Presentation to the Joint Committees’ Meeting on Second 2010 FIFA World Cup South Africa Special Measures Bill (proposed section 76 B ) and 2010 FIFA World Cup South Africa Special Measures Bill (proposed section 75 B ) 14 July 2006 vodacom

Mr Mthobi Tyamzashe: Executive Director, Stakeholder Relations.

An Outline 1.Introduction 2.Vodacom Key Areas of Concern 3.Discussion of Concerns 4.Recommendations

1. Introduction Vodacom is represented by Mr Mthobi Tyamzashe: Executive Director, Stakeholder Relations and Mr Peter Matlare, Executive Director, Commercial. Vodacom thanks the Portfolio Committee on Sport and Recreation and the Select Committee on Education and Recreation for the opportunity to submit comments on both Bills.

Introduction cont. Vodacom has been a key supporter & sponsor of sport in SA for more than a decade. Vodacom works closely with federations, clubs and individuals to promote best practice in South African sport. Vodacom believes that the success of the 2010 World Cup is critical to all South Africans. Vodacom will be there beyond 2010.

Mr Peter Matlare, Executive Director, Commercial. Key considerations with respect to the proposed legislation.

Background We all worked hard to get the right to host the 2010 FIFA Soccer World Cup. We all celebrated when we won the award. We are all committed to making it a success. We believe that gain should be for all. Those who negotiate with FIFA on the detail of the commercial arrangements must ensure that Africa is a net beneficiary.

2. Vodacom Key Areas of Concern Vodacom accepts in principle the need to have “clean” stadia for a certain period before, during and after the 2010 FIFA Soccer World Cup. There are however some consequences which might not have been identified by the policy makers which we wish to bring to the attention of the committee. These have been identified by Vodacom and some of the federations and clubs we have dealings with.

2. Vodacom Key Areas of Concern Vodacom’s key concerns relate to:  Clause 2 of the Section 76 Bill;  Clause 7 of the Section 76 Bill;  Clause 5 of the Section 75 Bill, and  Clause 9 of the Section 75 Bill. These concerns are with regards to both the World Cup and the Confederation Cup.

3. Discussion.  Clause 2 of the Section 76 Bill Clause 2 reads thus; the Minister of Trade and Industry can stipulate a period in excess of one month after completion of the final competition as the date on which the protection afforded by the declaration of the competition as a protected event, shall end

3. Discussion.  Clause 2 of Second 2010 FIFA Bill Vodacom submits that the period contemplated in terms of clause 2 should – be reasonable and must take into account existing rights and contractual arrangements of stadium owners, their sponsors and other business partners; There is no compensation by FIFA or the LOC for stadium owners during the period. -We believe that the duration of the period may put some organisations in financial jeopardy.

3. Discussion  Clause 2 of the Section 76 Bill Vodacom is concerned that an overly lengthy period will have the following potential adverse impact: - Sponsors will suffer considerable loss, and undue prejudice to their brand value if the period is too long as the penalties won’t compensate for such loss of brand value; - Stadium owners will suffer severe financial loss if they are required to pay substantial penalties to their sponsors for loss of branding rights over a long period in terms of the respective sponsorship contracts; and -Business partners of stadium owners such as companies which are in the business of selling advertising space at the various stadiums will suffer severe financial prejudice if the stadiums are required to be clean for a long period of time.

3. Discussion.  Clause 5 (b) (iv) of the Section 75 Bill iv) “zone surrounding or adjacent to a stadium, venue, place or facility that the LOC identifies as an exclusion zone in which prescribed commercial activities by any person other than persons identified by the LOC are prohibited. “

Discussion. Vodacom seeks clarity on whether this would mean closure of private business operations falling within the designated zones as this will have severe commercial implications. –Small business might be severely affected. –Surrounding business will be affected.

3. Discussion.  Minister's Regulation making powers in terms of clause 9 of the Section 75 Bill and clause 7 of the Section 76 Bill. In terms of clause 7 of the Section 76 Bill and clause 9 of the Section 75 Bill, the Minister is empowered to promulgate certain regulations. Clause 7 of the section 76 Bill specifically provides that the Minister consults with the Ministers of Trade and Industry, Agriculture and Land Affairs, and Health; Vodacom submits that consultation should not only be limited to the afore-mentioned Ministers but should also include all relevant stakeholders, including amongst others, sports federations, commercial entities and sponsors.

4. Recommendations 1.As regards clause 2 of the Section 76 Bill Vodacom proposes that the period contemplated in terms of clause 2 of the section 76 Bill should be restricted to a cumulative period of three months i.e. the period before, during and after completion during the protection subsist must not exceed three months. 2.A key question is who should compensate for losses suffered ? 3.As regards clause 5 of the 2010 FIFA Bill Vodacom humbly requests the Committee to consider the potential adverse impact of the designation of areas surrounding or adjacent to stadiums and other venues on private business operations. 4.As regards clause 7 of the Second 2010 FIFA Bill and clause 9 of the 2010 FIFA Bill Vodacom submits that the Minister must also consult all relevant stakeholders including amongst others, sports federations, commercial entities and sponsors before promulgating regulations

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