A ban on aid bodies in Zimbabwe’s Masvingo province has been lifted, and government is appealing to non-governmental organisations (NGOs) to resume operations there.
Former provincial governor, Titus Maluleke, ordered the discontinuation of 29 NGOs, which provided food to desperate families in Masvingo, accusing them of engaging in political activity.
However, Minister of Provincial Affairs, Kudakwashe Bhasikiti, has announced the cancellation of the ban, arguing that the government cannot feed all the starving people in the province on its own.
To read the article titled, “Masvingo welcomes back NGOs,” click here.Source:Mail and Guardian
The Independent Communications Authority of South Africa (ICASA) proposed a cut of up to 75 percent over the next three years in the fees mobile phone companies can charge competitors to use their network.
ICASA has released its draft call termination regulations, significantly reducing the cellphone rates of some networks.
In addition, ICASA introduced an asymmetric rates system for smaller operators with a market share of less than 20 percent, which is aimed at promoting investment, encouraging competition and fostering small, medium and micro enterprises.
To read the article titled ‘Icasa proposes slashing call rates’, click here.Source:Fin 24
Four hundred and sixty Zambian non-governmental organisations (NGOs) have resolved not to register under the NGO Act until all the necessary amendments on the proposed unconstitutional Act of 2009 are resolved.
Non Governmental Organisation Coordinating Council (NGOCC) chairperson, Beatrice Grillo, says the Act of 2009 is retrogressive and that it is not in the best interest of some civil society organisations (CSOs).
Grillo maintains that no genuine NGO is prepared to register under the Act in its current form.
To read the article titled, “NGOs refuse to register under the ‘unconstitutional’ NGO Act,” click here.Source:Lusaka Times
- I often wonder if certain captains of industries are entirely disconnected from reality. It is the only thing that can explain the breathtaking gall of Vodacom chief executive, Shameel Joosub, who complained publicly that new regulations would cost his company R1 billion in 2015, threatening to sue as a result.
His threat relates to the upcoming changes in mobile termination rates enforced by the Independent Communications Authority of South Africa (ICASA). These are the fees that our cellphone networks are allowed to charge each other when customers call numbers outside of their own network.
After years of squabbling, ICASA has finally managed to force the larger operators to gradually reduce these fees from 56 cents per minute in 2012 to 20 cents starting in March this year (2014), and down to 10 cents by 2016.
Let's be clear: we are not talking about Vodacom or MTN suddenly being unfairly fined or taxed. These termination fees are built into the cost of the phone calls we make. By forcing the operators to lower them, ICASA is acting on behalf of ordinary consumers because lowering these fees will stimulate competition and drive down call charges across the industry.
So what Joosub is effectively saying is: "Vodacom looked at the numbers and these lower call rates will hurt profits. We like profits, so we are (probably) suing ICASA." Were Vodacom some kind of struggling non-governmental organisation or a scheme to dig wells for the impoverished in South Sudan, say – we might have some sympathy. But Vodacom is a spectacularly profitable giant with over 50 percent of the South African market in its grasp.
In the year ending December 2013, Vodacom declared over R13.2-billion in pure profit – a rise of nearly 30 percent on the previous year. So the amount Joosub is complaining about does not even equal 10 percent of last year's profits. By 2015, it will probably be closer to five percent. Shame.
One of the things that is most vexing to Joosub and his compatriots at MTN (who control a healthy 33 percent of the market) is that ICASA has decided to treat the smaller networks – Cell C and Telkom Mobile – differently. They will receive much higher termination fees from Vodacom and MTN than they pay in return.
The logic behind this decision is that the larger players, left unchecked, might exercise their market power to squeeze the smaller players out completely. I am normally not a fan of such blatant market manipulation by a regulator, but given the alternative – a predatory duopoly – I am comfortable with the idea.
It is pleasingly ironic to watch Telkom argue that it needs special treatment to help it defeat mean old Vodacom, in which it owned a 50 percent stake until mid-2009. The spectacle of one rapacious monopolist stabbing another former comrade-in-monopoly in the back is grimly amusing. The fact that consumers may benefit as a result is purely coincidental, but with Telkom's history I suppose we will take what scraps we can get.
You could argue that Joosub and Zunaid Bulbulia, MTN's chief executive, are just doing their jobs. They are protecting their shareholders, many of them ordinary South Africans, against a regulator that blatantly seeks to make their companies less profitable.
But let us look at their profit margins in comparison to international norms. In its last financial year, Vodacom's net profit margin was 22.2 percent and the MTN group's was 17.8 percent. In the previous year, the figures were 17.5 percent and 19.5 percent respectively. International averages for the industry hover around 10 percent, and 15 percent is considered very high.
Profit margins are meant to reflect risk. Supermarkets make lower margins than many riskier businesses because the chance of people not needing food regularly is zero. But they make up for this in volumes.
I would argue that mature telecoms operators are much more like supermarkets than riskier businesses such as software or construction. They have huge, established customer bases and provide a daily service to even the poorest people. They simply do not deserve the large risk premium they are currently extracting from the market. So bitching about giving five percent of your enormous profits back to your customers will only come across as tin-eared and out of touch.
Oscar Wilde once said: "One should always play fairly when one has the winning cards." If I were Joosub or Bulbulia, I would take that to heart and shut my mouth.
Alistair is the Mail & Guardian's Chief Technology Officer. This article first appeared on the Mail & Guardian website.
- If your organisation is a NonProfit Company (NPC) - formerly known as a Section 21 company, you need to check whether you or your auditors have been making and are up-to-date with ‘annual returns’ to Companies and Intellectual Property Commission (CIPC).
According to the annual report recently tabled by CIPC they were planning a ‘bulk de-registration’ of non-compliant entities in the ‘foreseeable future’.
There is a notice on the CIPC website that the annual return system would be down from 7h00 - 9h00 am on 1 October 2013, for re-activation of late filing and penalty fees for company and close corporation annual returns. So, by the time you read this, it may already be too late.
The effect of de-registration will be that your organisation will no longer have legal status as a registered NPC, and your members / directors may be personally liable for the debts and obligations of the organisation.
Prior to the implementation of the new Companies Act, Section 21 companies were exempted from the requirement to file annual returns with CIPC. Under the new Act, however, this obligation now falls on NPCs as well as private companies (Pty Ltds).
You may find that your auditors, who will be used to filing these returns for all of their Ptys, will automatically have taken on the role of doing so for their NPC clients. It is worth making the call to them to check.
Please note that, although the process is referred to by CIPC as making an ‘annual return’, it is more like paying an annual fee to CIPC to remain registered. The CIPC system will, when you make the return, prompt you to input updated details on the NPC, but the crux of the exercise is paying the fee.
You therefore cannot complete the exercise yourself, unless you are registered as a CIPC customer and have money in your CIPC account.
The following is extracted from the CIPC website, and shows how to calculate your annual return amount:
Annual return fees
Annual Turnover Filing within 30 business days after anniversary Filing more than 30 business days after anniversary Less than R1 million R100 R150 R1 million but less than R10 million R450 R600 R10 million but less than R25 million R2 000 R2 500 R25 million or more R3 000 R4 000
Therefore, for example, if your NPC / Section 21 was registered on 28 August of any given year, your annual return should be paid, especially if you want the early payment discount, by 28 September each year.
Of course, your turnover will not be calculated with reference to your anniversary date but your financial year-end. What one simply does, is use the turnover figure for your last completed financial year, whenever that may be.
- Nicole Copley (BA LLB LLM-tax) is non-practising attorney at NS Copley Consultancy.
Zambia’s government has warned that non-governmental organisations (NGOs) that fail to register under the current NGO Act risk being deregistered and will not be allowed to operate.
Community Development Mother and Child Health Minister, Joseph Katema, says that all NGOs should register under the current Act even if they had other licenses for them to be allowed to operate.
Responding to the threats by NGOs that they will not register under the Act in its current form as it was ill intended, Dr Katema said most NGOs had already registered in accordance with the Act and that his office would soon compile a list of those that have not done so.
To read the article titled, “Government threatens NGOs with deregistration if they don’t register under NGO Act,” click here.Source:Lusaka Times
- On 20 June 2013, the New York State Senate passed the NonProfit Revitalisation Act, which overhauled the laws governing nonprofit organisations (NPOs) for the first time in 40 years. The last Act was passed in 1969.
New York State is heavily dependent on NPOs to offer community assistance, provide healthcare and respond in times of emergency. The law applies to five archival foundations, alumni associations, historical societies, agricultural societies, trade organisations, charities and NPOs. Many of these organisations are also regulated by other departments, including health and education departments and the Attorney General’s Office. Over 103 000 nonprofits are registered in the State. They employ over 1.25 million workers, one in every seven jobs in the state, and contribute billions of dollars in annual revenue.
The motivation for these amendments was that over the years, piecemeal changes created an antiquated and weakened regulatory environment, which was cumbersome, filled with fraud and financial abuse, slow economic recovery, as well as recent weather related disasters such as Cyclone Sandy. The aim was to cut the red tape, increase accountability and work for an enabling environment for these organisations.
Some of the key provisions of the Act provide for:
Reducing Unnecessary and Outdated Burdens
The Act has sought to make it easy to form and operate nonprofits in the state to deliver important social services to the people. The Act creates an enabling environment for nonprofits.
Eliminating Barriers to Forming Nonprofits
- Eliminating corporate types of nonprofits: The Act eliminates the four historic 1970 categories and makes provision for two new categories - charitable corporations and non-charitable corporations;
- Eliminating unnecessary pre-approvals: Historically, schools, colleges, universities, technikons, industrial schools and museums had to obtain pre-registration approval from the State’s Education Department. This amendment will now end the red tape and will ensure that public interest is protected; and
- Reducing Red Tape: Previously, nonprofits registered their corporate purposes first and later stated the specific activities they intended to undertake. Now the law allows them to state their corporate purposes and be registered. The Act also allows nonprofits to correct / amend language errors without having to resubmit original applications.
- Encouraging Electronic Communications: In keeping with international practice (including South Africa), the amendment allows for electronic communications and meetings;
- Increasing Thresholds for Financial Reporting: Presently, nonprofits receiving over US$250 000 have to provide an auditor’s report. The amendment raises the threshold to US$250 000 for an independent Certified Public Accountant report, and progressively increases the threshold to US$1 million by 2021, for an auditor’s report;
- Expediting Mergers and Property Transactions: This amended Act allows for nonprofits to obtain only the Attorney General’s approval, rather than the previous ‘two-steps’ approach, which required the Attorney General and the Courts’ approval. The Attorney General retains the right to ask for a judicial review if deemed appropriate;
- Simplifying Dissolution: The process of dissolving nonprofits is also simplified, so that assets can be quickly redistributed to other charitable organisations; and
- Facilitating e-Filing: Financial and other mandatory filings can now be completed in electronic form.
Enhancing Governance and Oversight
The amendment provides oversight for external audits, executive compensation and related party transactions. It provides boards with a roadmap for oversight and accountability.
- Audit Oversight: The amendments make provision for the board to retain auditors and review the findings of the external audit. For organisations with a revenue of over US$1 million, additional oversight measures have been put in place;
Related Party Transactions: The amendments require boards to actively assess and approve transactions between the nonprofit and its directors, officers and key employers, as well as their relatives and other entities to which they are affiliated:
- Material disclosure is sought from the interested person. The boards are required to make an affirmative determination that the transaction is fair, reasonable and in the best interest of the nonprofit. They should also be able to show that alternate transactions have been considered. The Auditor General will be able to bring an action to enjoin or rescind decisions and seek double damages in cases of wilful misconduct;
- Conflict of Interest: The Act will require written conflict of interest policies where these policies do not exist. These policies should govern boards, officers and staff;
- Whistle-blower Policies: While smaller organisations are exempt, larger nonprofits are required to adopt whistle-blower policies to create systems, in order to report illegality and prohibit retaliation against persons who make such reports;
- Board Leadership and Independence: The amendments also prevent the chief executive officer and other employees of a NPO from serving as a chair of its board;
- Board Leadership and Independence: To promote integrity and curb self-dealing, the Auditor General is provided with powers to challenge and void interested party transaction, if the Auditor General has reason to believe they are unreasonable and not in the best interest of the nonprofit; and
- Enhancing Board Capacity to correct wrongdoing: To identify and correct abuses, the Act now permits directors and managers to seek court approval to inspect a nonprofits books and records if they suspect wrongdoing. Previously, only creditors and members could petition court.
- An on-going review of our legislation to keep up with local and international best practice is essential;
- Measurement of the nonprofit sector’s contribution to the local, provincial and national economy must be undertaken as a priority by Statistics South Africa;
- Allowing for easy registration, simplified reporting and fast-tracking mergers, dissolution and closures assisted by electronic processes will keep the registration data current and accessible;
- Simplified financial reporting and auditing, based on total revenue, is a notion for which the time has come;
- Similarly, board functioning has to be improved, and if legislated for in the NPOs Act will give immense comfort to those board members and staff who wish and desire to act ethically; and
- South African civil society also needs introspection and a voice on conflicts of interest, whistle-blowing provisions and board capacity building. While provisions exist in other legislations, it may be of considerable value to entrench such provisions in the NPO Act to emphasise the centrality of these issues.
South African MPs say that communications regulator - the Independent Communications Authority of South Africa- has been failing to perform and allowing mobile service companies to ‘rip off’ the poor.
Members of Parliament's labour and public enterprises select committee were briefed by ICASA on the high cost of broadband and cellphone calls.
According to the African National Congress, MP Livhuhani Mabija, says that the committee has been experiencing "a lot of problems with ICASA.
To read the article titled, “ICASA berated over high cellphone charges,” click here.Source:Mail and Guardian
The Zambian government has extended the period for registration of non-governmental organisations (NGOs) for another 90 days.
Community Development Mother and Child Health Minister, Joseph Katema, says that all NGOs that will not register at the end of the 90 days shall cease to operate in Zambia.
Katema says those wishing to register a new NGO can proceed to do so starting from 15 July 2013 as registration forms can be obtained from the Ministry’s department of registrar for NGOs.
To read the article titled, “NGOs registration extended,” click here.Source:Zambia National Broadcasting Corporation
The NGO sector loves a crisis, and fresh out of the mass nonprofit organisations (NPOs) deregistration and re-registration calamity, panic is spreading again, this time about the supposed ‘deadline’ of 30 April 2013 for former section 21 companies (now called Non Profit Companies) to adopt new Memoranda of Incorporation (what the new Companies Act now calls the founding documents of all companies).
It is not true that NPCs (or any companies) have to adopt a new MOI, and it is also not true that it has to be done by 30 April.
A bit of background, first:
The Companies Act 2008 was finally, after much debate and controversy, made law on 1 May 2011. This is the Act which we refer to as the ‘new Act’, though the gloss of newness is long gone.
The Act created a new category of company, the Non Profit Company (NPC) and provided that all companies which had been registered as associations not for gain under section 21 of the previous Companies Act, as well as those registered under similar sections of prior acts, automatically became NPCs, and the end of their names were automatically changed to ‘NPC’ instead of the previous ‘Association Incorporated under section 21’.
NPCs are no longer (as section 21 companies were) public companies, but are in a category of their own.
The new Act introduces a couple of new options for NPCs, and if your NPC does want to take the opportunity to adopt these changes, or if it needs to amend its MOI for any other reason (satisfying SARS’ requirements is a common reason) then it would be appropriate and necessary to adopt a new MOI.
It is not true, though, that it is absolutely necessary for all NPCs (or all companies, for that matter) to adopt a new MOI.
The new Act defines ‘Memorandum of Incorporation’ as:
“… the document, as amended from time to time that sets out rights, duties and responsibilities of … directors and others within and in relation to a company, and other matters … by which the company was incorporated in terms of this Act… (or) a pre-existing company was structured and governed before the …effective date…”
This means that the existing Memorandum and Articles of a company which was formed before 1 May 2011 automatically becomes and is referred to by the new Act as a ‘Memorandum of Incorporation’. It is therefore not necessary to adopt new documents to have an MOI - your existing set of documents is now an MOI.
Schedule 5 to the new Companies Act, which deals with transition from old to new Act states that:
“2)At any time within two years immediately following the general effective date, a pre-existing company may file, without charge…an amendment to its Memorandum of Incorporation to bring it in harmony with this Act”;
Note, though, that section 16(1) of the new Act says that:
“A company’s Memorandum of Incorporation may be amended… c) at any other time if a special resolution to amend it i)is proposed by aa)the board of the company; or bb)shareholders entitled to exercise at least 10 percent of the voting rights that may be exercised on such a resolution; and ii)is adopted at a shareholders meeting, or in accordance with section 60, subject to subsection (3).So, you may amend your founding document at any time, but if you do so by 30 April 2013, CIPC waives its R250 registration fee.
Schedule 5 to the Act goes on to say that:
“4) During the period of two years immediately following the general effective date.. if there is a conﬂict between … a provision of this Act, and a provision of a pre-existing company’s Memorandum of Incorporation, the latter provision prevails, except to the extent that this Schedule provides otherwise…”So:
- During the period up until 1 May 2013 if any part of your memorandum and articles contradicts the new Act, your memo and articles win.
- From 1 May 2013, if your memorandum and articles contradicts the mandatory provisions of the new Act, the new Act wins.
An example of where this might occur is if your memorandum and articles (now called an MOI, remember?) provide for a higher than 50 percent majority requirement for members to vote to remove directors. Many organisations have stipulated a two thirds vote. Up until 30 April, whatever was required by your memorandum and articles would be the ruling provision. From 1 May, however, the provisions of section 71(1) of the new Act, which states that a director may be removed by ordinary (50 percent) resolution of voting members, will apply.
Naturally, it will be inconvenient to keep cross-checking with the Act, and I do think that it will simplify things to adopt a document which ‘harmonises’ with the new Act, but my view is that this potential inconvenience, and the R250 fee, are not enough to merit rushing the process of agreeing on and adopting a new MOI.
Your MOI is an important, indeed, fundamental document, and your organisation needs time for its directors and members to apply their minds to any proposed new document, to ensure that it is appropriate, useful and complies with all of the other requirements needed for raising funds and practising good governance.
- Nicole Copley (BA LLB LLM-tax) (Non practising attorney)
Specialist legal consultant to NGOs, Tel: 031 266 9427, Fax: 086 627 9420, Mobile: 083 922 0648, E-mail: firstname.lastname@example.org, Website: www.NgoLawSA.co.za.