Companies and Intellectual Property Commission · The Companies Act, 2008 (Act No. 71 of 2008)...

Companies and IntellectualProperty Commission

STRATEGIC PLAN 2014/15 - 2018/19

CIPC STRATEGIC PLAN 2014/15 - 2016/17 1

TABLE OF CONTENTS

Acronyms .....................................................................................................................................................................................................................................................................................2

Foreword by the Executive Authority ........................................................................................................................................................................................................................3

Overview by the Commissioner....................................................................................................................................................................................................................................4

Official Sign-Off .......................................................................................................................................................................................................................................................................6

1. Strategic Overview...........................................................................................................................................................................................................................................7

1.1 Vision ........................................................................................................................................................................................................................................................................7

1.2 Mission ....................................................................................................................................................................................................................................................................7

1.3 Corporate Values ...............................................................................................................................................................................................................................................7

2. Strategic Goals and Objectives ................................................................................................................................................................................................................8

3. Measures and Baselines ................................................................................................................................................................................................................................9

3.1 Programme 1: Business Regulation and Reputation ..................................................................................................................................................................9

3.2 Programme 2: Innovation and Creativity Promotion ..............................................................................................................................................................10

3.3 Programme 3: Service Delivery and Access ..................................................................................................................................................................................12

4. Products and Services .................................................................................................................................................................................................................................14

5. Environmental Scanning ...........................................................................................................................................................................................................................17

5.1 Performance Environment .......................................................................................................................................................................................................................18

5.2 Organisational Environment ...................................................................................................................................................................................................................23

6. Key Programmes and Alignment To the dti Priorities ...........................................................................................................................................................24

7. The Customer Value Proposition ..........................................................................................................................................................................................................25

8. CIPC’s Business Model .................................................................................................................................................................................................................................27

9. Financial Plan ....................................................................................................................................................................................................................................................30

9.1 Assumptions ......................................................................................................................................................................................................................................................30

10. Strategic Risk Register ..................................................................................................................................................................................................................................34

11. Fraud Prevention Plan..................................................................................................................................................................................................................................38

Companies and Intellectual Property Commission2

ACRONYMS

Abbreviation DescriptionAPM Application Perfomance Management

BEE Black Economic Empowerment

BRICS Brazil, Russia, India, China and South Africa

CC Close Corporation

CIPC Companies and Intellectual Property Commission

CIPRO Companies and Intellectual Property Registration office

CIT Corporate Identity Theft

CT Companies Tribunal

DAC Department of Arts and Culture

DED Department of Economic Development

DHA Department of Home Affairs

DHET Department of Higher Education and Training

DIRCO Department of International Relations and Cooperation

DOA Department of Agriculture

DOC Department of Communications

DST Department of Science and Technology

FNB First National Bank

FRSC Financial Reporting Standards Council

GDP Gross Domestic Product

GIC Gauteng Investment Centre

GRC Governance, Risk and Compliance

IFC International Finance Corporation

IK Indigenous Knowledge

IP Intellectual Property

IPAP Industrial Policy Action Plan

IT Information Technology

JSE Johannesburg Stock Exchange

MISS Minimum Information Security Standard

MOU Memorandum of Understanding

MTEF Medium Term Expenditure Framework

MTSF Medium Term Strategic Framework

NDP National Development Plan –2030

NGP New Growth Path

NIPMO National Intellectual Property Management office

NPC National Planning Commission

NT National Treasury

NYDA National Youth Development Agency

OCIPE office of Companies and Intellectual Property Enforcement

PWC Pricewaterhousecoopers

SA South Africa

SACU Southern African Customs Union

SADC Southern African Development Community

SARS South African Revenue Service

SCM Supply Chain Management/Model

SST Self-Service Terminals

THE DTI The Department of Trade and Industry

TIA Technology Innovation Agency

TISC Technology Innovation Support Centres

TRP Takeover Regulation Panel

VAT Value Added Tax

WB World Bank

WIPO World Intellectual Property Organisation

WTO World Trade Organisation

XBRL Extensive Business Reporting Language


FOREWORD BY THE EXECUTIVE AUTHORITY

‘The National Development Plan is a plan for the country to eliminate poverty and reduce inequality by 2030 through uniting South Africans, unleashing the energies of its citizens, growing an inclusive economy, building capabilities, enhancing the capability of the state

and leaders working together to solve complex problems.’ National Planning Commission

The Companies Act, 2008 (Act No. 71 of 2008) establishes a modern enabling environment for companies to do business with simplicity and more regulatory certainty. It creates a forward-looking regulatory framework that provides for simple, easy company registration, enhanced governance and clarity on disclosure standards for businesses. The CIPC has another important element to its mandate. It administers, regulates and protects South Africa’s intellectual property assets in accordance with the provisions of a range of legislation enacted over a number of decades. Based on the new administrations 2014/15 Cabinet Legotla CIPC is expected to play a critical role in fulfilling the goals of the National Development Plan as articulated in the IPAP, National Infrastructure Plan (NIP) and the NGP as per outcome 4.

While much work still remains to be done by the CIPC in matching the world-class companies legislation with world-class implementation, delivering the simplicity and regulatory ease as per the Companies Act, 2008, the focus of government is slowly shifting towards intellectual property law reform. The CIPC will have a critical role to play in implementing new policy initiatives in the coming period. The National Intellectual Property Policy was released by the dti during the last half of 2013. The policy tackles the important issues in the advancement of IP in the country like the longstanding issue of the substantive examination of patents. As the South African Intellectual Property office, the CIPC is key to the implementation of this policy and needs to put the necessary building blocks in place. The IP Amendment Law was recently signed into law by the President. In the coming period, we will see the empowerment of the communities through proper recordal of their Indigenous Knowledge, as well as financial benefits of its exploitation. Much work remains to be done by the dti and the CIPC in developing the enabling provisions and systems.

With such a broad mandate, the CIPC has recognised that collaborative efforts are key to enable effective service delivery and the empowerment of citizens. In line with this, CIPC and South African Revenue Services (SARS) have been working together to identify the best ways in which this can be achieved between the two agencies of government. Integrated tax and company registration is on the cards for the strategic period. The CIPC has also collaborated with the Department of Home Affairs (DHA) to provide an easy company registration process that integrates identity verification of incorporators and directors. These services are available on self-service terminals which CIPC is piloting in a recently established service centre in Pretoria. The idea or objective is to later replicate such centres throughout the country or major cities.

The CIPC has extended its collaborative approach to the private sector as well and has rolled out a joint project with the First National Bank (FNB) around integrated bank account opening and company registration. These collaboration projects will have a fundamental impact on the South African business environment and the ease of starting a business, as well as contributing to enhancing the Customer experience.

Similarly, in the IP area, the CIPC has looked to collaboration efforts to increase the impact of its work. Various projects, executed jointly with the National Intellectual Property Management Office (NIPMO) have aimed to expand IP awareness and to explore opportunities for increase in the registration/filling of the local IP and ultimately commercialization thereof.

Following the Brazil, Russia, India, China and South Africa (BRICS) Heads of State Summit earlier in 2013, CIPC championed the establishment of the BRICS IP Offices Forum (currently chaired by CIPC) which culminated into the adoption of the BRICS Cooperation Roadmap in Magaliesburg, South Africa. With the identified areas of cooperation between the offices it is anticipated that this partnership will contribute positively to the advancement of IP in BRICS in particular South Africa.

This Strategy sets out the journey that CIPC will embark upon over the period 2014 to 2019 to achieve world class implementation of the objectives set out in the Companies Act, 2008, and to provide an enabling and facilitative environment for entrepreneurship, investment and innovation in the broader South African society. It is in line with the dti’s objective of ‘Ensuring an economy that benefits all.’ I look forward to seeing the results of the implementation of this plan.

Dr Rob Davies

Minister of the dti


OVERVIEW BY THE COMMISSIONER

“Enabling private sector growth – and ensuring that poor people can participate in its benefits – requires a regulatory environment where new entrants with drive and good ideas, regardless of their gender or ethnic origin can get started in business and where firms can invest

and grow, generating more jobs.” (Janamitra Devan - World Bank-International Finance Corporation)

Since its establishment, CIPC has been engaged in a process of rapid, fundamental transformation in order to respond to its globalised, fast changing environment for both the delivery of value to its Customers and stakeholders and at the same time remain relevant to South Africa’s developmental and economic needs.

On various areas of its mandate CIPC has laid a strong foundation to move forward with both confidence and pride. IT systems have been stabilised with improved infrastructure, improved functionality, greater security and enhanced bandwidth. This enabled CIPC to, on an on-going basis, introduce new innovations and continuous improvement for a better Customer experience. The introduction of on line registration of companies confirmed the importance of e-services in improving operational efficiencies, accuracy and Customer experience. Some of the innovations include the review of the Customer registration process, introduction of self-help terminals, rollout of the Swedish model to deal with call centre challenges. CIPC will continue to leverage on these investments to ensure that there is expanded access, improved Customer experience and enhanced integrity of the registers.

CIPC will also continue to implement a balanced regulatory regime and to serve its Customers efficiently and effectively whilst continuing on its transformation journey. In order to enhance the scope of CIPC’s role in the economy (as envisaged in the Companies Act, 2008, National IP Policy and the IP Laws Amendment Act, of 2013) and to play a meaningful role in the new legal dispensation impacting business entities and intellectual property in South Africa, CIPC seeks continue with modernisation and repositioning the organisation into a regulator.

Going forward, three focus areas have been identified, namely: enhancing the integrity of registries; improving compliance with laws administered by CIPC; and migrating to e-services.

This year, three focus areas have been identified, namely:

• Continued ICT infrastructure and data management to improve the reliability and integrity of the information in CIPC’s registries;

• Accessibility and ease of transacting through modern, effective channels to improve the relevance and value of CIPC’s services to its Customers and Stakeholders; and

• Enforcement and compliance matters to demonstrate improved compliance with the laws that CIPC administers and build regulatory credibility.

Accessibility and query resolution are still major priority areas for this financial year but emphasis will also be placed on the enforcement and compliance areas in particular the CIPC will be looking into corporate governance issues.

CIPC is rapidly converting manual processes to electronic ones, our ICT is being upgraded and migrated to modern systems and we are shifting focus from an administrative to a regulatory entity.

• To support the above, priority will be given to:

• aligning the business names, company names and trademarks registries,

• introducing an active deregistration program,

• building the foundation for substantive patent examination,

• continuing with data cleansing and data modeling, as well as rolling out self service centers and self-service terminals,

• continuously developing and rolling out new e-services and channels,

• launching a brand new revised website, and

• implementing a new telephony solution.

We remain committed to the New Growth Path and National Development Plan – 2030, and as such CIPC confirmed its foundation of commitments, beliefs and aspirations that underpins its work. These include that:

• We are strongly committed to making a difference in South Africa’s economy. We believe that we can provide entrepreneurs and innovators with the efficient, world-class business entities and intellectual property vehicles they require to grow and leverage their assets and investments and to thereby contribute to sustained economic growth.

• We believe that, through our regulatory activity and our focus on financial disclosures, good governance and brand management; we will contribute to building the global reputation of South African businesses for integrity, credibility and reliability. This will increase South Africa’s global competitiveness and enhance South Africa’s reputation as an attractive destination for capital investments.

• We are committed to improving the governance environment by providing the investigations and enforcement action required to ensure compliance with the legislation that falls under our mandate.


• We are committed to improving the quality and integrity of our data to ensure that our information can reliably guide investment decisions.

• We will support our inventors, artists and indigenous communities through offering a basket of services. These will start with creating awareness around the opportunities that exist for protection of products that are the outcome of their innovation and creativity.

• We will give effect to the recently approved IP Amendment Laws Act of 2013 by recording the indigenous knowledge of various communities across the country. We will embark on educational campaigns to ensure that beneficiaries are aware of the legislation, know how to work with CIPC to record, register, maintain and protect their knowledge, inventions and art forms.

The current CIPC focus is around ‘optimisation and course correction’. Much has been done to ensure that CIPC has ‘caught up’ on the implementation of many of the core areas of focus within its mandate. In the coming strategic period CIPC will continue to invest in the development of its people and in providing the tools and the enabling environment required to deliver high performance.

CIPC is carefully evaluating the investments that will be required, as well as the strategic partnerships that will assist it in delivering on its strategic objectives. CIPC recognizes that it will achieve its goal of organisational excellence over time and that the journey will be based on consistent and continuous improvement in its service delivery and product offering.

CIPC will continue to focus on:

• Encouraging good governance and credible corporate citizenship through its proactive compliance strategy. The focus will be on compliance by companies with the requirements relating to accounting records, annual financial statements and holding of annual general meetings.

• Significantly expanding its compliance monitoring functions. Education and awareness will be primarily focussed on creating a culture of compliance, greater transparency and higher standards of corporate conduct.

• Improving its direct services to Customers through a number of channels – a Call Centre which has been re-orientated to ensure timely call answer and high resolution rates, private and public sector partnerships and enhanced access to services through facsimile transmission and e-mailing facilities. Similarly the self-help terminals as implemented later in 2013/14 will be expanded to ensure broadened accessibility and improved Customer experience.

• Expanding collaboration and co-operation with other regulators and government agencies such as SARS, DHA, NIPMO etc remains crucial to achieving improved impact and more convenience to the customer

• Expanding collaboration and cooperation with private sector institutions like the banks to increase access to services and increase awareness. We will be building on the foundation created by the partnership with FNB which was implemented in the previous implementation period to extend the service to the rest of the banking sector.

• Developing a research capability to better understand the needs of companies and other entities and to identify the underlying reasons, challenges and opportunities presented by registration and de-registration.

This focused action agenda will build a strong foundation for the CIPC to contribute to the achievement of the National Development Plan’s Vision 2030 and to the overall transformation of the South African economy.

Astrid Ludin

Commissioner: CIPC

24 June 2014


OFFICIAL SIGN-OFF

It is hereby certified that this Strategic Plan:

• Was developed by the management of the Companies and Intellectual Property Commission (CIPC) under the guidance of the Commissioner, Ms Astrid Ludin

• Takes into account all the relevant policies, legislation and other mandates for which CIPC is responsible.

• Accurately reflects the strategic outcome oriented goals and objectives which the CIPC will endeavour to achieve over the period 2014/2015 – 2018/19.

Ms Astrid Ludin Signature:____________________________

Accounting Authority

24 June 2014

Approved by

Dr Rob Davies Signature:_____________________________

Executive Authority

24 June 2014


1. STRATEGIC OVERVIEW

CIPC engaged in an extensive strategic review for the 2012 planning period, which entailed understanding who its Customers are and what their views of CIPC are, the expectations and requirements of key stakeholders in the public sector, as well as the inputs of internal stakeholders, including the senior management and organised labour. This gave the organization an understanding of the important issues the various customers and stakeholders needed to be attended to. During the 2013 planning period, the strategy and annual performance plans were reviewed and updated in accordance with the progress made in strategy implementation as well as the changes experienced and foreseen in the internal and external environment. A strategic review session was held on 17-18 October 2013 to review the strategy, business model and plans for the upcoming strategic period. In this session the vision, mission and core values of CIPC were confirmed with the belief that they remain relevant to the organization and the cause it aims to pursue.

1.1 VISION

The Vision of CIPC is to be the gateway to sustainable formal economic participation and investment for all in South Africa.

1.2 MISSION

The Mission of CIPC is to unlock value in businesses and intellectual property by:

• Providing easy, accessible and value-adding registration services for business entities, intellectual property rights holders and regulated practitioners;

• Maintaining and disclosing secure, accurate, credible and relevant information regarding business entities, business rescue practitioners, corporate conduct and reputation, intellectual property rights and indigenous cultural expression;

• Increasing awareness and knowledge of company and intellectual property laws, inclusive of the compliance obligations and opportunities for business entities and intellectual property rights holders to drive growth and sustainability, as well as the knowledge of the actual and potential impact of these laws in promoting the broader policy objectives of government;

• Taking the necessary steps to visibly, effectively and efficiently monitor and enforce compliance with the laws that CIPC administers.

1.3 CORPORATE VALUES

As an important cornerstone of desired culture, an agreed set of values was developed through consultation and engagement with all relevant organisational stakeholders. These values will inform the behaviour of CIPC’s employees going forward. The following core values will inform every aspect of CIPC’s work to ensure that it delivers a better service to entrepreneurs, innovators and creators:-

Table 1: CIPC values

Value What it means

Passion for service We work as one to seamlessly serve our Customers with passion, commitment and dedication.

Integrity We live out fairness, impartiality and respect in all of our actions as individuals and as an organisation.

Empowerment We recognize the value of our employees and partners and provide them with the discretion and tools to effectively deliver on their responsibilities.

Accountability We hold one another accountable for our commitments. We are responsible and responsive in the execution of our duties.

Collaboration We believe in the power of teams, teamwork and collaborative effort to deliver exceptional service and to execute our duties effectively.


2. STRATEGIC GOALS AND OBJEC TIVES

CIPC has identified three outcome oriented strategic goals that aim to give effect and substance to its strategy. These are: -

1. To improve the competitiveness of the South African economy by enhancing the reputation of South African businesses and the South African business environment;

Strategic Outcome Oriented Goal 1 Improve the competitiveness of the South African business environmentGoal Statement To improve the competitiveness of the South African economy by enhancing the reputation of

South African businesses and the South African business environment

Strategic objectives 1.1 To encourage the formalisation of South African businesses and their identity

1.2 Encourage the maintenance of high standards of corporate governance, transparency and brand protection

Programme 1 Business Regulation and Reputation

2. To contribute to a knowledge-based economy and competitive local industries by promoting innovation, creativity and indigenous cultural expression and knowledge;

Strategic Outcome Oriented Goal 2 To promote innovation, creativity and indigenous cultural expressionGoal Statement To contribute to a knowledge-based economy and competitive local industries by promoting

innovation, creativity and indigenous cultural expression and knowledge

Strategic objectives 2.1 To promote the protection and commercial exploitation of innovations in key sectors

2.2 To protect our cultural heritage and support a strong competitive South African creative industry that provides benefit to local artists

Programme 2 Innovation and Creativity Promotion

3. To promote broader formal economic participation by enhancing service delivery and extending the reach of CIPC.

Strategic Outcome Oriented Goal 3 To promote broader formal economic participationGoal Statement To promote broader formal economic participation by enhancing service delivery and extending

the reach of CIPC

Strategic objectives 3.1 To provide easy access to credible, reliable and relevant information and advice and secure, value-added services

3.2 Build an enabling and intelligent work environment anchored in a governed and sustainable organisation

3.3 To improve the reputation and organisational performance of CIPC

Programme 3 Service Delivery and Access


3. MEASURES AND BASELINES

3.1 PROGRAMME 1: BUSINESS REGULATION AND REPUTATION

Goal 1: To improve the competitiveness of the South African economy by enhancing the reputation of South African businesses and the South African business environment.

Purpose and functions

The purpose of the programme is to enhance the reputation of South African businesses and the South African business environment by ensuring that the registers of corporate entities, their managers and their identity have integrity and that a culture of corporate compliance and high standards of governance, disclosure and corporate reputation is established. The programme is also responsible to provide policy and legal insight and advice on the co-ordination, implementation and impact of the respective laws.

The following functions, amongst others, fall within this programme:

• maintaining registers of companies and close corporations, co-operatives, directors and delinquent persons, and trademarks as well as company names and business names,

• accreditation of practitioners and intermediaries,

• educating business owners and practitioners on compliance of the legislation,

• promote and enforce compliance with the legislation.

The CIPC is required to monitor compliance with certain requirements of the legislation, such as the submission of annual returns, the rotation of auditors and disclosures in terms of the financial reporting standards and the requirements for prospectuses. Furthermore, the CIPC investigates complaints and enforces the provision of the Companies Act, the Close Corporations Act, the Share Block Companies Act and the Co-operatives Act relating to governance and disclosure. Although the CIPC is currently conducting investigations into complaints and is deregistering companies and close corporations that have not submitted annual returns, it plans to significantly expand on its compliance monitoring functions.

The Business Regulation and Reputation Programme also incorporate a focus on policy and legal matters. This includes support for the prosecution of offences, the interpretation of laws, as well as the proposal of amendments to legislation and regulations. The function also entails continuously tracking international developments in the areas of corporate governance, disclosure, corporate registration and

enforcement and trademarks.

Enabling legislation

CIPC’s mandate is directed by the following legislation under Programme 1:

Legislation Mandate Sector

Companies Act, No 71 of 2008 Register companies, business rescue practitioners and corporate names, maintain data, regulate governance of and disclosure by companies, accredit dispute resolution agents; educate and inform about all laws, non-binding opinions and circulars, policy and legislative advice

Economy-wide

Close Corporations Act, No 69 of 1984 Maintain data, regulate governance of and disclosure by close corporations Economy-wide

Co-operatives Act, No 14 of 2005 Register co-operatives, maintain data, regulate governance of and disclosure by co-operatives

Economy-wide

Co-operatives Amendment Act, No 6 of 2013

Amend the accounting practices and requirements for co-operatives by providing for audit and independent review of co-operatives.

Economy-wide

Share Block Control Act, No 59 of 1980 Regulate conduct and disclosure by share block schemes Economy-wide

Consumer Protection Act, No 68 of 2008 Register business names Economy-wide

Trade Marks Act, No 194 of 1993 Register trade marks, maintain data, resolve disputes Economy-wide


Baselines and KPIs

The following table outlines the strategic objectives, baselines and key performance indicators (KPIs), also referred to as performance measures under the Business Regulation and Reputation Programme.

Strategic Objective 1.1 To encourage the formalisation of South African businesses and their identityObjective Statement To increase the formalisation of small businesses and the registration of local trade marks by South African corporate

entities

KPIs % of companies registered manually within the published service standard

% of companies registered electronically through the website, within the published service standard.

% changes in company director details processed manually within the published service standard

% changes in company director details processed electronically within the published service standard

% of co-operatives registered within the published service standard

% of trade marks applications allocated on official application number within the published service standard

Baseline (2013/14) 92% of companies registered manually within 25 working days

98% of companies registered electronically through the website within 3 working days

80% changes in company director details processed manually within 30 working days (April 2014)

96% changes in company director details processed electronically within 5 working days (April 2014)

92% of co-operatives registered within 21 working days

96% of trade marks applications allocated an official application number within 5 working days

Strategic Objective 1.2 Encourage the maintenance of high standards of corporate governance, transparency and brand protection

Objective Statement To improve the levels of compliance with corporate regulation and improve brand protection through the consistent application of corporate identity across trade marks, corporate and business names.

KPI % of companies with an “active business” status, that have filed annual returns by the end of the reporting period (year to date)

% of complaints received of which a determination to close or refer the matter to another regulatory authority or to be directed in terms of the Act to investigate the matter is made within the published service standard

Baseline (2013/14) 52% of companies with an “active business” status that have filed annual returns by the end of the reporting period (year to date)

% of complaints received of which a determination to close or refer the matter to another regulatory authority or to be directed in terms of the Act to investigate the matter is made within 30 working days of the date of receipt not measured

3.2 PROGRAMME 2: INNOVATION AND CREATIVITY PROMOTION

Goal 2: To contribute to a knowledge-based economy and competitive local industry by promoting innovation, creativity and indigenous cultural expression and knowledge.


The purpose of the Innovation and Creativity Promotion programme is to support the international IP system and to promote local innovation and creativity by maintaining accurate and secure registries of patents, designs, film productions and recordals of indigenous cultural expressions and creative works, as well as by supervising and regulating the distribution of benefits of copyright and IK rights and protecting existing rights. The programme is also responsible to provide policy and legal insight and advice on the co-ordination, implementation and impact of the respective laws.

The purpose of the programme is to support the international IP system and to promote local innovation and creativity by maintaining accurate and secure registries of patents, designs, film productions and recordals of indigenous cultural expressions and creative works, as well as by supervising and regulating the distribution of benefits of copyright and IK rights and protecting existing rights. The programme is also responsible to provide policy and legal insight and advice on the co-ordination, implementation and impact of the respective laws.

The Innovation and Creativity Promotion Programme’s purpose is primarily to encourage the uptake in the registering of patents, designs, film productions and recording indigenous cultural expressions and knowledge. This programme also oversees the accreditation of distribution agencies for the music industry and monitors the governance of the accredited institutions. In addition, the programme registers patent attorneys that have passed the Patent Board Examination and in future will also be responsible for the registration of intermediaries that transact on behalf of clients. As the intermediaries are primarily specialist lawyers, it is expected that the registration process will not involve intensive scrutiny.


The Programme is responsible for monitoring the unauthorised use of private and public intellectual property rights, with a particular focus on the protection of the intellectual property rights holders in the creative industries. These rights holders would also include communities that have registered rights in respect of indigenous cultural expressions and knowledge. The CIPC also sees an opportunity to promote local innovation and creativity by creating awareness of the opportunities that could flow from formalising rights through their registration, but also by making available information about opportunities and financing available for commercialisation. The CIPC sees a close relationship between the registration of rights and their commercialisation, as envisaged in IPAP3. A focus on certain sectors will also be pursued, which are outlined in IPAP3, namely green industries, agriculture, pharmaceuticals, business processing and creative industries. As innovation is closely linked with educational institutions, CIPC will further expand its relationship with the academic community and institutions of higher learning. The CIPC, through focused strategies, education and partnership initiatives with others enforcement agencies, notably with the National Intellectual Property Management Office (NIPMO), Technology Innovation Agency (TIA) and Department of Science and Technology (DST) focus on the protection of important assets such as IP products and brands from being misappropriated. The CIPC will act against counterfeiters and others that do not respect IP rights in collaboration with the other responsible government agencies.

Innovation and Creativity Promotion mainly focuses on the following activities: to register patents, designs, cinematograph films, indigenous knowledge, terms and cultural expressions of folklore and maintain such efficient and accurate registers; to monitor the unauthorised use of intellectual property rights and compliance with accreditation criteria for accredited intermediaries and to co-ordinate appropriate enforcement actions; to create awareness of the requirements and benefits of registration of intellectual property rights, the remedies available and the opportunities for intellectual property advice, commercialisation and industry development; and to provide policy and legal insight and advice on the implementation and impact of the relevant legislation. In this area, research and analysis is also important to identify and gauge the impact of registration of IP rights and further to have basis for intellectual property policy inputs.

Enabling legislation

The following legislation directs CIPC mandate under this Programme:

Merchandise Marks Act, No 17 of 1941 (Unauthorised Use of State Emblems Act, No 37 of 1961)

Prevent and enforce the unauthorised use of state emblems Economy-wide

Patents Act, No 57 of 1978 Register patents, maintain data, publish patent journal, administer Court of Commissioner of Patents

Economy-wide

Designs Act, No 195 of 1993 Register designs, maintain data, resolve disputes Economy-wide

Copyright Act, No 98 of 1978 Provide non-binding advice to the public Creative industries

Registration of Cinematography Films Act, No 62 of 1977

Register films, maintain data Film industry

Performers Protection Act, No 11 of 1967 Accredit Collecting Societies; regulate their governance, conduct and disclosure Music industry

Intellectual Property Laws Amendment Act, No 28 of 2013

Record and register IK, administer the National Trust and Council for IK, accredit dispute resolution agencies

Creative industries

Counterfeit Goods Act, No 37 of 1997 Conduct and co-ordinate search and seizure operations, oversee depots Economy-wide


Baselines and KPIs

The following table outlines the strategic objectives, baselines and key performance indicators (KPIs), also referred to as performance measures in the Innovation and Creativity Promotion Programme:

Strategic Objective 2.1 To promote the protection and commercial exploitation of innovations in key sectors

Objective Statement To increase the proportion of local filings of patents and designs and patents with recorded licence agreements

KPI % of patent applications allocated an application number within the published service standard

% of design applications allocated an application number within the published service standard

Baseline (2013/14) 97% of patent applications allocated an application number within 5 working days

97% of design applications allocated an application number within 5 working days

Strategic Objective 2.2 To protect our cultural heritage and support a strong competitive South African creative industry that provides benefit to local artists

Objective Statement To increase the number of local filings of cinematography and to increase number of performing artists with agreements in place

KPI % of copyright in film applications allocated an application number within published service standard

Baseline (2013/14) 57% of copyright in film applications allocated an application number within 2 working days

3.3 PROGRAMME 3: SERVICE DELIVERY AND ACCESS


The purpose of the programme is to promote better access to and service delivery by CIPC by ensuring that our access channels are secure and easily accessible to all, that the institution has sufficient and appropriate organisational resources to deliver the best possible service and that operational excellence is established in all areas of the organisation. The emphasis of the CIPC business model is equally on the quality of the services it provides, the acceptable speed with which it delivers them and the value that its products, services and solutions generate for Customers. The CIPC’s business model focuses on the manner in which it will deliver services, the quality of those services, the fees it will charge to be sustainable and the potential for value addition.

In order to deliver on its strategic mandate, CIPC has identified three key resources that it will need to build, develop and / or acquire: an informed, competent and engaged workforce; intelligent information technology systems and infrastructure; and strategic partners that assist the CIPC to deliver on its broader mandate in a mutually beneficial manner.

A large fraction of the CIPC’s services has been delivered through intermediaries - IP legal practitioners, company secretarial services, provincial small business development partners and other associated intermediaries. Customers chose to transact through intermediaries for the sake of convenience, but also because CIPC was difficult to access and navigate. CIPC focuses on improving its direct services to Customers through its the implementation of a new business model which is based on a direct channel and partnership approach which is aimed at meeting Customer needs through telephone services – where greater emphasis is placed on answering calls and resolving Customer queries, through Customer faxing or emailing documentation. Self-help terminals will also be rolled out.

The CIPC works with collaboration partners to increase access to its products, services and solutions through the development of indirect channels. These channels are managed in collaboration with identified service delivery partners. The partners are identified on the basis of the increased value that the combined services of the CIPC and its partners can deliver to its Customers. The key principles that inform the choice of service delivery partners is a combination of this enhanced value to entrepreneurs and inventors as well as the partners’ ability to contribute to the increased ease of doing business in South Africa. At all times, the selection of partners should not compromise CIPC’s operating or Customer service standards. Identity verification is a key required capability, so that the integrity of the CIPC’s information can at all times and through all channels, be consistently relied upon.

In order to deliver the enhanced services required by its Customers and stakeholders, CIPC require competent, engaged employees who deliver high quality work at an acceptable speed of delivery. As a public sector regulatory agency rather than a business, the CIPC’s ultimate goal is not to be profitable but is rather focussed on a self-sustaining funding model that delivers sufficient revenue to cover the capital and operating costs of the services it delivers. Operational efficiencies are enhanced by intelligent, high performance Information Technology (IT) systems, which serve CIPC employees, CIPC Customers and their partners and registered intermediaries. Expenditure on its IT systems continues to be a consistent feature in its budget over the period of the strategic plan and into the future.

Given the importance and sensitivity of the information held by the CIPC and the impact of service delivery on the business sector, CIPC prioritise information integrity and security, disaster recovery and change management in all its efforts. It places significant emphasis on pro-actively managing the strategic risks that have been identified, while providing innovative and value-adding services.

Baselines and KPIs


The following table outlines the strategic objectives, baselines and key performance indicators (KPIs), also referred to as performance measures in the Service Delivery and Access Programme:

Strategic Objective 3.1 To provide easy access to credible, reliable and relevant information and advice and secure, value-added services

Objective Statement To increase the % of applications received through on-line channels and e-mail to 95%

To increase the % of calls coming through the call centre number answered during the reporting period to 80% by 2018/19

To roll out 450 self-service terminals throughout the country by 2018/19

To increase the % of website availability to 99% by 2018/19.

KPI % of on-line company registrations transactions ( private company type only, CoR 15.1A)

% of on-line director changes transactions

% of on-line trademarks applications

% of on-line patents applications

% of on-line designs applications

% of on-line copyright in film applications

% website availability for on-line filings 24/7

% of calls coming through the call centre number answered during the reporting period

Number of self-service terminals installed and operational

Baseline (2013/14) 81% of on-line company registrations transactions (private company type only, CoR 15.1A) .

54% of on-line director changes transactions (April 2014)

49% of on-line trademarks applications

9% of on-line patents applications

8% of on-line designs applications

14% of on-line copyright in film applications

92% website availability for on-line filings 24/7

31% of calls coming through the call centre number answered during the reporting period

7 Self Service Terminals installed and operational

Strategic Objective 3.2 Build an enabling and intelligent work environment anchored in a governed and sustainable organisation

Objective Statement To improve the organisational capacity of CIPC by ensuring that CIPC can support itself 100% through its operating revenue

To ensure that the organisation has 95% human resource capacity by 2018/19

KPI % of operating expenditure covered by operating revenue

% filled positions on the approved structure

Baseline (2013/14) 100% of operating expenditure covered by operating revenue

70% filled positions of the approved structure

Strategic Objective 3.3 To improve the reputation and organisational performance of CIPC

Objective Statement To position CIPC as an effective regulator and a reliable service provider and to improve organizational performance.

To achieve 90% of the Annual Performance Plan (APP) targets

KPI % of Annual Performance Plan (APP) targets met

Baseline (2013/14) 67% of APP targets met


4. PRODUC TS AND SERVICES

CIPC mandate

The CIPC mandate, according to the legislation outlined in section 3, can be summarized as the registration of corporate entities, the protection of their identity and reputation and the regulation of their conduct and disclosure, as well as the registration and protection of intellectual property rights.

South Africa is also a member of a number of important Treaties and Agreements and ensuring compliance with South Africa’s obligations in terms of these Treaties or Agreements. CIPC administers these treaties on behalf of South Africa. These Treaties and Agreements include the:

• Paris Convention;

• Patent Co-operation Treaty;

• Berne Convention;

• Budapest Treaty; and the

• TRIPs Agreement.

It is anticipated that South Africa will conclude accession to The Hague Agreement and the Madrid Protocol in the near future, which will require of CIPC to administer those Treaties as well.


Customer needs and expectations

In understanding CIPC’s dominant value proposition, it is important to confirm that that CIPC has two important core functions. It has to deliver services to its Customers in a responsive, efficient and Customer-centric manner. This has to be done in such a way that ensures that the integrity of Customer information is not compromised in the interest or expediency of service. It is also an important regulator of market conduct. As such, ensuring compliance to legislation is an essential core component of its regulatory function.

This dual role has the potential for tensions and conflict. CIPC provides a revenue-generating service to its Customers. It also supervises and enforces its Customers compliance to the legislation entrusted to CIPC by its mandate. By so doing, it runs the potential risk of regulatory capture by being dependent upon those it regulates as the source of its revenue.

Regulatory capture occurs when a state regulatory agency, created to act in the public interest, instead acts in favour of the commercial or special interests that dominate the industry or sector that it is charged with regulating. The potential for regulatory capture presents a number of specific regulatory dilemmas or tensions that need to be managed on an on-going basis. The first tension is between having a Customer-centric orientation and retaining the independence, impartiality and the confidence to enforce where required.

The second key tension is between Customer satisfaction and Customer respect. Through the supervisory and enforcement activity CIPC exercises, it may well take action that does not directly generate Customer satisfaction as it may have an adverse effect on the interests of Customers. It should nevertheless engender a feeling of respect in that its actions are seen to be impartial and fair.

All of CIPC’s Customers ascribe significant value to the reliability and integrity of CIPC and the data that it gathers and maintains. They also require acceptable turnaround times for the registration of companies and intellectual property and prompt, secure access to relevant information held by CIPC. This needs to be done in such a way as to ensure that data integrity and privacy of individuals are not compromised. To deliver on operational excellence, CIPC should understand its Customers and adapt its structure, systems and processes to deliver on their legitimate needs and expectations. Not all Customers have the same needs and expectations, so it is important to adopt a business model with a model of Customer segmentation that informs the way in which organisational structures, systems and processes are best structured to enable effective service delivery and to deliver on CIPC’s promise.

CIPC’s Customers may (at a very high level) be segmented as follows for both corporate and intellectual property: -

1. Customers with registration needs;

2. Customers with information and data needs;

3. Customers with compliance needs; and

4. Customers with redress needs.

Different Customer groupings may also have different needs around access to CIPC. For example, Customers in rural areas do not have the same level of direct access to CIPC’s offices or the same levels of business sophistication. They may therefore require innovated communication and/or access channels to ensure that they receive the appropriate service from CIPC. The following table details the perceived needs and expectations of these Customer segments:


Table 6: Summary of Customer needs based on Customer segmentation

Needs Based Segmentation

Types of Customers Product and Service Needs

Customers with registration needs

Customers who access our services directly

Customers who access us indirectly through intermediaries or through their company secretaries

Includes actual and potential Customers

Efficient, predictable and reliable registration and amendment of registrations of entities and intellectual property rights

Accuracy, security and protection of registry information

Choice, efficiency and cost-effectiveness of access channels

Information about the benefits and obligations of registration and other rights, responsibilities and recourse

Information about opportunities for growth

More personalized, decentralized service, advice and support – face to face, agency or contact centre

Greater ease of doing business, e.g. integrated registration for tax, workman’s compensation, bank account, etc.

Customers with information and data needs

Government agencies, institutions, banks, international business entities, international bodies (WIPO), other regulators and the general public

Access to accurate, reliable information and data – either through face-to-face contact or direct access to CIPC systems and/or database, usually for verification and fraud prevention purposes, could also be for search purposes (e.g. IP or name reservations) and for legal clarity;

Access to policy information about business activity, conduct and impact of regulation on enterprise formation and sustainability, innovation and creativity in specific sectors

Customers with compliance needs

Registered entities or holders of renewable IP rights

Easily accessible information about the compliance obligations and requirements

Advice on complicated matters

Easy lodgment of compliance obligations, inclusive of ease of payment and feedback on levels of compliance

Minimal interaction with CIPC

Customers with redress needs

Individual or corporate investors, directors, IP rights holders, acting alone or through intermediaries

Timeous investigation of complaints, empathy;

Professional investigation, remedial action and report back by trained, knowledgeable professionals

Credible, reliable findings

Reversal of illegal actions and possible damages

During 2013, the CIPC initiated a Customer segmentation exercise to enable CIPC to better understand Customer needs in relation to CIPC services and Customer’s interaction with CIPC. The aim of this exercise was to assist CIPC become more Customer-centric. A survey, comprising telephonic, online and face-to-face interviews, was conducted on selected products and services offered with regard to Business Entities (companies, close corporations and co-operatives). Most of the respondents were from Gauteng (47%) followed by Western Cape (16%), KZN (13%) and then the rest of the provinces (24%). Interestingly, this pattern correlates directly with the number of business entities on the CIPC’s database and GDP contribution by provinces. The most recent transactions that the Customers had just concluded, related to business entity registration (36%), annual returns (28%) and business entity amendments, particularly changes of directors or members (18%). The main reason why Customers wanted to formalise their business, was as a result of identifying a business opportunity (52%).

The survey indicated that most of the Customers were satisfied with the CIPC website and preferred to transact through the website and cellular phones. Respondents indicated that the least preferred method of transacting was to physically visit the CIPC offices. Similarly, Customers prefer to communicate through the website, e-mails and sms channels respectively. An average of 95% of Customers have an active e-mail account, while an average of 94% have access to internet services. This suggests that there are great opportunities for the CIPC to leverage against these platforms to simplify transactions and communicate effectively with Customers.

In terms of its Vision, CIPC aspires to be ‘the gateway to sustainable formal economic participation and investment for all in South Africa’. This implies that individuals and corporate entities should enjoy many of the benefits of the formal economy once intellectual property or business entities are registered.

CIPC realises that for a number of individuals and single owner of small businesses, registration may not deliver any real benefits and may simply add unnecessary costs and create an unnecessary bureaucratic burden. For CIPC, registration without any real benefits accruing to the Customer, may simply lead to future de-registration and unnecessary administration.

It is important therefore that CIPC develops a value proposition around registration that delivers real, perceived value to Customers. It is also important that CIPC informs the discretion of individuals and corporate entities regarding the potential benefits of registration whilst ensuring that particularly small businesses derive real benefits from registration. In this regard, the organisation needs to be at a certain level of maturity to partner with particularly large corporates that can ‘handhold’ small businesses to reach a point of sustainability. The


sustainability of registrations is very important to CIPC in its future planning. To enable good quality registrations, CIPC will need to increase awareness of the potential benefits of registration in its ‘un-served’ market. The ‘un-served market’ may best be defined as ‘those individuals or corporate / collective entities that do not currently enjoy formal registration with CIPC and are unaware of the potential benefits of registration.’ This increased awareness should be realistic and balanced providing a sound basis for Customer decision-making.

CIPC’s proposition is that economic growth coupled with a growth in creativity and innovation will create a natural ‘pull through’ need for registrations. CIPC’s role should therefore be to ensure that all who may potentially benefit from registration are aware of the potential benefits of registration and are able to access registration quickly, easily and at a cost that does not discourage registration. Some of the potential criteria that could indicate that a need for registration exists include: -

• Where a single owner business has an aspiration for services provided by others within the formal economy, such as financial services and credit, and where registration is the pre-requisite for the supply of such services;

• Where a single owner business has an aspiration for growth and requires formal registration to access capital (either through the registration of the business itself or through the registration of intellectual property that has an assumed value and against which finance may be raised);

• Where the owner of a business may wish to avoid actual or potential personal liability through the transfer of such liability into a limited liability legal entity’

• Where the owner of a business may want to bring in equity partners or may want to sell a business and its assets;

• Where the owner/s of intellectual property may wish to protect its trade marks, copyrights, patents or designs from infringement, theft or abuse by others.

5. ENVIRONMENTAL SCANNING

While the legislative and policy mandate of CIPC establishes the foundation for its strategy, other factors that impact on its environment also need to be considered. These include the impact of the economic environment on the demand and need for its services, Customer needs and expectations, opportunities that exist, as well as local and international trends that influence the manner in which its mandate is executed.

CIPC’s strategy and plans have to be understood within the broader global context impacting on investors and businesses. The strategic environment within which CIPC finds itself is defined by a number of issues, including:

• Slow economy in South Africa – The National Treasury projects that the gross domestic product (GDP) growth of 2.1 per cent in 2013, down from 2.5 per cent in 2012 and 3.5 per cent in 2011. GDP growth is expected to recover over the next three years, reaching 3.5 per cent in 2016. This may increase the number of companies that have file for bankruptcy and de-registration. The CIPC’s role in Business Rescue will need to continue to develop and the impact of the de-registration process on other government agencies such as SARS will need to be mitigated;

• Importance of effective regulation reinforced – CIPC is both a service provider and a regulator. There is a need to strengthen CIPC’s regulatory role with the acquisition of the appropriate intelligence, risk analysis and mitigation and enforcement competencies. The CIPC has developed a culture of responsiveness to the needs of its Customers. This focus must not allow it to become subservient to the entities it regulates and must ensure that it avoids regulatory ‘capture’. The current economic environment remains complex for CIPC in pursuing its full mandate and requires some trade-offs in seeking to lower the cost of doing business and maintaining a register that has the necessary integrity. This should be achieved whilst CIPC fulfills its mandate and ensuring its sustainability in the long run;

• Emergence of knowledge and innovation as key strategic assets / differentiators for private and public sector organizations. Recent global court cases between Apple and Samsung have stressed the importance of IP as a significant business asset and have highlighted the high stakes involved in IP protection. Commercialization of IP remains the crux of ensuring that the innovators derive some form of remuneration for their worthy inventions. CIPC realized that despite its mandate extending only to protection of IP, it has to provide a platform for innovators to expose the inventions to the market for licensing among other possibilities. To this end CIPC launched the Market Place late in 2013 which is aimed at achieving this goal. It is anticipated that through this initiative CIPC will be able to collaborate with other relevant agencies for even better outcomes. The Technology Innovation Support Centre (TISC) in collaboration with NIPMO and other relevant offices remains strategic to stimulating local innovation, reducing cost, as well as ensuring improved access to the IP system in general and patent system in particular.;

• Intellectual property (IP) is viewed as key strategic asset at both business and national level. It is important to grow South Africa’s (SA) stock of IP and protect indigenous knowledge from exploitation. CIPC awaits the confirmation of the substantive examination as the new approach to add value to the patent system we will fill the 20 searcher positions as per the approved structure. During the period of the strategy they will be given the necessary skills and experience to meet thus new challenge. The Technology Innovation Support Centre (TISC) in Collaboration with NIPMO and other relevant offices remains strategic to maintaining this capacity, reducing cost, as well as ensuring improved access to the IP system and general and patent system in particular. The proposal for the TISC will be finalized


by the end on 2013/14 financial year. This is at the core of ensuring improved integrity of patent register as well as strengthening innovation and creativity. The CIPC works closely with WIPO to ensure that global IP standards are implemented in South Africa and that global best practice is reflected in the changing IP legislative and policy environment. An imperative for the CIPC is to attract the registration of IP from African countries, and in particular from countries within Southern African Development Community (SADC);

• An increased focus on enabling co-operatives in 2012 (the year of Cooperatives) and the discontinuation of close corporations has resulted in increased registration of co-operatives resulting in an increase in cooperatives being registered. CIPC will continue to ensure that this increase is also supported by increased compliance to the Law with regard to financial reporting.

• Ease of doing business is an important attractor for global capital – it is important for CIPC to envision ways of reducing regulatory burden and costs whilst increasing Customer value add. This has influenced the CIPC to explore alternative access channels and partners that should result in improved turnaround times on registrations and a ‘one stop’ registration process across different government agencies;

• Rising Customer expectations, the power of technology and social media are all amplifying pace of change and presenting new challenges and opportunities. Customers are increasingly expecting 24/7 real time access to their information and to transactions. This presents both challenges and opportunities for CIPC. The rapid adoption of smart phones has increased the viability of increasing access through the development of mobile applications. It has also enabled more effective communication to Customers of the progress of registration applications. Developing new access channels through smart phones and the utilisation of social media are immediate areas of focus for CIPC,

• Globalization requires that SA businesses be viewed as credible, well regulated entities with world class governance standards. The CIPC will continue to expand its governance capability and its regulatory functions in this regard;

• SA requires economic growth to deliver on its social obligations. Better understanding the needs and challenges of business, including the vital small business and co-operatives sector will inform the future role of the CIPC in this regard. Initiatives are planned for the

coming strategic period to research underlying needs and best practice in this regard.

CIPC has been brought into being within the context of a world in economic recession. At a global level, governance and regulatory failures, fiscal crises, global imbalances and shifts in economic power have all created a challenging environment of uncertainty and high risk. At a national level, the challenges of creating decent jobs, maintaining economic growth and dealing effectively with crime and corruption have all contributed additional impetus to the accelerated development of CIPC.

CIPC will continue its external focus on better understanding its role and in institutionalising its mandate. It will continue to do this mindful of its obligations as an important member of a community of government departments and agencies with which it shares a purpose to contribute to the economic and social well being of all South Africans.

5.1 PERFORMANCE ENVIRONMENT

5.1.1 THE ECONOMIC CONTEXT

The global recession has led to an environment of heightened economic uncertainty, with projections for growth in world GDP for 2014 being revised down significantly for most of the countries. Growth in world trade volumes has slowed sharply and the direct impact was felt in the South African economy as well. Some of the local macro-economic variables have also impacted on the economy like the prolonged mining strikes, the weakening of the rand, to mention but a few. However African economic growth continues to outperform traditional economies and this remains a positive factor for the South African economy.

In the face of an uneven global economic recovery and continued domestic constraints, the South African economy has continued to grow at a moderate pace. The National Treasury (NT) projects gross domestic product (GDP) growth of 2.1 per cent in 2013, down from 2.5 per cent in 2012 and 3.5 per cent in 2011. GDP growth is expected to recover over the next three years, reaching 3.5 per cent in 2016. After five years of financial and economic instability, world economic growth prospects remain subdued. While the NT expects a gradual recovery in trade and development prospects, South Africa cannot rely on the global economy to be the main driver of domestic growth and development.

It is expected that slow growth will continue in South Africa over the foreseeable future, as the world economy recovers. Historically, the growth in the number of applications for company and intellectual property registration has been closely linked to domestic and global growth. In the context of the current economic outlook, it is expected that growth in registration of companies and IP will be limited and will closely track the changes in the local and global economy, unless there is a particular policy focus and concerted effort in particular areas to stimulate local demand for registration. This may be the case with co-operatives, where there is a concerted government drive for new registrations.

Whilst growth in registrations is desirable as a short-term indicator of increasing economic activity as well as an acknowledgement by the marketplace of the value of registrations, the sustainability of registrations is probably a more accurate reflection of success in the medium to long term. Registrations that lapse or are cancelled are an indication that organisations do not have the competitive or managerial capacity


to survive or to fully benefit from the potential of registration. It may also be an indication of a premature shift from the informal to the formal economy and as such, registration may be of limited benefit to these organisations.

Unsustainable registrations are also of limited benefit to CIPC. The high administrative burden of de-registration and lapsed registrations is not in CIPC’s interests. Ultimately it is important that those who register have their discretion well informed so that they can make the best possible decision at the time of registration. This should be based upon a sound understanding of both the advantages and potential disadvantages of registration.

In 2013/14 CIPC conducted a customer survey to gain a better understanding of why customers register entities and then these are kept dormant and end up in the deregistration process. The outcome of the survey and analysis will be used to innovate new CIPC’s products and services and will potentially serve as an input to developing well informed Customers who are able to make better decisions regarding whether or not to register their entities and intellectual property.

CIPC aims to explore the existing infrastructure from South African Post Office (SAPO) to drive e-services and expand access to its services for its Customers through self-help terminals. SAPO has a sizeable network that can help CIPC achieve its objectives.

5.1.2 THE SMALL BUSINESS LANDSCAPE

Most large and medium sized businesses, if not all, can be expected to have registered their corporate entities. Furthermore, large businesses can safely be assumed to have trade marked their brands. The small business sector therefore represents the largely “unserved” or “underserved” registration market for corporate registration and for intellectual property rights, where such registration is applicable and appropriate.

According to a recent survey of Small Businesses in South Africa (FinScope Small Business Survey 2010), an estimated 5.9 million small businesses operated in South Africa in 2010, owned by roughly 5.5 million small business owners. Small business owners were defined as being 16 years and older, perceiving themselves to be business owners or generating an income through small business activities and employing less than 200 employees. According to the survey, the biggest concentration of small business owners is in Gauteng (23%), Eastern Cape (15%), and KwaZulu-Natal (14%), followed by the North West (13%) and Limpopo (10%).

The survey also measured levels of business registration. 17.3% of small business owners claimed that their businesses were registered, but only 8.3% claimed to be registered with CIPRO.

Business owners who claimed to have registered their business did not appear to see much value in registering their businesses:

• 54% claimed that registering their businesses meant “compliance with the law”;

• 14% claimed that they registered their businesses to “avoid harassment from the authorities”;

• 7% claimed that they registered their businesses to “avoid fines”;

• 6.5% claimed that registration held “no benefits” for their businesses.

The most frequently mentioned reasons for not registering businesses included:

• “the business is too small to register”(49% of owners of unregistered businesses);

• “don’t know how to register” (18% of unregistered businesses);

• “don’t have money to register” (18% of owners of unregistered businesses);

• “it is too complicated” to register the business (9% of owners of unregistered businesses).

It is clear that rigorous, in depth and more regular research into understanding the challenges and opportunities facing small business is essential. The CIPC will continue to encourage and fund, where appropriate, such research. In particular, a better understanding of the interplay between registration and long-term business success needs to be developed.

Targeted interventions will need to be pursued to develop a range of value-added services for small businesses. These services will need to enhance the registration process, provide additional benefits to mitigate some of the disadvantages of registration and contribute to the potential for long-term viability and sustainability. Such services may well include partnerships with large corporates who may in turn provide additional value-added services to small business. This was realised with the collaboration with First National Bank (FNB) on the registration of new companies. This made CIPC to realised that more can be achieved with collaboration particularly if access to CIPC services can be expanded. Partnership with SARS also led to the review of our data and improvement of its integrity and value.

Further CIPC has introduced the self help terminals and implemented at its Sunnypark Customer Centre during the last quarter of 2013/14.


This is pivotal in CIPC’s efforts to drive access and simplicity to its services as well as reaching out to small businesses. This model will during the period of the strategy be rolled out extensively to ensure inclusiveness of CIPC services.

Collaboration and partnership with other government agencies and offices like Technology Innovation Agency (TIA), National Intellectual Property Office (NIPMO) led to CIPC reaching new and critical segments of potential Customers like researchers and research institutions, universities, innovators, to mention but a few. This also ensured that there is a coherent, aligned response to IP issues.

5.1.3 REGULATORY TRENDS

5.1.3.1 EASE OF DOING BUSINESS

‘Enabling private sector growth – and ensuring that poor people can participate in its benefits – requires a regulatory environment where new entrants with drive and good ideas, regardless of their gender or ethnic origin, can get started in business and where firms can invest

and grow, generating more jobs.’ - (Janamitra Devan The - World Bank Group)

Internationally, the ease of doing business is an important differentiator of countries and attractor for global capital. The World Bank (WB) and the International Finance Corporation (IFC) conduct an annual survey, which ranks economies on their ease of doing business from 1 to 183.

It is becoming more difficult to do business in South Africa if one looks at the World Bank’s latest annual competitiveness survey released on Tuesday, 29 October 2013. On the 2013 list, SA ranks 41st out of 189 countries for ease of doing business. According to the report it takes 19 days on average to get a business up and running, which places South Africa 64th on the list. The rankings focus on what a small or medium-sized business faces in its home country, as opposed to how a multinational giant would fare in the same environment.

South Africa should aim to maintain and improve its ranking. CIPC is committed to increasing the ease of doing business in South Africa by reducing the compliance burden, in particular the burden of excessive administration, which has a significant impact on small business. CIPC has an impact on the ease of starting a business, the protection of investors and resolving insolvency (through business rescue). There is also potential to impact positively on the ranking of paying taxes through the strengthening of CIPC’s relationship with SARS.

The CIPC as the lead organisation, with the dti, hosted a regional ‘Ease of Doing Business’ conference in 2013 / 2014. This contributed to a greater awareness of the challenge and to the generation of innovative ideas and solutions that may well be applicable to the workings of the CIPC.

The World Economic Forum’s (WEF’s) latest competitiveness index ranks South Africa 53rd out of 148 countries surveyed – a notch down from 2012-13, and three notches down from 2011-12. The WEF’s 2013-14 Global Competitiveness Index (GCI) rates countries’ competitiveness

according to 12 pillars or sets of criteria, including infrastructure, institutions, efficiency, market sophistication and innovation.

South Africa has improved in some areas such as: strength of auditing and reporting standards, efficacy of corporate boards, protection of minority shareholders’ interests, regulation of securities exchanges and a legal rights index. The country also got decent scores on intellectual property protection (18th), property rights (20th), in the efficiency of the legal framework in challenging and settling disputes (13th and 12th, respectively) and high accountability of its private institutions (2nd). “The country also has an efficient market for goods and services (28th), and it does reasonably well in more complex areas such as business sophistication (35th) and innovation (39th),” states the report. The three most problematic factors for doing business were an inadequately educated workforce, restrictive labour regulations and inefficient government bureaucracy.


5.1.3.2 CORPORATE GOVERNANCE AND DISCLOSURE REGULATION

The global financial crisis and failures of large corporates, such as Enron and Arthur Andersen, has created a renewed focus on credible regulation and good governance. The LIBOR fixing scandal in the United Kingdom again emphasised the need for such a focus. The South African corporate regulatory environment needs to be respected as a credible, safe and secure environment that promotes good corporate governance and protects corporate and IP rights. The CIPC, as custodian of the Companies Act and as an enforcer of IP rights has an important role to play in this regard.

Financial reporting standards have received much attention internationally. South Africa has also revised its legislative regime in this regard and established a statutory scheme. The challenge, however, relates to its implementation and the pro-active compliance monitoring that it requires. Internationally, corporate regulators have adopted an eXtensive Business Reporting Language (XBRL) system, which allows financial statements to be lodged in a particular format, thus making compliance monitoring simpler for the regulators and given the companies that have submitted credibility. XBRL is still in its infancy in South Africa, but in some other jurisdictions, is very well established.

The new Companies Act, 2008 creates a regime that facilitates enhanced enforcement and compliance monitoring. It is important that a culture of corporate compliance is fostered and that smaller businesses in particular are made aware of their compliance and governance obligations. In the coming period, CIPC will strengthen its capability to deliver an effective compliance monitoring function. This will commence with a focus on communication and education and then expand into visible monitoring and enforcement, in line with a comprehensive risk based approach. This should over time translate into innovations in relevant policy, legislation and governance best practice.

As the custodian of the Companies Act, the CIPC takes its role as a regulator equally serious and it developed an external governance framework which will ensure the establishment of a number of governance committees to act in an advisory capacity to the accounting authority, the Commissioner.

5.1.3.3 IDENTITY THEFT AND FRAUD

Identity theft is a well-known fraud that has received a lot of attention. Corporate identity theft is a less known variation of identity theft, practised in much the same way. According to Reuters, “corporate identity theft (CIT) is the fraudulent and deliberate misrepresentation of a company’s identity”. It occurs when a person or a group take on a company’s identity for the purposes of extracting money, data or any other kind of information from the organisation in order to profit through illegal means. The internet has made corporations, banks and regulators more susceptible to identity theft by making information more accessible. This includes statutory documents, patents, trademarks, web domains as well as information that the company volunteers about itself.

Company logos and websites can be easily downloaded and replicated if steps are not taken to protect content. Another way in which corporate identity theft is perpetrated is by changing the names of directors or the registered business address of a company by submitting the required forms to regulators and it can be hard to detect and difficult to reverse once completed. Identity theft has been prevalent in South Africa for several years. It has affected individuals financially through illicit access to their bank accounts, credit obtained by someone else in their name and many other ways.

Corporate identity theft is also on the increase and is manifesting in many different ways. Public registries are used to obtain and falsify information. In 2010, a number of instances were identified and publicised where directors had been illegally changed at CIPRO, first electronically and then with the assistance of internal staff. These acts have been motivated by both criminality and internal disputes within corporations.

Often internal disputes amongst directors result in allegations of corporate identity fraud. This, together with the restoration of deregistered entities, often results in the public being misled about the credibility of an institution. In this regard, the CIPC has put in place mechanisms to discourage the reinstatement of deregistered entities. Only when creditors can demonstrate how they’ve been adversely affected by the deregistration of an entity will consideration be given to the reinstatement of such entities.

Many instances of CIT were also criminally committed to redirect tax refunds from the SARS. South Africa is not the only jurisdiction that has experienced CIT. The UK Companies House maintains on its website that between 50-100 cases of identity fraud occur every month. The institution encourages electronic filing to prevent CIT. The UK Companies House offers protected online filing, which enables companies to protect themselves from unauthorized changes to their company’s records, including documents for the appointment, termination, or change of particulars of company officers and the change of the registered office.

The dangers of identity theft have a major impact on institutions such as corporate and IP registries and it affects the manner in which identity is verified, information security is maintained, the security of the channels used to access the registries, the way in which information is disclosed by the registry and how paper-based documentation is disposed of.

As the CIPC migrates to more electronic channels to register and change information, more direct safeguards can be built into the process including SMS confirmations of access or changes to information. The CIPC will continue to be vigilant in this regard and strengthen all internal processes to reduce the potential for illegal acts. Besides the issue of protecting entities from being defrauded through potential CIT, the issue of protecting personal information from potential misuse is becoming more and more important. To this end, the CIPC is reviewing


its data disclosure policies, particularly its’ methodology for disclosing information in cases where CIPC acts in partnership with external parties. This is becoming particularly important as the re-sale of raw data poses a significant potential risk to the organization.

5.1.3.4 REDEFINING THE ROLE OF INTELLEC TUAL PROPERTY RIGHTS AND REGULATION

IP is increasingly recognised as a valuable strategic asset - at a national as well as at a corporate and individual level. As Bloomberg reports, ‘Suddenly companies are acknowledging that patents are a strategic asset worth billions.’ This acknowledges the reality that innovation is crucial to competitive advantage and that the ability to compete globally is essential to wealth, job creation and fiscal health.

Investment in intangible assets today outstrips investment in tangible assets. The global trade in IP licenses alone is estimated at more than R7 trillion per annum. This equates to over 5% of world trade. The Hargreaves Report in the United Kingdom has highlighted the need for countries to modernise both their IP legislative frameworks and regulatory regimes.

Globalisation, technological changes, as well as the emergence of low-cost manufacturers in developing countries such as China have fundamentally changed the IP landscape and are challenging the value of conventional IP rights protection and its enforcement. According to a 2005 report by PricewaterhouseCoopers (PWC), entitled Redefining Intellectual Property Value: The Case of China”,

“Technological changes, such as digitization, have made IP more portable and are diminishing the effectiveness of current intellectual property enforcement mechanisms. As more countries are entering and profiting in international markets, the level of intellectual property rights infringement is rising and the distinction between innovation and copying is blurring. Emerging economies are unlikely to implement IP rights and protection practices as those established in North America and Western Europe.” (p.9)

At the same time, however, the value of corporations has shifted more and more to intangible assets, namely their IP. According to the PricewaterhouseCoopers study, in 1998, 85% of the value of US corporations was in intangibles, up from 38% in 1982. The study argues that Multinational Companies must therefore find new ways in which to protect their IP that is distinct from the conventional methods. These ways include acquisitions, having a presence in big emerging economies, such as China, with the potential for infringements.

Similarly the Global Innovation Index Report 2012 produced by WIPO and Insead places South Africa at number 58 out of 142 countries on innovation accross the world. It seems that although it is ranked quite highly on other areas like the education, credit, investment, research and development, it does not derive a valuable return in terms of output. This is a challenge that does not only affect CIPC but all the organization that are involved in the space. It is for this reason that CIPC believes that collaboration with other state agencies is critical in harnessing the innovation potential of the country.

The implications for South Africa of these global changes is that there it is unlikely to see a substantial increase in the registration of IP rights from international sources. Any more substantial growth in IP registration will come from local or from African sources. Therefore, while South Africa must continue to support the international Intellectual Property system, and in particular participate in WIPO, it is important that CIPC clearly establishes what role IP rights and their protection can play in South Africa and how it should be better integrated economically.

South Africa also has a clear role to play in the development of IP rights on the African continent and more particularly, in SADC and South African Customs Union (SACU) countries. Developing a coherent strategy in this regard is an imperative for CIPC in the coming year. The aim should be to encourage the lodging of African applications in South Africa.

Commercialization of IP remains the crux of ensuring that the innovators derive some form of remuneration for their worthy inventions. CIPC realized that despite its mandate extending only to protection of IP, it has to provide a platform for innovators to expose the inventions to the market for licensing among other possibilities. To this end CIPC launched the Market Place late in 2013 which is aimed at achieving this goal. It is anticipated that through this initiative CIPC will be able to collaborate with other relevant agencies for even better outcomes.

Further as we look forward to Accession to the Madrid Treaty and The Hague protocol CIPC has spent a lot of time ensuring proper capacitation of resources on the one hand and alignment of processes on the other. The backlogs were also dealt with to ensure that the conducive environment exists for the accession should it occur. All this was achieved in collaboration with the WIPO and other relevant Offices.

Given the large scale on which counterfeit goods are manufactured, it is important that South Africa prevents these goods from entering our local markets through pro-active enforcement at our national and regional borders. Collaboration with local law enforcers will also be required to minimize the local production of counterfeits, especially given its impact on our local creative industry. In order to improve the protection for local patents and designs, serious consideration would also have to be given to developing substantive examination capacity in CIPC.

The Copyright Review Commission concluded its work in 2011 and has made recommendations regarding the changes it believes are necessary. These recommendations are likely to influence the IP policy review and to make a positive contribution to the overall IP industry in South Africa. Similarly the adoption of the Beijing Treaty on Audiovisual Performance is an important milestone in protecting the rights of performers. Preparatory work is being done by CIPC to ensure that South Africa is able to implement rapidly and effectively should a decision to adopt the treaty be taken by government. CIPC will continue to work collaboratively with the Department of Communication (DOC), the dti and other key stakeholders in this regard. The current collective management of rights regime remains challenging with various challenges from the industry. We look forward to the approval of the National Policy on IP as it takes into account the recommendations of


the Copyright Review Commission.

Preparations for the implementation of the IP Amendment Law are underway, most notably the aspects relating to the protection of indigenous knowledge and specifically preparations for the recordal of indigenous cultural expressions.

5.1.3.5 BUSINESS RESCUE

The introduction of Business Rescue in 2011 was met with a great deal of scepticism and resistance. It appears that these early fears were not justified and confidence in the process continues to grow with a number of well known companies applying to participate. CIPC continues to support Business Rescue with programmes of education and awareness and through round table meetings and engagement with industry stakeholders. As the process starts to mature, the CIPC will derive implementation lessons and will seek to inform improvements to the overall policy and legislative environment. It will also seek to take a more active role in the regulation of Business Rescue Practitioners.

5.2 ORGANISATIONAL ENVIRONMENT

CIPC is building a capable organisation that has a Customer-centric culture and a workforce that is energised, proud, committed and competent. In its first phase of institution building, CIPC ‘Prepared for Take-off’. It has had to go back to basics in understanding who its Customers are, what they value, require and expect and in crafting a strategy that is understood and supported by its people. This has been advanced through the design of effective and efficient business processes, the definition of a Customer segmentation model, a strategically-aligned structure, IT enabled systems, appropriate facilities and a ‘fit for purpose’ common organisational culture.

CIPC is now in its second phase of institution building - ‘In flight Adjustment’. Learning has been distilled from the first year of operation and adjustments have been made to some of the underlying strategic assumptions and approaches. Much success has been achieved in strengthening service levels and responsiveness to Customers, backlogs have been eradicated and the competence and commitment of its people continues to grow. The immediate challenges are to finalise the implementation the new organisational structure, to deepen core employee competencies (in particular in the regulatory aspects of CIPC’s work) and to innovate a number of important aspects of CIPC’s business model.

Much attention is also being paid to embracing technology to enable quicker, easier, secure access to CIPC and to delivering new and unique value through partnerships with channel partners in financial services. These new and unique service offerings focused around a single point of registration should contribute greatly to the reputation and credibility of CIPC in years to come. In the coming years (the strategic period), attention will be paid to developing an effective Reputation Model so that stakeholder perceptions of CIPC may be more accurately captured and benchmarks for improvements established.

In essence, the strategic challenge facing CIPC has two components:

• a transactional challenge to deliver faster, more accurately, reliably and in a more secure manner on the registration of companies and intellectual property rights, to safeguard the integrity of data and to enable responsive access to requests for information. This will require the re-engineering and integration of business processes, the IT enablement of workflows and information management, the training and development of competent people and the development of Customer-centric access, communication and service delivery channels

• a transformational challenge – to add greater value to entrepreneurs through enhanced products and services, a range of easily accessible channels as well as ongoing communication and engagement with segmented Customer communities. To positively impact good governance in South Africa, create a culture of voluntary compliance with legislation and to build the required capabilities to be able to deliver on the ‘new’ components of CIPC mandate.

This includes delivering on CIPC’s innovated regulatory functions, the need to promote voluntary compliance, initiate and investigate contraventions of the Act, monitor compliance with financial reporting standards and promote the reliability of financial standards.

This transformational process to build the required internal capabilities (knowledge, expertise, systems, culture / mind-set) to deliver on these aspirations will require a strategically focused transformation journey that will last for many years to come.

The current CIPC focus is around accelerating the pace of change. This encompasses innovating the way CIPC works in order to be able to deliver core registration and maintenance services timeously and in accordance with both acceptable standards of quality and the needs of CIPC’s Customers. At the same time it is focused on establishing the foundation of competent people and systems required to implement new services. In a sense this challenge to both ‘catch up’ and ‘get ahead’ at the same time is analogous to ‘changing the engines on an aeroplane in mid flight!’

In the coming strategic period, CIPC will continue to invest in the development of its people and in providing the tools and the enabling environment required to deliver high performance. Today’s data intensive, round the clock, globalised business environment also requires the appropriate technology investments that allow for intelligent work, informed decision making and seamless, engaging, satisfying and consistent Customer experiences. Renewed emphasis will be placed on issues of data integrity, alternative access points and channels will


be explored and adopted and innovative ways to provide value-added services will be developed to ensure the organisation’s continued relevance.

CIPC is continuously evaluating the investments that will be required, as well as the strategic partnerships that will assist it in delivering on its strategic objectives. CIPC recognizes that it will achieve its goal of organisational excellence over time and that the journey will be based on consistent and continuous improvement in its service delivery and product offering.

6. KEY PROGRAMMES AND ALIGNMENT TO THE DTI PRIORITIES

CIPC derives its policy mandate from the policies of its responsible department, the dti. The key policies and strategies of the dti relevant for CIPC are: -

• the dti Medium Term Strategic Plan 2014 - 2017;

• Industrial Policy Action Plan 2013 – 2016;

• Strategy on the Promotion of Entrepreneurship and Small Enterprise;

• Corporate Law Reform Policy;

• Policy on Indigenous Knowledge;

• Co-operatives Development Policy for South Africa; and

• Integrated Strategy for the Development and Promotion of Co-operatives.

As there are synergies between the legislative mandate of the CIPC and other policies and strategies of the dti, an opportunity presents itself for CIPC to define its role in enterprise development and industrial policy. CIPC identified key issues in the policies and strategies of the dti that are relevant to its mandate:

• The need for employment creation and economic growth in a manner that is sustainable and encourages broad-based economic participation;

• The emphasis on co-operatives as a vehicle for employment creation in marginalised areas and communities;

• The need for commercialising South African research and development, with a particular emphasis on certain sectors identified in the IPAP2;

• The importance of public and preferential procurement for enterprise and industry development;

• The need to develop SA’s competitiveness by improving the ease of doing business, stimulation of entrepreneurship, sustainable corporate entities, transparency, integrity and high standards of corporate governance; and

• The potential of indigenous knowledge and intellectual property and the need for their protection and commercialisation.

CIPC further considered the broader policy environment created by the National Planning Commission (NPC) and the Department of Economic Development (DED) as well as specific departments, whose work directly impacts on CIPC, namely the Department of Science and Technology (DST), the Department of Arts and Culture (DAC) and the Department of Agriculture (DoA). CIPC considered the following policies and strategies to inform its broader policy mandate: -

• The New Growth Path;

• The National Development Plan - 2030

• The Ten Year Plan on Innovation;

• Mzansi Golden Heritage: Contribution of the Arts, Culture and Heritage Sector to the New Growth Path; and

• The Government MTSF

These policies and strategies create a broader policy environment for CIPC. Key issues have been identified that impact on our work:

• The New Growth Path places emphasis on the ease of doing business, the sustainability of enterprises and the development of a


knowledge economy. It envisages that employment growth will result from the development of labour intensive sectors. These points are all directly relevant for CIPC.

• The National Development Plan – 2030 promotes a plan of action across a broad front with three key priorities:

• Raising employment through faster economic growth

• Improving the quality of education, skills, development and innovation

• Building the capability of the state to play a developmental, transformative role

CIPC contributes to all three of these priority areas. By improving the ease of doing business in South Africa through fast, efficient, integrated registrations and other value-adding services, the CIPC can directly impact the speed of economic growth. Through promoting and protecting IP, CIPC contributes to a culture of innovation. Through effective, well-balanced regulation and the promotion of good governance, CIPC contributes to strengthening the state’s transformative role in achieving an inclusive, equitable society

• The Ten Year Innovation Plan highlights the need for the development and exploitation of South African innovations - ‘converting ideas into economic growth’ – and the potential of certain sectors in promoting a knowledge economy, such as green technologies, agriculture, pharmaceuticals and business processing. The Plan further mentions the potential of indigenous knowledge and its exploitation as a way to benefit communities, especially in respect of medicines and indigenous cultural expressions. The IP amendment Laws Act is the enabling legislation that will ensure the achievement of some of the envisaged goals in this regard and CIPC is at the forefront of implementation as per the act.

• The Mzansi Golden Heritage policy document by the DAC considers the contribution that the Arts, Culture and Heritage Sectors could make to the New Growth Path, in particular with respect to employment creation. IPAP3 explicitly refers to the employment potential of cultural industries connected with the tourism industry. This is reinforced in the NDP which stresses that ‘South Africa can offer unique stories, voices and products to the world. In addition, artistic endeavour and expression can foster values, facilitate healing and restore national pride.’

The DAC policy document, read in conjunction with the NDP, sets out a vision for the creative sector, including the development of the music industry. Given its roles and responsibilities in promoting and protecting IP, CIPC could make a major contribution in this area. The IP Amendment Laws Act is the enabling legislation that further enhances the role CIPC could play in this regard.

• The Government MTSF, developed by the Minister in the Presidency responsible for Planning, emphasizes the need for Batho Pele and reliable, empathetic, respectful and efficient service delivery to the people of South Africa. Enhanced service delivery is evident in the initial years of the existence of CIPC.

The broader policy context implies that CIPC should have a more explicit enterprise development focus on the one hand, and an industry development focus on the other, with particular attention to sectors such as the creative industries, green industries, and indigenous knowledge.

The NDP stresses that ‘South Africa needs to sharpen its innovative edge and continue contributing to global scientific and technological advancement. This requires greater investment in research and development, better use of existing resources and more agile institutions that facilitate innovation and enhanced co-operation between public science and technology institutions and the private sector.’ The role of CIPC would be to encourage registration of intellectual property relating to innovation and creativity in South Africa, Africa and from within SADC in particular. It would also be to facilitate the development and exploitation of those rights by making rights holders aware of the opportunities, and by establishing strategic partnerships with relevant institutions in the public and private sector. In this way, government’s investment in public sector research can be strengthened and safeguarded.

7. THE CUSTOMER VALUE PROPOSITION

CIPC Customer Value Proposition is aspirational as it includes both benefits that Customers currently enjoy as well as future Customer benefits that will be developed and delivered by CIPC, in association with its channel and strategic partners, over time.

It must be emphasised that living up to these aspirations will require that CIPC build the required capabilities over time and in collaboration with its strategic partners. The achievement of these aspirations is therefore partly within its scope of control and partly under the control of CIPC’s strategic partners.

The value proposition of CIPC is that ‘dealing with CIPC means that you have access to opportunities for growth; are compliant with good corporate governance principles; have security of lodged information; and ease of registration.’

1. Access to opportunities for growth

‘As a registered entity, you are more likely to be able to attract investment in your businesses, through credit or equity. In the same


way, registered IP rights can be safely commercialised or licensed to third parties, whether through franchising or other distribution or manufacturing arrangements. CIPC will provide information to you about the possibilities to grow your business or your investment in intellectual property rights.’

2. Good governance and credibility of information and conduct

‘Registering with CIPC means that investors can rely on the credibility of your corporate entity’s information and conduct. You will be perceived as a credible corporate citizen who has paid their taxes, complied with good governance and statutory requirements and that the information you provide, such as your financial statements and Black Economic Empowerment (BEE) status, will be respected in accordance with global standards.

As a Customer, you can rely on the integrity and professionalism of registered business rescue practitioners, collecting societies and alternative dispute resolution practitioners in times of crisis.’

3. Security of lodged information

‘Being registered with CIPC means important assets such as IP, shares/equity, products, brands and identity are protected from being stolen or misappropriated. As a Customer, you can rely on CIPC to act against counterfeiters and other people who do not respect your trade mark rights.’

4. Ease of registration (reduced bureaucracy)

‘As a Customer, you can register your business and IP directly through our ‘one stop shop’ on-line portal and comply with all other statutory registrations at the same time such as Income Tax, Value Added Tax (VAT), Unemployment Insurance Fund (UIF) registrations, etc. You can register your business at the same time as you open your business bank account. You can register through our other channel partners and receive sound business advice at the same time. You can receive your registration number and certificate on the same day you register, dependant on whether CIPC can verify your details’.

You can call our Contact Centre or relevant Issue Champion to query any aspect of your registration or receive any information you may require. You can renew all of your registrations easily, on line or through banks, ATMs or other Self Help Terminals as well as through our other channel partners.’ This model is expected to be expanded to IP through the introduction of TISCs during the strategy period.

Commercialization of IP remains the crux of ensuring that the innovators derive some form of remuneration for their worthy inventions. CIPC realized that despite its mandate extending only to protection of IP, it has to provide a platform for innovators to expose the inventions to the market for licensing among other possibilities. To this end CIPC launched the Market Place late in 2013 which is aimed at achieving this goal. It is anticipated that through this initiative CIPC will be able to collaborate with other relevant agencies for even better outcomes.


8. CIPC’S BUSINESS MODEL

A business model describes ‘the rationale of how an organisation creates, delivers and captures value.’ (Osterwalder)

Whilst CIPC spent time defining its business model in 2011, enhancements to it became necessary in the 2012 year due to the organisation gaining a better understanding of its Customers, their needs, the challenges facing the organisation and the internal as well as external environment.

Its evolving business model is based on the priorities that it identified for the organisation, namely:

• Improving the reliability and integrity of the information in CIPC’s registries;

• Improving the relevance and value of CIPC’s services to its Customers and stakeholders

• Migration to e-services significantly reducing manual services

• Improving compliance with the laws that CIPC administers.

• Demonstrate CIPC’s economic impact

Partnerships with the right stakeholders are key in meeting these priorities and therefore a considerable amount of time is spent exploring, developing and enhancing such collaboration efforts with both private and public partnerships.

The organisation, through its innovation efforts, continues to seek opportunities to be innovative and to offer value added services whether through its products and services - registration and regulatory services or its access channels.

Of great importance is the issue of compliance with legislation and the business model takes into account the attempts to be made to ensure greater compliance. Its education and awareness function therefore has a great role to play in this respect.

All the efforts of the organisation will be in vain if no real economic impact can be seen over time. The business model therefore makes provision for working towards demonstrable change in the economic environment.

In addition to the strategic issues related to the business model, CIPC remains a public sector regulatory agency rather than a business, and therefore its goal is not to be profitable but is rather focussed on a self-sustaining funding model that delivers sufficient revenue to cover the capital and operating costs of the services it delivers.

The CIPC business model is equally on the quality of the services it provides, the acceptable speed with which it delivers them and the value that its products, services and solutions generate for Customers. CIPC’s business model focuses on the manner in which it will deliver services, the quality of those services, the fees it will charge to be sustainable and the potential for value addition.

In order to deliver on its strategic mandate, CIPC has identified three key resources that it will need to build, develop and / or acquire:

• An informed, competent and engaged workforce;

• Intelligent Information Technology systems and infrastructure;

• Strategic partners that assist CIPC to deliver on its broader mandate in a mutually beneficial manner.

An estimated 80% of CIPC’s services are currently delivered through intermediaries- intellectual property legal practitioners, company secretarial services, provincial small business development partners and other associated intermediaries. Customers choose to deal through intermediaries for the sake of convenience, but also because CIPC is difficult to access and navigate.

A benchmarking exercise with the Swedish Company Authority led to the CIPC revising its business model in an attempt to better serve its Customers. The “Swedish model to improve Customer service” was in a pilot phase in 2013. The project’s rationale is to increase the number of staff who will be taking calls in order to absorb the high volume of calls received by the CIPC. The model relies on the principle that staff would volunteer an hour per day to answering calls. All volunteers have to undergo a training process on the CIPC products and services including telephone etiquette and using the CIPC system. It is envisaged that having a high number of volunteers on board will increase the call answering rate and reduce the abandonment rate of calls. Seventy two staff members are part of this project.

CIPC will be establishing a framework for registering intermediaries that charge Customers for their services. Whilst much of the fraudulent activity experienced by CIPC has come through intermediaries, we recognise that many intermediaries are professionals that adhere to professional standards. This will be taken into consideration when developing the registration and regulatory criteria. CIPC will monitor the services provided through such intermediaries and take the necessary action against intermediaries who engage in fraudulent or unethical


activities.

CIPC will increase access to its products, services and solutions through the development of indirect channels. These channels will be managed in collaboration with identified service delivery partners.

The CIPC continues to provide the following services on-line: the registration of companies, the filing of annual returns, the changes to directors’ details, and the amendment of close corporations. The hybrid online functionality for the registration of companies through a standard Memorandum of Incorporation (MoI) was well received by Customers. CIPC consistently registered up to 70% of all companies through the online functionality. This has now been expanded to all IP domains including patents, copyright, designs and trade marks. The uptake of online services in this regard had been above 80% on average.

Fax and scan to e-mail options were introduced in February 2013 to allow Customers to submit documentation for the following transactions:

• name and defensive name reservations and extensions;

• close corporations to company conversions;

• company changes;

• company and close corporations deregistration; and

• company and close corporations reinstatements.

CIPC will continue to participate in a project to simplify and co-ordinate the requirements to start a business. In particular, it is working closely with the South African Revenue Services (SARS to create a seamless, single registration process for government related compliance obligations. Private sector partners, such as banks, to such an engagement have been explored. A collaboration project with FNB was launched in 2013 which allows for the opening of business accounts and registration of companies simultaneously through an electronic platform. It is believed that an integrated company registration and bank account opening process is a world first and that it can have considerable implications for SA’s ranking in the World Bank Doing Business survey going forward.

Similarly CIPC will continue to work with other government agencies like NIPMO and TIA, among others to ensure that there is increased innovation and commercialization of IP. Through these partnerships CIPC will also continue to ensure that through TISCs the cost of IP protection is reduced.

In order to deliver the enhanced services required by its Customers and stakeholders, CIPC will require competent, engaged employees who will deliver high quality work at an acceptable speed of delivery.

Operational efficiencies will be enhanced by intelligent, high performance IT systems, which will serve CIPC employees, CIPC Customers and their partners and registered intermediaries. CIPC envisages that expenditure on its IT systems will be a consistent feature in its budget over the period of the strategic plan and into the future. Often, expenditure on IT systems is accompanied by a reduction in expenditure on human resources. CIPC does not anticipate that this will be the case over the next five years and expects that its expenditure on human resources will need to increase in order to improve service delivery. Efforts will be made to achieve cost-savings in non-core areas to enhance the efficiency of the organisation. Efficiency will however, need to be balanced with effectiveness.

CIPC will prioritise improvements in service delivery as it recognises that the cost of non-delivery to the economy overall is very high. The implication of this is that CIPC’s overall income will need to increase in the short to medium term to fund the improvement in services, the development of new, enhanced value to Customers and the growth in its regulatory mandate. To meet these needs, a new revenue model

will be developed, based on both a simplification and rationalisation of CIPC’s fee structure.

Given the importance and sensitivity of the information held by CIPC and the impact of service delivery on the business sector, CIPC will prioritise information integrity and security, disaster recovery and change management in all its efforts. It will place significant emphasis on pro-actively managing the strategic risks that have been identified, while providing innovative and value-adding services.

The business model and strategic mandate of CIPC requires an enhanced set of key capabilities, which will need to be developed. These include capacity for:

• Programme and project management. There is a need in the organisation to enhance project management skills to ensure the enhanced implementation of projects that will yield tangible results. The shortcoming currently is the inabilities to problem solve challenges that threat the delivery of projects. The CIPC explored the Agile methodology in 2013. Agile methodology is an alternative to traditional project management, typically used in software development. It helps teams respond to unpredictability through incremental, iterative work cadences, known as sprints. This has proven beneficial for quick delivery of some CIPC projects.

• A Quality Management ethos with supporting quality control processes and competencies. There is a need to develop a set of quality


indicators at a granular level to ensure minimum rework and increased Customer satisfaction.

• Policy, research and Advocacy. CIPC will need to develop the capacity and ability to provide input into policy and legislative changes to the dti and other government institutions such as DST, Department of Higher Education and Training (DHET), DAC, based on its implementation experience, its institutional wisdom as well as learning derived from international trends and developments. In addition, CIPC will need to support the efforts of the Department of International Relations and Cooperation (DIRCO) to put forward policy positions and to advocate for international change in international fora, such as the World Intellectual Property Organisation (WIPO) and the World Trade Organisation (WTO).

• Product and Channel Development and innovation. CIPC will need to develop a specialised capacity to continuously monitor the value it delivers to existing and underserved markets to identify new opportunities for value addition, improvements and solutions creation. This will require an organisational culture and an operating model that encourages and rewards innovation at all levels in the organisation. It will also require a focused approach to the development of new, innovative Customer channels that provide for more efficient and effective Customer engagement and information processing.

• Market surveillance and enforcement. In order to become a credible regulator CIPC will need to enhance its capacity for monitoring compliance, its ability to proactively enforce compliance with legislation as well as to encourage and promote voluntary compliance.

• Good governance and risk management. As the custodian of corporate governance and conduct, CIPC will need to aspire to the highest standards of corporate governance itself. The effective management of risk to ensure that any potentially negative impacts on Customers and/ or stakeholders are minimised will also need to become an integral feature in all its operations. Good governance and effective risk management and mitigation are specific competencies that will need to be entrenched in the culture, processes and governance arrangements of CIPC.

• Stakeholder and reputation management. In order to be a credible, well-respected and effective regulator, CIPC will need to proactively manage its public image and intentionally shape the perceptions and the behaviour of those it regulates. CIPC will need to establish a reputation for integrity, for reliable service delivery, a value-enhancing partner and credible, impartial regulator.

This will require that all people within CIPC be clearly aligned with its strategy. It will also require a capacity for channel management, strategic communication and stakeholder management, as well as personalised relationship management with intermediaries and partners.

• Standard setting, monitoring and evaluation. CIPC will need to be able to set standards for security and service delivery for itself, its strategic partners and the capacity and skills to monitor, evaluate and enforce adherence to these standards.


9. FINANCIAL PLAN

9.1 ASSUMPTIONS

The following assumptions inform the financial projections:

1. CIPC has developed a new structure, which will ensure that adequate resources are employed in order for the institution to deliver on its mandate and improve its service delivery. The staff complement over the next five years will increase from 486 posts in 2013/14 to 630 posts over a period of five years.

Table 5: Projected staff numbers from 2014 - 2019

Projected number of employees 2014/15 2015/16 2016/17 2017/18 2018/19

Number of permanent employees 480 512 544 576 608

% filled positions 75% 80% 85% 90% 95%

Number of interns 00 50 50 50 50

Total staff complement 480 562 594 626 658

In order to improve service delivery, CIPC envisages that it will need to make a substantial investment into the capacity of its staff over the next five years to ensure better service delivery and to build capacity for new functions in the institution. The organisation reviewed its current remuneration framework. The performance management and reward system is currently being reviewed. The overall salary structures will remain aligned with the public service, but more flexibility will be introduced into the pay scales. Provision has been made for annual performance bonuses. In combination with increased staff numbers, the result will be increases in the overall salary budget of CIPC over the next five years. The increased expenditure will be funded from reserves that the organisation has, but a revision of the fee structures, especially for intellectual property transactions, will be necessary to ensure that sustainability is retained after year five (5).

2. CIPC has experienced major space constraints and is unable to add all the required staff due to the limitations. Attempts to procure a new building for CIPC were not successful in 2012; options were explored. CIPC will be located in Block F of the dti, while procuring a CIPC building. An estimated amount of R41 million has been provided for the lease of the premises, escalating by 10% per annum. The current space requirements have been planned maximum number of staff as per approved structure and National Treasury’s recommendations.

3. Another major expenditure area for CIPC over the strategic period will be its investment in information technology and in the assets required to ensure that filings are not only electronic, but that the institution also has electronic workflows. CIPC expects to continue with its drive of migrating to electronic filing over the strategic period and also to digitize its existing historical records over the same period. The investment will include installing dual screens for all staff involved in registration and investigations, increases in network infrastructure and the necessary applications to support the electronic filing process.

Table 6: Projected annual growth in numbers of electronic filings

Nature of Filing 2012/13(Actual)

2013/14(Actual)

2014/15 2015/16 2016/17 2017/18 2018/19

Co-operative registration 21, 515 21, 330 22, 550 24, 805 27, 285 30, 013 33, 014

% electronic filings - -- - 50% 60% 70% 75%

No of electronic filings 6,765 12,402 16,683 21,009 24,760

Company registration 222, 146 240, 781 276, 862 318, 391 366, 150 421, 073 484, 234

% electronic filings 66% 81% 90% 90% 90% 100% 100%

No of electronic filings 151, 784 194, 759 249,146 286,552 329,525 421,073 484,234

Trade marks applications 35, 074 35, 940 42,412 48,236 55,198 62,373 68, 610

% electronic filings -- 49% 90% 90% 90% 95% 100%

No of electronic filings 0 17, 692 38,171 43,412 49,678 59, 254 68, 610

Patent applications (excl. provisional applications) 9, 675 9,639 7,191 7,289 7,389 8, 127 8, 940

% electronic filings - 9% 50% 70% 90% 95% 100%

No of electronic filings 0 895 3596 5102 6650 7, 720 8, 940

Design applications 2, 504 1, 859 2,119 2,243 2,379 2,528 2, 780


No of electronic filings 0 148 1059 1570 2,142 2, 356 2, 591

Copyright in Film applications 59 69 63 66 69 71 78


No of electronic filings 0 10 57 60 62 67 78


4. Other areas of programme expenditure for CIPC will include commissioning of research and analysis, possible litigation and specialised investigations, as well as education and awareness campaigns and publications. These are key areas of strategic focus for the institution, as it establishes its new mandate and presence.

5. The Commission will reduce its reliance on consulting services over the strategic period, as it is able to appoint more staff and conduct the work itself. There was a high dependence on consulting services in the 2012/13, especially in the area if ICT. This reliance will, however, be significantly reduced over the strategy period. In addition, certain services will also be outsourced, such as printing services. These outsourced services will be provided for under the goods and services budget.

6. Revenue projections will largely be based on the baseline number of registered entities, as well as the estimated annual increases in new registrations. The revenue model will be revised to focus on renewals, rather than on the initial registration. In addition, a revision of the fee structure is anticipated.

Table 7 below outlines the projected corporate and IP registrations over the next seven years. It is expected that co-operative registration will increase at 5% rate over the strategy period. In company registration, it is expected that the level of registration will increase at a steady rate of 15% per annum. The trend in intellectual property filings over the past 10 years has been an annual growth of between 1% and 2%. This trend is expected to continue for international filings (estimated at 1% for all intellectual property filings), while specific efforts will be made to increase the number of local filings.

For this reason, the overall number of intellectual property filings will increase more substantially per annum, with the exception of patents, where the projection is that local filings will increase at a rate of 2% per annum. Provision has been made for an increase in local filings for designs and film productions of 10% per annum and in trade marks for 20%.

Table 7: Projected registration numbers of corporate entities and intellectual property rights.

Type of registration 2012/13(Actual)

2013/14(Actual)

2014/15 2015/16 2016/17 2017/18 2018/19

Co-operative registration 21,515 21,330 22, 550 24,805 27,285 30, 013 33, 014

Company registration 222,146 240,781 276, 862 318,391 366,150 421, 073 484, 234

Total Trademark registration 33,452 37, 536 42,412 48,236 55,198 62,373 62, 996

Estimated local filings 20, 288 21, 231 28,421 34,105 40,926 47,883 57, 459

Estimated international filings 14, 786 15, 009 13,991 14,131 14,272 14,414 5536

Total Patent registration (excl. provisional applications)

7,000 7102 7,191 7,289 7,389 7,462 7, 536

Estimated local filings 2, 964 2, 927 776 792 808 824 840

Estimated international filings 6, 711 7, 749 6,415 6,497 6,581 7,239 6, 695

Total Design registration 2, 000 2, 005 2,119 2,243 2,379 2,528 2, 545

Estimated local filings 1, 049 1, 290 1,150 1,264 1,391 1,530 1, 683

Estimated international filings 1, 296 569 969 979 989 998 862

Total Copy right in Film registration 59 61 63 66 69 71 72

Estimated local filings 16 26 21 23 25 27 29

Estimated international filings 63 53 43 43 44 44 42

Total registrations 286,172 308,815 351,197 401,030 458,470 523,520 590,397


FORECAST STATEMENT OF FINANCIAL PERFORMANCE

Details

Forecast 2014/15

Year 1

Forecast 2015/16

Year 2

Forecast 2016/17

Year 3

Forecast 2017/18

Year 4

Forecast 2018/19

Year 5

R’000 R’000 R’000 R’000 R’000

Operating Revenue 393 444 423 963 457 092 479 946 503 944

Companies 65 100 68 355 71 773 75 361 79 129

» Proposed revenue increase included above 5.00% 5.00% 5.00% 5.00% 5.00%

Co-ops 5 820 6 111 6 417 6 737 7 074


IP 93 000 97 650 102 533 107 659 113 042

» Proposed revenue increase included above Once off 5.00% 5.00% 5.00% 5.00%

Corporate Information 12 600 13 230 13 892 14 586 15 315


Annual Returns 216 924 238 617 262 478 275 602 289 382


Other Revenue (Interest etc) 43 000 37 000 35 000 33 000 30 000

Total Operating Revenue 436 444 460 963 492 092 512 946 533 944

Operating Expenses - - -

Employee Costs - Salaries (total package) 239 251 257 458 272 905 289 280 303 744

Other Staff related costs (Performance rewards) 23 925 25 746 27 291 28 928 30 374

Other Staff related costs (training, team building, telecom, bursaries, etc) 14 355 15 447 16 374 17 357 18 225

Total Employee costs 277 532 298 651 316 570 335 564 352 343

Advertisements 5 910 6 294 6 703 7 139 7 603

Communication 7 410 8 521 9 373 9 982 10 631

Computer Services 20 933 22 294 16 243 17 299 18 423

Consultants 5 325 5 671 6 040 6 432 6 850

Inventory 8 529 9 382 9 991 10 641 11 332

Repairs and Maintenance 6 659 7 092 7 553 8 044 8 567

Operating Leases 33 000 36 300 5 000 5 500 6 050

Travel 4 783 5 094 5 425 5 778 6 153

Other Operating Expenses (excl staff related costs add research, depreciation, audit fees , bank charges,temporary staff placements, litigation costs) 15 975 17 013 18 119 19 297 20 551

Capital Payments 5 325 5 671 6 040 6 432 6 850

New building oprating related costs:- - - - - -

• water & electricity - - 5 000 5 325 5 671

• Operational cost - - 4 000 4 260 4 537

• parking costs 1 100 1 210 - - -

• Building maintenance - - 50 2 000 3 000

• in-door plants,artwork 10 10 50 53 57

pest control services - - 40 43 45

Research - Allocation 4 260 4 537 4 832 5 146 5 480

Total Operating Expenses 396 750 427 740 421 029 448 935 474 145

Net Operating Result: (Deficit) Surplus 39 694 33 223 71 062 64 011 59 799


SPECIAL INITIATIVES AND ONCE OFF COST TO BE FUNDED FROM RETAINED EARNINGS

Details

Forecast 2014/15

Year 1

Forecast 2015/16

Year 2

Forecast 2016/17

Year 3

Forecast 2017/18

Year 4

Forecast 2018/19

Year 5

R’000 R’000 R’000 R’000 R’000

TOTAL 54 000 152 000 424 200 50 000 50 000

Special Initiatives 52 000 50 000 50 000 50 000 50 000

Once off cost - New building:- 2 000 102 000 374 200 - -

• project management (re-arranging the building) 2 000 2 000 4 000 0 0

• Construction cost (15 000m² office and 5000m² filing) - Cost include purchase of suitable land. - 100 000 300 000 - -

• ICT network and communication infrastructure - - 30 000 0 0

• furniture acquisition & special equipment - - 30 000 0 0

• building preparation (tenant installation) - - 1 500 0 0

• security systems (access control,CCTV,fire-detection,suppressionetc.) - - 3 000 0 0

• move contractor, move materials (include move of files) - - 5 000 - -

• pre-move clean-up & preparation - - 200 0 0

• building & office signage - - 500 0 0

- - - - -

(Deficit) Surplus (14 306) (118 777) (353 138) 14 011 9 799

Utilisation of Retained Earnings as approved by National Treasury 14,306 118,777 353,138

Net Result: (Deficit) Surplus 0 0 0 14,011 9,799


10. STRATEGIC RISK REGISTER

Strategic risk Inherent Risk Rating

Residual Risk Rating

Mitigation/Management Responses

Strategic objectives

Availability and adequacy of ICT systems

Extreme High Agree on business owners for actions on performance baselines and deviations

Build an enabling & intelligent work environment

Agree on early warning performance metrics, processes, procedures with business


Data backup/Archiving Build an enabling & intelligent work environment

Extension of Standard Operating Environment to Active Directory


Hardware update and upgrade (printers/laptops/desktops)


Improve the use and increase of APM Compuware


Oracle/Exadata box implementation Build an enabling & intelligent work environment

Skills development for ICT personnel Build an enabling & intelligent work environment

ICT Governance Framework Build an enabling & intelligent work environment

Ability to respond to increased volume of applications

Major Moderate Enhancement of the bandwidth Encourage the formalisation of South African businesses and their identity

Implementation of scanning project Encourage the formalisation of South African businesses and their identity

Implementation of electronic content management system

Encourage the formalisation of South African businesses and their identity

Publication ( education and awareness about new processes)


Website redesign Encourage the formalisation of South African businesses and their identity

Integrity of Registers

Major Moderate Quarterly data cleansing of all registers Encourage the formalisation of South African businesses and their identity

Roundtable/research on Framework for substantive Examination of Patent

To promote the protection and commercial exploitation of innovations in key sectors

Verification of data on all registers Encourage the formalisation of South African businesses and their identity






Accuracy , integrity and reliability of information

Major Moderate Data backup/Archiving Provide access to credible & relevant information,advice & secure, value-added services

Perform data purification/cleansing process

Provide access to credible & relevant information,advice & secure, value-added services

Implement registry function and secure handling of documents in terms of MISS ( Minimum Information Security Standard)


Internal solution and Data Architecture review, analysis and planning


Network perimeters security and management programme


Theft, fraud and corruption ( including corporate identity fraud)

Major Moderate Vetting of employees Improve the reputation and organisational performance of CIPC

Vetting and update supplier database annually.

Improve the reputation and organisational performance of CIPC

Revise and implement effective disclosure of information processes.


Investigate the possible misuse of customer accounts.


Introduce exception reporting / audit trails.


Finalise the Fraud and Corruption Investigation policy and procedures


Finalise Fraud Prevention Policy and Strategy


Enhance billing methodologies and reconciliations.


Conduct fraud risk assessment Improve the reputation and organisational performance of CIPC

Complete a Fraud and Corruption Register and perform trend analysis monthly







Ease of access to services ( including registration)

High Moderate Continuous technical support on the implementation of SSTs

Provide access to credible & relevant information, advice & secure, value-added services

Engage into partners collaborations( NYDA, GIC, JSE, Transnet etc)


Implementation of training programme for each partner


Open offices (Service Centres) in two provinces ( Eastern Cape and Limpopo)


Use of performance and measuring system


Adequacy of supply chain management

High Moderate Improve contract management Build an enabling & intelligent work environment

Quarterly compliance session conducted


Review of Supply Chain Model ( SCM) Build an enabling & intelligent work environment

Revision of current SCM policies and procedures


Organisation in transition (including staff competency and capability)

High Moderate Review HR policies and procedures - Human capital Policy


Review existing business processes and standard operating procedures.


Implement first phase recruitment. Build an enabling & intelligent work environment

Establish Collective Agreement processes


Enhance performance management system


Development and implementation of Training Strategy/Plan


Implementation of legislation for which the CIPC is responsible for

High Moderate Draft business requirements for co-operatives


Implement the Co-operatives Act Encourage the formalisation of South African businesses and their identity

Implement the Intellectual Property Laws Amendment Act

To protect our cultural heritage and support strong competitive South African creative industry and provide benefits to local artists








Reputation and stakeholder management

High Moderate Media campaigns Improve the reputation and organisational performance of CIPC

Enhance the performance of the CIPC in call taking


Conduct quarterly stakeholder liaison committee meetings.


Stakeholder Management Framework Improve the reputation and organisational performance of CIPC


11. FRAUD PREVENTATION PLAN

Outcome/Output Activity/Task Due Date Res. Person/StructureFRAUD GOVERNANCE ISSUES1.1. Governance

Annual review of the Fraud Prevention Policy and PlanAnnually Division : Governance,

Risk and Compliance (GRC/ Committees

Annual update of the Fraud Prevention Implementation Plan to ensure relevance and applicability

Annually Division: GRC

The Internal Fraud and Risk Committee, and the Risk Committee review the fraud reports on a quarterly basis

Quarterly Committees

Development of the Whistleblowing Policy June 2014 Division : GRC

PREVENTATIVE MEASURES1.2. Management Accountability Management should act on reported suspicion or detected

irregularities of fraud, corruption etc Annually All Managers

1.3. Embedding an ethical culture Availability of Code of Conduct and Ethics Annually All Managers

Awareness of the Code of Conduct Annually Knowledge Centre

Ethics related training Annually Knowledge Centre/GRC

1.4. Fraud Awareness and Training Development of awareness material in conjunction with Communication Section

Dec 2014 Division : GRC

Awareness – Induction Programme Annually Knowledge Centre

1.5. Fraud Risk Assessment Conduct and compile a fraud risk assessment in high exposure areas, Operations, SCM etc and compile a

July 2014 Division : GRC

1.6 Internal Control Segregation of duties in high exposure areas Annually All Managers

Employment Screening – qualifications/ employment history Annually Human Capital Division

Disclosure of interest – annual disclosures by senior management and above, and other staff members to disclose their financial interest to management

Annually Division : GRC

Application and approval of remunerative work outside the CIPC Annually Officials/Commissioner

DETECTIVE MEASURES1.7 Management accountability

reporting review and Identification of

early warning signs

Management must identify and address causes of internal control weaknesses.

Annually All Managers

1.8 Reporting instances of fraud Implementation of the Whistleblowing Policy Annually Division: GRC

RESPONSE MEASURES1.9 Investigation Investigation of all cases or suspicion of fraud Annually Division: GRC

1.10 Disciplinary/Criminal action Institute disciplinary measures where applicable and reporting of criminal cases to law enforcement

Annually Human Capital/GRC Division

www.cipc.co.za

RP65/2014

ISBN: 978-0-621-42542-0

CIPC Contact Number: 086 100 2472

Postal Address: PO Box 429, Pretoria, 0001

Companies and Intellectual Property Commission · The Companies Act, 2008 (Act No. 71 of 2008)...

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