State Information Technology Agency Act, 1998

16 OKTOBER 1998 No. 19371 OFFICE OF THE PRESIDENT KANTOOR VAN DIE PRESIDENT No. 1324.

16 October 1998 No. 1324. 16 Oktober 1998 It is hereby notified Act which following information:- that the President has assented is hereby published to the for general Hierby word bekend gemaak dat die President keuring geheg het aan die onderstaande Wet wat hierby algemene inligting gepubliseer word:- sy goed- ter No. 88 of 1998: State Information Technology Agency Act, No. 88 van 1998: Wet op die Staatsinligtingstegnologie- 1998. agentskap, 1998 . Act No. S&l998 STATE INFORMATION TECHNOLOGY AGENCY ACT, 1998 (English text signed by the President.) to 12 October 1998.) (Assented ACT To provide technology, participating departments South African Government; for the establishment systems of, information and in regard to these services, act as an agent of the of a company and related to, or on behalf that will provide information services and to provide for matters connected therewith. B E IT ENACTED follows:- Sections by the Parliament of the Republic of South Africa, as ARRANGEMENT OF ACT CHAPTER 1 STATE INFORMATION TECHNOLOGY AGENCY ESTABLISHMENT, (PTY) LIMITED: INCORPORATION AND RELATED MATTERS 1. 2. 3. 4. 5. 6. 7. of Agency of Agency Definitions Establishment Incorporation Application of Companies Act to Agency Certain provisions of Companies Act not applicable Objective of Agency Powers and functions of Agency to Agency CHAPTER 2 GOVERNANCE OF AGENCY 8. 9. 10. 11. 12. Board of Directors Roles and responsibilities Composition of Board Terms of office of members of Board Service conditions and remuneration of Directors CHAPTER 3 MANAGING DIRECTOR 13. Functions of Managing Director CHAPTER 4 STAFFING OF AGENCY 14. 15. Staff of Agency Staff of participating departments 10 15 20 25 4 No. 19371 GOVERNMENT GAZETTE, 16 OCTOBER 1998 Act No. 88,1998 STATE INFORMATION TECHNOLOGY AGENCY ACT, 3 998 CHAPTER 5 FINANCIAL MATTERS Funding of Agency 16. S hareholding 17.

18. Nature of financial Transfer of assets 19. interest of State 20. Business agreement CHAPTER 6 SERVICE DELIVERY CHAPTER 7 GENERAL AND MISCELLANEOUS PROVISIONS 21. 22. 23. 24. 25. 26. property intellectual Dissolution of Agency Regulations Accountability State bound by this Act Short title and commencement CHAPTER 1 STATE ESTABLISHMENT, INFORMATION TECHNOLOGY INCORPORATION AGENCY (PTY) LIMITED: AND RELATED MATTERS 10 15 20 Definitions

1. In this Act, unless (0 the context otherwise indicates- (ii) (iii) (iv> (v> (vi> (vii) (viii (ix (xi) (xii) 6 No. I9371 GOVERNMENT GAZETTE, I6 OCTOBER 1998 Act No. 88,1998 STATE INFORMATION TECHNOLOGY AGENCY ACT, 1998 Establishment of Agency 2. (1) A juristic person to be known as State Information Technology Agency (Pty) Ltd is established. (2) The Agency will be incorporated as a private company in accordance with sec- tion 3. Incorporation of Agency 5 3, (1) The Minister must effect the incorporation of the Agency as a private company in terms of the Companies Act. (2) Despite the provisions of the Companies Act or any other law. the State will be the sole shareholder of the company. (3) Despite (a) (b) the provisions of the Companies Act- on behalf of the Minister, association, articles of association connection with the formation and incorporation the Registrar of Companies must- (i) the State, must of association the memorandum register signed by the Minister; incorporate Information Technology Agency issue to the company a certificate the date of the company’s (ii) (iii) incorporation. sign the memorandum and all other documents necessary of the company; and and articles of association 10 15 of in as the company as a private company under the name “State (Pty) Ltd”; and to commence business with effect from 20 (4) The Agency will initially comprise of- (a) (b) (c) (d) the Central Computer Services of the Department of State Expenditure; Infoplan; the sub-component Security; and any other department approved by the Minister. Information Systems within the Department of Safety and 25 (5) Departments must participate in the formation of the Agency, subject to subsection (6). (6) Participation will be phased in over a period of time as determined, from time to 30 time, by Cabinet on recommendation of the Minister. (7) The Agency must, at incorporation, be exempt from the provisions of sections 63 and 172 of the Companies Act. Application of Companies Act to Agency 4. (1) The provisions of the Companies Act will apply to the Agency, except where 35 otherwise stated in this Act. (2) The Companies Act will not apply to the Agency where the Minister of Trade and Industry has issued a declaration under section 5 of this Act. Certain provisions of Companies Act not applicable to Agency 5. (1) The Minister, on the recommendation the Minister of Trade and Industry request Companies Act not applicable to the Agency. of the Agency, may, from time to time, to declare any particular provision of the 1 40 (2) (a) The request must be fully motivated, and the necessary particulars about the request and the motivation be made known by the Registrar of Companies by notice in the Gazette. 45 (b) In that notice the Registrar must- (i) (ii) to invite interested persons who may have any objections to a person named in the notice; or submit their objections and representations if sent by post, not later than 21 days after the date of the notice, place that person in possession of their objections and representations. to such a declaration 50 (3) The Minister of Trade and Industry may, by notice received, and representations in the Gazette, after having if satisfied on reasonable considered grounds (a) the objections that the non-application contribute to the efficiency of the Agency or will reduce its operating costs; of that provision to the Agency will- 8 No. 19371 GOVERNMENT GAZETTE,

16 OCTOBER 1998 Act No. 88,1998 STATE INFORMATION TECHNOLOGY AGENCY ACT, 1998 - -_- _--- .- (b) not reduce or limit the accountability detract from the requirements and operations; (c) not be prejudicial of the Agency as a public institution or and its functioning of transparency regarding to the rights or interests of employees of the Agency or of any other interested party, or to the claims of the creditors of the Agency, 5 declare, with effect from the date stated in the notice, the whole or part of a provision of the Companies Act not applicable to the Agency. Objective of Agency

6. The objective of the Agency is to provide systems and related services in a maintained to, or on behalf of, participating departments services, act as an agent of the South African Government. information technology, information systems security environment information and organs of state and in regard to these Powers and functions of Agency training; technology services; to enhance the advice and support regarding 20 systems technical, 7. (1) To achieve and maintenance of information and information the effective utilisation the Agency may- services; technology software development its objective, provide data processing provide information provide application promote efficiency at all levels of the Public Service; provide and business information provide services; with regard to any of the above functions act as procurement of information ment policy; and perform determine (2) The Agency must to give effect to the objective of the Agency. any other function which requirements, technology; information information technology technology functional and systems management agency in respect in accordance with State procure- the Minister may, from time to time, information systems security environment in the execution of its functions maintain according a comprehensive to approved policy and standards. to the policies on and a framework of norms and technology to give effect to such policies, as well as regulations made in this regard by the in terms of the Public Service Act, 1994 (Act No. 103 of 1994), and this Act. in the execution of its functions and information (3) The Agency must information management standards Minister adhere 10 15 25 30 35 CHAPTER 2 GOVERNANCE OF AGENCY Board of Directors 8. (1) The Agency will be governed and controlled, in accordance with this Act, by a Board of Directors appointed by the Minister after consultation with Cabinet. (2) The business and operational plans of the Agency must beapproved by the Board 40 of Directors in consultation with the Minister. (3) The Board of Directors will represent the Agency. Roles and responsibilities of Directors

16 OCTOBER 1998 Act No. 88,199s STATE INFORMATION TECHNOLOGY AGENCY ACT, 1998 CHAPTER 5 FINANCIAL MATTERS Funding of Agency 16. (1) The Agency is funded from monies stipulated and organs of state. in the service level agreements entered received for services into with participating rendered that are departments 5 (2) The rates used for determining the cost of service will be reasonably market related and periodically approved by the Department of State Expenditure. (3) The Agency will focus on generating maximum efficiency and cost-effectiveness for the State and the Board will recommend plan what excess funds will be retained by the Agency and for which purpose. to the Minister on the basis of a strategic 10 (4) Funding and capital agreed to between participating departments. from funds the Minister and the Minister of Finance, after consultation with the the Agency must be obtained to start operating (5) Payment for services provided by the Agency will be made according to the stipulations of the business agreement between (6) (a) Any special funding required or other special financial arrangement, any government grants, may be negotiated by the Agency with the Minister, of Finance and any other interested party. to a department or an organ of state the parties. including the Minister 15 (b) The subsequent agreement will include all conditions to be met relating to such an 20 arrangement. (7) (a) The Agency may, with the approval of the Minister, accept donations and bequests. (b) Particulars of each donation or bequest accepted by the Agency must be given in the annual report of the Agency. (8) The Department of Public Service and Administration will be responsible for all transfer payments to the Agency approved by the Department of State Expenditure. (9) The books and records of accounts and financial statements of the Agency will be audited annually by the Auditor-General. Shareholding

9. A Director of the Agency must carry out prov isions of this Act and the Companies Act. his or her duties in accordance with the 45 10 No. 19371 GOVERNMENT GAZETTE,

16 OCTOBER I998 Act No. 88,199s STATE INFORMATION TECHNOLOGY AGENCY ACT, 1998 Composition of Board 10. (1) The Board must consist of not more than ten members appointed by the Minister, consisting of- a non-executive Chairperson; (a) (b) not more than three executive Directors, one of whom must be designated as 5 (c) the Managing Director; additional non-executive members, consisting of- (i) one member the Department representing Administration; of Public Service and (ii) one member (iii) one member as a legal expert; and (iv) other members on the grounds of their expertise. representing the Department of State Expenditure; (2) A majority of the appointed Directors (3) The Chairperson has a casting vote in addition forms a quorum. to a deliberative vote, and on an equality of votes he or she must exercise the casting vote. Terms of office of members of Board 11. (1) A non-executive member of the Board- (a) holds office for a period of three years which can be extended, unless a shorter 10 15 (b) period is stipulated serves as member on the terms and conditions determined by the Minister and 20 specified in the letter of appointment in the letter of appointment of the member; and of the member; (c) may resign by giving one month’s written notice to the Minister. (2) An executive member of the Board may resign by giving notice as stipulated in his or her employment contract. Service conditions and remuneration

12. A member of the Board, except the executive directors and any appointed member who holds a post or office in a department, or body established by or under any other law and funded wholly or partly by the State, will be remunerated, from time to time, with the concurrence of the Minister of Finance. on a daily basis at a rate determined by the Minister, or any institution, organisation CHAPTER 3 MANAGING DIRECTOR Functions of Managing Director 13. (1) The organisation of the Agency and its day to day business and operations will and control of the Managing Director, that the Board may, from the charge and general management and instructions to the general or special directions be under subject time to time, issue to the Managing Director. (2) The Managing Director is accountable to the Board, and is the chief administrative and executive officer of the Agency. -3 CHAPTER 4 STAFFING OF AGENCY 25 30 35 40 Staff of Agency 14. (1) The Managing Director may appoint staff to perform work for the Agency, subject to any general or special direction of the Board. (2) The remuneration, allowances and service benefits of the staff of the Agency must 45 be determined by the Board. 12 No. 19371 GOVERNMENT GAZETTE, 16 OCTOBER 1998 Act No. 88,1998 STATE INFORMATION TECHNOLOGY AGENCY ACT, 1998 (3) The normal rules of non-disclosure of information in the Public Service will apply to personnel of the Agency. (4) In the making of appointments must be based on training, imbalances of the past to achieve an Agency broadly representative people, skills, competence, knowledge representation according including to race, gender and disability. and the filling of posts, the evaluation of persons and the need to redress the of the South African Staff of participating departments 15. (1) All employees departments involved contemplated in the information function in section 3(4), and practitioners technology participating information made an employment Agency, an employee and the department concerned. function of departments contemplated offer by the Agency, unless otherwise technology of the the in in section 3(5), will be the agreed to between to the but package, including six months the Agency, in section 3(4); to the following principles: (2) The offer will be subject The total remuneration the comparable monetary value of the service benefits due to them, offered by the Agency, may not be less than immediately prior to those payable or due to them by the previous employer their package must be remuneration transfer reconsidered within contemplated all vested funds to the Agency; transferred transfer of Infoplan employees who are members of a pension fund registered in terms of the Pensions Fund Act, 1956 (Act No. 24 of 1956), must be done in terms of section 14 of the said Act; prior to the transfer of the personnel, among the current employers, concurrence of the Minister of Finance, where applicable, as to whether- (i) certain benefits such as accrued leave and sick leave should be wholly or rights accrued from the previous employer and associated an agreement must have been reached and with the to the employee must be acknowledged the offer was made and the Minister, to employees the Agency after and (ii) partially carried over to the Agency; or the monetary value of such benefits should be payable wholly or partially to an employee prior to transfer, the employer and the employee; and the agreement must furthermore stipulate which portion of the costs of the transferred benefits are carried by the previous employer and which portion by the Agency; the agreement must also deal with the handling of any contractual obligation between the offer will only be made respective employers at the time of the conclusion of the agreement; personnel accept that offer, will not be entitled an officer who is a member of the Government Employees’ Pension Fund and who is employed by the Agency may- (i) choose to become a dormant member of such Fund, and from the date of such a choice, such an officer must, despite the provisions of in the service of the State and to whom an offer is made and who to voluntary to employees who are in the service of the to be a dormant member of the Fund; or exercising any other law, be regarded choose to remain a member of the Fund, in which case the Agency will be responsible request withdraw Employees Pension Law, 1996 (Proclamation No. 21 of 1996). to become a member of any other approved pension in accordance with the Government for the employer’s contribution from the current Fund severance package; to the Fund; or fund and (ii) (iii) (3) (a) The Minister or any other Minister may, at the request of the Agency, second in accordance with section 15(3) of the Public Service Act, an officer to the Agency 1994. 5 10 15 20 25 30 35 40 45 50 (b) For as long as that officer is seconded for the remuneration to the Agency, and allowances paid by the department the Agency must reimburse the relevant department that officer, and for any other moneys spent by the department on the officer’s other arising from the secondment of service benefits and any other costs to the department that officer to the Agency. to 55 14 No. 19371 GOVERNMENT GAZETTE,

17. The rights attached to the shares f the Minister on behalf of the State. bY Nature of financial interest of State of which the State is the holder will be exercised 18. (1) The State will be issued with fully paid-up shares in the Agency as specified the Agency and Minister, with the concurrence of in the Agency for the assets and liabilities to the State, but if the State is issued with shares which in the Agency, the Agency the nett value of the assets so in an agreement entered into between the Minister of Finance, in exchange valued on a method acceptable are less than the nett value of the assets and liabilities will be indebted invested and the value of the shares so issued. to the State for the difference between invested invested to the Agency, (2) (a) The debt contemplated (1) will be regarded as a loan by the State the terms and conditions of such a loan must be set out in the agreement. that the Agency may issue the State with in subsection (b) The agreement must make provision debentures for the whole or part of the amount of the loan. (3) For the purpose of this section, any reference in the Agency must be understood and other property or assets transferred to the nett value of the assets and the value of all the the to the Agency, minus to mean liabilities movable, liabilities. invested immovable 25 30 35 40 45 16 No. 19371 GOVERNMENT GAZETTE, 16 OCTOBER 1998 Act No. 88,1998 STATE INFORMATION TECHNOLOGY AGENCY ACT, 1998 Transfer of assets 19. (1) Where an activity of the Agency was performed by a participating department and an asset was held or used by any of the parties connection with the performance of that activity, consultation with his or her Minister must transfer to in section 3(4) in in the relevant Head of Department the asset to the Agency. referred 5 (2) The transfer of such assets to the Agency must take place by mutual agreement in consultation with the Minister from Denel (Pty) Ltd, the between the participating department and the Agency of Finance, and in the case of a transfer of assets of Infoplan provisions of the Companies Act will apply. (3) Despite subsections (1) and (2), the State may transfer assets to the Agency in 10 order to further the objective, powers and functions of the Agency. (4) The Agency may sell fixed assets only with the approval of the Board in consultation with the Minister. CHAPTER 6 SERVICE DELIVERY 15 Business Agreement 20. (I) A business agreement to regulate the relationship between individual participating departments or organs of state and the Agency must be concluded. (2) The business agreement must be supported by service level agreements negotiated between individual participating departments or organs of state and the Agency. 20 (3) Contracts, rights and obligations existing at the time of transfer of assets from participating departments or organs of state must be ceded to the Agency. CHAPTER 7 GENERAL AND MISCELLANEOUS PROVISIONS service, item, method or any other in any other law, all intellectual property rights, in any in any or thing of any nature vested to information technology or organ of state relating department Intellectual property 21. (1) Despite any provision product, participating information (2) The Board of Directors systems will vest in the Agency. is empowered thing of any nature method or any other achievement of its objective. to direct how such product, service, is to be utilised by the Agency item, in the 30 25 Dissolution of Agency

23. The Minister may make regulations regarding- (u) (b) (c) (d) (e) 0 of Directors to the Board; to be performed by the Agency; the functions the appointment the security requirements the security clearance of staff; transitional any other matter which the Minister may consider necessary order to achieve of the different departments the objects of this Act. arrangements with regard to the formation of the Agency; and to prescribe and organs of state; in Accountability 24. (1) The Agency is accountable to the Minister. 35 40 45 18 No. 19371 GOVERNMENT GAZETTE, 16 OCTOBER 1998 Act No. 88,1998 STATE INFORMATION TECHNOLOGY AGENCY ACT, 1998 (2) The Agency must compile an annual report and submit it to the Minister, who must table that report in Parliament. (3) The Agency must comply with the Reporting by Public Entities Act, 1992 (Act No. 93 of 1992), as applicable to listed entities. State bound by this Act

25. This Act binds the State. Short title and commencement 26. (1) This Act is called the State Information Technology Agency Act, 1998, and in the Gazette. comes into operation on a date fixed by the President by proclamation (2) Different dates may be fixed in respect of different provisions of this Act. (3) A reference in this Act to its commencement must be construed as a reference to 10 the applicable dates so fixed.