Mindless legislation

Government has made a habit of drawing up complicated legislation: pieces of paper that will require companies to spend millions on new ICT systems, but cannot be effectively implemented.

Instead, the Acts that Parliament passes - sometimes at lightning speed and often with blunders along the way - are completely unenforceable, and eventually do nothing more than create endless red tape and cost the economy millions.

A few years ago, government introduced the Financial Intelligence Centre Act (FICA), which had as its aim the bold ideal of cutting down on fraudulent money transactions and laundering of cash. This required all of us to pop along to the bank and hand in copies of our ID and a recent proof of registration, or face the cold prospect of having our accounts frozen.

Its aim was indeed laudable, but I suspect the actual nitty-gritty of putting something like this into action was never really thought through properly. Several people bemoaned, at the time, that despite handing in said required documents, they had to go through the entire process again, but this time for a different account held at the same bank.

It seemed to translate into an absolute mess: for every account, one must hand in copies, stand in queues and generally become irritated. Never mind the amount of working hours that were lost thanks to the mess that was implementation.

What made it worse was that the banks didn't say the process would have to be repeated umpteen times because their databases were not linked, but instead assured clients that all was sorted. I'm sure for some people, the whole process went swimmingly, but that was not the case for all.

Despite the strict penalties for not making sure person AN YMOUS complies, the Act has failed. Abysmally.

This is not a statement devoid of fact: I am constantly receiving posted bank account statements and letters of demand addressed to someone who has not, and does not, live at my house. These statements date back just over a year, well within the timeframe that would have required the bank to follow FICA.

I can speculate that the reason behind the initial mistake was an ID10T error, or that the problem was between the keyboard and the screen.

Nicola Mawson, senior journalist, ITWeb

I have - of course - brought this to the attention of the bank-in-question several times and have even followed the process all the way through its internal complaints department. I have also been assured it will not happen again, yet post of a somewhat sensitive nature arrives each month unabated.

I can speculate that the reason behind the initial mistake was an ID10T error, or that the problem was between the keyboard and the screen. However, I suspect that the bank's systems and processes are not up to scratch, and that the Act requires far more from financial institutions than they are able to deliver.

RICA is yet another example of legislation that has required millions to be invested in systems so that people's cellphone numbers can be logged in a database against their ID numbers and addresses. All of SA's millions of subscribers need to have registered by year-end, or be cut off from networks.

Yet, as ITWeb previously reported, the new law has already been circumvented. Some poor consumer discovered to his dismay that a contract had been taken out in his name, without his knowledge, after the Act became law.

The facts around the situation seem to imply this incident was an inside job - although we may never know.

What is apparent is that no matter how much money the network providers have invested into making sure people can be RICAed, the system is not foolproof, and therefore the Act does not do what it was meant to do - eliminate crimes that are committed through the use of cellphones.

There are two pieces of legislation that will come into effect next year - and require even more investment in systems and processes so that companies can comply with Acts that have not been properly thought out.

The update to the Companies Act is a prime example. The amendments are needed, no doubt about it, because the current legislation is older than I am and simply does not cater for the Internet world.

However, some of the requirements, although maybe in keeping with global best practices, may not be possible to implement without entire legions of legacy systems and databases being ripped out and replaced, at a mammoth cost.

Take, as an example, the new allowances for company names. Now one can, should one so choose, register a company called 'Gardener 4U - trees and leaves @ their b3st Pty (Ltd)'.

Based on the comments ITWeb received from banks - only one part of the economy that will have to deal with this aspect of the law - systems are not yet in place to handle these sorts of names.

They should have been ready to roll this month, when the Act was meant to come into effect. However, banks are still looking into the exact ramifications of what the new requirements will mean.

If the banks are not ready in time, our little gardening service will not be able to open an account with that name, log on for Internet banking, deposit cheques, or receive electronic payments. And that is assuming the Companies and Intellectual Property Office can even register such a name.

The fact that banks - and who knows how many other businesses - are not ready could be an indicator of just how ridiculous some of these Acts are, and the level of work that has to be done to be ready in time, or at all.

The Companies Act has already had to go back to the drawing board because there were parts of it that were flawed and now it - and the Consumer Protection Act - have been delayed for several months.

If I was a bank, I certainly would not rush out and spend millions on systems that would allow me to cope with legislation in the pipeline because it may change before it gets to the final stage. It may also be suspended in some nowhere land while politicians battle out aspects and clauses of the legislation.

The unintended consequences of legislation that has not been properly thought out are obvious, and the small set of examples outlined here are but a drop in the ocean.

However, as a voting public, we have only ourselves to blame. South Africans have a tendency to sit and wait until the absolute last minute before doing anything - the queues outside tax offices countrywide on the day of whatever deadline can attest to this.

Moreover, we also have a bad habit of sitting back and letting the issue become someone else's problem, refusing to see that it may actually impact us and our lives. Perhaps it is for this reason that government passes legislation that we bemoan.

However, surely instead of complaining after the fact, we could take better advantage of the public participation process and get our 2c-worth in before it becomes a multimillion-rand exercise?

We need to stop sitting back and watching the show unfold like some sort of reality TV programme - decisions made by government affect all of us and we can't point fingers after the fact. That is democracy at work - and will help make SA a better place for all of us.