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Towards an Electronic Commerce Policy for South Africa

Michael GROENEWALD <mgroen@csir.co.za>
South Africa

Dillo LEHLOKOE <dillo@doc.org.za>
Department of Communications
South Africa


South Africa is in the unique position of having significant components of developed and developing countries in one country, with the majority of its citizens living in third-world conditions. It has recognized the role and importance of the emerging information economy and has played a pro-active role in the region to achieve the vision of an "African Renaissance."

The emergence of the information economy in a country such as South Africa provides significant challenges to the public and private sector. One of these challenges is the development of government policies that will enable the growth of an equitable information economy while considering the interests of the public and private sector as well as civil society. This paper will describe the progress made, the process followed, and the learning gained in the development of a government policy on electronic commerce in South Africa.

The South African government, under the leadership of the department of communications, has recently embarked on a process to develop a discussion document on electronic commerce. The document will outline the government perspective on issues that need to be addressed. This perspective will then act as a point of departure for interacting with the private sector and other stakeholders.

The paper will focus primarily on three important aspects that need to be considered when drafting an electronic commerce policy for an emerging economy. Aspects include the more traditional issues such as privacy, copyright, and jurisdiction, each considered in the light of the South African environment, as well as issues such as society, labor, access to services, and potential impact on micro-enterprises.



International events and drivers

On the international front, electronic commerce has been high on the agenda of several countries and international organizations. During the middle 1990s three predominant positions emerged globally:

There were some key differences between these positions. In 1998, the Organization for Economic Cooperation and Development (OECD) developed what can be seen as a synthesis of the three positions and this was presented at the OECD ministerial conference on electronic commerce in Ottawa, Canada. This synthesis presented issues regarding electronic commerce in four themes:

Under these broad themes, several issues were discussed. Probably the most important document arising out of the conference was "A Global Action Plan for Electronic Commerce Prepared by Business with Recommendations from Governments."

In this document, a business perspective is presented with an expectation it has in terms of government action.

The issues presented in the document are summarized as follows:

Various issues were discussed at the conference, much of which remained unresolved. However, two matters that are relevant to this paper should be noted. First, OECD countries' businesses argued strongly for self-regulatory structures for e-commerce. Second, although some developing countries were invited as observers, the positions developed are from a predominantly first world perspective. {quote from Min Naidoo ?}

In May 1998 the World Trade Organization (WTO) declared its intention to establish a WTO work program for e-commerce. This work program will examine all trade-related issues relating to global electronic commerce, including the issues identified by members of the WTO. It is likely that the WTO will then develop international e-commerce trade agreements and rules.

Although the OECD positions cannot be enforced, it is likely that it will significantly influence the WTO's deliberations on electronic commerce.

Events and drivers in South Africa

The current legal and regulatory framework in South Africa poses significant problems for legally transacting via electronic means. A typical example is the purchasing of goods or services via the Internet with credit cards.

In South Africa, various national departments have responsibility related to the development of policies related to the Information Society and per implication e-commerce. These departments are

Because of the responsibilities for various elements of electronic commerce-related policies were in different departments, little progress was made towards a consistent set of polices for the enablement of e-commerce in South Africa.

In May 1998 the Department of Communications received the mandate to establish an Information Technology investment cluster. The main objective of this cluster was to develop coherent legislation on Information Society- related issues.

A governmental task team was established to develop a discussion document that would facilitate debates on e-commerce in both the national and international arenas.

This document would form the basis of discussion for the development of an e-commerce policy and subsequent legislation.

The next section describes the development of this discussion document.

Toward an electronic commerce policy for South Africa

Developing policy in South Africa

Policies are developed in South Africa through a green/white paper process. Because of the intensive and democratic process of consultation, the policy process will take approximately two years to complete. The process is divided into three phases:

More information on the development of policies in South Africa can be obtained at http://www.polity.org.za/govdocs/legislation/process.html

The electronic commerce discussion document

The South African government has approached the development of electronic commerce policy with the following objectives in mind. The government needs to

In reviewing and developing policies regarding electronic commerce, the government will pursue the following activities:

Discussion document development process

The objectives of the discussion document and the process used to develop it are to:

A process that has been developed to address the above objectives is described in the following section.

The government discussion document development process

Figure 1. Process for the development of the South African e-commerce discussion document

The process suggested for the development of the discussion paper is outlined in the figure above. The process runs on two parallel tracks and is divided into three cycles. The tracks can be broadly categorized into issue development and research.

The first track -- issue development -- has different focus areas addressed by specific task teams. These focus areas correspond to the themes of the OECD position:

The first track has identical first and second cycles. In the first cycle a first draft of the responses to the OECD positions are developed using the above-mentioned themes as guidelines. In the second cycle the government positions on the OECD action plan are finalized.

Addressing the first track cycles in more detail: Each cycle starts with the core government task team outlining the responsibilities, expectations, and so forth. After this task, teams focusing on the OECD themes have separate processes. The first two cycles have a full task team preparatory workshop. This is followed by individual task leaders organizing separate workshops for their individual areas of focus. It was suggested that the workshops be preceded with a preparatory session where the discussion material is prepared. The workshop leader should develop -- as far as possible -- a document for discussion by the workshop participants. The workshop discussion document template was provided. If appropriate, it was suggested that more than one workshop be organized to ensure appropriate coverage of work. Subsequent to the workshops, consolidation took place where information gathered and issues discussed during the workshop are consolidated into the document guideline provided.

During the third cycle the information is consolidated and a government discussion paper on electronic commerce is developed.

The second track, research, informs the main activity of issue and position development. Research will be conducted in global trends, best practices, foresight, and so forth.

It may be possible to use scenario processes to develop scenarios based on the positions and issues raised in the response to the OECD action plan. These scenarios will allow the government to prepare for its interaction with the private sector during subsequent phases of the process to develop electronic commerce policy.

The deliverables for each cycle are outlined in the table below.

Cycle Deliverables Delivery Date
  • 1st draft of South African position on OECD Action plan: Using the OECD action plan as discussion point, present South Africa's views
  • 1st draft on South African government perspective on Electronic Commerce: Matters not directly addressed by the OECD action plan but considered important to be discussed
  • Red flags and exceptions: Red flags and exceptions may occur during the development of the draft positions. These could include:
    • Task group not reaching consensus on a particular topic
    • A global trend that has negative consequences to South Africa or other developing worlds
    • A local trend/view that is contrary to international trends/best practice and may have negative consequences for South Africa in the global environment
    • Task team research agenda for cycle 2

Areas identified that would require further research should be listed and priority indicated.

Early March


  • Draft report on global initiatives
  • Draft report on technology trends
  • Draft report on market trends
  • Status of electronic commerce in South Africa
Early Feb

Research (to be discussed)

  • Foresight / scenario baselines
  • South Africa's position on OECD action plan
  • South Africa's perspective on electronic commerce
  • Red flags
  • Task team research agenda for cycle 2

To be expanded on later in the process

End March


  • Report on global initiatives
  • Report on technology trends
  • Report on market trends
  • Status of electronic commerce in South Africa
  • Foresight / scenarios regarding electronic commerce
3 South Africa government discussion document on electronic commerce End April

The process design described above is based on cybernetic principles and conforms to the Viable Systems Model which (by design) allows for a sustainable process.

Private sector response

The private sector has been informed of the government's intention to develop a discussion document and subsequent green and white paper. The response to this has been mixed. Although this has been welcomed, concerns exist that the process may be too extended to develop policies that are useful to the country.

Having expressed that opinion, organizations and institutions are currently preparing positions on e-commerce that will be presented to government for consideration.

Current status and insights

At the time of writing this paper, the process was moving toward the end of its first cycle. Because of this, some comment can be made regarding the process and content, but more substantial feedback would only be provided after the completion of the first, second, and third cycles.


On the whole, the process appears to be stable and well structured. There are, however, a few issues that warrant highlighting that may affect the changes in the second cycle.

Although it was suggested that processes driving specific focus areas were to have a structured approach to development of views (preparation of discussion points, workshops, consolidation, repeat if necessary), little support was given to the individual task teams in their work. This led to varied outcomes in terms of quality. It will be imperative to provide significant support in terms of skills in workshop preparation, workshopping, and information consolidation for the next phases. It should be noted that the result of the lack of know-how mainly resulted in processes taking longer than expected, and more workshops required, but it is expected that the different focus areas will deliver quality products.

Due to a lack of resources, a common knowledge base could not be created. This is providing problems in terms of the interaction between the different groups (between task teams as well as between task teams and the research team). It may become imperative to develop an information infrastructure for sharing knowledge, best practices, etc.

Team aspects

The use of skills from different departments is working very well from two perspectives; there is more diversity and domain knowledge influencing the debates and issues identified. This will ensure a richer and more thorough set of issues. Secondly, using members from different departments is indeed raising the awareness of e-commerce in these departments as well as ensuring buy-in into the process.

Addressing the task teams specifically, very few team members are allocated full time to the process. This results in delays in work packages that delay delivery of the interim outputs of the process. Initially the process was designed to be completed in early April 1999, but for the reason mentioned the discussion paper submission date was moved to the end of April. If at all possible, it should be ensured that individuals from different departments are wholly allocated to such processes.

There are cases where important departments are not participating. This is a factor that will be addressed as an exception at the end of the first cycle. The current thinking is that those departments will become more involved in the second cycle when the first outputs of the process are made available to the various departments. It is felt that the issues raised are of such importance that an effort will be made to commit resources to the process.


At this point in time it is difficult to comment on the quality of the content developed by the different task teams. Towards the end of February, after the second full task team meeting, more information will be available.

Use of the OECD position as point of departure

Regarding the process designed for the development of the e-commerce discussion document, it appears that using the OECD document is very successful. Similar to the comment made on content, a clearer indication of its value in terms of the discussion document content will only be obtained after the end of the first cycle.


The development of enabling policies and regulatory infrastructures in support of the emerging Information Society are arguably the most important initiatives that can be embarked on by governments, both in the developed and developing worlds. For this reason, it has to be ensured that processes are followed to produce quality products while using scarce resources. This paper outlined the approach taken by South Africa, and has articulated the insights and best practices derived from the process.

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