KPMG and the E-Commerce Association of South Africa (ECASA) have released the joint industry comment on the E-Commerce Green Paper - the result of a number of workshops and information sessions run in collaboration since the Green Paper`s release in November last year.
The document discusses several issues that are key to the e-commerce legislation, not the least of which is the view that unless e-commerce legislation is addressed urgently, e-commerce in SA will be inhibited and the lack of legal certainty will act as deterrent to trade with and investment in the country.
This is the view of South African business representatives who participated in the KPMG and the ECASA E-Commerce Green Paper workshops.
"It is clear that SA needs e-commerce legislation desperately. However, until such time, business will need to take a self-regulatory approach and manage the legal risk which is a result of the uncertainty in our existing law," says Mark Heyink, head of KPMG e-business legal risk management.
"It is not unsurprising that the golden thread throughout the discussions is the need to ensure that South African law is in line with international developments. The urgent need for privacy legislation is an example of where it is imperative that international privacy principles and in particular, the European Union`s directive on privacy are followed. In contrast, the law on trademarks which has been based on international convention, is in line with international trends," adds Heyink.
Representatives from commerce and industry, academia, government, service providers, the legal and accounting professions, and representative industry bodies, attended the KPMG/ECASA workshops, and examined the increased importance of intellectual property and its role in the new economy.
They agree that legislation amending the law of copyright, which has been impacted by the Internet, is needed to bring it into line with the realities of the new economy. Although no questions of policy on patents are raised in the Green Paper, they increasingly serve as a mechanism for protecting business processes and computer programs in other jurisdictions. Suggestions were made to examine these developments with a view to enhancing South African law in this regard.
"There is universal agreement, too, that legislation is required to recognise the basic tenants of e-commerce, being electronic communication, contracts and signatures. The UNCITRAL model law is recommended widely as a guideline," says Mike Lamb, chairman of ECASA.
Another issue on which the group has taken a stand is the proposed government control of infrastructural bodies facilitating e-commerce such as certification agencies and domain naming authorities, which is not seen to be appropriate or advantageous.
The group concurred on the need for co-operation between public and private sectors in the provision of necessary and enforceable regulation, and urges government to create structures that encourage this collaborative effort.
Another point raised was that the necessity for finding practical methods of establishing the infrastructure required to meet SA`s needs for Internet access would best be served by competition within a regulated environment.
Government`s role in providing incentives and subsidisation to address current imbalances in the Internet environment and encouraging innovation in the provision of services to under-serviced areas is stressed and deemed of critical importance.
There is concern that the current mechanisms of law-making and governance are not adequate to meet the challenges of the information age and new economy with the necessary urgency. Regulatory mechanisms that provide the flexibility and collective wisdom of both public and private sectors need to be explored and developed.
In addressing the tax issues, it is important that SA follows the lead of major trading partners and international bodies.
Three sections not included in the KPMG/ECASA discussions included the payments system, maximisation of benefits and e-government. Deferring discussion of electronic payment systems to the greater expertise of the banking sector, the latter issues were not addressed, say the key players, primarily because the maximisation of benefits area is extremely broad and can only be properly and productively addressed once government provides more clarity on its intended policies and e-commerce strategy. Similarly, e-government was not addressed because participants had no indication of the readiness of government from a technological, staff, priority, cultural or strategic viewpoint.
"The way forward is extremely challenging. Government has an enormous burden in discharging its expressed desire and responsibility to create an environment facilitating to e-commerce and the use of technology to lead the African Renaissance. This response recognises that responsibility and is evidence of participants` willingness to join with government in this quest. Government in turn must show its confidence in its citizens by taking heed of the sentiments in the responses that it will receive, to develop the policies and alliances that will be necessary for it to succeed," adds Lamb.
Business is urged to respond to the comment and give it its sanction. A copy of the KPMG/ECASA submission can be found at www.kpmg.co.za.
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