Corporate Responsibility » Corporate Governance » Legislative and Regulatory Compliance
Regulatory compliance is of importance due to the frequent amendments to the regulatory framework in South Africa. The compliance function is responsible for the general monitoring of regulatory requirements and is also involved in implementing requirements of recently enacted legislation. During the reporting period, the Competition Commission of South Africa (“the Commission”) initiated an investigation into the possible anticompetitive
conduct of various food retailers which included the Group’s main trading subsidiary Shoprite Checkers (Pty) Ltd. The Group has indicated that it will co-operate fully in assisting the Commission with the investigation. Several new laws and regulations that will have an impact on the business of the Group are being finalized by the legislator.
The Consumer Protection Act aims to provide a fair, accessible and sustainable marketplace for consumer products and services. This law will harmonise existing laws relating to protecting consumers and promoting a consistent enforcement framework for consumer transactions and agreements. This act will become effective during 2010. A project has been established to ensure effective implementation of this act.
The new Companies Act aims to simplify the registration of companies, encourages corporate governance, balance the rights and obligations of shareholders and directors and to promote the efficient and responsible management of a company is expected to take effect during 2010. It also provides for the increased liabilities for directors in the event of a breach of fiduciary duty or for any direct/indirect loss, damages or costs sustained as a result of the breach. An assessment of the impact of this act is currently in process to ensure that the Group effectively addresses the Act’s legal and compliance applications.
Competition Amendment Act
Signed into law during 2009, the Competition Amendment Act provides for the regulation of “complex monopolies”. This act introduces criminal liability for directors and managers who are responsible for a company participating in a cartel and knowingly allows a company to participate in a cartel. The effective date of this act is yet to be promulgated, but the Group has been proactive in addressing any risks in this regard.
Protection of Personal Information Bill
Once enacted the bill will regulate the processing of personal information of individuals and juristic entities and will apply to all private sector and public sector bodies and individuals. The Group is monitoring the legislative process and appropriate action will be taken to implement the requirements of the Bill once finalised and enacted.