A recent survey of South African laws found that most businesses must keep up to 170 types of records for minimum periods ranging from between six months to 40 years, while some records must be kept "indefinitely". Certain industries such as financial services must keep 460 types of records prescribed by law.
The law does not distinguish between electronic and physical records, and both are subject to the same laws prescribing retention periods, says Paul Mullon, Metrofile divisional director of marketing.
He says of the record types identified so far:
* 11% must be retained for between 48 hours and two years;
* 52% for three years;
* 25% for five years;
* 5% for between 10 and 15 years; and
* 7% must be kept from between 30 years to "indefinitely".
A law firm specialising in records management conducted a nine-month survey of South African laws in order to determine what records companies must keep and for how long. Metrofile used the law firm`s research findings to provide businesses with the MetroGuide, the first comprehensive and regularly updated online guideline on record retention laws.
Metrofile determined a need for creating an online guide as most organisations lack the resources to audit and continually review laws. The cost for companies to individually commission similar research from their own external advisors may run into hundreds of thousands of rand, notes Mullon.
Mullon says examples of laws requiring records to be retained include the corporate laws which requires companies to keep around 40 types of records, such as minutes of meetings and accounting records. Employment laws and occupational health and safety laws require employers to keep around 35 types of records such as employee files and employment equity plans. Tax laws require businesses to keep around 45 types of records such as books of account and invoices. Financial services laws require the retention of records of communications with customers, complaints, transactional data, policies, client identification and suspicious transactions, to mention a few.
"In some instances, some organisations may never destroy certain records; these must either be handed over to a curator or the regulator in question if a business is liquidated or ceases to operate," says Wim Mostert, director of Mostert Opperman Goodburn, the law firm which performed an audit of more than 2 000 South African laws, regulations and official notices.
It is becoming clear from new local and international corporate and accounting law reforms that a much higher premium is being placed by regulators on proper records management practices. "Records constitute the audit trails required by regulators and auditors to monitor and report on compliance," says Mullon.
"By understanding the legislative compliance requirements, organisations can determine which records to keep and which not - thereby reducing storage and archival expenses. However, it is important to understand that other factors such as business operational requirements, corporate governance and evidence in litigation must be considered before records are ultimately destroyed," says Mostert.
While the Electronic Communications and Transactions Act 25 of 2002 facilitates document imaging and electronic retention in terms of most laws, some laws expressly prohibit the destruction of the physical source document, either for a specified period or at all, says Mostert.
According to Mullon, an understanding of the regulatory requirements could serve as a sound basis for an organisation to draw up a document retention policy.
"Local and international courts have recognised and expressed approval for controlled destruction of records in terms of a documented retention and destruction policy," he says.
* More information on record retention legal requirements can be found in Metrofile`s guidelines on record retention laws (MetroGuide) available at www.metrofile.co.za/retentionguide.
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Metrofile, an Empowerdex BBB-rated empowerment company, is the South African market leader in the management of business documents, and is committed to help customers reduce costs and improve productivity in processes that are centred on documents and corporate records.
All companies have a combination of paper and electronic documents, and are forced by law and customer requirements to secure the availability of the documents for the duration of their lifecycle. For most organisations, the volume of documents is growing at an exponential rate, and is becoming increasingly difficult to manage.
Metrofile is uniquely positioned to provide consulting and implementation of full lifecycle paper and electronic records management solutions from storage and conversion through to destruction.
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