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Disaster Regulations | Potential impact on the workplace
- 01 March 2023
- Accounting
- South African Accounting Academy
On 9 February 2023, Government issued a notice in terms of the Disaster Management Act of 2002 (the Act), declaring a state of national disaster in relation to the impact of the severe electricity supply constraints. Pursuant to the declaration, the Minister of Cooperative Governance and Traditional Affairs, Dr Nkosazana Dlamini Zuma, has issued Regulations in terms of section 27(2) of the Act. Further regulations may follow.
The Regulations relate to minimising the impact of load shedding, specifically in relation to lifesaving and specified essential infrastructure such as; health infrastructure, water infrastructure, rail and ports infrastructure, food production, and critical electronic communications and broadcasting infrastructure. The Regulations also make provision for emergency procurement procedures and allow relevant cabinet ministers to issue directions that expedite, streamline and/or facilitate actions that will mitigate the adverse impact of the consistently constrained electricity supply.
In the employment context, the Regulations also make provision for relevant Cabinet ministers to issue directions on taking steps that may be necessary to prevent an escalation of the national state of disaster, or to alleviate, contain or minimise the effects of the national state of disaster. In this regard, the question is whether these forthcoming directions (as well as any further regulations that are issued) may potentially prescribe processes that impact on the workplace such as restricting retrenchments; regulating time-off and remuneration for employees during periods of load shedding that affect a business's operations; and/or make provision to interdict industrial action where such action escalates and exacerbates the national state of disaster time to time.
In a nutshell, here are the highlights of the Disaster Regulations:
Hospitals, harbours, railways, water treatment plants and other essential infrastructure will be exempted from load-shedding.
They also exempt critical electronic communications and broadcasting infrastructure and — where feasible — food production and storage facilities from load-shedding and have taken immediate effect.
The regulations allow government departments to use emergency procurement procedures to add new energy sources and perform maintenance work on existing electricity infrastructure.
But accounting officers will have to report on emergency expenditure to both the auditor general and parliament, a move aimed at preventing a recurrence of the looting of Covid-19 emergency funding that took place during 2020 and 2021.
The regulations allow Eskom to import electricity from neighbouring countries, while the “wheeling” of electricity to allow third party networks to provide power will also be introduced in a bid to increase power generation.
All government departments will be compelled to introduce electricity saving measures and to install alternative energy sources at their facilities to ensure that the services they provide suffer less interruption.
Click here to download the Regulations:
Relevance to Auditors, Independent Reviewers & Accountants:
- The Disaster Management Act and newly-issued Regulations is yet another piece of legislation that your clients must comply with, and which you must assess compliance with. If they don’t comply with the relevant laws and regulations, you have certain reporting obligations in terms of NOCLAR (NOn-Compliance with Laws And Regulations) – this could include reporting to management, qualifying your audit opinion, reporting a Reportable Irregularity, etc.
- As an auditor, independent reviewer or accountant, you may need to advise your clients on the impact of these Disaster Regulations on their workplaces.
- As an employer, you also need to consider the impact of these Regulations on your workplace
Relevance to Your clients:
- An entity (company or close corporation) has a duty to comply with the Disaster Management Act and newly-issued Regulations, and directors have to fulfil their duties accordingly, otherwise they could be held liable.
- An employer has a duty to consider the impact of these Regulations on their workplace.
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