Cell C Department Comments on Electronic Commerce & Transactions Bill Wednesday, 15 May 2002

Page 2 Cell C Representatives Zwelakhe Mankazana:Director Pierre Obeid:Senior Network Operations & Maintenance Manager Nerisha Pillay:Legal Advisor Pheladi Gwangwa:Regulatory Planning Manager Dewald JacobsohnE-commerce System Administrator

Page 3 Presentation Overview  Introduction  Purpose of Bill  National e-strategy  Facilitating electronic transactions  Automated transactions  Consumer protection  Protection of personal information  Universal Service  Conclusion

Page 4 Introduction SA must develop law in harmony with international best practice to ensure global trading, whilst taking cognisance of unique SA circumstances, like the need for universal service

Page 5 Introduction Any person concluding a transaction electronically must be confident that it will be: capable of being concluded, enforceable; and that confidentiality will not be compromised

Page 6 Purpose of ECT Bill To facilitate electronic transactions & communications by: the promotion of legal certainty; the creation of confidence & trust in electronic transactions; the promotion of universal accessibility

Page 7 National e-strategy – (Section 5) The national e-strategy must, inter alia, set out : the role expected to be performed by private sector ; how Government can solicit participation by private sector to perform such role

Page 8 National e-strategy continued… Cell C’s view is that: Government should not seek to introduce additional obligations into the market to bring e-commerce to society hurriedly; Rather: should consult with private sector players like Cell C in the formation and implementation of e-strategy; to maximise on their existing social economic development plans.

Page 9 Facilitating electronic transactions E-commerce is a substitute for paper- based commercial transactions. Two of its main objectives are: transparency; and equivalence Proper, suitable framework needed taking into account requirements of: Police; Reserve Bank; Law Commission; Ministry of Justice

Page 10 Facilitating electronic transactions Some existing laws are capable of capturing e-commerce concerns; however further laws required to support and legitimise e-commerce practices As evidenced by international jurisprudence Some examples include: electronic writing & signature;amendment to civil and criminal evidential laws to recognise electronic evidence; intellectual property law; payment systems;taxation; jurisdiction

Page 11 Facilitating electronic transactions In order to facilitate e-commerce: a transaction entered into electronically should not need to be reinforced by any additional activity; transaction on its own must have legal effect and be enforceable

Page 12 Facilitating electronic transactions Further requirements include: the ability of transaction to be recognised as legally binding by courts; the electronic evidence of transaction should be capable of constituting sufficient proof of transaction; certainty as to which forum/court should be approached by party wishing to enforce rights; the need for user to be confident that electronic payments made/received constitute actual payments; security in electronic delivery mechanisms

Page 13 Facilitating electronic transactions Without certainty on these issues, environment not conducive to development of e-commerce Uncertain legal framework and need to simulate earlier electronic transaction in paper-based format constitute significant barrier to wider use of e-commerce in SA

Page 14 Facilitating electronic transactions Coupled with uncertainty: networks utilised for the operation of e-commerce make it borderless and instantaneous; Accordingly, uncertainty exists as to : the time and place where electronic contracts are concluded; which countries laws govern the contract and to what extent Affects ability of authorities to control, monitor and regulate electronic trade

Page 15 Facilitating electronic transactions Electronic Signatures A number of electronic signature possibilities exist, for eg: , scanned manuscript signature, digital signatures, the clicking of a web button, the typing of a name, etc Challenge in conducting e-business with such a wide range is to ensure that person providing electronic signature is the person he/she is claiming to be Simple electronic signatures ( s and scans) provide for potential risk of fraud

Page 16 Facilitating electronic transactions Considerable number of concerns around electronic signature, are not and cannot be comprehensively dealt with in Bill Internationally, separate legislation created to address electronic signature issues, for eg: UNCITRAL Model Law on Electronic Signatures adopted by UNCITRAL in July 2001

Page 17 Automated transactions Cell C’s concern relates to the actual point at which the terms and conditions of a transaction are reviewable: Is it when software is being programmed; customer displays details of purchase,etc Drafters intention is unclear Irrespective, as currently drafted, open to abuse and removes certainty as to how and when contract concluded

Page 18 Consumer protection Ito S45, a consumer is entitled to cancel a transaction without reason: for the supply of goods within 7 days after receipt of goods; of services, within 7 days after conclusion of agreement Only cost that may be levied on consumer is “direct cost of returning the goods” Clarity is sought on what is meant “by direct costs”. Does it include: the physical returning of the item; The reallocation of that item; The system administration costs incurred in reloading the item onto the system; the transaction fees incurred when transaction was concluded; 3 rd party banking costs, etc

Page 19 Consumer protection Cell C is of the view that : items such as handsets and accessories may be included in the list of goods ito which s45 is applicable; intangible goods such as prepaid voucher recharges and sim cards should be excluded from s45

Page 20 Protection of personal information Current law in SA does not adequately protect information privacy Is a barrier to development of e- commerce: If no confidence in protection of privacy while engaging in e-commerce transactions, some may simply not engage while others choose to give up a fundamental right in order to do do so – neither scenario is acceptable

Page 21 Protection of personal information Issue of information privacy magnified because of nature of electronic commerce:i.e. the ease with which data can be obtained, stored, manipulated and retrieved

Page 22 Universal service Cell is concerned that it is unclear from the provisions of the Bill how universal service will be facilitated. It is Cell C’s view that the Bill may create a barrier to the entry of South Africans by introducing complex and uncertain provisions in law Having regard to intended objectives to be achieved, attention should be focused to creating simple, effective, clear law.

Page 23 Conclusion Cell would like to emphasise that all the issues discussed today and recorded in its submission should be addressed with the recognition: of the unique nature of electronic commerce and the inherently dynamic nature of information technology of the need to consider international trends in respect of how they should be dealt with; of the need to protect the consumer and privacy; of the need to develop effective and legitimate policy and regulatory frameworks.

Page 24 Conclusion Cell C would like to thank the PPCC for the opportunity to have commented on the Bill