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Legal Advisory solutions

Legal Advisory Solutions

Challenges mining companies face
Political and regulatory changes have long had a bearing on mining companies. Regulatory compliance is not negotiable and holds serious consequences if not fulfilled.

Mining companies therefore need to continuously ensure that new legislation is considered for impact on investment decisions and to ensure operations comply with the law.

Following the recent global financial crisis, government interventions and new legislation have reached new heights across the globe, including Africa. Examples include imminent data privacy law, new royalty and other resource tax legislation, tightening of permitting, beneficiation, changes in labour laws and competition law to mention a few.

How does the Deloitte solution address the business issue?
Through our Deloitte network of offices in Africa and our Global Legal Network, we provide advice to clients on cross-border M&A and regulatory requirements including:

  • Country reviews including political, economic, social, technological, legal and environmental reviews and specific environment of business assessments
  • Market reviews focussing specifically on competition and regulatory assessments
  • Regulatory reviews including sector specific regulatory environment assessments and general corporate law
  • Due diligence assessments on potential acquisition and/or joint venture targets
  • Country specific compliance offerings addressing topics such as competition law, records management, electronic communication and transactions, labour law, royalty and social license requirements.
  • Legal agreements including cross-border M&A, expatriate employment contracts and general commercial agreements.

Benefits to your organisation
Deloitte Legal is represented in 47 cities in 30 countries throughout Africa. We therefore have on-the-ground knowledge of new legislative requirements ensuring that:

  • Sound knowledge exists of the legislative requirements and that the ease and cost of doing business is assessed before entering a country
  • The impact of new legislation is assessed and addressed in terms of financial performance or investment
  • Companies keep abreast of the latest developments and legislative requirements
  • Compliance with legislation and regulations
  • Proactive action is taken to reduce cost of compliance
  • Ethical risks to the company are understood and managed appropriately.

Dean Chivers
Tel: +27 (0)11 806 5159

Contract management solution

Challenges mining companies face
Next to regulatory compliance, contractual obligations make up the greater part of the legal risk which businesses must manage. In addition, as economic conditions get tougher each year and businesses must ensure they are extracting sufficient value from the contracts which they have entered into.

Extraction of value entails a number of aspects, including –

  • Having an enterprise wide view of contract spend to understand supplier spend;
  • Contract optimisation through efficient price escalation and performance penalty enforcement;
  • Supplier performance level management through better utilisation of contract management systems and tools; and
  • More strategic procurement through a long term view of contractual obligations.

Extraction of the maximum value from contracts and contractual obligations requires an appropriate contract management framework, organisation of contracts, eased day-to-day management through software utilisation and on-going training.

Deloitte has vast experience in providing these services, providing additional capacity and transferring knowledge and skills during the execution of such services. Our solution will accelerate compliance and empower on-going compliance while maximising value extraction from contracts

How does the Deloitte solution address the business issue?
Our solution considers the entire contract lifecycle and the execution of our methodology ensures an appropriate customised framework, a sustainable solution and clear processes for contract optimisation.

Thus, our solution deals with four specific areas, each of which a business may or may not already be executing on or have in place, but all of which are essential for optimal contract management:

  • Contract management function - This deals with setting up the necessary function for efficient contract management and reporting. Existing policies will be assessed for completeness and additional policies put in place if necessary. Fully understanding the requirements for an optimal contract management structure is imperative but documenting this is a clear, simple manner is what enables implementation of a culture of contract management throughout the organisation. Deliverables in this phase of the solution include recommendations on the reporting lines, contract management structure and staff numbers required to execute the function effectively.
  • Contract management framework - Ensuring completeness of the framework under which contract management is conducted is key to reaching effective compliance. Deliverables during this phase of the methodology include drafting/amending the contract management policy, its accompanying procedure and processes and developing concept contracts and classifying contract clauses in light of editing rights
  • Contract Management Administration - The sustainability of any framework which is implemented is based on the practicality and on-going use of the systems put in place to manage contracts on a daily basis. This is best achieved through an electronic contract management system. Deloitte can assist with uploading contracts into a semi-electronic system and advise on and supply a fully automated contract management system. The system will provide, amongst others, automatic reminders for price increases, expiry and notice periods which enable efficient and automated contract management
  • Contract management audit and reporting - For management to procure strategically and to ensure on-going compliance, accurate and continuous reporting capability must be provided for within the system. This is enabled through on-going audits and assessment of the implemented contract management system.

Benefits to your organisation
Our approach will deal with the above areas through a phased methodology aimed at –

  • Understanding the existing extent of contract management;
  • Developing the necessary supplementary processes and documentation to achieve the necessary level of contract management;
  • Providing a contract management tool;
  • Transfer of skills to the current staff to enable on-going compliance;
  • On-going training and skills assessment of staff responsible for contract management; and
  • On-going reporting for strategic management of the overall contract risk to the organisation.

Dean Chivers
Tel: +27 (0)11 806 5159

Candice Holland
Tel: +27(0)11 209 8598

Regulatory compliance

Challenges mining companies face
South Africa is becoming one of the most regulated countries in the world, with new and extensive legislation coming into force each year. It is now a business imperative for organisations to understand the extent of their compliance obligations as a first step. But this is merely the beginning, different industries have different regulatory universes, compliance obligations and reporting imperatives. Unpacking these compliance obligations is a complex process which results in a large number of obligations being identified which must then be managed on an on-going basis. Although identifying and unpacking these obligations is a once off exercise, the on-going management of compliance and providing for the on-going amendments to legislation is a huge challenge.

How does the Deloitte solution address the business issue?
The Deloitte approach is one which is:

  • Self-regulating
  • Holistic
  • Proactive

Our solution covers people, process and technology with Deloitte expertise, relationships and international network access. The solution is also scalable, meaning that it can be customised to your organisation’s needs. Our solution has three phases, each aimed at deconstructing the steps required to achieve and maintain on-going compliance:

Benefits to your organisation
Our solution begins with determining the regulatory framework within which your particular entity must function. This involves developing the appropriate regulatory compliance policy and procedure, ensuring the correct organisational structure for sustainable and continued compliance and developing the regulatory universe appropriate for the industry within your organisation must operate and prioritising this in terms of likelihood and impact of noncompliance.

Once the regulatory universe has been documented and prioritised, the task of unpacking the obligations, either of the priority regulation or for all regulation, into task or action items which must be executed within the business must begin. This process includes determining the documentary proof which must be captured as proof of compliance and also assigning responsibility for each task or action item to be executed.

The second part of phase two of the execution of such a regulatory compliance project is to capture the tasks and action items in a format which enables and eases compliance. It is almost impossible to do this without an electronic regulatory management tool which can be customised to the requirements of the business. Deloitte offers a scalable electronic tool which can be customised to ensure automatic reminders for compliance, the ability to scan proof of compliance into the tool and a large number of reports on the extent of compliance on a number of criteria, such as compliance with a particular piece of legislation, compliance within a particular business area or compliance in a particular geographic area. The criteria on which reports will be extracted can be customised and decided with the business. The solution also provides for the incorporation of the changes to compliance obligations through regulatory amendments or changes.

The final phase of such a regulatory compliance project is the necessary awareness and training requirement to fully implement the new policy, procedures, processes and tools to ensure on-going compliance. Training on all aspects of the new regulatory compliance regime, including –

  • training on the actual policy and processes;
  • training on any software tool which was implemented; and
  • technical training on the regulatory content for those champions which are tasked with execution of the assigned tasks and action items.

Dean Chivers
Tel: +27 (0)11 806 5159

Candice Holland
Tel: +27(0)11 209 8598

Labour solutions

Challenges mining companies face
It is estimated that approximately 3.9 million people are employed in South Africa in either a temporary, fixed term or labour brokered relationship. Some argue that this casualization of work is grossly unfair to employees, while others vigorously defend the operational need for a flexible workforce. No matter where you stand in this debate – amendments to our employment legislation are imminent. The amendments are likely to have a significant impact on the employment status, remuneration and benefits of the non-permanent workforce. It is now critical for organisations to analyse the potential risks and consequences of the proposed changes to legislation to manage them effectively, going forward.

The proposed amendments and its impact on the non – permanent workforce Labour Broking 
Unlike the 2010 bills the 2012 bills no longer seek to ban labour broking in general. However, additional protection is proposed for employees that earn below the BCEA earnings threshold. With reference to these brokered resources a client of a labour broker may:

  • be deemed to be the employer of a brokered resource if the resource is employed for longer than six months and is not rendering temporary work for the client;
  • be obliged to grant remuneration and benefits to a brokered resource deemed to be its employee, similar to the remuneration and benefits of the clients other employees doing the same work.
  • be liable for the unfair termination of employment and unfair labour practices related to the brokered resource.

Fixed Term Employees 
The proposed amendments will impact the appointment of certain fixed term employees as follows:

  • An employer will be permitted to employ an employee on a fixed term contract or successive fixed term contracts for up to six months.
  • Employees employed on a fixed term contract for more than six months may be deemed to be permanently employed and must be treated not less favourable than an employee on an indefinite contract performing the same or similar work, unless there is a justifiable reason for treating the employee differently.
  • An employer must provide an employee employed on a fixed term contract with the same access to opportunities to apply for vacancies as it would
  • provide to an employee employed on an indefinite contract of employment.

Independent Contractors 
The most common mistake made in independent contracting relationships is to contract out of employment law and tax provisions and regard the relationship as a legitimate exclusion of such provisions. Ignoring the tax and employment law consequences exposes companies to potential under deductions of PAYE, skills development and UIF levies, as well as legal liability for work related illness and injuries and labour disputes with disgruntled contractors.

How does the Deloitte solution address the business issue?
Deloitte has developed a comprehensive solution to help organisations in identifying, calculating and managing the employment law risks associated with a non - permanent workforce.

The solution follows a phased approach:

  • Phase one involves a comprehensive review and analysis of all the non- permanent workforce appointments within the organisation.
  • The second phase focuses on the identification of employment law risks, quantification of risks and equalisation of remuneration and benefits (if applicable) and recommendations to address and manage the risks.
  • The third and fourth phases involve a strategic design of a tailor made solution and the creation of an implementation roadmap to address and manage the risks identified.

Chris Kotze
Tel: +27 (0)11 806 5389

Protection of Personal Information Solution

Challenges mining companies face
In October 2005 the South African Law Commission finalised its investigation into privacy protections and recommended a whole new law to deal with the protection of private and personal data. The recommended Protection of Personal Information Bill 2009 has recently been passed by Parliament, meaning it will shortly be binding law.

PPI requires all businesses that process personal information like names, addresses, email addresses, ID numbers, employment history, health data and the like to comply with the PPI law.

According to section 2 the purposes of the Bill are to:

  • Give effect to the Constitutional right to privacy
  • Regulate the manner in which personal information may be processed
  • Provide persons with rights and remedies in order to protect their personal information
  • Establish the Information Protection Regulator

In adoption of the EU model, PPI reflects 9 so-called information protection principles and details no less than 37 compliance areas.
An Information Protection Regulator has been created, and certain of the regulated matters include marketing, outsourcing, cross border flows of data and security. All businesses will also have to appoint Information Officers to monitor compliance.
Non-compliance may result in criminal fines, civil liability and complaints to the Regulator.
In order to comply with the PPI provisions, businesses will have to implement significant changes to policies, procedures, controls, security, contracts and data management processes, to name a few.

How does the Deloitte solution address the business issue?
The Deloitte PPI Solution includes the following modules:

  • GAP analysis
  • PPI compliance implementations
  • Privacy and data protection strategy
  • Training and awareness
  • Building up an organisation-wide inventory and classification map of personal data
  • Compliance with law enforcement requests
  • Marketing and outsourcing programmes
  • Cross border data transfers
  • Building privacy controls into IT projects

Dean Chivers
Tel: +27 (0)11 806 5159

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