
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DETAILS
Please click on the link provided below to view the full document
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LINK TO FULL NOTICE
National Environmental Management Act: Intention to adopt a substation exclusion norm and to exclude development and expansion of transmission and distribution substations from requirement to obtain environmental authorisation: Comments invited
G 52691 GoN 6201 – Comment by 16 Jun 2025 16 May 2025
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ACTION
Ensure that you submit your comments before 16 June 2025. |
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LAW AND TYPE OF NOTICE
National Environmental Management Act:
Adoption and Implementation of the Sandveld Environmental Management Framework Standard, 2025 and the exclusion of Identified Activities from Requirement to obtain Environmental Authorisation
G 52691 GoN 6202
16 May 2025
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APPLIES TO:
Primary Applicability
This Standard applies to proponents who intend to undertake the clearance of indigenous vegetation for cultivation in the Sandveld region, specifically when such activities would otherwise trigger:
Who is a “Proponent”?
A proponent is defined as:
Conditions for Applicability
The Standard applies only if: 1. The activity has not yet commenced. 2. The land is located within the Sandveld Environmental Management Framework geographical area. 3. The land is classified as “cultivated land” or “land to be cultivated”. 4. The MEC (Member of the Executive Council) for environmental affairs in the Western Cape is the competent authority. 5. The proponent follows the registration and compliance process outlined in the Standard.
Other Stakeholders Involved
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SUMMED UP
Purpose of the Standard
Geographical Scope
Key Requirements for Exclusion
1. Farm-Level Management Plan must be developed and signed off by: · Environmental Assessment Practitioner (EAP) · Botanist · Agricultural Scientist · GIS Specialist
2. Registration Process: · Notification to stakeholders · Submission of a registration form (Annexure 5) · Declarations (Annexure 6) · Compliance with the Standard
3. Compliance Monitoring: · Annual compliance reporting statements · Five-yearly audits by an Environmental Control Officer · On-site availability of documentation
Environmental Management Measures
Outlined in Annexure 3 and 4, including:
Transitional Provisions
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FULL TEXT |
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DETAILS
Please click on the link provided below to view the full document. |
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LINK TO FULL NOTICE
National Environmental Management Act: Adoption and Implementation of the Sandveld Environmental Management Framework Standard, 2025 and the exclusion of Identified Activities from Requirement to obtain Environmental AuthorisationG 52691 GoN 6202 16 May 2025
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ACTION
For an organisation—such as a farming enterprise, agricultural cooperative, or land management company—operating within the Sandveld Environmental Management Framework (EMF) area, the actions required to comply with the Sandveld EMF Standard, 2025 are structured and procedural. Here’s a step-by-step breakdown of what such an organisation would need to do:
1. Determine Applicability
2. Appoint a Qualified Team
3. Develop a Farm-Level Management Plan
This plan must include:
4. Notify Stakeholders
Provide written notice and a draft of the farm-level management plan to:
5. Submit for Registration
Submit to the competent authority:
6. Await Decision
7. Implement Activities
8. Monitor and Report
9. Amendments (if needed)
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HEALTH AND SAFETY
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LAW AND TYPE OF NOTICE
Compensation for Occupational Injuries and Diseases Act: 2024
Return of Earnings (ROE) filing season and extension of Letters of Good Standing (LOG) validity
G 52699 GeN 3200
19 May 2025
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APPLIES TO:
All Organizations
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FULL TEXT |
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DETAILS
NO. 3200 19 May 2025
GOVERNMENT NOTICE
DEPARTMENT OF EMPLOYMENT AND LABOUR
COMPENSATION FOR OCCUPATIONAL INJURIES AND DISEASES ACT, 1993 (ACT No. 130 OF 1993), AS AMENDED
NOTICE ON THE 2024 RETURN OF EARNINGS (ROE) FILING SEASON AND EXTENSION OF LETTERS OF GOOD STANDING (LOG) VALIDITY
I, Farzana Fakir, the Acting Commissioner for the Compensation Fund, hereby issue this notice in accordance with Section 6A of the Compensation for Occupational Injuries and Diseases Act (COID Act), 1993 (Act No. 130 of 1993), as amended, to inform employers and relevant stakeholders of administrative adjustments to the 2024 Return of Earnings (ROE) filing season.
In order to accommodate operational readiness and year-end processing, the following revised filing dates apply for the 2024 ROE season (covering the earnings period 1 March 2024 to 28 February 2025):
• The commencement date for ROE submissions is from 1 May 2025. • The closing date for ROE submissions is 31 July 2025.
Employers are further advised that the following compulsory supporting documents must be uploaded via ROE Online at the time of submission:
• Confirmation of Employer Details Form • Detailed Payroll Report covering the period 1 March 2024 to 28 February 2025, containing amongst others, employee names & numbers, ID numbers, wage/salary types and total earnings
To ensure that compliant employers retain access to the Fund’s benefits while preparing 2024 ROE submissions, the expiry date for LOGs issued for the 2023 assessment year will be extended from 30 April 2025 to 31 May 2025.
In terms of Section 83(6)(b) of the COID Act, late ROE submissions after 31 July 2025 will incur penalties of 10% of the final assessment, effective 01 August 2025.
Employers are encouraged to use the extended period to prepare and submit accurate ROEs along with the required supporting documentation. ________________________________ Ms Farzana Fakir ACTING COMMISSIONER: COMPENSATION FUND
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LINK TO FULL NOTICE
Compensation for Occupational Injuries and Diseases Act: 2024 Return of Earnings (ROE) filing season and extension of Letters of Good Standing (LOG) validityG 52699 GeN 3200 19 May 2025
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ACTION
Ensure you do your submission before the deadline.
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INTERNATIONAL TRADE
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LAW AND TYPE OF NOTICE
International Trade Administration Act:
Ban and Trade Policy Directive on importation of blank guns: Comments invited
G 52697 GeN 3199
– Comment by 02 Jun 2025
19 May 2025
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APPLIES TO:
1. Criminal Justice and Law Enforcement
2. Film and Entertainment Industry
3. Private Security Sector
4. Importers and Distributors
5. General Public
6. Government and Regulatory Bodies
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SUMMED UP
Background
Proposed Measures
Legal Authority
Objectives of the Ban/Directive
Permit System (Alternative to Ban)
If a ban is not imposed, a permit system may be implemented with the following conditions: 1. Identity verification of importers. 2. Declaration of purpose (e.g., SAPS, SANDF, film production). 3. No resale to unauthorized users. 4. Purchaser screening and database maintenance. 5. Detailed permit application including inventory and logistics. 6. Ban on easily modifiable models. 7. Random inspections and audits by the Commission.
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FULL TEXT |
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DETAILS
Department of Trade, Industry and Competition
NOTICE 3199 OF 2025
INTERNATIONAL TRADE ADMINISTRATION COMMISSION OF SOUTH AFRICA
NOTICE OF PROPOSED BAN AND DRAFT TRADE POLICY DIRECTIVE ON THE IMPORTATION OF BLANK GUNS
1. BACKGROUND
1.1 The rise in crime in South Africa has been a significant concern for both citizens and law enforcement. Among the various weapons used in criminal activities, specifically in the commission of contact crimes, are blank guns, which are designed to fire blanks or non-lethal rounds.
1.2 Blank guns, while originally intended for legitimate uses such as training by the South African Police Service (“SAPS”) and the South African National Defence Force (“SANDF”), signalling in sports events and as props in movies, have increasingly been misused by criminals. In particular, there has been a reported increase in the usage of imitation guns and blank guns in the commission of crime in the Western Cape,
1.3 There may be several reasons for the use of blank guns in criminal activities:
• Realistic appearance: They closely resemble real firearms, making them effective tools for intimidation during crimes such as robberies or hijackings; • Ease of acquisition: they are more easily accessible than traditional firearms; and • Modification potential: Some blank guns can be illegally modified to fire live ammunition, turning them into actual lethal weapons.
1.4 What makes policing of blank guns difficult is the fact that they are not currently fully regulated in terms of the Firearms Control Act, 2000 (Act No. 60 of 2000) (“FCA”), especially the possession of these devices.
1.5 Consequently, in recognition of the danger that blank guns pose to public safety, the SAPS has taken steps to regulate them more strictly.
1.6 Among the measures currently being considered by the SAPS are amendments to the FCA through the Firearms Control Amendment Bill. This approach is necessary because, historically, blank guns were not regulated under the FCA, meaning they could be bought and carried without a license.
1.7 The proposed amendments to the FCA include measures that would place blank guns in a category similar to conventional firearms in terms of legal oversight as well as measures direct at the importation of blank guns. However, the amendment process is ongoing and will require time to finalise all the while that blank guns are being used to commit crimes.
1.8 In light of the urgency of the matter, the SAPS approached the International Trade Administration Commission of South Africa (“the Commission”) with a request for the immediate imposition of controls on the importation of blanks guns, such as imposing specific conditions on the issuing of permits for the importation of blank guns or an outright ban on the importation of blank guns.
1.9 In terms of the International Trade Administration Act, 2002 (Act No. 71 of 2002) (“the Act”), it is the Minister of Trade, Industry and Competition (“the Minister”) who has the authority to ban or otherwise regulate the importation of goods into South Africa.
1.10 Specifically, section 6 of the Act provides that –
(1) The Minister may, by notice in the Gazette, prescribe that no goods of a specific class or kind, or no goods other than goods of a specified class or kind, may be – (a) imported in the Republic; (b) imported into the Republic, except under authority of and in accordance with the conditions stated in a permit issued by the Commission.
1.11 Based on these provisions, and in terms of section 5 of the Act, the Minister may issue a trade policy directive to the Commission directing the Commission, in terms of section 6(1)(b) of the Act, to regulate the importation of blank guns by imposing specific conditions in import permits issued by the Commission.
2. OBJECTIVE OF THE BAN AND DRAFT POLICY DIRECTIVE
2.1 The regulation of blank guns in South Africa, either through import permits or the imposition of an outright ban, serves a multifaceted objective centred on public safety, crime prevention, and effective law enforcement. Given the use of blank guns in contact crimes, regulating their importation is a logical step toward reducing their availability to criminals. It also aligns with the broader firearm control strategies of the SAPS aimed at reducing gun violence in South Africa,
2.2 At the core of any import control measure lies the objective of limiting the proliferation of weapons that can be easily repurposed or misused. While blank guns are technically non-lethal, some models can be modified to fire live ammunition or projectiles, thus posing a real threat to public safety. In the hands of criminals, these modified or even unmodified blank guns undermine public trust and challenge the capacity of law enforcement to respond appropriately, as officers must treat all firearm threats as potentially lethal. By controlling or banning the entry of blank guns into South Africa, the government can reduce their role in contact crimes.
2.3 However, legitimate uses of blank guns should also be considered. These guns are used for police and military training. Film production companies and private security firms also rely on blank guns for professional purposes. Therefore, an outright ban might materially and negatively impact these sectors. This raises the issues whether a permit system would be a more balanced regulatory approach as it would allow authorities to scrutinize importers and related end-users, ensuring blank guns are only accessible to those with valid and verified needs.
2.4 Ultimately, whatever control measure may be put in place, the objective is not merely about restricting a type of weapon, but ultimately about promoting a safer, more secure public space for South African citizens by reducing gunrelated violence.
3. BAN ON, OR CONTROL OF, THE IMPORTATION OF BLANK GUNS
3.1 In term of section 6(1)(a), the Minister may, by notice in the Government Gazette, prescribe that no good of a specified class or kind be imported into South Africa.
3.2 Given the gravity of the matter, as discussed about, the Minister is considering, subject to comments from the public, banning the importation of blank guns into South Africa.
3.3 Alternatively, the Minister may exercise his authority under section 6(1)(b) to direct the Commission to regulate the importation of blank guns through a permit system. In this case, the Minister may issue a trade policy directive to the Commission, as provided for in paragraphs 3.3.1 – 3.3.4.9, below.
3.3.1 In terms of section 5 of the Act, the Minister is empowered to issue trade policy directives to the Commission. In terms of section 7(2)(a)(ii), the Commission is subject to trade policy directives issued by the Minister in terms of section 5.
3.3.2 In terms of section 6 of the Act –
(1) The Minister may, by notice in the Gazette, prescribe that no goods of a specific class or kind, or no goods other than goods of a specified class or kind, may be – (b) imported into the Republic, except under authority of and in accordance with the conditions stated in a permit issued by the Commission.
3.3.3 This Directive outlines the minimum regulatory requirements that must be met by individuals or entities seeking import permits for the importation of blank guns into South Africa.
3.3.4 The Minister directs the Commission to exercise its powers in terms of section 6(1)(d) of the Act in accordance with the following considerations:
3.3.4.1 General requirement
The importation of all blank guns into South Africa is to be regulated through a permit system;
3.3.4.2 Importer identity verification
An applicant, whether an individual or legal entity, seeking to import blank guns must undergo an identity verification. This may include submission of certified personal identification documents for individuals, and corporate registration, tax identification, and principal officer information for companies.
3.3.4.3 Import purpose declaration
The applicant must clearly declare the intended purpose of the importation. Acceptable purposes include only the following: training exercises by the SAPS, the SANDF or private security firms or film production. The Commission may consider other purposes, but only if these pose no risk to public safety. Supporting documentation, such as contracts or project outlines, as stipulated by the Commission must be submitted as evidence.
3.3.4.4 No blank gun may be imported for sale or transfer to an end user unless that end user is a party identified in the preceding paragraph.
3.3.4.5 Purchaser registration and screening
The Commission may require importers to maintain a database of verified purchasers, including name, address, contact details, identification documents, and proof of lawful purpose.
3.3.4.6 Permit application and approval process
All importers must apply for and obtain a Blank Gun Import Permit from the Commission prior to shipment. The application must include an inventory of items to be imported, the country of origin, the shipping route, and storage location upon arrival. Permits will be granted only upon satisfaction of all identity, security, and purpose requirements.
3.3.4.7 Restrictions on modifiable models
3.3.4.8 Any blank guns capable of being easily converted into lethal firearms shall be prohibited from importation. Technical assessments may be required to certify that imported models do not pose a risk of conversion or modification.
3.3.4.9 Inspection and compliance audit
The Commission shall retain the right to conduct random inspections and compliance audits of importers, including reviewing records, examining storage facilities and seizing contraband items found to be in violation of this Directive.
4. NOTICE
4.1 In light of the above considerations, the Minister is hereby directing the Commission to publish a notice seeking public comments on a potential ban on the importation of blank guns or, alternatively, the exercising of control over the importation of blank guns through a permit system imposed by the Commission in line with the above draft trade policy directive.
4.2 This Notice is issued for public comment before the Minister decides whether to ban the importation of blank guns or to issue a trade policy directive.
4.3 Interested parties are invited to submit comments. Given the urgency of this matter, comments must be submitted within a period of two (2) weeks from the date of publication of this notice. Comments should be directed to –
The Minister of Trade, Industry and Competition, for the attention of Donovan Mitchell- DMitchell@itac.org.za
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LINK TO FULL NOTICE
International Trade Administration Act: Ban and Trade Policy Directive on importation of blank guns: Comments invited
G 52697 GeN 3199 – Comment by 02 Jun 2025 19 May 2025
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ACTION
Ensure you submit your comments before 02 June 2025.
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LAW AND TYPE OF NOTICE
International Trade Administration Act:
Administrative Fees Guidelines.
G 52691 GeN 3194
16 May 2025
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APPLIES TO:
Affected Organizations and Entities
1. Importers and Exporters
2. Automotive Industry Participants
3. Manufacturers and Industrial Firms
4. Non-Profit and Humanitarian Organizations
5. Academic and Research Institutions
6. Small, Medium, and Micro Enterprises (SMMEs)
7. Customs Brokers and Trade Consultants
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SUMMED UP
1. Administrative Fees Regulations
2. Fee Structure (Annexure A)
Note: Import/export permits may incur multiple fees based on the number of tariff headings.
3. Exemptions
Fees may be waived for:
4. Payment Process
5. Implementation
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DETAILS
DEPARTMENT OF TRADE, INDUSTRY AND COMPETITION
NOTICE 3194 OF 2025
INTERNATIONAL TRADE ADMINISTRATION COMMISSION OF SOUTH AFRICA
NOTICE IN TERMS OF SECTION 60 OF THE INTERNATIONAL TRADE ADMINISTRATION ACT, 2002 (ACT NO. 71 OF 2002) ADMINISTRATIVE FEES GUIDELINES
1. In light of ongoing budgetary constraints, arising from a difficult macrofiscal environment that has limited the growth of parliamentary appropriations, the International Trade Administration Commission of South Africa (“the Commission” or “ITAC”) has been considering levying fees to recover certain costs incurred by it in carrying out functions assigned to it under the International Trade Administration Act, 2002 (Act No. 71 of 2002), other legislation or by the Minister of Trade, Industry and Competition.
2. In this regard, on 24 June 2025, draft regulations, namely the ITAC Administrative Fees Regulations (“Regulations”), were published by the Commission for public comment in Notice No. R. 4989 in Government Gazette No. 50841 of 21 June 2024. The Regulations serve as the regulatory underpinning for the proposed Guidelines, Rules and Conditions (“Guidelines”) attached hereto, which it is proposed will guide the levying of administrative fees by the Commission.
3. Comments received from the public on the Regulations centred on why the Commission was considering levying fees, where heretofore the Commission had not levied fees for any of its functions, as well as the amount of the fees.
4. Attached to the Guidelines, as Annexure A, is a proposed fees schedule. As explained in the Guidelines, the fees being proposed are directly related to the cost that the Commission incurs in the processing of applications for functions carried out by it.
5. The Guidelines also explain other administrative aspects of the proposed fees, such as functions performed by the Commission that will not incur a fee, exemptions and payment details.
6. It is the Commission’s intention to introduce fees in a carefully sequenced and staggered manner. This is because of the likely teething challenges that may come with the introduction of any new billing process. Applications for the processing of authorisations (permits and certificates) issued under the Automotive Production and Development Programme Phase 2, specifically Eligible Production Certificates, Production Rebate Certificates and Company Specific Percentage certificates, are likely to be rolled out first for the levying of fees by the Commission.
7. Comments on the Guidelines should be submitted within fourteen (14) days of the date of publication of this notice and should be addressed to the following Commission official:
The Senior Manager: Policy and Research Mr Alexander Amrein E-mail address: aamrein@itac.org.za
Guidelines, Rules and Conditions in terms of the Administrative Fees Regulations
A. GENERAL
1. Definitions
In these Guidelines, unless the context indicates otherwise –
1.1. “Act” means the International Trade Administration Act, 2002 (Act No. 71 of 2002).
1.2. “administrative fee” means the amount payable for the processing of an application for a permit or certificate, or for other functions performed by the Commission in terms of the Administrative Fees Regulations.
1.3. “Administrative Fees Regulations” means the ITAC Administrative Fees Regulations published in draft form in Notice No. R. 4989, in Government Gazette No. 50841, of 21 June 2024 for the levying of administrative fees by ITAC.
1.4. “APDP” means the Automotive Production and Development Programme Phase 2, legislated in Rebate Item 317.03 of Schedule No. 3 to the Customs and Excise Act.
1.5. “certificate” means, as applicable, a certificate issued in terms of the APDP or a drawback certificate as provided for in sections 17 and 26(1) of the Act read with the provisions of the Customs and Excise Act or such other certificate as the Commission may issue from time to time.
1.6. “Commission” means the International Trade Administration Commission of South Africa established in terms of section 7 of the Act.
1.7. “Customs and Excise Act” means the Customs and Excise Act, 1964 (Act No. 91 of 1964).
1.8. “Common Customs Area” means the combined areas of the Member States of SACU.
1.9. “designated bank account” means ITAC’s bank account identified in paragraph 9.3 of the Guidelines.
1.10. “duly completed” means an application that has been fully and correctly finished.
1.11. “Export Control Regulations” means the regulations prescribed by the Minister and published in Notice No. R. 92 in Government Gazette No.35007, dated 10 February 2012, as amended.
1.12. “Guidelines” means these Guidelines, Rules and Conditions issued by the Commission in terms of the Administrative Fees Regulations.
1.13. “household or personal effects” means goods (excluding firearms and ammunition, pneumatic tyres, tyre casings and used or second-hand motor vehicles and goods contained in Schedules 2 and 3 of the Commission’s Import Control Regulations) imported for the personal use of a South African citizen returning to the Republic or by a person entering the Republic for purposes of either permanent or temporary residence; or goods (excluding controlled vehicles and goods contained in Schedules 2 and 3 of the Commission’s Export Control Regulations) exported for the personal use by a natural person leaving the Republic temporarily or permanently.
1.14. “Import Control Regulations” means the regulations prescribed by the Minister and published in Notice No. R. 91 in Government Gazette No. 35007 dated 10 February2012, as amended.
1.15. “Minister” means the Executive Member of the Cabinet responsible for Trade, Industry and Competition.
1.16. “other function” means any task performed, or service provided, by the Commission in terms of Regulation 4 of the Administrative Fees Regulations.
1.17. “permit” means, as applicable, a permit issued in terms of the APDP, a rebate or drawback permit or an import or export control permit, as provided for in sections 17, 26(1) and 27 of the Act read with the provisions of the Customs and Excise Act.
1.18. “Republic” means the Republic of South Africa.
1.19. “SACU” means the Southern African Customs Union.
1.20. “Schedule” means the various Schedules to the Customs and Excise Act.
1.21. “second-hand goods” means any goods or parts thereof that were (or are assumed to have been) previously owned, possessed, held and/or registered by or in the name or names of any person or entity, excluding goods that have been sold or otherwise transferred solely between the manufacturer, authorised/appointed wholesaler or authorised/appointed retailer of the goods concerned.
1.22. “used goods” means any goods, including parts thereof that were (or are assumed to have been) used for:
(a) the purpose it was designed for, excluding use by the manufacturer for testing and evaluation purposes, or; (b) any purpose whatsoever, including use resulting in such goods reflecting signs of use, ageing, deterioration, modification or alteration. Used goods also include damaged, shop soiled, defect, rejected, outdated, remanufactured, reconditioned, refurbished or modernized goods of any nature and to any extent whatsoever.
1.23. “waste and scrap metal” means ferrous and non-ferrous waste and scrap metal subject to an export permit issued by the Commission in terms of the Price Preference System, which system was established pursuant to a trade policy directive issued by the then Minister of Economic Development under Notice No. 470 in Government Gazette No. 36451.
2. Purpose
The purpose of these Guidelines is to provide a reference and procedural guide for the payment of administrative fees for the processing of applications for permits and certificates or for other functions performed by the Commission.
3. Scope
These Guidelines cover the application process and other matters related to the payment of administrative fees for the processing of applications for permits and certificates or for other functions performed by the Commission.
4. Background
4.1. The Minister issued regulations under section 59 of the Act prescribing administrative fees to be levied for various functions performed by the Commission.
4.2. The purpose of the administrative fees is to allow for the recovery of the administrative costs the Commission incurs in carrying out its functions under the Act, in terms of other legislation or as directed by the Minister.
4.3. The Guidelines should be read and understood together with the Administrative Fees Regulations, the International Trade Administration Act, 2002, the Import Control Regulations and the Export Control Regulations.
5. Fee basis, increases, exemptions and refunds
5.1. The amount of each administrative fee set forth in Annexure A is directly related to the processing cost of an application plus any associated overhead costs. Specifically, an administrative fee is based on the number of Commission officials processing an application and the time spent processing it. Additionally, where the Commission incurs overhead costs, typically for verifying information provided by an applicant, such costs have been included in the calculation of an administrative fee.
5.2. An administrative fee will be levied on each duly completed application accepted by the Commission in accordance with the fees schedule attached as Annexure A. Applications that are not accepted by Commission for processing either because they have not been duly completed or because they are not subject to the payment of a fee, will not incur an administrative fee.
5.3. Notwithstanding subparagraph (2), in light of the unique nature of import and export permit applications, an application for an import permit or an export permit, other than a waste and scrap permit, may incur multiple administrative fees depending on the number of tariff lines for which permits are to be issued. This reflects the fact that import and export permits are issued per tariff heading contained in an application. For example, if an application for the importation of fish subject to import control contains 10 tariff subheadings for which 10 import permits are to be issued, the corresponding fee will be the fee set forth in Annexure A times 10.
5.4. The administrative fees set forth in Annexure A may be adjusted from time to time in terms of Regulation 7(1) of the Administrative Fees Regulations. Increases in any given year will not exceed the maximum of the Headline Consumer Price Index for the year prior to the adjustment unless the Minister decides on a higher increase in terms of Regulation 8(2) of the Administrative Fees Regulations. Unless otherwise indicated by the Commission, a fee adjustment will become effective on 1 April of any year. Should administrative fees be adjusted, a revised fees schedule will be published by the Commission on its website and/or in the Government Gazette no later than 1 month before the adjusted fees are to come into effect.
5.5. In terms of Regulation 5(1) of the Administrative Fees Regulations, the Commission may exempt an applicant or certain categories of applicants from the payment of an administrative fee for good cause or because the Commission deems an exemption to be in the public interest, as provided for in Regulation 5(2) or 5(3) of the Administrative Fees Regulations, respectively. In determining good cause or the public interest, the following provides an overview of some of the factors that the Commission may consider:
(a) Good cause: As provided for in the Administrative Fees Regulations, establishing good cause for an exemption entails a detailed review of the applicant’s identity and the nature of the good in question. Specifically –
(i) The identity of the applicant: consideration will be given to whether the applicant is – • A non-profit company, meaning entities formally registered as non-profit organisations in terms of the Companies Act, 2008 (Act No. 71 of 2008), and operating for purposes such as education, health, social services, environmental protection, or community development. Such entities are typically not engaged in profit-generating activities and should be contributing to the public benefit. • A person acting in a non-commercial capacity: This includes individuals or organisations whose activities are not intended for commercial gain. Examples might include: • Researchers or academic institutions applying for permits or certificates related to educational or scientific matters; • Humanitarian groups importing goods for aid or disaster relief; • Private individuals moving personal property because of relocation, inheritance or for other non-commercial reasons.
(ii) Nature of the good: The exemption must also be justified based on the characteristics and intended use of the good, such as: • Goods intended to further a public purpose, such as medical supplies for public hospitals or educational materials for schools. • Goods with minimal or no commercial value, such as items not intended for sale, including samples, promotional materials, used personal items, or obsolete equipment intended for donation or educational use. • Personal property, which includes non-commercial goods such as household items, heirlooms, or gifts not intended for trade.
(b) Public interest: Establishing that an exemption is in the public interest requires an assessment of the broader economic and social impact of requiring a fee payment. In evaluating the public interest, the Commission may consider –
(i) The effect on industrial sectors or regions and whether the payment of a fee may have a disproportionately negative effect on emerging or strategic industries or underdeveloped or economically vulnerable regions; or (ii) Whether an exemption may facilitate the participation of small, medium or micro enterprises, start-ups or previously disadvantaged individuals or groups in economic activity.
5.6. An administrative fee is non-refundable at any time after the Commission’s acceptance of an application that has been duly completed.
6. Applications for permits and certificates subject to the payment of an administrative fee
6.1. The Commission may levy an administrative fee for, amongst other functions performed by it, the processing of a duly completed application for –
(a) an import or export permit; (b) a tariff amendment in the form of a rebate or drawback permit or certificate; (c) a production rebate certificate (PRC) or equivalent certificate under the APDP; (d) an eligible production certificate (EPC) or equivalent certificate under the APDP; (e) a company specific percentage (CSP) certificate or equivalent certificate under the APDP; and (f) any other permit or certificate that the Commission may issue from time to time.
6.2. Import and export permits
As a general rule, goods that are subject to import or export control require the payment of an administrative fee because the Commission will be issuing a permit, whereas goods that are not subject to import or export control do not require the payment of an administrative fee. In this regard –
Paragraph 6.2.1 below describes goods that do not require an ITAC import permit and therefore do not require the payment of an administrative fee;
Paragraph 6.2.2 below describes some of the goods that require an ITAC import permit and for which an administrative fee is payable;
Paragraph 6.2.3 describes goods that do not require an ITAC export permit and therefore do not require the payment of an administrative fee; and and for which an administrative fee is payable.
6.2.1 The following goods are not subject to import control by ITAC under the Import Control Regulations and may therefore be imported into the Republic without the payment of an administrative fee:
(a) new and used or second-hand goods landed for transit through the Republic; (b) new and used or second-hand goods (excluding firearms and ammunition, pneumatic tyres, tyre casings and used or second-hand motor vehicles) imported as household or personal effects for the personal use of a South African citizen returning to the Republic or by a person entering the Republic for purposes of either permanent or temporary residence, whether or not such a person qualifies for importation of the above-mentioned goods under rebate of duty in terms of Schedule 4 to the Customs and Excise Act;
(c) (i) new and used or second-hand goods imported from the Republic of Botswana, the Kingdom of Lesotho, Republic of Namibia or the Kingdom of eSwatini which are grown, produced or manufactured in the Republic of Botswana, Kingdom of Lesotho, Republic of Namibia or the Kingdom of eSwatini; provided that the above shall not be interpreted to include new goods which are subject to the Import Control Regulations, used or secondhand goods imported from outside the Common Customs Area, goods manufactured from used or second-hand goods imported from outside the Common Customs Area and used or second-hand vehicles manufactured in the Republic exclusively for export to foreign markets outside the Common Customs Area;
(ii) new goods imported from Malawi that are grown, produced or manufactured in Malawi; provided that the above shall not be interpreted to include new goods which are subject to the Import Control Regulations, used or second-hand goods and goods manufactured from used or second-hand goods imported from outside Malawi;
(iii) new goods imported from Zimbabwe that are grown, produced or manufactured in Zimbabwe; provided that the above shall not be interpreted to include new goods which are subject to the Import Control Regulations, used or second-hand goods and goods manufactured from used or secondhand goods imported from outside Zimbabwe;
(d) (i) new spares, sub-assemblies and materials imported as original equipment for the manufacture of motor vehicles; (ii) new spares and sub-assemblies imported for the maintenance of motor vehicles, but excluding tyres; (iii) all other new spares for all goods which are not subject to import control measures, but excluding tyres;
(e) new and used or second-hand goods exported from the Republic for repair or maintenance and returned to the original exporter in the Republic;
(f) new and used or second-hand empty containers originally containing goods exported from the Republic and returned to the original exporter in the Republic;
(g) new and used or second-hand goods warehoused in Customs and Excise warehouses for delivery as ship’s stores and goods warehoused in duty free shops;
(h) new and used or second-hand goods imported by heads of States, diplomatic and other foreign representatives in terms of rebate item 406 of Schedule 4 of the Customs and Excise Act;
(i) new and used or second-hand goods imported in terms of rebate items 409.01, 409.02 or 409.04 of Schedule 4 of the Customs and Excise Act;
(j) new and used or second-hand goods excluding used or second-hand motor vehicles imported in terms of rebate item 412.03 or 412.04 of Schedule 4 to the Customs and Excise Act;
(k) new and used or second-hand abandoned goods imported into the Republic and abandoned in terms of rebate item 412.07 of Schedule 4 of the Customs and Excise Act;
(l) new and used or second-hand goods imported in terms of rebate items 470.02 or 470.03 of Schedule 4 of the Customs and Excise Act;
(m) new and used or second-hand goods imported in terms of rebate item 480.00 or 490.00 of Schedule 4 to the Customs and Excise Act; and
(n) goods referred to in Schedule 4 of the Import Control Regulations.
6.2.2 The following goods are some of the goods subject to import control by ITAC under the Import Control Regulations and are subject to the payment of an administrative fee. These goods include, but are not limited to the following: fish; crustaceans; molluscs; radioactive chemical elements; new and used pneumatic tyres; fossil fuels; chemicals listed in the 1988 United Nations Convention Against Illicit Trade in Narcotic Drugs and Psychotropic Substances; arms and ammunition; gambling devices and used goods (for example, used electronic equipment, used medical equipment, used aircraft and all waste and scrap metal).
6.2.3 The following goods are not subject to export control by ITAC under the Export Control Regulations and may be exported from the Republic without the payment of an administrative fee:
(a) goods landed for transit through the Republic;
(b) goods (excluding motor vehicles) exported as household or personal effects for the personal use by a natural person leaving the Republic temporarily or permanently;
(c) goods (excluding motor vehicles) exported as bona fide gifts at own cost by a natural person in the Republic to a designated natural person living outside the Common Customs Area;
(d) samples of no commercial value;
(e) goods which are imported into the Republic for repair or maintenance and, after such repair or maintenance, exported to the original consignor;
(f) vehicles of South African origin, vehicles imported as new into South Africa and vehicles legally imported into South Africa against a valid import permit issued in terms of Section 6 of the Act exported to any Member State of the SACU.
(g) goods in Schedule 4B of the Export Control Regulations – (i) exported to a private individual under a medical prescription; (ii) exported for clinical trials; or (iii) exported to SACU Member States.
6.2.4 The following goods are some of the goods subject to export control by the Commission under the Export Control Regulations and are subject to the payment of an administrative fee. These goods include, but are not limited to the following: tiger’s eye and sugalite; some types of ores; fossil fuels; some types of wood; waste and scrap paper; waste and scrap metal; used and second-hand vehicles; some types of gases; and some types of chemicals.
6.3 Rebate and drawback permits and certificates
6.3.1 In general, an administrative fee is payable for a rebate or drawback permit or certificate.
6.3.2 Notwithstanding subparagraph (1), the following rebate items are not subject to an administrative fee in light of the purpose they serve:
(a) Rebate item 405.04 (donated goods);
(b) Rebate item 412.11 (goods imported for the relief of distress or persons in cases of famine or other natural disaster, under any technical assistance agreement or in terms of any multilateral international agreement to which the Republic is a party;
(c) Rebate item 460.03/0207.14.9/01.07 (temporary rebate for the rebate of the full anti-dumping duty on bone-in cuts of the species gallus domesticus);
(d) Rebate items 460.03/0207.12/01.06, 460.03/0207.14.1/01.07, 460.03/0207.14.2/01.07 and 460.03/0207.14.9/02.07 (temporary rebate provision for the full ordinary customs duties on meat and edible offal, not cut in pieces, frozen, of fowls of the species gallus domesticus);
(e) Rebate item 460.17/87.00/04.02 (Importation of motor vehicles principally designed for the transport of physically disabled persons, including station wagons (excluding racing cars), adapted or to be adapted for the transport of physically disabled persons); and
(f) Rebate item 460.17/87.03/02.04 (Motor vehicles principally designed for the transport of physically disabled persons, including station wagons (excluding racing cars), adapted or to be adapted to be solely driven by a physically disabled persons).
It should also be noted that certain of the aforementioned rebate items are not currently in effect (as in the case of the disaster rebate) or are temporary rebates.
6.4 APDP certificates
The processing of applications for the three types of certificates issued by the Commission under the APDP programme, namely EPCs, PRCs and CSPs, are subject to the payment of an administrative fee in the amount provided for in Annexure A.
7 Other functions subject to the payment of an administrative fee
7.1 The Commission may, from time to time, introduce other functions to be made subject to the payment of an administrative fee following consultations with the Minister.
7.2 Prior to the levying of an administrative fee in terms of paragraph (1), the Commission will publish a notice in the Government Gazette to provide interested parties an opportunity to comment thereon.
7.3 After considering any comments, the Commission may levy an administrative fee in an amount as determined by the Commission in terms of paragraph 5.1.
B. PROCEDURES
8 Application process
If an administrative fee is not payable, the normal application process will not change. However, if an administrative fee is payable, in addition to the normal application process, proof of payment of the relevant administrative fee must be provided and the payment process described in the paragraph 9 below must be followed.
9 Payment of an administrative fee
9.1 Advance payment
An applicant applying for a permit or certificate or for the carrying out of other functions performed by the Commission should first determine if an administrative fee is payable. If an administrative fee is payable, the administrative fee must have been paid and received by the Commission at the time of the submission of an application, meaning that the payment must reflect in the Commission’s designated bank account as having cleared. Applicants should therefore allow sufficient time for the processing of a payment because an application will not be processed if the payment has not cleared whether or not a third party is responsible for the payment not having cleared.
Note: If the required administrative fee has not been paid and has not reflected in the Commission’s bank account at the time an application is submitted to the Commission, the application will not be processed.
9.2 Mode of payment
Payment of an administrative fee may be made by an electronic funds transfer (EFT) or cash deposit into the Commission’s designated bank account.
9.3 Bank account details
The required administrative fee must be paid into the Commission’s designated bank account, the details of which are as follows [to be provided in final, gazetted Guidelines]:
Account name: International Trade Administration Commission of South Africa Bank: Branch and branch code: _____________/_____________ Type of account: ____________________
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LINK TO FULL NOTICE
International Trade Administration Act: Administrative Fees Guidelines.G 52691 GeN 3194 16 May 2025
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ACTION
Ensure you submit your comments on the guidelines within 14 days of publication.
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LABOUR
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LAW AND TYPE OF NOTICE
Skills Development Act: Regulations:
SETA Grant: 2025/2026 Financial Year Applications for Mandatory Grants: Extension of date for applications
G 52698 GoN 6208
– Comment by 31 May 2025
19 May 2025
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APPLIES TO:
1. Sector Education and Training Authorities (SETAs) – These bodies are responsible for managing skills development and training within specific economic sectors in South Africa. 2. Employers and Training Providers – Especially those who contribute to the Skills Development Levy and are eligible to apply for mandatory grants through SETAs. 3. Human Resource and Skills Development Departments – Within companies and institutions that rely on SETA funding for training programs.
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FULL TEXT |
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DETAILS
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LINK TO FULL NOTICE
Skills Development Act: Regulations: SETA Grant: 2025/2026 Financial Year Applications for Mandatory Grants: Extension of date for applications
G 52698 GoN 6208 – Comment by 31 May 2025 19 May 2025
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ACTION
Ensure you submit your comments by 31 May 2025
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LINK TO FULL NOTICE
Labour Relations Act: Intention to cancel registration of trade union: Progressive Workers Union of South Africa (PWUSA): Comments invited
G 52714 GeN 3223 – Comment by 21 Jul 2025 22 May 2025
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MEDICAL
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LAW AND TYPE OF NOTICE
Pharmacy Act:
Fees payable to the Council
G 52709 BN 787
21 May 2025
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APPLIES TO:
Pharmacies and Pharmacists
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FULL TEXT |
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DETAILS
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LINK TO FULL NOTICE
Pharmacy Act: Fees payable to the CouncilG 52709 BN 787 21 May 2025
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ACTION
Ensure that you take note of the new fees.
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LAW AND TYPE OF NOTICE
Dental Technicians Act:
South African Dental Technicians Council: Appointments and elections
G 52691 BN 785
16 May 2025 |
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APPLIES TO:
Dental Technicians Council.
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LINK TO FULL NOTICE
Dental Technicians Act: South African Dental Technicians Council: Appointments and electionsG 52691 BN 785 16 May 2025
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TRANSPORTATION
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LAW AND TYPE OF NOTICE
Road Accident Fund Act:
Adjustment of statutory limit in respect of claims for loss of income and loss of support (English / Afrikaans)
G 52691 BN 786
16 May 2025
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APPLIES TO:
Individuals who have claims for loss of income and loss of support with the Road Accident Fund (RAF) in South Africa.
Specifically, it pertains to:
The notice announces an adjustment to the statutory limit for such claims, increasing it to R372,824.00, effective 30 April 2025, in line with inflation as measured by the Consumer Price Index (CPI).
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LINK TO FULL NOTICE
Road Accident Fund Act: Adjustment of statutory limit in respect of claims for loss of income and loss of support (English / Afrikaans)G 52691 BN 786 16 May 2025
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ACTION
Take note of the Adjustment |
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CONTRACT ARTICLES
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CORPORATE GOVERNANCE ARTICLES
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CUSTOMS AND EXCISE ARTICLES
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SOUTH AFRICA |
Updates on Customs and Excise Rules and Treasury’s Budget Facility for Infrastructure
What businesses need to know
The South African Revenue Service (SARS) has implemented crucial amendments to the Customs and Excise Act Rules, as published in the Government Gazette No. 52255 on 11 March 2025. These changes, which apply retrospectively from 19 February 2025, have significant implications for businesses affected by excise duties, including those in the alcohol, tobacco, and fuel industries.
The amendments to the Customs and Excise Rules are made in terms of the Customs and Excise Act, 1964.
Key amendments: What has changed?
The amendments introduce two major updates.
Firstly, a clear definition of Budget Day has been inserted into Rule 58A.01. It is now officially defined as: “The date of the national annual budget contemplated in section 27(1) of the Public Finance Management Act, 1999 (Act 1 of 1999).” This amendment aligns tax and customs regulations with national budgetary processes, ensuring businesses have a clear reference point when planning for duty changes.
Secondly, new anti-forestalling measures have been introduced as per Rule 58A.03. Governments may implement measures to counter tax forestalling, such as restrictions on the timing of transactions or the quantities of goods that can be moved before a tax increase.
Definition of forestalling: When a government announces that it will increase taxes on a particular good, service, or activity, individuals or businesses may anticipate the change and take actions to minimise their tax burden. It includes the practice of bringing forward transactions or activities to benefit from lower tax rates before a pre-announced tax increase takes effect. For example, if a government announces an increase in excise duties (taxes on goods like tobacco or alcohol), businesses might increase their sales or clear inventory before the new rates are implemented.
In this instance, the South African government has inserted a new Rule 58A.03 to specify the controlled period during which anti-forestalling measures apply. The controlled period starts on 1 December of any year or 90 days prior to Budget Day, whichever is later. It ends when the rate of excise duty is increased on Budget Day. This regulation prevents businesses from stockpiling excisable goods in anticipation of tax increases, thereby ensuring compliance with the revenue collection framework.
These amendments reinforce the South African government’s efforts to streamline tax compliance and prevent revenue losses due to early stockpiling strategies.
What this means for businesses
These changes require businesses in excise-related industries to stay vigilant. Staying compliant means understanding how these rules impact logistics, supply chain management, and financial planning—particularly around Budget Day.
Opportunities presented by Treasury’s Budget Facility for Infrastructure (BFI)
Furthermore, National Treasury’s recent announcement regarding the Budget Facility for Infrastructure (BFI) signals an increased focus on fiscal responsibility and large-scale infrastructure investments. The BFI serves as an appraisal review process for assessing large scale infrastructure proposals exceeding R1 billion that require government funding to bridge a viability gap.
As part of the reconfigured BFI, multiple bid windows are now planned rather than a single yearly window. The first BFI window is now open, with applications closing on 16 April 2025. Three additional BFI windows planned for the 2025/26 financial year.
GoLegal
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ENVIRONMENTAL ARTICLES
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NIGERIA |
Environmental, social, and governance (ESG) and data protection: a nexus
1. INTRODUCTION
Environmental, social, and governance (ESG) integration into corporate decision-making has been profoundly transformed. Once considered a niche concern, they are recognised as essential drivers of long-term sustainability and value creation for businesses worldwide.[1] Concurrently, data protection and privacy have become a growing concern today. The escalating importance of data privacy has prompted regulators, businesses, and consumers to scrutinise the collection, use, and protection of personal data with unprecedented rigour. Data protection is considered an area that will have profound implications for ESG if privacy and data protection policies grounded in existing data protection laws are not implemented effectively. Organisations are beginning to view data responsibility as integral to their ethical and sustainable business practices as investors increasingly consider new ESG developments in their decision-making processes.[2] This connection emphasises the importance of ethical data handling, regulatory compliance, risk management, and corporate reputation enhancement. Companies with strong data protection practices will likely attract investment as they align with the growing demand for responsible and sustainable business practices in the ESG context. This article discusses the connection between data protection and ESG in corporate operations. It recognises that although data protection and sustainability regulations do not directly connect, they make it vital for companies that seek to enhance corporate responsibility by their sustainability commitments to balance ESG with ethical data governance.
2. MEANING OF ESG AND DATA PROTECTION
ESG is a framework to assess an organisation’s business practices, sustainability and ethical performance. ESG merges three critical aspects of corporate responsibility to estimate and manage the impact of sustainability and ethical practice on an organisation’s operations by supplying a means of quantifying opportunities for businesses and risk factors. Data protection refers to the processes, policies, and technologies designed to safeguard personal and sensitive information from unauthorised access, use, disclosure, alteration, or destruction. Data protection ensures privacy, integrity, and availability, particularly with personal data. The key aspects of data protection include the legal and regulatory framework, data processing principles, technological safeguards, data protection strategies, data breaches, and the rights of data subjects.[3]
2.1 What are Data Privacy Risks in ESG?
Data protection links with ESG during data collection, management, analysis, and reporting[4]. Accordingly, privacy risks in ESG arise primarily from handling and disclosing personal data during ESG reporting and compliance efforts, data transfer, and technology usage. Privacy risks in the ESG context are growing as businesses increasingly rely on data to meet ESG goals. Thus, they must manage this data responsibly to avoid regulatory and reputational pitfalls. Companies must prioritise cybersecurity and provide sufficient resources and expertise to support their efforts by investing in cybersecurity, anonymising data, implementing encryption and limiting access controls to secure data storage and transmission, and maintaining privacy principles.
Some Privacy risks[5] in ESG Practice include:
i. Unclear consent: The concept of consent in data protection applies only to the processing it was obtained for; further processing requires further consent. Companies must obtain explicit consent before data collection through simple language and an accessible format; consent must be affirmative,[6] either written orally or electronically.[7] Before obtaining consent, a data controller must inform data subjects about their identity, residence, communication methods, processing basis, intended purposes, recipients, rights, retention period, complaint rights, automated decision-making, and the right to contest and challenge the processing of such data.[8] Employees and consumers ought to be fully aware of the management and usage of their data; unawareness of a data subject is a potential violation of privacy laws.
ii. Overcollection of data: Data minimisation and purpose limitation are some privacy principles at the forefront of processing data. The former mandates collecting only necessary personal data and keeping such data for a required time, while the latter requires data to be collected for specific and legitimate purposes and processed for the sole purpose for which it was collected.[9] These principles of personal data processing restrict the extent and purpose to which data is collected to mitigate risk, protect privacy, decrease the necessary server space and energy required to store the excess data and reduce the data footprint, resulting in a greener environmental impact. Companies may gather more unnecessary personal data, which increases the risk of data breaches or misuse. Thus, only relevant and sufficient data should be collected, processed,[10] and kept as long as required to meet the legal justification for such collection.[11] Overcollection of data enables intrusion upon an individual’s privacy or excessive or unjustified surveillance, a risk to personal control. The 2020 implementation framework of the NDPR provides three years following the most recent active digital platform usage. It also follows six years after the most recent transaction in a contract agreement, upon presentation of the data subject evidence of death, an immediate request by the data subject or legal guardian when there is no statutory provision or the data subject is not subject to an investigation or suit that may require the data sought retention timeline for data storage.[12]
iii. Data Breaches: As companies increasingly digitalise data, they become cyberattack targets. Sensitive information about employees, investors, customers, suppliers, the community, and other stakeholders can be exposed if proper security measures are not implemented, leading to financial, reputational, and legal damage. Data breaches can severely harm a company’s ESG standing, especially in governance and social responsibility. Privacy impact assessments should be conducted to proactively identify and address potential risks while analysing data at scale.
iv. Regulatory Compliance: Companies must ensure their data practices align with local privacy laws and international standards. To mitigate privacy risks in ESG practices, companies must implement data privacy policies and adhere to several relevant regulatory provisions, such as the NDPA 2023, the NDPR Implementation Framework, 2020, the General Data Protection Regulation (GDPR) 2016, the Nigerian Data Protection Regulation (NDPR), 2019, and the NITDA Guidelines for Nigerian Content Development in Information and Communication Technology 2019 (as amended). Fulfilling regulatory obligations for data protection and compliance requirements for ESG in corporate practices will create synergy. In contrast, failure to comply with data regulations while processing ESG data could lead to fines, penalties, and loss of investors and trust.
v. Cross-Border Data Transfers: Data reporting frequently entails cross-border data sharing, which poses risks due to different privacy regulations in various jurisdictions. In Nigeria, it is illegal for data processors and controllers to transfer personal data outside the country unless the recipient is subject to adequate protection or one of the conditions listed in Section 43 of the NDPA.[13] The Nigerian Data Protection Commission may require data controllers and processors to inform them of these measures and explain their adequacy. Additional restrictions may be imposed based on the nature of the data and risks to data subjects. In Europe, the European Union’s Schrems II ruling[14] has complicated international data transfers, making it essential for organisations to manage privacy risks in global ESG reporting efforts.
vi. Use of Technology Ethically: AI and data analytics are increasingly used to measure ESG performance but can introduce ethical risks. For example, AI algorithms that analyse employee data for diversity metrics might inadvertently discriminate or misuse personal data if not properly governed.
vii. Transparency and Accountability: Companies adopting ethical considerations in data processing must have a transparent system for accountability during data breaches, as stakeholders expect clarity on how companies handle personal data in the context of ESG initiatives. Ethical breaches, such as misrepresenting data privacy practices or failing to safeguard personal information, can damage a company’s reputation and trustworthiness in ESG reporting.
3. THE NEXUS BETWEEN DATA PROTECTION AND ESG
As companies increasingly embrace ESG frameworks to guide their operations and investments, an intersection emerges between corporate responsibility and data protection responsibility. This connection can be seen in certain areas where both distinct fields seek similar results, such as ethical responsibility, corporate reputation, regulatory compliance, risk management, sustainable business practice, and investors’ expectations. At this intersection, companies must navigate the moral duties of ESG, which are rooted in how companies balance profitability and sustainability with the legal obligations surrounding data privacy.
3.1 Connecting the Nigerian Data Protection Act (NDPA) 2023 with ESG The NDPA 2023 defines adequate safeguard for personal data by considering factors such as enforceable data subject rights, the rule of law, appropriate instruments between the Commission and competent authorities, public authority access to personal data, effective data protection laws, independent supervisory authorities, and cross-border data transfer to provide a comprehensive framework on personal data security to protect individual privacy and data in Nigeria. The Nigeria Data Protection Commission (NDPC) established under the Act outlines the Commission’s duties to regulate data processing activities, the Commission’s Governing Council and its responsibilities in overseeing data protection practices. The Act addresses individual rights to their data. It establishes guidelines for data processing, data breach procedures, and cross-border data transfer, as well as the legal foundation and guiding principles of data processing, data subjects’ rights, data security, enforcement, and legal proceedings. Its significant principles include lawfulness, fairness and transparency, accuracy, purpose limitation, data minimisation, storage limitation and accountability. The NDPA connects with ESG in governance, social responsibility, transparency, and risk management. Complying with the NDPA can strengthen a company’s ESG performance as it demonstrates a commitment to ethical, appropriate data management and respect for the privacy rights of individuals. At the same time, non-compliance can lead to reputational damage, negatively impacting a company’s ESG ratings.
The NDPA 2023 links ESG principles in certain key areas, such as:
i. Data Protection and Governance: “Governance” in ESG emphasises transparency, accountability, and ethical business practices. It encompasses the composition of the board, executive compensation, risk management, transparency, and accountability that guide corporate behaviour, decision-making, and oversight. The NDPA emphasises data processing accountability and mandates that organisations in Nigeria protect personal data. This aligns with ESG governance standards that require businesses to adopt responsible management practices, including sophisticated data security measures. The NDPA establishes the independent NDPC to regulate personal data processing. The Act mandates that data controllers of “major importance” designate a Data Protection Officer to handle data of considerable importance.[15] One of the tasks of this officer is to advise the data controller on compliance with the Act, which would include ensuring the proper handling of children’s data. The NDPC’s responsibilities under the Act strongly align with good governance practices through promoting data processing practices, guaranteeing legal, equitable, and accountable data, promoting transparency and public awareness on personal data protection, encouraging businesses to adopt international best practices for data protection, and collaborating with relevant government bodies and international organisations to ensure adherence to data protection obligations.
ii. Privacy and Social Responsibility: “Social” in ESG covers human rights, employee well-being, and fair treatment, which includes respecting individuals’ privacy. This aspect highlights the significance of respect for human rights in business practices. It encompasses a broad spectrum of factors related to human capital management, diversity and inclusion, labour practices, community engagement, and stakeholder relations.[16] Vendor relationships, employee welfare, healthcare Initiatives, gender equality, race equality, religious equality, workforce demographics, employee satisfaction surveys, and diversity statistics.[17] Data reflects the company’s relationships with its employees and other stakeholders and is used for reputational advantage as it upholds corporate responsibility. Data protection concerns deal with the data subject’s confidentiality, understanding, and consent. The NDPA reinforces this by protecting individual privacy rights, particularly in how organisations collect, store, and use personal data. Organisations are expected to handle personal data ethically, ensuring that individuals’ rights and freedoms are respected to contribute to their social license to operate because the impact of technology and data processing on individuals falls within the ESG’s social pillar[18]. Therefore, obtaining informed consent before data collection must be done through simple language and an accessible format to ensure the data subject understands the consequences of the processing and their rights as data subjects, and consent must be affirmative, orally, written, or electronically. Although the NDPA does not provide any special category of data, Article 9 of the GDPR 2016 provides that any such data that reveals racial, biometric, health, trade union membership, and so on is regarded as a special category of data and cannot be processed to identify the data subject.[19] So, before proceeding with such processing, consent for data processing must be explicitly obtained, and processing must be obligatory and not contradict any of the provisions listed in Article 9 (2) of the GDPR, 2016.
The NDPA emphasises the need for data processors and controllers to be accountable for upholding these rights. Specific provisions within the NDPA directly serve to protect individuals in the social sphere of ESG:
i. Data Breach Notification: The NDPA mandates organisations to report data breaches, minimising individual harm. If a breach occurs, the processor must immediately notify the data controller and respond to all information requests by the controller. Upon awareness of a high-risk data breach, the controller must inform the NDPC within 72 hours, describing the nature of the violation and categories of data subject.[20] The data controller must also unambiguously notify the data subject immediately if it is a high-risk breach. All notifications should bear the details of the data controller, describe the probable implications of the breach, and explain measures taken to address it.[21]
ii. Rights of Data Subjects: The Act grants individuals the right to access, object,[22] correct, and delete their personal information, promoting individual autonomy and control.[23]
iii Children’s Data Protection: The NDPA explicitly addresses the data rights of children, recognising their vulnerability and need for enhanced protection in the digital sphere. Given their vulnerability, it contains particular clauses that safeguard the personal information of minors and individuals without legal capacity. Since children cannot fully comprehend the implications of processing their data, a data controller must get parental consent or approval from a legal guardian before processing a child’s data.[24] The NDPA mandates that data controllers implement appropriate mechanisms to verify the age and consent of individuals before processing their data, taking into consideration available technology. This shows the importance of due diligence in protecting children’s data online. The Act further outlines specific situations where processing children’s data without consent is permissible, when protection is for the child’s vital interest, educational purposes, medical or social care, provided it is undertaken by a professional or similar service provider owing a duty of confidentiality, necessary proceedings before a court.[25]
iii. Data collection and Environmental Sustainability: “Environment” in ESG involves resource conservation, energy efficiency, waste management, and reduction of greenhouse gas emissions. Data collection poses a serious future problem, as companies have collected and analysed vast amounts of data in the last few years. It deals with how companies increasingly recognise the importance of measuring and disclosing their ecological impact as part of their broader commitment to sustainability and corporate responsibility.
As data management technology continues to improve, data protection inclusion in ESG concerns is a new development centred around collecting and storing unnecessary data, yielding electronic waste because unlimited cloud-based storage has a long-term impact on the environment. Companies can prioritise data responsibility by integrating environmental considerations into their business practices. This latest development has caused companies to seek energy-saving ways to build and operate their data centres and physical servers because more data collection and data storage requires a physical server, which further requires excess server space, hard drives, and other electronics to store environmental information, leading to physical waste and increased energy output in the long run. While not the primary focus, the NDPA indirectly supports environmental goals by promoting electronic communication between the data controller and data subject, encouraging digitalisation and reducing reliance on physical documents and their associated environmental impact.
iv. Data Management and Transparency in ESG Reporting: The NDPA requires organisations to be transparent about handling personal data, including obtaining consent, data processing purposes, and individuals’ rights. In the ESG context, transparency is key to reporting sustainability efforts, and data privacy disclosures have become an essential part of ESG reporting frameworks. Presently, consumers are concerned about the ethical use of their data. They want responsibility and openness from the companies they are affiliated with,[26] so when reporting s, transparency and accountability practices should also be at the forefront to build trust and assurance of control in data processing.
v. Risk Management and Regulatory Compliance: ESG emphasises effective regulatory compliance, while NDPA emphasises effective risk management. It can be recognised that data privacy risks are part of a company’s broader risk profile in ESG because failing to comply with data regulations can lead to legal penalties, affecting a company’s regulatory standing. The NDPA is a data protection framework that serves as a regulatory standard in ESG compliance. The NDPA mandates companies to conduct a data privacy impact assessment to evaluate if the potential data processing activity may risk individuals’ data. Companies should integrate data protection impact assessments (DPIA) into their ESG risk management processes. This guarantees that data privacy risks are considered when assessing overall ESG-related risks, especially when implementing new technologies or business models that involve personal data processing. This assessment is carried out before processing, and if there is any indication of risk, the NDPC must be informed. Furthermore, companies should have an incident response plan for privacy incidents, and boards must hold management accountable for upholding data privacy standards and responding effectively to data breaches or incidents.
3.2 The Corporate Sustainability Reporting Directive, 2020 (CSRD) Connecting with Data Protection This Directive is a key European regulation that enhances transparency in sustainability reporting. It mandates companies to provide detailed disclosures on how their businesses impact ESG factors. As companies collect and report more detailed data, especially regarding social issues like diversity and labour practices, data privacy concerns are raised, making data governance strategies important. While the CSRD does not establish a distinct data protection framework, its requirements, particularly those related to social factors, disclosure, proportionality and ethical practice, create a clear connection with data protection. Companies regulated by the CSRD should proactively consider data protection principles throughout their sustainability reporting processes to ensure compliance and trust. CSRD encourages ethical and responsible practices across ESG metrics, and data protection can be identified as a component of ESG. Companies must ensure that their ESG data processing practices respect the human right to privacy, as recognised in GDPR, the European Convention on Human Rights and other data regulations. The CSRD primarily focuses on the reporting requirements. To understand the specific data protection obligations, referring to the relevant data protection regulations applicable to the company and its data processing activities is crucial.
Some ways the CSRD connects with Data Protection
i. Personal Data Considerations: To comply with CSRD, companies must report on various social metrics, including workforce diversity, employee well-being, and human rights performance. These often require collecting and processing data such as gender, age, or health information, which triggers data protection regulation considerations. When reporting on social issues, companies must be cautious not to disclose personal data that could identify individuals without their consent. This is particularly relevant when discussing sensitive topics like gender pay gaps or employee demographics.[27]
ii. Disclosure and Risk Management: The CSRD emphasises the need for companies to disclose their risk management strategies related to sustainability matters. Gathering this data could involve processing personal data, which would necessitate adhering to data protection principles such as the legal basis for processing, data minimisation, and data security because of the risks associated with personal data processing. This necessitates robust DPIA to ensure that ESG reporting practices, especially those involving third parties or global operations, do not expose the company to privacy violations. Companies must assess and report on how they manage these risks and ensure that their sustainability reporting does not compromise the privacy of individuals.[28]
iii. Proportionality and Relevance: The CSRD encourages that data reported should meet the users’ needs without placing a disproportionate burden on the reporting undertakings[29]. The CSRD acknowledges the need for proportionality in data collection and reporting, particularly for small and medium-sized enterprises (SMEs).[30] CSRD aims to balance the demand for comprehensive sustainability information with the capacity of companies to provide it, especially those in complex global supply chains. This aligns with data protection laws, which advocate for collecting and processing data only as much as is required for the intended use.
iv. Data Reliability and Avoiding Greenwashing: The CSRD stresses the necessity for reliable[31] and accurate sustainability reporting to avoid “greenwashing” and misleading stakeholders about a company’s sustainability performance[32]. This emphasises an ethical responsibility to guarantee the quality and integrity of the data collected and processed for sustainability reporting. The push for assurance opinions from statutory auditors or independent assurance providers on sustainability reports further emphasises this commitment to data reliability.[33]
v. Governance and Third-Party Transfer: The CSRD applies to companies in multiple jurisdictions, often requiring cross-border data transfers. Businesses must ensure that any data shared with third parties aligns with applicable data protection regulations, especially regarding handling personal data, as the expanding market for sustainability information typically involves third-party data providers who gather and analyse data from multiple sources.[34]
4. CONCLUSION
Companies can integrate data security to control the dangers associated with data violations and compliance to manage ethical risks to certify that their data processing operations contribute to the overall sustainability goals of the organisation. The challenge of connecting ESG to data protection lies in balancing the need for comprehensive data collection, processing, transfer, management, and reporting with the legal obligations under data protection laws, which mandate data minimisation, consent, and processing of personal information in a lawful manner, etc. Consequently, recognising privacy principles and legal obligations of processing as an ESG approach can offer practical guidance on how to link sustainability and data protection. Furthermore, the convergence of data protection and ESG is a strategic imperative, as this connection enables data protection and ESG to rely on each other for high standards and ethical corporate practices. As global ESG standards increasingly recognise the importance of data protection compliance, it is crucial for Nigerian and foreign companies operating in Nigeria to ensure they meet their legal obligations and global investor expectations regarding data protection and ESG. As a result of regular digital transformation, companies should communicate openly with stakeholders about their data protection practices, as the alignment of ESG and data protection will become increasingly critical, to ensure that companies create long-term value for shareholders by connecting data responsibility with corporate responsibility.
Ngozi Chinwa Ole, Lilian Adat and Anastasia Edward Alliance Law Firm
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DATA PROTECTION AND CYBERCRIMES ARTICLES
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UNITED ARAB EMIRATES |
Legal Consequences Under the UAE’s Cybercrimes Law
Introduction:
A nation’s reputation is crucial, and the UAE has implemented strong legislation to address these issues under the Federal Law No. (34) of 2021 (cybercrimes law). These laws specifically target online activities concerning rumors.
What are the most serious online crimes in the UAE?
The most significant online crimes in the UAE are hacking government websites, damaging government computer networks, infringing on government data, fabricating emails, websites, and digital accounts, and illegally monitoring and disseminating data.
Cyberattacks on government institutions
Article 3 of the cybercrimes law stipulates that anyone who hacks a government website, electronic information system, information network, or technology method that belongs to the government may be sentenced to imprisonment and to pay a fine of not less than AED 200,000 and not more than AED 500,000. Additionally, the same article says that if the hacking causes harm, destruction, or disruption to a website, electronic information system, information network, or technology method, or if it involves removing, deleting, damaging, changing, publishing, or violating the privacy of any data or information, or if the crime happens because of a cyberattack, the punishment will be at least five years in prison and a fine of at least AED 250,000 and up to AED 1,500,000.
Article 5 stipulates that anyone who intentionally damages, destroys, suspends, or disrupts a state institution or critical facility website, electronic information system, information network, or information technology method may face imprisonment and a fine of at least AED 500,000 and no more than AED 3,000,000. A cyberattack will be considered an aggravating circumstance if it leads to the crime.
Article 7 of the cybercrimes law outlines penalties for breaching government data and information. Those who obtain, acquire, modify, damage, disclose, leak, cancel, delete, copy, publish, or republish confidential government data without authorization may face a seven-year imprisonment and a fine of AED 500,000 to AED 3,000,000. If these actions harm the state or compromise the confidentiality of electronic systems and software in military and security facilities, then they may face a ten-year sentence.
According to Article 25 of the cybercrime law, anyone who publishes information, news, data, visual images, visual materials, or rumors on a website or any information network or technological means to ridicule or harm the reputation, prestige, or status of the country, its authorities or institutions, or founding leaders, flag or currency, national anthem, slogan, or hymn, or any national figure shall be sentenced to five years in prison and a fine not exceeding Dh500,000.
Conclusion:
Under the UAE’s cybercrimes law, actions that affect the safety and security of people or institutions can result in legal consequences such as jail time and substantial penalties.
Dr. Hassan Elhais Hassan Elhais
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ENERGY ARTICLES
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FINANCE ARTICLES
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NIGERIA |
A general introduction to Banking Regulation in Nigeria
Introduction
The Nigerian banking sector plays a key role in the growth of the country and is therefore one of the most heavily regulated sectors in Nigeria. As the primary regulator of the banking sector, the Central Bank of Nigeria (CBN) develops and implements policies to ensure that the banking sector remains viable and drives efficiency in economic activities. As at March 2025, there are 26 commercial banks in the country.1 In 2024, the CBN implemented significant regulatory changes aimed at strengthening the financial system. One of the most impactful developments was the announcement of new minimum capital requirements for commercial, merchant, and non-interest banks through a circular issued on 28 March 2024. Under the new regime, the minimum paid-up share capital for different categories of banks was increased across board and banks were given until 31 March 2026 to comply, by exploring options such as fresh equity injections, mergers and acquisitions, and licence adjustments. This policy measure is the first regulatory-induced recapitalisation since 2005 and will remain the highlight of the Nigerian banking sector for the next 12 months leading up to the deadline. The highlights of the mandated recapitalisation are further discussed under the header ‘Year in Review’.
Monetary policy saw a series of aggressive interventions by the CBN’s Monetary Policy Committee (MPC) in 2024. The CBN also released, among others, the Reviewed Guidelines on International Money Transfer Services in Nigeria on 31 January 2024 (the Revised IMTO Guidelines), revising the regulatory framework for International Money Transfer Operators (IMTOs); the Revised Guidelines for Blacklisting for Banks and Other Financial Institutions (OFIs) in Nigeria (the Blacklisting Guidelines); and the Revised Regulatory and Supervisory Guidelines for Bureau De Change (BDC) Operations in Nigeria 2024 (the Revised BDC Guidelines) aimed at curbing illicit currency flows and enhancing transparency in the foreign exchange market. The highlights of these are further discussed under the header ‘Year in Review’.
Abasi-Akara Edet, Amanze Izundu, Mayowa Olagbaiye, Nelson Iheanacho and Seun Mosuro Banwo & Ighodalo
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UNITED STATES OF AMERICA |
Long-awaited DOJ guidance on white collar enforcement priorities and policies: Key takeaways
In his remarks at the Securities Industry and Financial Markets Association (SIFMA) Anti-Money Laundering and Financial Crimes Conference on May 12, 2025, the Head of the US Department of Justice (DOJ)’s Criminal Division, Matthew Galeotti, announced the following:
This guidance follows a number of Executive Orders (EOs) and other memoranda from the DOJ, including (1) the February 10, 2025 EO pausing enforcement of the Foreign Corrupt Practices Act (FCPA) for 180 days, pending the release of new guidelines; and (2) Attorney General Pam Bondi’s February 5, 2025 memo directing DOJ resources to the Total Elimination of Cartels and Transnational Criminal Organizations (TCOs), among other guidance.
The DOJ also has undergone many structural and policy changes, as have a number of other federal enforcement authorities, leaving many open questions as to the path of future criminal and regulatory enforcement under the Trump Administration.
These announcements from the Criminal Division, with over 1100 prosecutors and staff including the largest collection of DOJ white collar enforcement attorneys, answer many of these questions by providing some clarity on the Administration’s policies and priorities for criminal white collar enforcement, and will likely set the model for the US Attorneys’ offices around the country.
The guidance in these releases generally align with the Administration’s prior pronouncements and priorities, including President Donald Trump’s “America First” agenda focusing on the interests of US businesses, holding individuals accountable for wrongdoing, and renewed incentives for companies to self-disclose potential criminal conduct to help the “Department devote its resources to investigating and prosecuting individual wrongdoers and the most egregious criminal scheme[s].”
The White Collar Enforcement Plan, which outlines the DOJ’s criminal enforcement priorities under President Trump’s second Administration, is guided by three tenets: focus, fairness, and efficiency. According to remarks by Galeotti, these tenets will “will focus the Criminal Division’s efforts on the most egregious white-collar crime to make our nation safer and more prosperous, vindicate victims’ rights, maximize the use of the Department’s resources, and provide fairness and transparency to individuals and companies alike.”
Focus: DOJ Criminal Division will prioritize investigating and prosecuting corporate crime in ten “high-impact areas.”
Under the White Collar Enforcement Plan, the DOJ Criminal Division will focus on “key threats to America,” including fraud perpetrated against US citizens as individuals, as taxpayers, and as recipients of government services; dishonest actors who take advantage of government and enrich themselves through waste, fraud, and abuse; and criminals who exploit the US monetary and financial system.
To this end, the Plan outlines ten “high-impact areas” the DOJ will prioritize for investigating and prosecuting white collar crimes:
1. Waste, fraud, and abuse, including healthcare fraud and federal program and procurement fraud 2. Trade and customs fraud, including tariff evasion 3. Fraud perpetrated through variable interest entities (VIEs), including, but not limited to, offering fraud, “ramp and dumps,” elder fraud, securities fraud, and other market manipulation schemes 4. Fraud that victimizes US investors, individuals, and markets including, but not limited to, Ponzi schemes, investment fraud, elder fraud, servicemember fraud, and fraud that threatens the health and safety of consumers 5. Conduct that threatens the country’s national security, including threats to the US financial system by gatekeepers, such as financial institutions and their insiders that commit sanctions violations or enable transactions by cartels, TCOs, hostile nation-states, and/or foreign terrorist organisations (FTOs) 6. Material support by corporations to FTOs, including recently designated cartels and TCOs 7. Complex money laundering 8. Violations of the Controlled Substances Act and the Federal Food, Drug, and Cosmetic Act (FDCA), including activities related to fentanyl production and unlawful distribution of opioids by medical professionals and companies 9. Bribery and associated money laundering that impact US national interests, undermine US national security, harm the competitiveness of US businesses, and enrich foreign corrupt officials; and 10. Digital asset-related crimes, including ones that (1) victimize investors and consumers; (2) use digital assets in furtherance of other criminal conduct; and (3) involve willful violations that facilitate significant criminal activity.
The Plan also instructs prosecutors to “prioritize efforts to identify and seize assets” related to criminal offenses to compensate victims, with focus on forfeiture actions related to conduct involving senior-level personnel or other culpable actors, demonstrable loss, and efforts to obstruct justice.
To align forfeiture proceedings with the DOJ’s high-impact areas for criminal enforcement, the DOJ has also revised the Criminal Division’s Corporate Whistleblower Awards Pilot Program (the Whistleblower Program) to add the following additional “Subject Areas” to Section II.3, which sets forth specific subject matter areas that a tip must pertain to in order to qualify for a whistleblower award:
1. Violations by corporations related to cartels or TCOs, including money laundering, narcotics, the Controlled Substances Act, and other violations 2. Violations by corporations of federal immigration law 3. Violations by corporations involving material support of terrorism 4. Corporate sanctions offenses 5. Trade, tariff, and customs fraud by corporations 6. Corporate procurement fraud
The prior version of the Whistleblower Program limited awards to information related to violations by financial institutions; violations under bribery, corruption, and money laundering statutes; and violations related to federal healthcare-related offenses and crimes. Language for some of these “subject matter areas” was simplified, and the additional areas above were added. Otherwise, the Whistleblower Program remains largely unchanged and remains an important area for companies considering their enforcement risk and the effectiveness of their compliance programs.
Takeaways
Fairness: The DOJ Criminal Division’s amended Corporate Enforcement Policy aims to provide more transparency and enhanced incentives to companies that self-disclose and cooperate.
Although the White Collar Enforcement Plan establishes that the DOJ’s “first priority is to prosecute individual criminals” and “investigate these individual wrongdoers relentlessly to hold them accountable,” it also emphasizes that it is “critical to American prosperity to promote policies that acknowledge law-abiding companies and companies that are willing to learn from their mistakes and provide those companies with transparency from the Department.”
To this effect, the DOJ has revised its Corporate Enforcement and Voluntary Disclosure Policy (the CEP) to be as “transparent as we can to companies and their counsel about what to expect.”
The CEP’s revisions could realign the incentive structure in ways that could impact a company’s analysis, potentially making it more likely that companies, including those presented with aggravating factors, will decide to make a voluntary self-disclosure.
The most significant change is the revised CEP’s use of more streamlined language and a new Appendix A to visualize three clear paths to potential resolutions of corporate criminal misconduct: the declination path, the non-prosecution agreement (NPA) path, and a third path capturing other resolutions requiring prosecutorial discretion.
These three paths provide for clear routes to resolution that companies can expect to achieve so long as the requirements for each are satisfied. These formalized paths contrast to the prior CEP, which merely set forth “presumptions” of declinations or non-prosecutions if the same elements were met.
Although these paths appear aimed at removing uncertainty associated with perceived prosecutorial discretion, Criminal Division prosecutors are expected to conduct a case-by-case analysis and can wield discretion to determine the appropriate path, penalty, and term based upon the particular circumstances of the case.
1. The company voluntarily self-disclosed the misconduct to the Criminal Division 2. The company fully cooperated with the Criminal Division’s investigation 3. The company timely and appropriately remediated the misconduct, and 4. There are no aggravating circumstances related to the nature and seriousness of the offense, egregiousness or pervasiveness of the misconduct within the company, severity of harm caused by the misconduct, or criminal adjudication or resolution within the last five years based on similar misconduct by the entity engaged in the current misconduct.
In addition to that path that provides greater certainty, companies that voluntary self-disclose, cooperate, and remediate – but have potentially aggravating circumstances – may still be eligible for a declination “based on weighing the severity of those aggravating circumstances and the company’s cooperation and remediation.” The primary change under these circumstances is the elimination of the requirement for companies to pay disgorgement or forfeiture relating to the misconduct at issue, which could be a significant factor in cases with large economic gains.
1. Fully cooperated 2. Timely and appropriately remediated, and 3. There are no other particularly egregious or multiple aggravating circumstances.
The CEP provides that, if these circumstances are met, the NPA term should be fewer than three years, should not require an independent compliance monitor, and applicable fines should reflect a 75-percent reduction off the low end of the US Sentencing Guidelines (USSG) fine range. These parameters are not significantly different from the previous CEP effective under the Biden Administration’s DOJ, although they formalize this “middle ground” for an NPA if a company does not fully satisfy the requirements for a declination and establishes clear boundaries for reduced NPA term lengths, compliance obligations, and penalty reductions.
Consistent with the prior DOJ guidance in the earlier versions of the CEP, corporate resolutions must take into account the severity of the misconduct, the company’s degree of cooperation and remediation, and the effectiveness of the company’s compliance program at both the time of the misconduct and the time of resolution. For all of the above paths, Criminal Division prosecutors must still conduct individualized assessments to determine the appropriate disposition in any given matter. As part of those individualized assessments, the CEP’s definitions and requirements for “voluntary self-disclosures,” “full cooperation,” and “timely and appropriate remediation” remain largely unchanged. The revised CEP modifies the definition of a “voluntary self-disclosure” somewhat by eliminating the broad requirement for companies to disclose “all relevant, non-privileged facts known” to qualify for a voluntary self-disclosure, but incorporates that requirement instead into determining whether a company has fully cooperated.
In the near term, the Criminal Division is reviewing the length and term of all existing corporate resolutions “to determine if they should be terminated early,” consistent with the revised CEP. A number of agreements have already been terminated early, with factors including duration of the post-resolution period, substantial reductions in the company’s risk profile, extent of remediation, maturity of the corporate compliance program, and whether the company self-reported the misconduct.
Takeaways
Efficiency: DOJ Criminal Division commits to streamlining corporate investigations.
In its White Collar Enforcement Plan, the DOJ highlights the significant costs and disruption federal investigations cause for businesses, investors, and stakeholders, “many of whom have no knowledge of, or involvement in, the misconduct at issue.” This includes reputational harm that “may at times be unwarranted.” To address this concern, the Criminal Division is adopting two key policy changes: 1. “Prosecutors must take all reasonable steps to minimize the length and collateral impact of their investigations, and to ensure that bad actors are brought to justice swiftly and resources are marshaled efficiently,” while still recognizing that the criminal schemes it investigates are “complex and often cross borders” and may require significant time to complete. 2. “Independent compliance monitors must only be imposed when they are necessary” and “must be narrowly tailored to achieve the necessary goals while minimizing expense, burden, and interference with the business.”
The newly issued Memorandum on Selection of Monitors in Criminal Division Matters details the factors that prosecutors must consider when deciding if a monitor is appropriate and steps to ensure a properly tailored scope of the monitor’s “mandate.” Factors that must be considered before imposing a monitor include:
To ensure a monitorship is “appropriately tailored and focused,” the monitorship is required to be proportionate to the conduct and the size and risk profile of the company; there must be at least biannual tri-partite meetings between the company, monitor, and government; and the monitorship “should be a collaborative endeavor” involving “ongoing and open dialogue” between the DOJ, the monitor, and the company. This does not appear to significantly depart from more recent monitorship practices, but it could help discourage more adversarial monitorship relationships.
The DOJ is currently reviewing all existing monitorships in an effort to, according to Galeotti, “narrow their scope or, where appropriate, terminate a monitorship altogether, based on a totality of the circumstances review.” To date, this review has resulted in at least several early terminations that have been announced publicly.
Takeaways
Conclusion
DOJ’s Criminal Division’s newly announced White Collar Enforcement Plan and related polices and guidance reinforce the second Trump Administration’s focus on “America First” economic principles and a reformulated enforcement strategy that aligns with the new policy agenda.
Given the variety of new ways that historical laws may be enforced, companies (especially non-US companies) are encouraged to map out how their business operations overlap with these new enforcement risks and whether their compliance programs and internal controls can effectively manage this new world of white collar enforcement.
DLA Piper will be diving into further details on many of these key areas in the weeks to come and analyzing how these new DOJ policies may impact companies’ compliance priorities, investigative strategies, and posture with enforcement agencies (in the US and around the world).
Eric Paul Christofferson, Nathaniel Edmonds, Aurelie Ercoli, Christian Ford, Jonathan W. Haray, Katrina A. Hausfeld, David Stier, Brian H. Benjet, Karl H. Buch, Lindsey Dieselman, John M. Hillebrecht, Matt Hiller, Jonathan D. King, Courtney Gilligan Saleski, Jeffrey Tsai, Brian Wilmot, Jeffrey Scott and Carlton E. Wessel DLA Piper
Think Compliance Got Easier? Think Again—DOJ’s New Era in White-Collar Enforcement (Part 2)
As discussed in our May 15th post, Matthew R. Galeotti, the Head of the Department of Justice’s (“Department”) Criminal Division, issued a memorandum on May 12th that highlights the core tenets of the Department’s enforcement of corporate and white-collar matters under the Trump Administration—focus, fairness, and efficiency. Whereas our first post discussed the focus tenet, this second post in our series delves into the Department’s “fairness” tenet. Under the fairness prong, Galeotti underscores that “justice demands the equal and fair application of criminal laws to individuals and corporations who commit crimes.”
For several years, the Department has expressed an emphasis on individual liability. The Galeotti Memorandum explains that a central component of fairness is to “prosecute individual criminals,” focusing on executives, officers, and employees who are directly responsible for wrongdoing. Galeotti further notes that the majority of American businesses are legitimate, and that enforcement overreach can “punish risk-taking and hinder innovation.”
The Galeotti Memorandum cautions that “not all corporate misconduct warrants federal criminal prosecution.” Instead, civil and administrative remedies are often satisfactory for low-level misconduct. Also, Galeotti instructs prosecutors to ensure their charging decisions take into consideration factors such as whether companies self-report misconduct, cooperate with prosecutors, and engage in remediation.
Transparency is another cornerstone of the fairness directive. The Department is committed to making the terms of corporate resolutions—paths to declination, fine reductions, and relevant factors for resolution—”more easily understandable.” As explained by our colleagues last week, the revised Corporate Enforcement and Voluntary Self-Disclosure Policy contemplates benefits for companies that self-disclose, including potentially shorter oversight terms and early termination of agreements.
In addition, the Department is actively reviewing existing agreements between companies and the Department to determine if early termination is warranted. This determination will be based on factors such as:
For companies that have cooperated with the government and remediated the misconduct at issue, the Galeotti Memorandum states that the terms for corporate resolutions will not exceed three years except in rare circumstances. These resolutions will also be regularly reassessed to ensure they remain appropriate.
We will delve into the final prong of the Galeotti Memorandum—efficiency—in our next post.
Ryan Meyer, Johnjerica Hodge and Taylor M. Stilwell Katten Muchin Rosenman LLP
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FOODSTUFFS ARTICLES
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UNITED STATES OF AMERICA |
Food and Beverage News and Trends – May 16, 2025
This regular publication by DLA Piper lawyers focuses on helping clients navigate the ever-changing business, legal, and regulatory landscape.
FDA approves three color additives derived from natural sources. In order to “expand the palette of available colors from natural sources for manufacturers to safely use in food,” the FDA announced on May 9 that it has approved three new color additives derived from natural sources. They are (1) butterfly pea flower extract, which can be used to create lively blues, purples, and greens – this coloring already has been used for some time in some beverages and sweets, and is newly approved for use in an array of crackers, pretzels, chips, and ready-to-eat cereals; (2) Galdieria extract blue, derived from the red microalgae Galdieria sulphuraria and described as an acid-stable intense blue, for use in foods and beverages; and (3) the mineral compound calcium phosphate, approved as a white coloring for use in candies, donuts, and ready-to-eat chicken products. As we reported earlier this month, Health and Human Services (HHS) Secretary Robert F. Kennedy, Jr. intends “to phase out all petroleum-based synthetic dyes from the nation’s food supply,” eliminating the last eight approved synthetic food dyes from US manufacturing.
Should nutritional requirements for infant formula be revised? New RFI from FDA. FDA has issued a Request for Information (RFI) as it seeks to determine if the nutritional requirements for infant formula should be revised. The most recent comprehensive assessment of such nutritional requirements took place in 1998. Among the questions the agency is raising, it is asking what new scientific data should be considered regarding nutrient requirements for healthy, full-term infants that are associated with positive short- and/or long-term health outcomes; which nutrients already required by 21 CFR 107.100 should be reviewed; and what other nutrients should be added to, or removed from, 21 CFR 107.100. The RFI is part of Operation Stork Speed, an initiative launched in March this year to expand options for safe, reliable, and nutritious infant formula sold in the US. Comments to the RFI are due by September 11, 2025.
Canada unveils tariff relief for food and beverage sector amid US trade dispute. The Department of Finance Canada has announced a temporary six-month remission of tariffs on US-origin goods used in Canadian food and beverage packaging and processing. The measure, part of a broader response to escalating US trade actions, is intended to provide short-term cost relief while businesses adjust their supply chains. The government also confirmed the launch of the Large Enterprise Tariff Loan Facility, offering liquidity to large firms – including those critical to national food security – that are facing hardship in accessing traditional marketing financing. Eligibility is contingent on maintaining domestic operations and pre-dispute viability. “We’re giving Canadian companies more time to adjust their supply chains and become less dependent on US suppliers,” said Finance Minister François-Philippe Champagne.
Ontario and Manitoba pledge to reach a deal on direct-to consumer alcohol sales. The Premiers of Ontario and Manitoba signed a memorandum of understanding (MOU) on trade on May 14, 2025 stating that a bilateral agreement will be reached by June 30 on the subject of direct-to consumer alcohol sales. This is part of efforts to liberalize alcohol sales between most provinces of Canada – efforts triggered by the tariffs imposed on Canadian goods by the US Administration.
Kennedy says coming Dietary Guidelines for Americans will address school meals. During a recent Cabinet meeting, Secretary Kennedy stated that the Trump Administration is expediting its ongoing efforts to overhaul the country’s official nutrition advice, in part so that major changes can be made to the federal school meals programs. Kennedy noted that HHS and the USDA, which jointly issue the Dietary Guidelines for Americans every five years, have until December 2025 to get the 2025 edition out. “But we are working very very fast together, we’re going to get it done by the end of the summer in time to drive major, dramatic changes in the school food, the school lunch programs over the next school year,” Kennedy said during the meeting. He also said that 70 percent of the food served in school meals is ultra-processed food.
DOJ says USDA’s purged climate and farm support pages will be restored. On May 12, the Department of Justice told the US District Court for the Southern District of New York that the numerous climate, conservation, and agricultural support resources that were removed from its website on January 31 this year will be restored. The return of the purged pages is the result of a lawsuit filed in the SDNY in February by a coalition of agricultural and environmental advocacy groups. In a letter to the court, the DOJ stated that the purged USDA content – a vast swathe of materials about conservation practices, rural clean energy, climate-smart farming, and access to federal loans – would be fully restored in about two weeks. The DOJ also said that, going forward, “USDA commits to complying” with such federal laws as the Freedom of Information Act and “the adequate-notice and equitable-access provisions of the Paperwork Reduction Act.” See our earlier coverage of this story here.
FDA to expand surprise inspections of foreign facilities. Every year, the FDA carries out an estimated 3,000 inspections, in more than 90 countries, of foreign manufacturing facilities that produce foods, medicines, and medical products for American consumers. This is in addition to the agency’s more than 12,000 annual inspections of domestic food and drug manufacturing sites. However, while inspections carried out in the US are often unannounced, foreign facilities are given advanced warning of a coming inspection, typically weeks ahead. On May 6, the FDA announced that it will expand the use of unannounced inspections at such foreign manufacturing facilities. FDA Commissioner Martin A. Makary, MD, stated, “For too long, foreign companies have enjoyed a double standard – given advanced notice before facility inspections, while American manufacturers are held to rigorous standards with no such warning. That ends today. This is a key step for the FDA as part of a broader strategy to get foreign inspections back on track.” An agency press release noted that, even when foreign manufacturing facilities receive early warning of a coming inspection, FDA inspectors still find “serious deficiencies more than twice as often” as in US inspections. The expanded use of unannounced inspections is part of a larger evaluation of the foreign inspection program, which, the press release states, will also aim to clarify “policies for FDA investigators to refuse travel accommodations from regulated industry.”
USDA accepts 15,000 resignations but now says it needs to staff up. On May 4, Politico reported that at least 15,000 employees of the USDA have accepted the Trump Administration’s offers to resign. An official USDA readout prepared for Agriculture Secretary Brooke Rollins’ recent congressional testimony noted that 555 employees at the department’s Food Safety and Inspection Service accepted the offer to resign. Rollins said in her testimony May 6 and 7, however, that the department is now looking to fill positions “that are integral to the efforts and the key frontlines.”
FDA reverses dismissal of food-safety staffers. Federal health officials have reportedly reversed the decision to fire a few dozen scientists at the FDA’s food-safety labs and said that they are conducting a review to determine whether other critical posts were cut. A spokesman for HHS said that these employees had been inadvertently fired because of inaccurate job classification codes. In the last few months, roughly 3,500 jobs at the FDA, or about 20 percent of its work force, have been eliminated, representing one of the largest workforce reductions among all the government agencies targeted by the Trump Administration. Later in the month, more than 20 of the agency’s travel staff, who handle travel bookings for safety inspectors, were also said to be reinstated.
FDA extends comment period on Nutrition Info FOP label. The comment period for the proposed FDA rule Food Labeling: Front-of-Package Nutrition Information is being extended by 60 days. The proposed rule, first announced on January 15, 2025, would require most packaged foods to bear a simple, prominent front-of-package (FOP) nutrition label – which the agency has dubbed the Nutrition Info box – that sets out the saturated fat, sodium, and added sugar content of a food and says whether that content is “Low,” “Med,” or “High.” Manufacturers would also have the option of listing calorie content in the box. The Nutrition Info box would be in addition to the extant Nutrition Facts label that is already required for most US packaged foods. Comments on the proposed rule are now due by July 15, 2025.
Nutrition Regulatory Science Program announced. On May 9, the FDA and National Institutes of Health announced the Nutrition Regulatory Science Program, a joint research initiative created, according to an NIH press release, to address the diet-related chronic diseases crisis and “provide critical information to inform effective food and nutrition policy actions to help make Americans’ food and diets healthier.” Through the initiative, the agencies stated, FDA and NIH will work together on “a comprehensive nutrition research agenda” studying such concerns as the effects on human health of ultra-processed foods and food additives. According to FDA Commissioner Martin A. Makary, MD, the model for the initiative was “the highly successful FDA and NIH Tobacco Regulatory Science Program.” The Nutrition Regulatory Science Program, he continued, will allow the agencies to focus “on the greatest contributors to the staggering health care crisis: chronic diseases.” NIH Director Jay Bhattacharya, MD, PhD, stated, “By teaming up with the FDA, we’re taking a major step toward answering big questions about how food affects health – and turning that science into smarter, more effective policy.”
Latest CORE report on foodborne outbreaks in the US. On May 5, the FDA’s Coordinated Outbreak Response & Evaluation (CORE) Network released its CORE 2023 Annual Report: Investigations of Foodborne Outbreaks and Adverse Events in FDA-Regulated Foods. In 2023, the report states, the CORE Signals and Surveillance Team evaluated 69 incidents – potential outbreaks, confirmed outbreaks, and adverse events – initiating 25 responses to outbreaks that appeared to be caused by an FDA-regulated human food. Ultimately, as a result of these investigations, in 2023 FDA issued 10 public health advisories notifying the public of multistate outbreaks of foodborne illnesses or adverse events. The report also provides more detail about individual FDA regulatory and enforcement actions arising from CORE’s investigations and looks at trends in foodborne outbreaks that emerged in 2023. See the report here.
California bill would require testing prenatal vitamins for toxic metals. California’s SB 646 has moved out of the Senate Environmental Quality Committee. The measure would require manufacturers of prenatal vitamins to test representative lots of their products for the presence of arsenic, cadmium, lead, and mercury, and to publicly disclose the test results on the company website. Vitamin package labels would also need to carry a QR code linking both to those results and to an FDA web page “where consumers can find the most recent FDA guidance and information about the health effects of the toxic elements on fetuses, infants, children, and individuals who are pregnant, planning to become pregnant, or breastfeeding,” along with this notice: “For information about toxic element testing on this product, scan the QR code.” The bill would also ban the sale in California of prenatal vitamins that do not comply with its requirements. Should SB 646 become law, California would be the first state in the nation to mandate testing of prenatal vitamins for toxic metals and to require disclosing the test results.
Oklahoma legislature approves bill for labeling of plant-based proteins. On May 1, the Oklahoma state Senate passed a bill that would require food manufacturers to label products that come from plants or insect proteins as such rather than identifying them as “meat.” The bill, which earlier in this legislative session passed the state House, moves to the governor’s desk following a 40-7 vote. “People should know where their food comes from,” said a chief Senate sponsor. “If it comes from insect proteins, plant products, a Petri dish, no matter where it comes from, this legislation would make sure it’s labeled correctly so people will know what they are consuming. We have to maintain a safe food supply.” Under the bill, the burden of proof of a food’s contents would be upon the manufacturer, not the retailer. Any violation of the law would constitute a misdemeanor.
Daly v. The Wonderful Company LLC: Key considerations for consumer product contaminant litigation. The US District Court for the Northern District of Illinois has issued a significant decision in a putative class action alleging that Fiji Water’s “Natural Artesian Water” labeling was deceptive due to purported microplastic contamination. This ruling provides important considerations for companies facing similar claims, particularly in the context of microplastics and nanoplastics. See our alert.
Court challenge to Florida law against cultivated meat survives. The US District Court for the Northern District of Florida is keeping alive a lawsuit against the state’s first-in-the-nation ban on lab-grown meat. The suit, brought by Upside Foods, a cultivated meat company, and the Institute for Justice, argued in part that the law violates the Constitution’s Commerce Clause by shielding in-state producers of conventional meat from competition from out-of-state producers of cultivated meat. While the court dismissed other arguments brought by the plaintiffs, that part of the challenge survives. Uma Valeti, Upside’s CEO, stated, “Upside is not looking to replace conventional meat, which will always have a place at the table. All we are asking for is the right to compete.” In June 2023, Upside Foods received regulatory approval from the USDA for the label it plans to use for its cell-cultivated chicken.
Study points to possible link between ultra-processed foods and Parkinson’s. On May 7, a new study in the journal Neurology said that consuming ultra-processed foods like breakfast cereals, soft drinks, hot dogs, and ketchup appears to increase a person’s risk of developing Parkinson’s disease. The researchers reported that people who ate about 11 servings of ultra-processed foods per day had a 250 percent greater risk of developing three or more early symptoms of Parkinson’s than those who ate the least amount, researchers reported in the scientific journal. The article concluded that more studies are warranted to confirm whether lowering the consumption of ultra-processed foods may prevent the occurrence of certain symptoms that often precede a diagnosis of Parkinson’s disease. The study was conducted by researchers at the Fudan University Institute of Nutrition in Shanghai.
Avian flu update.
Stefanie Jill Fogel, Maggie Craig, Sharon Lindan Mayl and Amy Pressman DLA Piper
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LABOUR ARTICLES
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SOUTH AFRICA |
All eyes on the Pretoria High Court: The DA’s challenge to Employment Equity Act amendments heads to court
On 14 June 2023, the Democratic Alliance (“DA”) launched an application in the Pretoria High Court, challenging some of the most recent amendments to the Employment Equity Act 55 of 1998 (“EEA”), as unconstitutional and invalid.
A key amendment to the EEA was the introduction of section 15A dealing with the determination of sectoral numerical targets. This amendment empowers the Minister of Employment and Labour to identify national economic sectors and, with the advice of the Commission for Employment Equity, set numerical targets to be reached by designated employers in those sectors.
The introduction of the Minister’s power to set numerical targets per sector occasioned ancillary amendments to the EEA, namely:
The aim of the DA’s application is to have sections 15A, 20(2A), 42(1)(aA), 53(6)(a) and 53(6)(b) of the EEA, described above, declared unconstitutional and invalid. One of the grounds for this claim is that it amounts to the power to set quotas, which is contrary to what is allowed for and envisaged by the EEA and section 9 of the Constitution, since the application of quotas in practice may give rise to unfair discrimination.
The application leaves the balance of the EEA amendments untouched. Neither the new definitions of “designated employers” or “people with disabilities”, nor the further additions or deletions to the provisions of the EEA, are being challenged. These amendments will stand, should the DA’s application be successful.
The Minister of Employment and Labour, the Commission for Employment Equity, the Speaker of the National Assembly, and the Chairperson of the National Council of Provinces, are opposing the application.
On 6 May 2025, the application was heard in the Pretoria High Court.
What are the potential outcomes?
If the application is successful, it will have to go to the Constitutional Court for confirmation of the unconstitutionality and invalidity of the amendments related to the introduction of sectoral numerical targets.
If the DA does not succeed in the High Court, it may elect to pursue an appeal before the Supreme Court of Appeal, or appeal directly to the Constitutional Court. Either way, we expect this matter is far from over.
Hugo Pienaar, Asma Cachalia, Alex van Greuning, employment law associates at Thomson Wilks Attorneys.
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INSURANCE ARTICLES
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INTELLECTUAL PROPERTY ARTICLES
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NIGERIA |
Copyright in the age of artificial intelligence (AI): legal implications and emerging issues
1.0 Introduction:
The advent of artificial intelligence (AI) is transforming various fields, thereby bringing new dimensions to the classic legal concept of copyright. The intersection of AI and copyright has become a contentious area, raising questions about authorship and ownership of digital work. This article examines the legal implications and emerging issues surrounding copyright in the age of artificial intelligence.
2.0 Understanding Copyright in the Traditional Context
2.1 What Is Copyright?
Copyright is a legally established right granted to a creator of literary work, music, drama, art, cinematography, and in general, all works of creative minds,[1] except works retained in government agencies.[2] In Nigeria, creators’ rights are protected under the Nigerian Copyright Act, 2022, which grants rights of reproduction, distribution and public display to copyrighted works.[3] Under the Act, a work qualifies for protection if it is original, and fixed in a tangible form of expression.[4] This allows Nigerian creators to benefit from their intellectual property and safeguard their works from exploitation.
2.2 Human Authorship Requirement
Traditionally, copyright protects works created by human beings. The fact that computers can now generate creative works does not automatically grant them authorship or copyright protection.
In the European civil law tradition exemplified by France and Germany, copyright is seen as a manifestation of the creator’s individuality rather than a mere commercial product. Similarly, Australia firmly associates authorship with natural persons and rejects the idea of AI as an author. Despite this, advancements in technology are challenging this traditional framework. A landmark decision by the Indian Copyright Office in 2021 has further complicated the debate. For the first time, the office acknowledged an AI tool, the RAGHAV Artificial Intelligence Painting App as a co-author of a copyright-protected artistic creation.[5] This recognition suggests a potential shift towards acknowledging AI as an author in certain contexts.
In China, copyright law allows not only natural persons but also legal entities and organisations without legal personality to be recognized as authors. A legal entity can claim authorship if a work is produced within its organisation, reflects its intent, and the entity assumes responsibility for it. Since legal entities, despite being non-human, can hold copyright, this raises the possibility of AI being similarly recognized as a copyright holder in the same fashion.[6]
The Nigerian Copyright Act, 2022, like other international laws, does not address the concept of a non-human author. Instead, it is built on the foundation of originality as a product of human intellectual work. This aligns with global precedents and practice, including the U.S. Copyright Office’s stance which holds that works generated solely by AI are not copyrightable unless there is a significant human contribution in its creation.[7]
However, as Nigerian artists, writers, and musicians increasingly use AI programs to aid their creative processes, this traditional human-centric assumption becomes less straightforward. If a Nigerian artist creates a work of art using DALL·E or similar AI tools, can they be considered the sole owner of the resulting work? Under current law, the programmer or user who initiates the artistic creation and provides creative input is generally regarded as the rightful copyright owner.
3.0 AI As A Creator: The Rise of Machine-Generated Content
AI has become a driving force behind the evolution of the global creative industry, significantly impacting Nigeria’s creative landscape. A new creative environment is emerging as artists utilize AI tools to generate beats, and digital artistic experiment with platform like DALL·E[8] for their digital art projects. However, the rapid surge of AI-generated content has raised serious legal questions about authorship recognition. When AI-generated works originate from machines, what legal frameworks exist to determine ownership? This issue primarily involves three key groups: 1. The Designer– The individual who oversees the AI workflow and selects the final output. Given their authority over the end result, they could potentially claim ownership. 2. The AI firm -The entity that developed the proprietary algorithm. They may argue that their technology performed the ‘heavy lifting’, justifying their claim to the rights. 3. The Data Contributors– Artists, authors, and photographers whose works were used to train the AI. They may feel that their creations have been utilized without their consent or proper acknowledgment.[9]
In most jurisdictions, the person who uses the AI tool is considered the owner of the generated content. However, this may change as intellectual property laws evolve to pace with AI’s rapid advancement.[10] In Nigeria, copyright protection under the Nigerian Copyright Act, 2022 applies exclusively to works with human authorship, as the law does not currently recognize AI-generated works for copyright compliance. Aligning with global copyright standards and practice, the U.S Copyright Office has ruled that works lacking meaningful human involvement and participation are ineligible for copyright protection.[11] Despite this, AI systems are increasingly participating in creative activities in Nigeria. Tech startups in Lagos, for instance are developing AI-powered content generation platforms that Nigerian artists can employ to enhance their artistic production. However, uncertainty over the ownership rights in AI works may lead to disputes between human creators and AI developers. Such legal ambiguities could hinder innovation and reduce the potential earnings for artist leveraging AI tools.
4.0 The Legal Grey Area: Copyright Ownership of AI-Generated Works
The rapid rise of AI has disrupted traditional copyright frameworks, raising complex legal and ethical questions. Nigeria’s copyright laws do not explicitly address ownership of AI generated works, creating legal ambiguity for authors, developers, and technology companies. Additionally, international copyright frameworks emphasize that only human contributors who exert “independent intellectual effort” should be recognized as authors.
Legal precedents reinforce this human-centric approach. In Naruto v. Slater,[12] the U.S. courts ruled that a monkey could not hold copyright, as the law recognizes only human authorship. Similarly, in Thaler v. Perlmutter,[13] a U.S. federal court ruled that AI generated works lack legal authorship under existing copyright laws. In contrast, China’s recent rulings suggest that AI assisted works may qualify for protection if substantial human creativity is involved.[14] The European Union’s approach hinges on the “intellectual creation” standard, allowing copyright where human authors make free and creative decisions.[15] As AI reshapes creative industries, policymakers must address gaps in copyright law to balance innovation with fair protection for human creators.
AI generated content also challenges key copyright principles. Traditional copyright law requires originality, human authorship, and a fixed form of expression, yet AI produces dynamic, evolving content. Additionally, copyright protection typically extends for a period after the author’s death, a framework incompatible with AI. The concept of moral rights designed to protect an author’s personal and reputational interests also becomes unclear when the creator lacks intent or emotion.
As AI continues reshaping creative industries, these unresolved legal issues could impact innovation, ownership disputes, and the broader enforcement of intellectual property rights.
4.1 Potential Solutions and Future Developments in AI Copyright Law
As AI technology continues to evolve, Nigeria has a crucial opportunity to amend its copyright laws to balance innovation with the protection of authorial rights. Addressing current legal deficiencies require legislative reforms, public policy adjustments, and international collaboration.
Key solutions include amending the Copyright Act to explicitly define ownership rights for AI generated works, establishing co-copyright protections for human AI collaborations, and implementing blockchain based digital copyright registries to enhance transparency. Capacity building through education initiatives for artists, musicians, and legal professionals can ensure proper protection of intellectual property. Additionally, Nigeria should collaborate with international bodies like the African Regional Intellectual Property Organization (ARIPO) to align policies with global best practices and safeguard creators’ rights across borders.
5.0 Conclusion
Nigeria stands at the intersection of technology and creativity, necessitating modernized copyright statutes to reflect AI’s growing role in artistic production. Reforms must clarify AI assisted authorship, establish clear ownership structures, and introduce conflict resolution mechanisms. Organizations like WIPO and the Nigerian Copyright Commission will play pivotal roles in guiding these changes. By fostering dialogue among lawmakers, creatives, and tech innovators, Nigeria can position itself as a leader in AI driven copyright reform, ensuring that both human and machine generated creativity are fairly recognized and valued.
Blessing Ajunwo-Choko and Adizua Vianney Alliance Law Firm
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MEDICAL ARTICLES
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UNITED STATES OF AMERICA |
President Trump signs Executive Order aimed at reducing prescription drug prices
President Donald Trump signed an Executive Order (EO) titled “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients” aimed at reducing prescription drug prices for Americans by ensuring they do not pay more than the lowest prices set in other developed nations.
This approach, known as most favored nation (MFN), was a key initiative during President Trump’s first term to address “global freeloading.” The approach appears to target drug pricing and market access practices outside of the US that allow other countries to set low prices and benefit from US investment in research and development. The EO is short on details regarding how the MFN prices would be achieved for US patients.
The EO states that within 30 days, the Secretary of Health and Human Services (HHS) will communicate MFN price targets to biopharmaceutical manufacturers to align US prices with those paid in other developed nations.
To facilitate the shift to MFN pricing from biopharmaceutical companies in the US, the EO commits to establishing a pathway for companies to provide medicine direct-to-consumers (DTC) in the US at MFN prices. While it is unclear how this would be implemented, it could include regulation or effort to facilitate direct purchasing from pharmaceutical companies rather than wholesalers and insurance companies, presumably for people who don’t have access to the medicine in their insurance plan (details unclear).
The EO directs the Secretary of Commerce and the US Trade Representative to take action to ensure foreign countries are not engaged in unreasonable or discriminatory actions that jeopardize US national security or that may have “the effect of forcing Americans to pay for a disproportionate amount of global pharmaceutical research and development, including by suppressing the price of pharmaceutical products below fair market value in foreign countries.” While short on details, this could create an opportunity for the pharmaceutical industry to achieve priorities for pricing reforms in other major markets that could be elevated in multinational trade negotiations.
The specific actions the Administration may take if pharmaceutical manufacturers do not act to make significant progress towards implementing MFN pricing in the US include the following:
1) Rulemaking: The Secretary of HHS shall propose a rulemaking to impose MFN pricing.
2) Personal drug importation: The Secretary shall consider certification to US Congress that personal importation of drugs will pose no additional risk to public health and safety – and will result in significant reduction in the cost of prescription drugs to the American consumer – and the Commissioner of Food and Drugs will take action to describe circumstances under which waivers will be granted to individuals for the personal importation of prescription drugs on a case-by-case basis from developed nations.
3) Enforcement against anti-competitive practices: The Attorney General and Chairman of the Federal Trade Commission shall undertake enforcement action against anti-competitive practices identified the report issued under Section 13 of EO 14273 of April 15, 2025. Such enforcement actions may include Sections 1 and 2 of the Sherman Antitrust Act and Section 5 of the FTC Act.
4) Export actions: The Secretary of Commerce, and heads of other relevant agencies, shall consider actions regarding the export of pharmaceutical drugs or precursor material that may be fueling the global price discrimination.
5) Review unsafe or ineffective drugs: The US Food and Drug Administration (FDA) Commissioner shall review and potentially modify or revoke approvals granted for drugs that may be unsafe, ineffective, or improperly marketed.
6) Other potential actions: Heads of agencies shall take all action available to address “global freeloading” and price discrimination against American patients.
As HHS and other agencies take action to implement and execute the directives under this EO, additional details will come to light regarding its full impact. DLA Piper will be closely monitoring any communication regarding MFN drug pricing targets. It is important to note that this EO may be setting up a framework for broader trade negotiations, similar to the tariff executive actions.
The Administration has broad latitude to implement price changes under CMMI and the full scope of pharmaceuticals that may be implicated by this EO remains to be seen.
During President Trump’s first term, he initiated rulemaking in November 2020 to propose a pilot program under CMMI to link the price of drugs offered under Medicare Part B to MFN pricing. This rulemaking was challenged in the courts and ultimately not implemented under the Biden Administration.
The DTC concept is relatively new, although some biopharma companies do offer that type of a model for drugs that do not have insurance coverage. While it remains to be seen what circumstances the FDA Commissioner may identify for purposes of granting personal importation waivers, this concept could be applied in select cases where pharmaceutical manufacturers do not make pricing changes to equalize with other developed nations.
Potential reconciliation and legislative threats
Congress is focused on completing its goal of passing reconciliation legislation to ensure President Trump’s tax policy priorities become law. The US House and US Senate Committees of jurisdiction are working to review and report out legislation that does not increase the deficit and has the support of the majority in both Republican-led chambers. MFN policies have the potential to be considered as part of this legislative process; in fact, a proposal to tie the price of drugs under Medicaid to MFN prices has already been debated as part of this process.
Additionally, Senators Josh Hawley (R-MO) and Peter Welch (D-VT) introduced the Fair Prescription Drug Prices for Americans Act (S. 1587), which would lower drug costs by barring drug companies in the US from charging higher prices than the international average. It is a very broad-sweeping policy that could impact drugs in both public and commercial markets, and it would impose civil monetary penalties on pharmaceutical companies that violate this rule.
Karina Lynch, Kirsten Axelsen and Margaret Martin DLA Piper
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MINE HEALTH AND SAFETY ARTICLES
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SOUTH AFRICA |
Mine health and safety: amendments to regulations on machinery – winding equipment
On 28 March 2025, the amendments to chapter 8 of the regulations to the Mine Health and Safety Act (MHSA), dealing with machinery and equipment at mines were promulgated. These amendments repeal and replace the Minerals Act regulations dealing with winders and winding equipment. A copy of the complete gazette and new regulations can be found here.
These amendments introduce revised guidelines and requirements for the design, operation, and maintenance of winding systems, as well as for the training and competency standards of personnel involved in these operations and are an addition to the current chapter 8 of the MHSA regulations. Whilst the amendments largely reflect the provisions which were previously applicable under the Minerals Act regulations, there are some notable new inclusions. These include:
With new obligations and technical standards now in effect, the onus is on employers to review and update their safety protocols. Early implementation will be key to reducing liability and operational risk.
Kate Collier Webber Wentzel
Part 1 | Mine health and safety: amendments to rescue, first aid and emergency preparedness and response regulations
Significant changes to the regulations dealing with emergency preparedness and response have been promulgated. These require employers to review their risk assessments and the measures currently in place. Several new obligations have been introduced to strengthen employers’ ability to respond to emergencies and safeguard employees. These obligations will need to be integrated into mine safety systems and will require updates to: risk assessments; training and assessment materials; procurement and contracting practices; and statutory appointment letters, including the roles and responsibilities they define.
Some of the key changes that employers should consider and implement are summarised below. The complete revised Chapter 16 regulations can be accessed here. The revised regulations were signed by the Minister of Mineral and Petroleum Resources on 28 February 2025 and published in the Government Gazette on 28 March 2025. They are in force from the date of publication.
Reports to be prepared for the employer
Issuing and deployment of Self-Contained Self-Rescuers (SCSRs)
The revised regulations introduced two types of Self-Contained Self-Rescuers (SCSRs), portable oxygen sources that provide breathable air when activated:
Previously, different requirements applied to coal and non-coal mines. Under the new regulations, all employers are strictly required to ensure the following:
Employers must take reasonably practicable measures to ensure that each Body-Worn SCSR is allocated for the sole use of one employee for the duration of its deployment at the mine. Employees must always wear the SCSR underground or in surface areas where an irrespirable atmosphere exists. In the event of an emergency, the SCSR must be used to escape to a refuge bay or a place of safety. Defective, obsolete, or unauthorised SCSRs must not be issued or used at a mine.
All employees issued with SCSRs must be trained in their use, in accordance with the Mandatory Code of Practice for Lamproom Management. Any employee who may need to use an SCSR in an emergency must either be trained or operate the device only under the direct supervision of someone who is trained. Each year, a representative sample of SCSRs (not less than 1% of each type in use at the mine) must be tested by accredited organisations. The sample must reflect the variety of make, age, and deployment of the SCSRs.
The employer must retain readily available records, covering the preceding 24 months, for both Body-Worn and Long-Duration SCSRs in use at the mine. The minimum information to be recorded is set out in Regulations 16.4(4) and 16.4(5).
Click here for part 2 of this update, which covers changes to mine rescue and fire responder teams, refuge bay standards, and the use of missing person locator systems.
Kate Collier Webber Wentzel
Part 2 | Mine health and safety: amendments to rescue, first aid and emergency preparedness and response regulations
In part 1 of our summary of the significant amendments to the emergency preparedness and response regulations under Chapter 16 of the Mine Health and Safety Regulations, we unpacked overarching duties such as risk assessments, reporting, and the use of SCSRs. In part 2 of this summary, we look at the changes to rescue and fire responder teams, control room operations, refuge bay requirements, and the introduction of missing person locator systems.
Underground mining operations: Emergency preparedness and response – Mine rescue teams Employers at underground operations must provide and maintain mine rescue teams at the mine, in the proportions set out below. These proportions are based on the number of persons who could be underground, not only employees. In our view, this use of the word “persons” is deliberate and must be factored into risk assessments and rescue planning. Employers must ensure the availability of sufficient, compliant breathing apparatus for use by mine rescue team members.
Minimum number of mine rescue teams required:
Each mine rescue team must:
Employers must enter into a contract with a mines rescue services provider per mining shaft to coordinate and facilitate the provision of mines rescue teams and other services relating to an emergency on a cooperative basis. The provider must train and certify mine rescue team members to the prescribed competency levels, and train and certify persons to manage the control room in the event of an emergency when mine rescue teams are deployed.
The mine rescue services provider must be immediately notified by the employer if an emergency occurs at the mine that requires, or which may require, the use of the mine’s own rescue team members or the use of outside rescue teams.
In the event of an emergency, the employer must establish a suitable control room that meets the following minimum requirements:
During an emergency, the employer must ensure that:
Surface operations: Emergency preparedness and response – Surface fire responder teams
Employers at surface operations are required to provide and maintain readily available surface fire responder teams that are competent and equipped with sufficient emergency equipment to respond to any emergency that may occur at the mine, across all shifts worked.
The surface fire responder teams must:
Employers must:
Underground operations: Refuge bays
The revised regulations expand on the previous Chapter 16 provisions dealing with refuge bays, introducing more detailed obligations for employers regarding their design, equipping, and inspection.
Refuge bays must be constructed in a manner that:
In addition to the existing requirements, the revised regulations introduced the following obligations:
Inspection requirements for refuge bays now include:
Missing person locator systems
A missing person locator system, which determines a person’s last known location if they go missing, must:
This system must be provided and used, as part of the mine’s emergency preparedness and response strategy, in respect of:
All personnel required to wear this device must be properly trained in its use and must wear it at all times.
In addition to ensuring that training is conducted, procedures must be prepared and implemented for:
Kate Collier Webber Wentzel
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TECHNOLOGY ARTICLES
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SOUTH AFRICA |
Can new technology improve case outcomes?
Legal practice that is premised on a deep and expansive knowledge of the law is the aspiration of most firms and practitioners.
For an industry that is built on precedent and precision, it’s easy to assume that success is purely a function of legal nous, but in a dynamic and increasingly competitive legal landscape, top-performing firms and legal departments are embracing a more holistic approach to building a strong reputation with clients – one that prioritises client outcomes, operational excellence and the strategic use of technology.
In practice, achieving remarkable case outcomes boils down to a delicately balanced combination of a sound methodology, thorough research, critical thinking and quick access to the right information.
Mastery of this extraordinary capability is what drives client-demand for the best firms. But can recent advancements in technology now improve a firm’s legal practice competency?
Can new technology improve case outcomes?
The result is sound legal research that is accurate, comprehensive and optimised to produce the desired outcome.
A strategic investment in reputation
Legal technology doesn’t just help manifest better case outcomes, it also facilitates sustainable cost and time savings. It creates the conditions under which legal practitioners have more time to think strategically about their professional approach to each case, adding value to direct engagements with clients rather than being captured by the process.
Technology is not a substitute for expertise. But when thoughtfully implemented, it becomes an enabler of consistent excellence, a multiplier of a team’s competence.
Firms and departments that treat innovation as a core component of their strategy are not only improving outcomes; they’re shaping the longer-term trajectory of their market reputation.
Ultimately the choice isn’t just about the merits of an advanced legal tech tool over a more traditional approach. What also needs to be considered is the improved financial performance for the firm and shorter case resolution times because of the adoption of a forward-orientated mindset, which secures higher levels of client satisfaction overall.
Golegal
Personhood credentials: Safeguarding human identity in the age of AI
As artificial intelligence (AI) continues to evolve, the lines between human and machine interactions online are becoming less clear. While this progress brings exciting opportunities, it also highlights the importance of ensuring we can confidently and securely verify human identity in the digital world. Establishing trustworthy and privacy-respecting ways to confirm personhood is becoming an essential part of navigating our increasingly digital lives.
A recent paper titled “Personhood Credentials: Artificial Intelligence and the Value of Privacy-Preserving Tools to Distinguish Who is Real Online” introduces the concept of personhood credentials (PHCs). A PHC enables an individual to prove their human status to online services, without revealing personal information and without necessarily relying on biometric data. PHCs can be issued by various trusted entities, including governments, and are designed to be both local and global in scope. The use of PHC, therefore, aims to balance the need for online anonymity with the necessity of establishing trust.
The paper highlights two critical AI-driven trends that exacerbate online deception: 1. Indistinguishability: AI’s ability to generate human-like content, create realistic avatars, and perform actions that mimic human behaviour makes it difficult to differentiate between genuine users and AI entities. 2. Scalability: The cost-effectiveness and accessibility of AI technologies allow malicious actors to deploy deceptive operations on a massive scale, amplifying their impact.
One prominent example of AI-powered deception at scale is the use of deepfake technology in social engineering scams. In a well-publicised case, fraudsters used AI-generated voice cloning to mimic the CEO of a company and instructed an employee to transfer large sums of money to a “trusted partner.” Because the voice sounded convincingly real, the employee complied – resulting in a significant financial loss. What makes this particularly alarming is that such technology is becoming more affordable and easier to use, enabling cybercriminals to replicate this kind of attack across multiple organisations with minimal resources.
Compounding the issue, traditional countermeasures, such as CAPTCHAs, are becoming increasingly ineffective against sophisticated AI systems. Moreover, stringent identity verification processes often infringe upon user privacy, creating a conundrum for online platforms striving to maintain both security and user trust. PHCs providing a means for users to signal their authenticity without sacrificing anonymity.
In the African context, PHCs could be transformative. Individuals across the continent face challenges related to identity verification, due to lack of proper documentation and infrastructural inefficiencies. South Africans, for example, require visas for 96 countries because of a lack of trust in the country’s passports. Such obstacles hinder access to essential services, economic participation, and cross-border interactions. By adopting PHCs, African nations can enable their citizens to engage securely in the global digital economy.
Establishing trusted digital identities is of critical importance. According to Carrie Peter, Managing Director of Impression Signatures and Advocacy Committee Vice-Chair at the Cloud Signature Consortium: “In an era where AI blurs the lines between human and machine, ensuring that individuals can securely and privately assert their personhood online is not just a technical necessity but a fundamental human right.”
The path forward requires a concerted effort to develop PHCs-systems that are privacy-preserving, user-centric, and cross-border interoperable.
“This way we can create a digital environment where trust is restored, and individuals are empowered to navigate the online world with confidence. As AI continues to evolve, the imperative to distinguish between human and artificial agents will only grow more pressing,” concludes Peter. “PHCs represent a vital step towards safeguarding human identity in the digital age, ensuring that the internet remains a space for genuine human connection, safe interactions and mutually beneficial global recognition.”
Golegal
Understanding Agentic AI and Generative AI: Legal and ethical considerations
Artificial Intelligence (“AI”) has become a transformative force in various industries, offering unprecedented capabilities and efficiencies. Much of the public conversation has been dominated by generative AI, systems like ChatGPT that can produce realistic text, images, code, and more. However, an equally important development is the rise of agentic AI, systems that don’t just generate content, but autonomously act toward goals in the real world. Both agentic AI and generative AI stand out due to their unique functionalities and implications. In this article, we aim to draw a distinction between agentic AI and generative AI, explore the legal and ethical considerations associated with these technologies, and provide guidance on how businesses can mitigate potential risks.
Agentic AI: What is it?
Agentic AI refers to AI systems that possess the ability to make autonomous decisions and take actions based on those decisions. These systems are designed to operate independently, often mimicking human-like decision-making processes. Key characteristics of agentic AI include:
Think of an AI meeting assistant that scans your emails, proposes meeting times, books slots in your calendar, and reschedules if something changes, without being prompted each time. Or consider an AI Ops tool that monitors IT systems, detects outages, diagnoses the issue, and automatically restarts affected servers. These are examples of agentic AI: systems that go beyond generating responses and instead take real-world actions to pursue a defined goal.
There is also the autonomous vehicle that navigates traffic to get you to the airport, adjusting in real time to road conditions. Or a finance automation agent that reviews invoices, approves expenses below a threshold, and posts them to your general ledger, all without waiting for human instruction. These systems act on your behalf, often continuously, using reasoning, planning, and execution capabilities. That’s what makes them agentic, not just generative.
Generative AI: What is it?
Generative AI, on the other hand, focuses on creating new content, such as text, images, music, or even code, based on the data it has been trained on. Unlike agentic AI, generative AI does not make autonomous decisions but rather generates outputs that can be used for various purposes. Key characteristics of generative AI include:
Here is a nice mental shortcut to distinguish between the two:
Legal Considerations
As businesses adopt AI, the legal risks differ significantly depending on whether the system is generative or agentic. Generative AI, like a chatbot or content generator, raises concerns around intellectual property infringement, data privacy, bias, and transparency. However, these risks are typically contained to the output generated and can often be mitigated through human oversight before publication or use.
Agentic AI, by contrast, introduces a far broader legal risk surface. Because these systems act independently (whether booking meetings, approving transactions, or adjusting IT infrastructure), they can cause real risk through incorrect, biased, or misaligned actions. The legal implications now shift from content risks to conduct risks. Think of it this way: The same AI that generates a contract clause is fundamentally different from one that sends that clause to a counterparty and commits to terms.
The deployment of agentic AI and generative AI raises several legal issues that businesses must address to ensure compliance and mitigate risks:
To mitigate the risks associated with agentic AI and generative AI, businesses can adopt the following strategies:
Agentic AI and generative AI offer immense potential for innovation and efficiency, but they also present significant legal and ethical challenges. By understanding the distinctions between these AI types and proactively addressing the associated considerations, businesses can harness the power of AI while mitigating risks and ensuring responsible use. Through careful planning, policy development, and stakeholder engagement, companies can navigate the complexities of AI and leverage its benefits for sustainable growth and success.
Wilmari Strachan and Priyanka Raath ENSafrica
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TRANSPORTATION ARTICLES
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