1. PRESENTATION TO PORTFOLIO COMMITTEE ON COMMUNICATIONS ON THE REPEAL OF SECTION 16(5) OF THE POSTAL SERVICES ACT NO124 OF 1998

2. Background on Legislative Process  An extensive process of public consultation - Green Paper, gave rise to the White Paper on Postal Policy  The fundamental part of this policy is the provision of a universal service  The policy led to the formulation of the Postal Services Act No.124 of 1998  Section 16 (3) of the Act authorises the Minister to grant and issue a licence to the South African Post Office to operate the reserved area.

3. Continued  In 2001, the South African Post Office was granted and issued a licence imposing a Universal Service Obligation  The obligation is to ensure that all citizens of this country have equal access to a basic letter service that is : reasonably accessible irrespective of physical location at a uniform postage rate at an affordable price that offers a reliable service

4. Challenges brought about by Section 16(5)  Section 16(5) makes provision for licencing of courier companies who operated in the reserved area before the Act came into being.  The following are challenges posed to the government by this provision: –the inability to prohibit courier companies from operating the reserved postal service resulting on adverse impact on SAPO’s financials –the inability to ensure that SAPO strikes a balance between the fulfilment of its social obligation while it remains commercially viable

5. Continued –is a threat to the exclusivity given to SAPO to operate the reserved area(Schedule 1) of the Act due to its encouragement of other licencees /competition –the inability to protect customers effectively –has given rise to arguable interpretations e.g: A dissenting judgement of the Supreme Court of Appeal of South Africa in the case of Interlink Postal Courier SA (Pty) Ltd v South African Post Office were it was stated “ …the Legislature recognised that couriers were illegally performing reserved postal services and intended to allow them to do so legally in the future…”

6. Continued The majority argument dismissed IPC SA from operating the reserved postal service on the basis that section 16(5)(d) requires a courier service to track and trace the whereabouts of an item received or collected and delivery to a street address in this regard is impractical.

7. Why the the Repeal of Section 16(5)  The outome of the repeal of this section will: –protect section 16 (8) exclusivity given to the South African Post Office in respect of reserved postal service –Eliminate the ongoing debates as to whether or not the pre-existing couriers operated the schedule 1 postal service before this section came into being

8. The end