1. Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development South African Post Office Bill, [B2-2010] Department of Communications 12 April 2011 PCC 1

2. Delegation  Willie Vukela :Acting Chief Director  Alf Wiltz:Director  Phindile Dlamini :Deputy Director Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development 2

3. Cover page  The cover page of the Bill was amended to reflect the new name of the Post Office, in accordance with section 11(3)(c)(iv) of the Companies Act, 2008  This section requires that a company name must end with the expression “SOC Ltd” in the case of a state- owned company  “ SOUTH AFRICAN POST OFFICE SOC LTD BILL ” Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development 3

4. Clause 1: Definitions  The definition of Companies Act was amended to refer to the new Companies Act of 2008  “ ‘‘Companies Act’’ means the Companies Act, [1973 (Act No. 61 of 1973)] 2008 (Act No. 71 of 2008);”  The definition of Post Office was amended in accordance with the naming convention prescribed by the new Companies Act  “ ‘‘Post Office’’ means the South African Post Office [Limited] SOC Ltd established in terms of the Post Office Act [, and any of its subsidiary companies]; ” Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development 4

5. Clause 2: Objects of Act  Clause 2 was amended to omit “Limited” and to substitute “SOC Ltd” in the name of the Post Office  “ 2. [The purpose of this Act is to] The objects of this Act are to— (a) provide for the continued existence of the South African Post Office [Limited] SOC Ltd;” Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development 5

6. Clause 3: Continued existence of Post Office  The same name change was done in clause 3  “ 3. (1) The South African Post Office [Limited] SOC Ltd, the postal company contemplated in section 3 of the Post Office Act, continues to exist as a public company, notwithstanding the repeal by this Act of provisions in the Post Office Act relating to the postal company.”  Clause 3 was further amended to replace references to articles of association with references to memorandum of incorporation Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development 6

7. Clause 3: Continued existence of Post Office  “ 3. (4) (a) Notwithstanding the Companies Act, the Minister exercises the power to add to or alter the memorandum [and articles of association] of incorporation of the Post Office.”  “ 3. (5) The memorandum [of association] of incorporation of the Post Office must inter alia provide ……..” Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development 7

8. Clause 27: Application of Companies Act to Post Office  Clause 27(2) was amended by omitting the words “A provision” and substituting it with the words “Notwithstanding sections 5(4) and 9 of the Companies Act, a provision”  This amendment is necessary to clarify that the SAPO SOC Ltd Act will prevail in case of conflict between the Companies Act and the SAPO SOC Ltd Act Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development 8

9. Clause 27: Application of Companies Act to Post Office  “ 27. (2) [A provision] Notwithstanding sections 5(4) and 9 of the Companies Act, a provision of the Companies Act does not apply to the Post Office in circumstances where—…..”  ……..” Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development 9

10. Clause 28: Certain provisions of Companies Act may be declared inapplicable to Post Office  Clause 28(1)(a) was amended by omitting the word “The” and substituting it with the words “Notwithstanding section 9 of the Companies Act, the”  This amendment is necessary since a different exemption procedure is provided in the Companies Act. The application of section 9 of the Companies Act must be excluded to ensure that the procedure in clause 28 of the Bill can be followed to declare certain provisions of the Companies Act inapplicable to the Post Office Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development 10

11. Clause 28: Certain provisions of Companies Act may be declared inapplicable to Post Office  “ 28. (1) (a) [The] Notwithstanding section 9 of the Companies Act, the Minister may request the Minister of Trade and Industry to declare any provision of the Companies Act to be inapplicable to the Post Office.”  The references in clause 28 to Registrar of Companies have been replaced with references to Companies and Intellectual Property Commission, in line with the new Companies Act Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development 11

12. Clause 28: Certain provisions of Companies Act may be declared inapplicable to Post Office  “ 28. (2) (a) The [Registrar of Companies] Companies and Intellectual Property Commission must publish particulars about the request and the motivation contemplated in subsection (1) by notice in the Gazette (b) In such notice, the [Registrar] Commission must invite interested persons to submit representations to a person named in the notice within the period stipulated in that notice.” Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development 12

13. Clause 32: Short title & commencement  The short title of the Bill was amended in clause 32 in accordance with the naming convention prescribed by the new Companies Act  “ 32. This Act is called the South African Post Office [Act, 2010,] SOC Ltd Act, 2011, and takes effect on a date determined by the [Minister by notice] President by proclamation in the Gazette.” Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development 13

14. Schedule 2: Short title & commencement  The definition of ‘postal company’ was substituted with the following definition in the Schedule, for purposes of amending both the Post Office Act, 1958 and the Postal Services Act, 1998  “ [‘‘ ‘postal company’ means the South African Post Office Limited, referred to in section 3(1) of the South African Post Office Act, 2010;’’;] ‘‘ ‘postal company’ means the South African Post Office SOC Ltd, referred to in section 3(1) of the South African Post Office SOC Ltd Act, 2011;’’;” Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development 14

15. Schedule 2: Short title & commencement  The words ‘memorandum of association’ were replaced with ‘memorandum of incorporation’ in the amendment of section 3(4) of the Post Office Act, 1958 in the Schedule  Section 3(5) of the Post Office Act, 1958 has been deleted in the Schedule to remove the following provision:  “ “[(5) Notwithstanding the provisions of the Companies Act, the postal company and the telecommunications company may have fewer than seven members.] ”.” Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development 15

16. Schedule 2: Short title & commencement  This amendment is necessary since the requirement in the Companies Act, 1973 that a public company must have at least seven members has fallen away in the Companies Act, 2008 Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development 16

17. Memorandum of Objects  The heading of the Memorandum was amended to refer to the new name of the Bill  “ MEMORANDUM ON THE OBJECTS OF THE SOUTH AFRICAN POST OFFICE SOC LTD BILL, [2010] 2011 ” Paragraph 3.1 of Memorandum  This paragraph was amended to reflect the new name of the Bill  “3.1 The South African Post Office SOC Ltd Bill is aimed at providing a comprehensive legal framework addressing corporate governance of the Post Office in a single Act focusing on the Post Office as a legal entity.” Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development 17

18. Memorandum of Objects Paragraph 4.31 of Memorandum  Paragraph 4.31 was amended to clarify that the name of the Bill has changed since the introduction thereof  “4.31 Clause 32 contains the short title and provides for the commencement date of the Act. The Bill was introduced as the South African Post Office Bill but the name was changed by the Portfolio Committee on Communications to South African Post Office SOC Ltd Bill.” Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development 18

19. Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development THANK YOU 19

20. Clause 3 Continued existence of Post Office  Clause 3(5), “The memorandum of association of the Post Office must inter alia provide that the Post Office  (a)….  (b) shall not have the power to perform the following without the approval of Minister [granted with the concurrence of the Minister of Finance ] : Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development 20

21. Clause 3 Continued existence of Post Office  ……  (c) shall not issue any shares except as approved by the Minister [with the concurrence of the Minister of Finance] ’’ Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development 21

22. Clause 8 Government support to Post Office & Loans by Post Office & Subsidiaries  Clause 8(3), “The payment of financial support is subject to the appropriation made by parliament and must be for such purpose and periods and subject to such conditions as the Minister may determine [with the concurrence of the Minister of Finance] ”  Clause 8(4)(a), “The Post Office and its subsidiaries may not borrow money without the prior written approval of the Minister [and the Minister of Finance] ” Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development 22

23. Clause 18 Conditions of appointment of CEO, CFO, COO  Clause 18(5), “The chief executive officer, chief financial officer and chief operating officer are entitled to a remuneration package determined by the board with the concurrence of the Minister [and the Minister of Finance] ” Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development 23

24. Clause 22 Personnel of the Post Office  Clause 22(1)(a), “The Board must determine the structure or organogram of the Post Office and conditions of service, remuneration and service benefits of the personnel of the Post Office after consultation chief executive officer and with the concurrence of the Minister  The wording [and the Minister of Finance] was removed at the end of clause 22(1)(a) Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development 24

25. New Clause 23 Subsidiaries & accountability  Clause 23(3)(a), The Post Office must, before it establishes a subsidiary or revives a dormant subsidiary, submit a feasibility study and business plan of the proposed subsidiary to the Minister for consideration Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development 25

26. New Clause 23 Subsidiaries & accountability  (b)The Minister may, subject to section 51(1)(g) of the Public Finance Management Act, after consideration of the feasibility study and business plan, approve the establishment of the subsidiary or revival of the dormant subsidiary, as the case may be  The wording [and the Minister of Finance] was removed in both paragraphs (a) and (b) of clause 23(3) Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development 26

27. Clause 12 Appointment of non executive members of board  This clause has been amended to give the Minister a discretion to appoint the nomination committee  The amendments further reintroduces the role of trade unions in the nomination of non executive members of the Board  The amendments further ensure that at least one and half times the number of board members are nominated Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development 27

28. Clause 12..  Clause 12 (1), “For the purposes of appointing the non- executive members of the Board, the Minister must-  (a) by notice in at least two newspapers and in the Gazette invite interested persons; and  (b) in writing invite trade unions recognized by the Post Office, to, submit, within the period and in the manner mentioned in the notice, the names of persons fit to be appointed as members of the Board with due regard to section 9(5) Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development 28

29. Clause 12..  Clause 12 (2), The Minister [must] may appoint a nomination committee to make recommendations to the Minister for the appointment of the non executive members of the Board contemplated in subsection (1) (a) Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development 29

30. Clause 12..  Clause 12(3 )[In establishing] If a nomination committee is established, the Minister must-  (a)ensure that the committee is broadly representative of the various racial groups and geographic areas of the Republic and that both males and females are represented; and …….  (4) “The Minister and, if applicable, the nomination committee [,] in making a recommendation to the Minister must consider-” Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development 30

31. Clause 12..  Clause 12(5) “The [Committee] Minister must ensure that the [persons nominated] non-executive members of the Board represent a sufficient spread of skills, knowledge, qualifications and experience to enable the Post Office to function efficiently and effectively  (6)(a) Nominations of suitable persons as contemplated in subsection (4) must include at least one and a half times the number of Board members to be appointed Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development 31

32. Clause 12..  ( b) If a suitable person or the required number of suitable persons are not nominated as contemplated in subsections (1) (b) and (4), the Minister may call for further nominations in the manner set out in subsection (1)  ( 7) (a) The Minister must appoint –(i) two non executive members of the Board from suitable persons nominated by trade unions contemplated in subsection (1) (b); and ” Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development 32

33. Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development THANK YOU 33