Agricultural law in South Africa: overview

A Q&A guide to agricultural law in South Africa.

The Q&A gives a high level overview of agricultural law, including acquiring agricultural companies and co-operatives, competition law, land ownership and usage rights, pricing and tender processes, tax and financing, crop seed business, importing crop seeds, commercial crop production and distribution, plant variety right protection, GM crops, GM foods, importing animals, gene patents, and product liability.

To compare answers across multiple jurisdictions, visit the Agriculture Country Q&A tool.

This Q&A is part of the Agricultural Law Global Guide. For a full list of jurisdictional Q&As visit www.practicallaw.com/agriculture-guide.

Contents

Agricultural policy

1. State whether and when your jurisdiction has joined the following:
  • The World Trade Organisation.

  • The Food and Agriculture Organisation of the United Nations.

  • The International Plant Protection Convention.

  • The Office International des Epizooties, also known as the World Animal Health Organisation.

World Trade Organisation (WTO)

South Africa has been a member of the WTO since 1 January 1995.

Food and Agriculture Organisation of the United Nations (FAO)

South Africa has been a member of the FAO since 21 August 1997.

International Plant Protection Convention (IPPC)

South Africa has been a member of the IPPC since 21 September 1956.

Office International des Epizooties (IOE)/World Animal Health Organisation

The OIE was established on 25 January 1924. South Africa was admitted to the IOE on 7 November 1945.

 
2. Describe the most recent national agricultural policy of your jurisdiction, in particular with respect to biotech crops and new crop growing technologies.

A lot has been done over the last few years with respect to new crop development, involving the elimination of land ownership inequality and price inefficiencies that have plagued large parts of the agricultural sector since apartheid. Apartheid was a system of racial segregation in South Africa enforced through legislation by the National Party, the governing party from 1948 to 1994.

South Africa put in place a National Biotechnology Strategy during 2001. This policy was aimed at the creation of incentives for the biotechnology sector. In 2014, this policy was replaced by the South African Bio-economy Strategy, which is devoted to the application of biotechnology in agriculture, health and industry in South Africa. It is closely linked to the Industrial Policy Action Plan (the plan which details South Africa's approach to industrial development), the National Development Plan (the plan for South Africa to eliminate poverty and reduce inequality by 2030 through uniting South Africans) and the New Growth Path (the plan to centre economic policy around job creation).

South Africa was the first African country to approve transgenic crops for commercial purposes and is the leader in agricultural biotechnology research and development on the continent. South Africa performs a substantial amount of Africa's research and development in biotechnology, since this area of research is considered a tool for addressing development challenges such as food security and improved healthcare. There is widespread approval and use of insect-protected cotton in Africa. The reason for this is that it is easier for regulatory authorities in developing countries to approve this crop because they are not required to consider food safety measures. South Africa stands out in this regard as an exception insofar as transgenic crops are already commercialised. The significant development can be attributed to South Africa's rich natural resources, such as diamonds and gold, and advanced financial, legal, communications, energy and transport sectors. These strong sectors provide biotechnology with a developed infrastructure.

Some key pieces of recent legislation regulating the development, production and/or trade of certain biotech crops are the:

  • Intellectual Property Rights From Publicly Financed Research and Development Act No. 51 of 2008.

  • Genetically Modified Organisms Act No. 15 of 1997.

  • National Environmental Management Biodiversity Act No. 10 of 2004.

 

Acquisition of agricultural companies

3. Is the acquisition of domestic agricultural companies by foreign investors subject to special prior government approval(s)? Set out the approval procedures and the authorities involved.

At present there are no restrictions on the acquisition of domestic agricultural companies by foreign investors in South Africa. For the acquisition of agricultural land by foreigners, see Question 7. Foreign investors can acquire and register a company in South Africa. To this extent, a foreigner can be listed as a director of a company in South Africa without any additional requirements. Further, companies can be wholly owned by nationals, foreign nationals, a foreign entity or another company or close corporation registered in South Africa. However, visa requirements apply in instances where the foreign national director(s) intend(s) to work for the company in question.

 
4. Describe if specific legal forms (such as co-operatives) are regulated or used in the agricultural sector and whether they are open to foreign investment.

South Africa allows free participation by all participants in the agricultural sector. To stay ahead in such a competitive environment, many co-operatives have converted to companies, or pursued mergers, acquisitions and joint ventures.

South African laws regulating co-operatives do not specifically address the issue of foreign investment. However, certain provisions in the Co-operatives Act No. 14 of 2005 regarding membership eligibility and allowable levels of non-member business may influence foreign investment activities of co-operatives.

Since 2012, the year acknowledged by the United Nations General Assembly as the International Year of Co-operatives, the Department of Trade and Industry has focused on creating awareness around co-operatives and their contribution to social and economic development in the agricultural sector.

Co-operatives in the agricultural sector in South Africa have long been recognised as playing an important role in tackling poverty through increasing the productivity and income of smallholder farmers, by helping them to collectively negotiate better prices for seeds, fertiliser, transport and storage.

The Co-operative Incentive Scheme (CIS) is a 100% grant for registered primary co-operatives in South Africa (a primary co-operative consists of five or more members). The objective of the CIS is to improve the viability and competitiveness of co-operative enterprises by lowering their cost of doing business through an incentive that supports Broad-Based Black Economic Empowerment (a form of economic empowerment aimed at repairing the economic problems in South Africa that stem from South Africa's past racist political regime).

 
5. To what extent does competition (anti-trust) law apply to agriculture?

The Competition Act 89 of 1998 (Competition Act) has no automatic exemptions for the activities of agricultural co-operatives or other similar vehicles, therefore the normal rules of competition law apply to agriculture.

Competition law risks characteristic to agricultural co-operatives where the parties are in a horizontal relationship are relevant in South Africa as in other jurisdictions. Individual farmers cannot steadily control prices of their inputs and outputs, which will often drive them to form agricultural co-operatives. Activities of such co-operatives may therefore often involve joint selling and purchasing by the farmers through their co-operatives, which may be viewed as anti-competitive by the South African competition authorities.

Horizontal agreements are prohibited if they have the effect of substantially lessening or preventing competition in a market. The prohibition can, however, be overcome by showing that pro-competitive gains outweigh the anti-competitive effect.

Farmers must make certain that their joint selling activities do not lead to market collusion and price-fixing. Joint selling does not, however, require farmers to sell through a central point, such as a co-operative, but can often include other types of joint activity such as agreements on supply restrictions. Small farmer co-operatives with little influence in the market are less likely to affect pricings, while large farmer co-operatives may have the ability to affect competiveness and prices.

 

Acquisition of agricultural land

Sale and transfer of usage rights and ownership

6. Set out the domestic laws that apply to the acquisition of:
  • Usage rights to agricultural land.

  • Ownership of agricultural land.

Acquisition of agricultural land

The transfer of immovable property acquired is regulated by the Deeds Registries Act No. 47 of 1937 (Deeds Act). The acquisition of agricultural land is dealt with the same way as the acquisition of any other type of immovable property, such as a dwelling, house, an erf or sectional title unit.

It is essential that any agreement for the sale of immovable property is in writing and specifies the:

  • Seller.

  • Purchaser.

  • Property.

  • Purchase price of the property.

The conveyancer (an attorney responsible for the transfer and registration of immovable property, bonds and rights over immovable property) will, after receipt of the relevant documents and payment of the deposit and/or purchase price (which in practice, is usually paid to the conveyancer in trust) effect the transfer of the property for a fee.

The conveyancer requires the following to transfer the property:

  • The sale of immovable property agreement.

  • Original title deeds.

  • A power of attorney to authorise the transfer.

  • An electrical compliance certificate from the seller for the property.

  • If applicable, a gas compliance certificate.

  • If applicable, a rates and clearance certificate from the municipality.

  • Marital and solvency status of the purchaser.

  • A transfer duty or value added tax (VAT) declaration.

  • If relevant, the details of any bond registered over the property, the particulars of the bond holder and the cancellation figures for the cancellation of such bond(s).

  • If relevant, any guarantees for the payment of the purchase price.

The conveyancer files the relevant documentation at the deeds registry in the district where the property is situated. It takes around seven to 14 days after filing for the transfer to take place and for the South African Revenue Services (SARS) (tax authority) to issue a transfer duty receipt/exemption in respect to the tax applicable to the transfer.

Acquisition of usage rights to agricultural land

Usage rights over property can be acquired by servitude and by lease.

Servitudes are either real or personal rights of enjoyment over the land of another also registered by a conveyancer in the relevant deeds registry.

A real servitude is any right of usage which must be registered in the title deed of the land. The real servitude is binding on the owner and any successors in title of the land, provided that the new owner is aware of the existence of the servitude, which is achieved by the registration of the servitude against the title deed. However, the landowner cannot be required to take any positive action in terms of the servitude.

Personal servitudes attach to the registered holder of the right. They endure until the happening of an event or for the lifetime of the holder, and if the holder is a legal person, for 100 years. A rights holder's right is limited to the described servitude. Accordingly, the rights holder cannot encumber the land or transfer its rights in terms of the servitude to a third party. A personal servitude entails use and enjoyment of land together with the fruits of the land, or the right to occupy the land, while ownership remains with the landowner and not the rights holder.

A lease and payment of rent for the land is another way to use and enjoy land, while having the right to occupy the land. A lease is not required to be in writing to be valid, even though in practice this is strongly advisable. To provide security for the lessee, the lease can be registered against the title deed of the property. Such registration will ensure the lease's enforceability against the successors in title of the owner. Leases exceeding ten years are registered this way.

 
7. Are there any legal restrictions on the acquisition of agricultural land (or usage rights) by a foreign (or foreign invested) party?

Currently, there is no restriction on the ownership of land in South Africa or the acquisition of land by a foreign party. The new Land Holdings Bill (Land Bill) which has not yet come into operation will change this. The aim of the Land Bill is to address South Africa's past racially discriminative laws and dispossession. The Land Bill still has to be sent to cabinet for approval, then it will undergo a public consultation process, after which it will be constitutionally tested in parliament.

The Land Bill proposes that foreign nationals and entities will no longer be entitled to own agricultural land in South Africa, but will be allowed to enter into long-term leases for a minimum period of 30 years. This restriction will not apply retrospectively with regard to agricultural land already owned by foreign nationals or entities and will also not apply to residential land. The Land Bill further limits the amount of agricultural land owned by any resident to 12,000 hectares. The average size of commercial farms in South Africa is estimated to be about 1,200 hectares and likely to get bigger.

A foreign company conducting business in South Africa must register as an external company if it is a party to an employment contract or engages in a series of activities that can reasonably be construed as that company having the intention to continue conducting business activities in South Africa, but excludes the acquisition of any interest in land in South Africa. A foreign entity can also use a foreign-owned resident company to acquire an interest in or lease of land.

South African law provides for the expropriation and restitution of land dispossessed through past racially discriminative laws, if a dispossession and restitution claim relating to land can be proven, subject to fair compensation paid to the landowner.

 
8. Are there any compulsory tendering or prior approval procedures required for a sale and purchase of agricultural land? Briefly describe these procedures and the approval authorities (if any).

There are no compulsory tendering or prior approval procedures required for the sale and purchase of agricultural land, apart from the standard requirements of the deeds office to submit necessary documents of a purchaser or seller (see Question 6), which can include constitutional or identification documents, proof of address and necessary consents. Further conditions and consents can apply to the sale of land if it is subject to an expropriation claim (see Question 11).

 
9. Does the law and/or regulations prescribe minimum land purchase prices if the (local) government sells agricultural land?

The law and/or regulations do not prescribe minimum land purchase prices if the government sells agricultural land.

If it is proved that land has been disposed of through past racially discriminative practices, such land can only be expropriated subject to fair compensation paid to the owner. South African courts have discretion with regard to the amount of such compensation.

The purchase price of land is essentially based on the size, location, capacity, suitability, accessibility and security considerations of the land.

 
10. Is there a maximum term applicable to the lease (or use) of agricultural land?

Currently, under the Subdivision of Agricultural Land Act No. 70 of 1970 (SALA), a lease of part of agricultural land cannot exceed ten years, unless the Minister of Agriculture, Forestry and Fisheries consents in writing. This does not apply to the long-term lease of the whole of the land.

The new Land Bill (see Question 7), which provides for a minimum lease period of 30 years for foreign investors, might change the provisions and the maximum period in the SALA.

 
11. In which circumstances can the government authorities expropriate agricultural land?

The Constitution of South Africa 1996 states that land can only be expropriated in accordance with law of general application for a public purpose or if it is in the public interest, and subject to just and equitable compensation being paid to the owner/affected party of the land.

The Expropriation Act No. 63 1975, the Restitution of Land Rights Act No. 22 1994 and the Restitution of Land Rights Amendment Act No. 15 2014 provide for the expropriation of land and the restitution of land dispossessed through past racially discriminative laws during apartheid, if a historically unfair dispossession of land and subsequent restitution claim can be proven.

The Commission on the Restitution of Land Rights (Commission) receives and investigates the merits of land claims for the repossession of land. The Commission will give notice of the claim to the landowner, all affected parties and the public. Once notice has been given, the land cannot be sold, donated, developed or subdivided without the prior consent of the Commission. If the claim is valid, the Commission will notify the owner and enter into negotiations and/or mediation with the owner and the claimants.

Tax and financing

 
12. Which taxes apply with respect to the sale and transfer of land ownership (or usage rights)?

The Transfer Duty Act No. 40 of 1949 provides that any acquisition of land or usage rights of land is subject to the payment of transfer duty, except in specific circumstances. Transfer duty is payable before the transfer of the land into the name of the buyer, and is calculated on a sliding scale based on the value of the land or usage right.

Value added tax (VAT) is payable by the buyer on the purchase price of the land at a rate of 14% if the seller is a registered VAT seller (a supplier of goods and services with an income exceeding ZAR1 million) in the course of business. If both the seller and the buyer are registered for VAT and the land is sold as a going concern (the land together with the business forming part of the land), VAT is charged at a rate of 0%.

Either VAT or transfer duty is payable on a sale and transfer of land, not both.

Capital gains tax (CGT) applies to a disposal of land for a purchase price which exceeds the original acquisition cost of land, at an effective rate of 13.65% for individuals, 18.65% for companies and 27.31% for trusts. These rates are expected to increase in 2017 to 16.4% for individuals, 22.4% for companies and 32.8% for trusts. Individuals and certain trusts further receive a ZAR30,000 exemption on capital gains each year.

Where a foreign investor sells any land in South Africa to a resident, withholding tax, pending determination of the actual tax liability of the foreign seller (CGT), is payable to SARS. This withholding tax is based on the purchase price of the land at a rate of 5% for individuals, 7.5% for companies and 10% for trusts. Tax relief may be available to the foreign seller under a double tax agreement or other applicable treaty.

An external company (for example, a subsidiary of a foreign company registered in South Africa), is liable for corporate income tax at 33%. If a foreign company registers a branch in South Africa (as opposed to a subsidiary) to conduct its business, for instance to collect rental income or run a farming business, it is only liable for corporate income tax at 28%.

Generally, there is no restriction on the remittance of proceeds from South Africa derived from the land, provided that the necessary exchange control approval has been obtained.

 
13. Does your jurisdiction have special regulated agri/green-parks and is (foreign) investment in such parks incentivised? If so, what incentives apply in general?

The government has identified some special agri/green-parks across South Africa, which emphasise networked innovation systems of agro-production, processing, logistics, training and extension services, located in district municipalities. As a network, an agri/green-park enables a market-driven combination and integration of various agricultural activities and rural transformation services.

President Jacob Zuma stated in his 2015 State of the Nation Address that the government would focus on the "establishment of agri-parks or co-operatives and clusters in each of the 27 poorest district municipalities to transform rural economies", and that the government would commit initial funding of ZAR2 billion to agri/green-park initiatives, including the establishment of agri/green-parks in all 53 district municipal districts.

Foreign and domestic investment is incentivised in the areas of supply, women-centred development, processing and packaging of fruit and vegetables, as well as the export of beef, pork, chicken eggs, fruit and vegetables.

Incentives are generally offered by the Department of Trade and Industry to strengthen the business sector, as direct incentives, indirect (tax) incentives and non-fiscal incentives.

Investment opportunities are available for private and emerging farmers who participate in the supplying of agri/green-parks.

 
14. Briefly describe the procedures to mortgage/pledge agricultural land rights in order to acquire domestic financing.

A mortgage bond over immovable property (land) can be registered as security for the repayment of financing and must be registered in the deeds office by a conveyancer (see Question 6).

A mortgage is classified as a limited real right, therefore the mortgage limits the rights of ownership of the debtor while providing the financier with certain limited rights to the land. Accordingly, the debtor cannot sell the land or burden it with servitudes without the financier's permission. However, the debtor is entitled to lease the land or register further mortgages on it.

A mortgage bond over immovable property grants the financier the right, provided it has obtained a court order to this effect and given the debtor reasonable notice, to sell the land if the debtor defaults on its loan, in order to recover the amount/s advanced to the debtor.

 

Crop seed business

15. Which domestic laws and regulations regulate the crop seed industry and which domestic authorities/agencies supervise this sector?

Legislation

The seed industry is regulated under the:

  • Plant Improvement Act No. 53 of 1976 (Plant Improvement Act) for issues dealing with registration of varieties, premises, seed certification, labelling, minimum quality standards, prohibition on the sale of uncertified seed and requirements for seed.

  • Agricultural Pests Act of No. 36 of 1983 regarding phytosanitary issues.

  • Plant Breeders' Rights Act No. 15 of 1976 (Plant Breeders' Rights Act) for plant breeders' rights and registration of plant breeders.

  • Genetically Modified Organisms Act No. 15 of 1997 dealing with the requirements for genetic modification.

  • Secondary legislation and regulations on matters regarding biodiversity, the environment and agricultural chemicals.

South Africa is also a party to the Cartagena Protocol on Biosafety (Cartagena Protocol), the international agreement regulating the transboundary movement of living modified organisms.

Regulatory authorities

The Minister of Agriculture, Forestry and Fisheries designates an officer in its department as the registrar of plant improvement. He exercises the powers and functions and carries out the duties imposed under the Plant Improvement Act, the key piece of legislation governing the seed industry in South Africa.

The regulatory authorities/agencies are the:

  • South African National Seed Organisation (SANSOR).

  • Association of National Seed Organisation (ANSO).

  • The Association of Official Seed Certifying Agencies (AOSCA).

  • Organisation for Economic Cooperation and Development (OECD) Seed Schemes.

  • National Plant Protection Organisation of South Africa (NPPOSA).

The Department of Agriculture, Forestry and Fisheries has a regulatory function with respect to the import and export of plants and plant products to and from South Africa.

Seed certification is voluntary in South Africa, except for specific varieties listed in Table 8 of the Plant Improvement Act.

The NPPOSA issues regulations and control programmes to improve and protect plant health in South Africa and to adhere to international obligations and agreements. In co-operation with other government departments and directorates, the NPPOSA administers laws and regulations for plant health and plant quarantine, as well as eradication and control measures.

When plants or plant products are to be imported into South Africa, the importer must apply for an import permit, issued by NPPOSA. A pest risk assessment based on scientific data is conducted and specific conditions are set according to the phytosanitary risks involved.

As an exporting country, South Africa must comply with the import conditions of the destination country or countries, by issuing phytosanitary certificates.

Section 26 of the Plant Improvement Act regulates the importation of plants and propagating material, and section 27 the export of them.

Import control measures

No person can import into South Africa a plant or propagating material unless it:

  • Is of a variety of which the denomination is entered in the varietal list.

  • Complies with the requirements prescribed in respect of the registered variety.

  • Is packed in a container which is sealed and branded, marked or labelled in the prescribed manner (which includes the prescribed information).

  • Is imported through a prescribed port of entry or such other place as the register may determine.

  • Is under a denomination other than the denomination entered in the varietal list.

Seed that is imported into South Africa or intended for export must be presented for examination and sampling so that both:

  • Access to the seed concerned can readily be obtained.

  • All the marks, printing or writing on the containers of the seed or on labels attached can readily be read.

Export control measures

No person can export any plant or propagating material from South Africa unless they have a certificate from the registrar authorising the export.

An application must be lodged in duplicate for each separate consignment of seed and each application must both:

  • Be accompanied by the application fee.

  • Reach the register at least ten days before the intended date on which the seed concerned will be exported.

  • The following procedures should be followed when exporting plants and plant products out of South Africa:

  • Before exporting the plants or plant products, the exporter should establish what the phytosanitary import conditions of the importing country are.

  • The exporter can obtain the import conditions from the NPPOSA or the importer in the importing country.

  • In conjunction with the NPPOSA, the exporter must establish whether it can comply with the import conditions of the importing country.

  • The agent or importer in the importing country must apply for an import permit from the national plant protection organisation of the importing country. The importing parties must obtain an import permit from the national plant protection organisation of the importing country.

  • The exporter must present the goods to the NPPOSA for evaluation and inspection.

  • The NPPOSA will issue a phytosanitary certificate if the goods pass evaluation and inspection.

  • The exporter must ensure that the goods are exported within 14 days of the final inspection.

  • The exporter must ensure that the goods are accompanied by the original phytosanitary certificate.

  • Plant inspectors of the national plant protection organisation of the importing country detain goods for evaluation and inspection.

  • The agent or the importer must clear all documents with the customs of the importing country at the port of entry before the goods are released.

List of prohibited or restricted species

The Alien and Invasive Species Regulations 2014 (adopted under the National Environmental Management Biodiversity Act No. 10 of 2004) contain a list of 559 alien invasive species, of which 379 are plants.

The Conservation of Agricultural Resources Act No. 43 1983 sets out the regulations regarding the control of weeds and invasive plants and provides a list of prohibited plants, which are divided into three categories (available at www.biodiversityexplorer.org).

Imported bio-control agents and plant species constituting a high phytosanitary risk are evaluated at a quarantine facility of the NPPOSA, an approved facility or the premises of the importer, depending on the outcome of the pest risk assessment.

 
16. State the approvals/licences that are required to engage in the following activities:
  • Import of new plant species or varieties and crop growing technologies.

  • Set up of R&D centres and use of test plots of new crops.

  • Crop seed production.

  • Commercial crop production.

  • Distribution of seeds or crops (wholesale/retail/e-commerce).

Import of new plant species or varieties and crop-growing technologies

An application must be made to the Department of Agriculture, Forestry and Fisheries under section 13(2) and 26(2) of the Plant Improvement Act for new plant species which are of an unlisted variety.

The import regulations (see Question 15) apply. To import a new plant species, the following should be considered:

  • Find out the phytosanitary import conditions that apply to the commodity to be imported by consulting the Agricultural Pests Act or the NPPOSA in the Department of Agriculture, Forestry and Fisheries.

  • Apply for an import permit from the Department of Agriculture, Forestry and Fisheries. If the commodity to be imported is exempted from an import permit, ensure compliance with the phytosanitary measures for such an exemption.

  • Forward a copy of the import permit to the exporter or supplier in the exporting country to ensure that the consignment to be exported meets the phytosanitary import requirements of South Africa.

  • Ensure that the exporter or supplier presents the commodity to be imported to the national plant protection organisation of the exporting country for phytosanitary inspection and certification, where necessary in terms of the permit and/or exemption requirements.

  • Inform the exporter or supplier to send the original phytosanitary certificate with the consignment to South Africa (if a phytosanitary certificate is required).

National plant improvement requirements and activities as prescribed by legislation are aligned with those of international standard setting bodies to which South Africa is a member. These include the:

  • International Seed Testing Association which ensures the uniform application of standard procedures and techniques for sampling and testing seed.

  • Union for the Protection of New Varieties of Plants which prescribes guidelines for the recognition and evaluation of new plant varieties.

  • Organisation for Economic Co-operation and Development Seed Schemes which provide guidelines on monitoring seed quality, varietal identity and varietal purity.

Setting up R&D centres and using test plots of new crops

The Plant Improvement Act provide for specific requirements test laboratories must comply with to register as an establishment (Regulation 8A). Test laboratories can only be conducted on a premises registered under section 7 of the Plant Improvement Act, unless exempt under section 10 of the Plant Improvement Act.

Crop seed production

Crop seed production is included in "business" as defined in the Plant Improvement Act. Any premises where "business" is conducted must be registered under section 7 of the Plant Improvement Act.

Any further licences or approvals depend on the specific crop seed and whether a scheme applies to the crop seed.

Commercial crop production

Crop production generally does not have any specific regulations or approvals. The situation depends on the specific crop. For example, maize production in South Africa is deregulated and operated in a free market environment. Phytosanitary requirements and quality standards must be complied with.

Distribution of seeds or crops (wholesale, retail and e-commerce)

Plants/propagating material can be sold for cultivation if all of the following apply:

  • They are of a variety in the varietal list.

  • Are of a denomination prescribed in the varietal list.

  • No qualifying term of reference is added to or used in connection with the denomination referred to in the above bullet point.

  • The propagating material, which is pre-packed or packed in containers complying with the requirements, is sealed and branded or labelled in the prescribed manner.

  • The prescribed information appears on a label affixed to the plant, or on the container in which the plant grows or is packed.

The registrar can on good cause shown in writing grant exemption from any of the above requirements.

 
17. Set out the domestic labelling requirements in the crop business sector.

Marking and labelling of plants

A plant sold without authority referred to in section 13 of the Plant Improvement Act must have a label stating all of the following in clearly legible symbols, letters and figures:

  • The recognised name of the kind to which the plant belongs.

  • The denomination generally used for the variety concerned.

  • The name and address of the establishment where the plant is sold or was grown.

  • The lot number of the lot of plants to which the plant belongs.

If the plant is certified, the label must also contain both the:

  • Number of the certificate issued in respect of the lot concerned.

  • Further information which must appear on the label in terms of the scheme concerned.

Alternatively, the above information can be indicated on a container in which a plant grows when sold, on a label attached to the container, or if plants are packed in bundles on a label attached to each bundle. The producer takes delivery of the plants at the nursery, or the nursery concerned delivers the plants direct to the producer at its premises. The information (see above) is provided in an accompanying invoice. The above information is provided in an accompanying invoice.

Marking and labelling of not certified seed

A container, in which seed referred to in the Plant Improvement Act (regulations 22 and 24) which is not certified or pre-packed is sold, must be marked in clearly legible symbols, letters and figures with, or have a label on which is likewise indicated:

  • The name, as indicated in a notice under section 2 of the Plant Improvement Act, of the kind of plant to which the seed belongs.

  • The denomination of the variety to which the seed belongs, in the manner required under section 13(1)(a) and (b) of the Plant Improvement Act.

  • The lot number of the seed.

  • The words "percentage germination" or "percentage viability", where applicable, followed by the group in which the actual percentage germination or actual percentage viability, where applicable, of the seed falls.

  • The name and address of the establishment where the seed is sold.

Marking and labelling of certified seed

A container in which certified seed is sold must be marked in clearly legible symbols, letters and figures with, or be provided with a label on which is likewise indicated:

  • The appropriate particulars which are required in terms of regulation 36 in respect of seed which has not been certified.

  • The number of the certificate issued in respect of the lot concerned.

  • The further information which, in terms of the scheme concerned, is required to be indicated on the container or label.

Despite the first bullet point above, the indication of the germination group or validity group, where applicable, referred to in paragraph d of regulation 36(1), is not required on the containers of certified maize seed.

The regulations go further to regulate marking and labelling of mixed seed, pre-packed seed and containers of potato tubers that are certified.

Certified pre-packed seed must comply with the same requirements as the certified seed process.

Except where the register determines otherwise, no brand, name, design, illustration, indication or particulars can appear on a container in which the plant or propagating material is sold, or on a label attached to the plant or container, unless it:

  • Will in terms of these regulations or, in case of a plant or propagating material which is certified the certification scheme concerned, appear on it.

  • Will or may in terms of any other law appear on it.

  • Relates to the relevant plant or propagating material or the producer of it, or the establishment where it was cleansed or sold.

Product labelling must not be misleading to consumers when attached to the goods, or displayed alongside them or contained in advertising material from which a consumer can place an order (section 24, Consumer Protection Act No. 68 2008).

Regulation 7 of the Consumer Protection Act relates to GMOs, and states that goods containing at least 5% of GMOs must have a notice in plain and understandable language attached to them, stating that the good, ingredient or component "contains Genetically Modified Organisms".

 
18. Are there any restrictions on foreign direct investment (FDI) in this sector?

There are no FDI restrictions in the seed crop sector. For the impact that the Land Bill will have on foreign ownership of land in South Africa, see Question 7.

 
19. Summarise landmark or recent cases that have defined the law and practice in this sector.

The Western Cape High Court has held that a sublicence of plant breeders' rights for several seedless grape varieties did not transfer ownership to the licensee of the tangible grape vines resulting from propagation under the sublicence (Voor-Groenberg Nursery CC and Another v Colors Fruit South Africa (Pty) Ltd (A21/12) (2012) ZAWCHC 157).

Sheehan Genetics (Sheehan), a California-based breeder of table grape varieties, granted to Antonio Munos y Cia S.A. (AMC), an exclusive licence to test and commercially develop its seedless grape varieties. AMC entered into a sublicence with Colors Fruit South Africa (Pty) Ltd (Colors), in terms of which Colors was granted rights to exploit the Sheehan varieties in South Africa and Namibia. Among other things, the sublicence gave Colors the non-exclusive right to use Sheehan's intellectual property rights in the grape varieties in the agreed territory. The sublicence would terminate automatically on termination of the head licence between Sheehan and AMC.

The court ordered delivery of the materials to Colors. 

The appeal court looked into the silence of the sublicence regarding ownership of materials and held "where an agreement does not expressly provide for what is going to happen when some event occurs…the most usual inference…is that nothing is to happen". The court further heard expert testimony from the South African Plant Improvement Organization Trust which stated that "the industry norms appear to be that ownership of buds and budwood remains with the owner of the plant breeders' rights, irrespective of whether such vegetative materials are in possession of the licensor, licensee, or a sublicensee. Ownership of the vegetative materials, in my experience, does not pass to licensee or a sublicensee when such materials leave the hands of the licensor".

The court further rejected Color's final argument based on section 23 (6) of the Plant Breeders' Rights Act. It found that because Colors obtained the propagating material pursuant to a valid licence, it could not invoke section 23(6). The court reiterated that the section is designed as a defence and not a basis to compel another party to transfer possession to another person claiming to own such materials.

The court concluded that the silence of the sublicence regarding ownership of the propagating materials was a strong factor indicating that it was not intended for ownership to transfer. The order of the court of first instance was set aside.

 
20. Has your jurisdiction ratified the International Convention for the Protection of New Varieties of Plants 1961 (UPOV Convention) and its revisions in 1972, 1978 and 1991?

South Africa became the tenth member of the UPOV Convention on 6 November 1977. The latest revision of the UPOV Convention to which South Africa is a party is the 1978 revision.

 

Plant variety rights (PVR)

21. Briefly describe the registration process for PVR in your jurisdiction.

Plant breeders' rights are primarily governed by the Plant Breeders' Rights Act No. 15 of 1976, as amended from time to time. The Plant Breeders' Rights Act allows plant breeders' rights to be granted only to plants varieties recognised by the Plant Breeders' Rights Act. A national list of these recognised plants is in Table 1 of the Regulations to the Plant Breeders' Rights Act. If a type of plant does not appear on this list, a written request for recognition can be made to the Registrar for Plant Breeders' Rights (Registrar).

For the requirements for registration of a plant breeders' right, see Question 22.

Under section 6 of the Plant Breeders' Rights Act, only a breeder can apply for a plant breeder's right. A breeder is defined in section 1 of the Plant Breeders' Rights Act as any of the following:

  • The person who bred, discovered or developed the variety.

  • The employer of the person who bred, discovered or bred the variety.

  • The successor in title of the person or the employer.

An application for a plant breeder's right must be made to the Registrar in the prescribed manner and accompanied by the prescribed application fee, documents and other proof in connection with it.

The application can only be made by:

  • An individual who is a citizen of or domiciled in South Africa, or of a relevant convention or agreement country.

  • A legal person with its registered office in South Africa, or a relevant convention or agreement country.

If an application is submitted to the Registrar by any qualifying individual who is not resident in South Africa, or by any qualifying legal person without a registered office in South Africa, the application must be submitted through a duly authorised agent resident in South Africa.

The Registrar will determine whether the application complies with the Plant Breeders' Rights Act. The Registrar must either (section 19(2), Plant Breeders' Rights Act):

  • Undertake or cause to be undertaken such tests and trials as he may deem necessary with a variety in respect of which an application has been made.

  • Use the results of tests and trials obtained from the appropriate authority in a relevant convention or agreement country in terms of an agreement concluded between South Africa and that country.

The applicant must, within 12 months from the date of filing the application, provide (at the applicant's cost) the Registrar with all of the following (section 19(5), Plant Breeders' Rights Act):

  • Plant samples for trials, examinations and testing.

  • Documents and other proof.

  • Written undertakings and/or guarantees for the reimbursement of costs.

  • Any other additional information and/or documentation required by the Registrar for a proper examination.

The Registrar can grant an extension of this 12-month period on written application with reasons.

If the Registrar does not reject an application under the Plant Breeders' Rights Act, it will publish by notice in the Government Gazette:

  • The particulars relating to the application (as may be prescribed).

  • That the application has been withdrawn before a plant breeder's right had been granted or refused (if this is the case).

The Registrar must grant the plant breeder's right if he is satisfied that:

  • The application complies with the Plant Breeders' Rights Act.

  • The applicant is entitled to make the application.

  • The variety is new, distinct, stable, and uniform (see Question 22).

  • No money is due from the applicant in terms of prescribed fees.

If the plant breeder's right is granted, the Registrar must:

  • Issue a certificate of registration to the applicant.

  • Enter the particulars in the register of plant breeders' rights.

  • Publish the particulars of the grant in the Government Gazette.

The breeder must pay the prescribed maintenance fee to the Registrar annually.

A protective directive can be issued by the Registrar at the request of an applicant whose application has not been rejected by the Registrar and is to be published in the Government Gazette. If the Registrar issues this directive, the variety in respect of which the application has been published will be protected as if a plant breeder's right has been granted for it. The directive will cease on the date on which the Registrar allows or refuses the application.

 
22. Briefly describe the laws and procedures of your jurisdiction covering the protection of PVR in terms of:
  • Requirements for protection.

  • Extent of the protection.

  • Restrictions on the rights of the PVR holder.

  • Farmer's privilege.

Requirements for protection

Certain requirements must be met before a variety can be registered and protected as a form of intellectual property. A variety is defined in the Plant Breeders' Rights Act in the same terms as in the Plant Improvement Act. This means any plant in a single grouping in a single botanical taxon of the lowest known classification, and which grouping, irrespective of whether the conditions for the grant of a plant breeder's right are met, can be all of the following:

  • Defined by the expression of the characteristics resulting from a given genotype or combination of them.

  • Distinguished from any other plant grouping by the expression of at least one of these characteristics.

  • Considered a unit with regard to its suitability for being propagated unchanged.

For the variety to be protected, its propagating material (seeds, cuttings, bulbs, other plant parts and the harvested material of them) must be all of the following.

New. The variety must not have been sold or otherwise disposed of by, or with the consent of, the breeder for the purpose of exploitation of the variety in:

  • South Africa, for a period exceeding one year before the filing date of an application for a plant breeder's right.

  • A convention or agreement country, in case of:

    • vines and trees, for a period exceeding six years before the filing date of an application for a plant breeder's right; and

    • other varieties, for a period exceeding four years before the filing date of an application for a plant breeder's right.

Distinct. The variety must be clearly distinguishable from any other variety of common knowledge at the date of filing the application for a plant breeder's right.

Uniform. The plant characteristics must be consistent from plant to plant within the variety.

Stable. The plant characteristics remain unchanged from generation to generation or after a particular cycle of propagation.

Extent of the protection

Section 21 of the Plant Breeders' Act sets out the duration of protection of a plant breeder's right as the following, from the date of issue of the certificate of registration:

  • 25 years, for trees and vines.

  • 20 years, for all other varieties.

There is no extension period under the Plant Breeders' Rights Act. Protection is only granted for the specified duration in the Plant Breeders' Rights Act.

In many other countries, the term of protection is extended up to 30 years for some crops, for example potatoes. The Plant Breeders' Rights Bill 2015 seeks to replace the Plant Breeders' Rights Act in the near future. This deficiency regarding protection periods will be addressed in it.

Restrictions on the rights of the breeder

The protection of a plant breeder's rights extends over 20 or 25 years, depending on the type of plant (see above). The holder has a sole right during the first five to eight years of protection. For the remaining time, the holder must issue licences to the public from which he can claim royalties. After the full period of the plant breeder's right has expired, the plant variety will fall into the public domain and anyone can propagate and sell it.

Farmer's privilege

Farmers' privilege is set out in section 23(6)(f) of the Plant Breeders' Rights Act. This stipulates that farmers' privilege is provided to a farmer who, on land occupied by him, uses harvested material obtained on the land from legitimately procured propagating material, provided that harvested material obtained from the replanted propagating material is not used for propagation purposes by any other person other than the farmer.

Farmers' privilege is one of the exceptions to plant breeders' rights in South Africa, as it allows farmers to save protected seeds of protected varieties on their own farms for resowing or replanting. The lack of a clear definition of the beneficiaries of this privilege has however allowed farmers to abuse it.

 
23. Which legal actions are available to owners of PVR in the event of PVR infringements?

Current penalties are inadequate to deter deliberate infringements of plant breeders' rights. Deliberate abuse without paying the required royalties is a major disincentive for breeders to continue developing new varieties or release varieties. This may ultimately impact on the competitiveness of the agricultural sector.

The owners of PVR are entitled to normal delictual remedies of an interdict, damages and delivery up of infringing material.

Section 47 of the Plant Breeders' Rights Act sets out compensation which can be claimed by the holder of a plant breeder's right in the event of a PVR infringement.

The holder can, on proof of an infringement of the PVR and without proof of damages which might arise from the infringement, recover by court action compensation up to ZAR10,000 from the person who infringed the plant breeder's right. This action is available instead of an action for damages for an amount which might arise from the infringement. However, it cannot be made if the relevant plant breeder's right or variety is subject to either:

  • An objection, which under the Plant Breeders' Rights Act is determined by the Registrar.

  • An appeal decided by a board appointed by the Minister of Agriculture, Forestry and Fisheries, consisting of one person with expert knowledge of the law and two persons with expert knowledge on the subject.

In addition, a competent court can, in proceedings due to an infringement of a plant breeder's right, order the custody, surrender or disposal of any book, document, plant, propagating material, product, substance or other article.

 
24. Summarise landmark or recent cases that have defined the law and practice in this sector.

Weltevrede Nursery (Pty) Ltd v Keith Kirsten's (Pty) Ltd and Another (515/2002) [2003] ZASCA 136; [2004] 1 All SA 181 (SCA) (28 November 2003) dealt with the requirement of "bred, discovered and developed for registrability". Mr Kirsten obtained a plant breeder's right for a variety of Canna (Phasian) which he allegedly discovered and developed. The Supreme Court of Appeal, however, found that Mr Kirsten had not discovered the variety, but had found the plant in Mr Kruger's garden, a well-known nurseryman in Bethal who had been fully aware of the Canna variety growing in his garden. The court held that Mr Kirsten was therefore not the first person to learn about something previously unknown and therefore could not be said to have discovered the Canna variety.

Piquante Brands International (Pty) Ltd v OMC Marketing (Pty) Ltd and Another 2007 BIP 453 (RPBR) dealt with the stability requirement for registrability in section 2(2)(d) of the Plant Breeders' Rights Act. The Appeal Board of the Registrar held that the Registrar had erred in cancelling the plant breeder's right for the Piquante pepper variety, on the basis that the variety was not fully developed at the time when the application was filed. The Appeal Board considered the breeder's evidence and held that the breeder believed that uniformity and stability had been reached when the application was filed. Peppers are self-fertilising plants and scientific evidence shows that the level of homogeneity is sufficiently high after six to eight generations of in-breeding. No evidence had been advanced as to the generation of the plant that the breeder originally discovered and developed. The evidence which was contested at the time is that the breeder was satisfied that the Piquante variety was uniform and stable when the application for the plant breeders' right was made. The Appeal Board was therefore satisfied that the Piquante variety was uniform and stable at the time of filing the application and that the grant of the right was correct. The Registrar's decision to cancel the plant breeders' right was set aside and the Piquante plant breeder's right was reinstated.

 

Genetically modified (GM) crops

25. Has your jurisdiction ratified the Cartagena Protocol on Biosafety 2002? What is the domestic policy with respect to GM crops?

South Africa acceded to the Cartagena Protocol on 14 August 2003. The Department of Agriculture, Forestry and Fisheries, in terms of the Cartagena Protocol, is the recognised Competent National Authority for South Africa responsible for ensuring that all provisions and obligations relating to the Cartagena Protocol are met.

Domestic policy with respect to genetically modified (GM) crops in South Africa is regulated by the Genetically Modified Organisms Act. The Act states that biosafety assessments must be conducted for every proposed genetically modified organism (GMO) activity, and provides a framework to ensure that all activities involving the use of GMOs are carried out so as to limit possible harmful consequences.

The scope of the Genetically Modified Organisms Act includes all activities involving GMOs, including imports, exports, transit, development, production, use and storage.

The Genetically Modified Organisms Act is administered by the Directorate of Genetic Resources, in the Department of Agriculture, Forestry and Fisheries, and provides for the appointment of a Registrar of GMOs, the Advisory Committee, the Executive Council and inspectors.

 
26. Describe the domestic laws regulating genetic engineering. Which authority(ies) is(are) responsible for approving GM crops. Set out the permit requirements and prohibitions as well as sanctions in the event of infringement.

Authorities responsible

The primary legislation regulating genetic engineering is the Genetically Modified Organisms Act. Other relevant laws are in legislation such as the National Environmental Management Biodiversity Act, the Consumer Protection Act and the Foodstuffs, Cosmetics and Disinfectants Act.

The Registrar of GMOs, the Advisory Committee, and the Executive Council are responsible for approving GM crops. A user (defined in the Genetically Modified Organisms Act as a person who conducts an activity with a GMO) must apply to the Registrar of GMOs for a permit to conduct activities in respect of GMOs.

An application for a permit must include the following (GMO Regulations published under the Genetically Modified Organisms Act):

  • A scientifically-based risk assessment.

  • Proposed risk assessment measures.

  • A copy of public notices as required under the GMO Regulations.

  • If the Executive Council deems it appropriate, an environmental risk assessment.

If the Registrar of GMOs is satisfied that the application complies with the Genetically Modified Organisms Act, he sends the application to the Advisory Committee.

The Advisory Committee, which consists of scientific experts, is responsible for the evaluation of the risk assessment data of all applications as it relates to food, feed and environmental impact. The Advisory Committee then submits its recommendation to the Executive Council. The Executive Council is the ultimate decision-making body, and consists of members from different government departments. All applications for field trials, commodity clearance (food/feed/processing) and general release are published for the information and input of the general public.

The Executive Council, before taking a decision whether to permit a GMO activity, will consider:

  • The recommendations of the Advisory Committee.

  • Compliance with various policies.

  • Comments from members of the public or interested parties.

The Executive Committee can approve the application, reject it, or request the applicant to provide additional information. The Executive Committee must provide reasons for its decision. If the Executive Committee approves an application, it must include all applicable terms and conditions, which the Registrar of GMOs will then attach to the permit.

Any applicant aggrieved by a decision or action of the Executive Committee, the Registrar of GMOs, or an inspector can appeal to the Minister of Agriculture, Forestry and Fisheries within 30 days of the issue of the decision or action.

Prohibitions

If the Minister of Agriculture, Forestry and Fisheries has reason to believe that the release of a GMO into the environment under a permit applied for under the Genetically Modified Organisms Act poses a threat to any indigenous species or the environment, a permit for the release cannot be issued unless an environmental impact assessment has been conducted under Chapter 5 of the National Environmental Management Biodiversity Act, as if the release was a listed activity contemplated in that Chapter (section 78, National Environmental Management Biodiversity Act).

It is the Minister's responsibility to convey his belief referred to above to the Advisory Committee that issues permits, before the application is decided.

The Minister can, on the recommendation of the Executive Committee, by notice in the Government Gazette, prohibit any activity involving genetically modified organisms.

Offences and penalties

A person who does any of the following is guilty of an offence (section 21, Genetically Modified Organisms Act):

  • Contravenes or fails to comply with any provision of the Genetically Modified Organisms Act or any condition, restriction, prohibition, reservation or directive imposed or issued under it.

  • Obstructs or hinders any inspector in the exercise of his powers or the performance of his duties in terms of the Genetically Modified Organisms Act.

  • Refuses or fails to provide information or give an explanation or reply to the best of his knowledge to a question lawfully demanded from or put to him by the registrar, Advisory Committee, Executive Committee or any inspector in the performance of his functions under the Genetically Modified Organisms Act, or provides information, an explanation or reply to the Registrar of GMOs, the Advisory Committee, Executive Committee or an inspector which is false or misleading, knowing that it is false or misleading.

  • Falsely holds himself out to be an inspector or other officer appointed under the Genetically Modified Organisms Act.

Any person convicted of an offence under the Genetically Modified Organisms Act is:

  • On a first conviction liable to a fine, or to imprisonment for a period up to two years.

  • On a second or subsequent conviction liable to a fine, or to imprisonment for a period up to four years.

If the Minister of Environmental Affairs has reason to believe that the release of a GMO into the environment under a permit applied for under the Genetically Modified Organisms Act may pose a threat to an indigenous species or to the environment, such a permit can only be issued if an environmental impact assessment has been conducted (National Environmental Management Biodiversity Act). The Minister must convey his belief to the authority issuing the permit before the application for the relevant permit is decided.

The environmental impact, as well as those required by the Executive Committee under the Genetically Modified Organisms Act, must be conducted in accordance with Chapter 5 of the National Environmental Management Biodiversity Act.

 
27. Which safety evaluations are legally required before GM crop commercial market entry? How are GM crops regulated?

Safety evaluations

To carry out a GMO-related activity, an application must be made to the Registrar of GMOs, including:

  • A scientifically-based risk assessment.

  • Proposed risk assessment measures.

  • A copy of public notices as required under the GMO Regulations.

  • If the Executive Committee deems it appropriate, an environmental risk assessment.

Scientifically based risk assessment

There are strict rules on how a scientifically based risk assessment is conducted. The assessment must take into account current national, regional, and international risk-assessment methods. It must include the following:

  • Identification of any potential adverse effect resulting from the new genotypic and/or phenotypic characteristics of the GMO.

  • An evaluation of the likelihood of these adverse effects being realised, taking into account the level and kind of exposure of the potential receiving environment to the GMO.

  • An evaluation of the consequences if these adverse effects occur.

  • An estimate of the overall risk proposed by the GMOs, based on the evaluation of the likelihood and consequences of the identified adverse effects occur.

Socio-economic considerations

An assessment of socio-economic impact can include information on the impact of the activity on the following:

  • The continued existence and range of diversity of the biological resources.

  • Access to genetic and other natural resources previously available.

  • Cultural traditions, knowledge, and practices.

  • Income, competitiveness or economic markets.

  • Food security.

Risk management

An application for a permit must include measures to manage the potential risks identified for a proposed activity.

The Executive Committee must, when deciding an application, determine the appropriateness of the mechanisms, measures and strategies proposed by the applicant to manage or control identified risks during the activity, and impose further mechanisms where appropriate.

Risk management mechanisms, measures and strategies can include the following:

  • Containment and confinement of GMOs.

  • Storage and inventory of GMOs.

  • Harvest and/or disposal of GMOs after completion of the activity.

  • Monitoring of compliance with permit conditions.

  • Restriction of unlawful access to GMOs.

  • Management and maintenance of records and reports.

Regulation of GM crops

All places where contained use of a GMO takes place (facility), must be registered with the Registrar of GMOs. The application for registration must include:

  • The name of the person taking responsibility for the facility.

  • A map of the facility showing the different units in it.

  • Locality map that includes geographic co-ordinates.

  • A science-based risk assessment of the activity in the facility.

  • The proposed risk-management mechanism, measures, and strategies.

Inspectors appointed by the Registrar are authorised by the GMOA to investigate and, among other things:

  • Seek and obtain warrants to search for and seize various items, including GMOs and documents, when they have reason to believe that the GMOA has been violated.

  • Conduct routine, unannounced, and warrantless inspections of facilities registered for conducting GMO-related activities, and take samples of the GMOs.

 
28. Describe the GM crop test plot regulations and requirements.
 
29. Describe pre-market approval requirements (and approval timelines) to grow, produce and sell GM food or feed. Provide details on the competent approval authorities.
 
30. Set out the domestic product genetically modified organism (GMO) content labelling obligations (or the absence of them) and sanctions in the event of non-compliance or inaccurate content labelling.

The Department of Health, specifically the Food Control Section tasked with ensuring food safety, has issued regulations requiring foodstuffs obtained through certain genetic modification techniques be labelled as such before being offered for sale in the market. Further labelling requirements are imposed by the Consumer Protection Act and the Foodstuffs, Cosmetics and Disinfectants Act.

The Consumer Protection Act provides for improved access to information for consumers. Therefore any prescribed goods that are produced, supplied, imported or packaged must display a notice disclosing the presence of any GM ingredients or components of them.

The Regulations of the Consumer Protection Act specify that labelling provisions apply to goods approved for commercialisation by the Executive Committee and to all goods containing at least 5% of GM content, irrespective of whether they are produced in South Africa or elsewhere.

Mandatory labelling

The following applies:

  • If the product has a GM content of at least 5%, it must state "contains GMOs".

  • If food is produced directly from GM sources and no testing is needed, it must have a label stating "produced using genetic modification".

  • If it is arguably scientifically impractical to test the GM content, it must have a label stating "may contain GMOs".

A GM good or ingredient or component cannot be produced, supplied, imported or packaged without a conspicuous and legible label indicating that it contains GMOs.

Voluntary labelling

Voluntary labelling can be used in other cases:

  • If the GM content of a product is less than 5% but more than 1%, it is not stated which label is to be used.

  • If the GM content is less than 1%, the product can be labelled without GM ("GM‐free, no GMO, GMO-free, biotech‐free, or non‐GM").

Information regarding an alleged breach or non-compliance in terms of the consumer goods regulations (section 71, Consumer Protection Act) can be submitted to the National Consumer Commission.

A complaint can be filed to the National Consumer Commission about an alleged breach or non‐compliance (in terms of misleading representation). It will then be investigated by an inspector (directed by the Commissioner).

Non‐compliance with a labelling requirement can relate to an omission, wrong or illegal label content, and can lead to a fine or imprisonment up to 12 months, or both.

 
31. Summarise landmark or recent cases that have defined the law and practice in this sector.

In 2005, questions regarding access to information on GMO-related activities were litigated in court (Biowatch Trust v Registrar, Genetic Resources, and Others 2009 (6) SA 232 (CC)). Biowatch Trust, a non-governmental organisation engaged in monitoring and publicising issues of genetic modification, made a number of requests for information regarding the use of GMOs in South Africa, including locations of GMO field trials and risk-assessment date.

When the Registrar of GMOs refused to release information on the grounds that the request was too broad and that part of the information sought was proprietary in nature, Biowatch brought legal action before the High Court against the Registrar of GMOs, the Executive Committee, and others. 

The court noted that access to information in South Africa is not an absolute right and should be weighed against justifiable governmental and private concerns for maintaining confidentiality of certain information. However, the court held that:

  • Biowatch was entitled to access some information, and that the Registrar's refusal to grant access to such information violated Biowatch's constitutional rights. 

  • The Registrar of GMOs' claim that Biowatch's request was too broad was unacceptable, noting that the Registrar of GMOs had a legal obligation to work with Biowatch to identify the relevant information sought.

The matter was brought to the Constitutional Court on appeal. The Constitutional Court confirmed the first instance decision.

 

Importing animals and gene patents

32. Summarise the import/export control measures for animals and genetic resources.

The main source of import and export control measures for animals and genetic resources in South Africa is the Animal Improvement Act No. 62 of 1998 and the regulations issued under it.

Import control

Section 16 of the Animal Improvement Act and Regulation 13 of it provides import control measures.

To import live animals, poultry and genetic materials such as semen and embryos into South Africa, a permit must be obtained from the Registrar (the Minister of Agriculture, Forestry and Fisheries designates an officer in the department as Registrar) 30 days before the intended date of import.

Depending whether animals, poultry or genetic materials are involved, additional requirements apply.

Quarantine

If animals must be quarantined, the state veterinarian must be notified at the port of entry. The state veterinarian will arrange accommodation at the quarantine station, complete the relevant part of the application form and fax this to the permit office.

Export control

Section 17 of the Animal Improvement Act and Regulation 14 provide for export control measures.

The Animal Improvement Act only applies to landrace cattle breeds such as Nguni, Afrikaner and Bonsmara, but it might be revised to apply to other breeds, if the relevant societies see a need for this (landrace means a specified breed of a kind of animal indigenous to or developed in South Africa):

  • No-one can export any animals or genetic material of a landrace breed without an animal improvement authorisation from the Registrar.

  • An application must be accompanied by the application fee and authorisation by the relevant breed society that the genetic material must be certified as suitable for registration.

  • No applications are processed without an inspection report from the relevant breeders' society. This report will certify that the animals are registered or non-registered, and that they comply with the minimum standards for the breed.

  • The application must reach the Registrar at least 30 days before the date of export.

South Africa has a restricted species list, issued by the Department of Environmental Affairs in Government Notice No. 599. Chapter 5 of the National Environmental Management Biodiversity Act deals with species and organisms posing potential threats to biodiversity.

 
33. Does the law of your jurisdiction allow for patentability of livestock genes on the grounds of isolating and purifying them?

South African patent law does allow for the patentability of livestock genes, but not on the grounds of isolating or purifying them directly as such.

The Patent Amendments Act No. 20 of 2005 provides for the patentability of a biological or genetic resource. It requires that every applicant who applies for a patent must state whether the claimed invention is based on or derived from:

  • An indigenous biological resource or indigenous genetic resource.

  • Traditional knowledge or use from South Africa.

 
34. Which legal instruments are available to protect animal breeding know-how and a resulting animal nucleus?

South African law does not specifically protect "breeding know-how". In terms of protecting animal breeding, as well as the local biodiversity of the country, South Africa has well developed legislation and systems in place.

The National Environmental Management Biodiversity Act No. 10 of 2004 and the Patent Amendments Act No. 20 of 2005 regulate access by foreign companies to indigenous biological resources by requiring them to comply with access and benefit sharing regulations, and ensures that local communities are compensated when inventions are derived from traditional knowledge.

The Department of Environmental Affairs has started The South African Access and Benefit-Sharing Clearing House. This is the information node on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization (ABS). Its aim is to facilitate the exchange of scientific, technical and legal information on ABS between parties and the general public.

Further, the National Environmental Management Biodiversity Act provides for the following offences:

  • Carrying out a restricted activity involving a specimen of a listed threatened or protected species, alien species, listed invasive species, engaging in bioprospecting involving an indigenous biological resources or exporting indigenous biological resources for the purpose of bioprospecting or any kind of research, without a permit.

  • Failing to comply with any notice or directive issued in terms of the National Environmental Management Biodiversity Act.

  • If a permit holder:

    • breaches section 69(1) or 73(1) of the National Environmental Management Biodiversity Act;

    • breaches a condition of the permit; and/or

    • permits or allows another person to do or omit to do anything which is an offence in the above two points;

  • Fraudulently altering a permit.

  • Fabricating or forging a document for the purpose of passing it off as a permit.

  • Passing, using, altering or possessing an altered or false document purporting to be a permit.

  • Knowingly making a false statement or report for the purpose of obtaining a permit.

A person convicted of an above offence is liable to a fine or imprisonment for up to five years, or both.

 
35. Are there legal or practical restrictions on the introduction of new breeds/species, the breeding of certain animal species or certain breeding practices?

The National Environmental Management Biodiversity Act No. 10 of 2004 regulates dealing in invasive or prohibited species in Chapter 5. There are restricted activities involving alien species, invasive species and other threats such as genetically modified organisms.

Activities involving invasive or prohibited species can only be carried out with a permit under Chapter 7 of the National Environmental Management Biodiversity Act. The National Environmental Management Biodiversity Act prohibits certain species and provides exceptions in certain cases. It holds a person authorised by a permit to a certain degree of care relating to the species.

 
36. Summarise landmark or recent cases that have defined the law and practice in this sector.

A notable case involved the African Centre for Biodiversity, Berne Declaration (Swiss NGO) and the Church Development Service (a community in Alice, a town in South Africa) against a German Pharmaceutical company, Schwabe. Schwabe was granted patents relating to the Pelargonium species found in South Africa.

Schwabe wanted to patent a method of extracting extracts from the species' roots. The community in Alice said that the extraction method had been used for generations by traditional healers and that Schwabe had no right to patent it.

The court found the Schwabe method not to be based on an inventive step, therefore it was not patentable.

This case has raised the bar, so that biopiracy includes unlawful use of traditional knowledge and not just the law relating to patents.

The SA Predator Breeders Association (Association) represents the interests of breeders of predators and hunters of such animals bred in captivity. The Minister of Environmental Affairs is the cabinet member responsible for national environmental management and, as such, for the administration of the National Environmental Management Biodiversity Act. The Association challenged the inclusion of lions as a listed large predator in the threatened or protected species regulations, and the 24 month period in which captive-bred lions had to fend for themselves before they could be hunted (SA Predator Breeders Association v Minister of Environmental Affairs (72/10) [2010] ZASCA 151 (29 November 2010).

The court considered the validity of regulations made in terms of section 97 of the National Environmental Management Biodiversity Act, specifically Regulation 24(2). The court held that all regulations must be rational and can be struck down if they lack rationality.

The court further held that the decision that captive-bred lions had to fend for themselves in a wildlife system for 24 months before they could be hunted was irrational.

The regulations have been (temporarily) amended to remove lions from the ambit of Regulation 24(1).

 

Agricultural safety and product liability

Standards

37. Summarise the system of food safety standard setting, the main regulator(s) and regulations. If industry input is possible, indicate how this is conducted.

There are various mandatory and voluntary standards applicable in South Africa in relation to food safety standard setting, which are governed by relevant government bodies. The main departments supervising food safety in South Africa are the:

  • Department of Health.

  • Department of Agriculture, Forestry and Fisheries.

  • Department of Trade and Industry.

The main food safety legislation is the:

  • Consumer Protection Act No. 68 of 2008.

  • Agricultural Product Standard Act No. 199 of 1990.

  • Sea Fishery Act No. 12 of 1988.

  • Health Act No. 63 of 1977.

  • Foodstuffs, Cosmetics and Disinfectants Act No. 54 of 1972.

  • Meat Safety Act No. 40 of 2000 (including poultry).

All government initiatives are geared towards physical participation and involve all participants in the food supply chain, from farm to fork. South Africa's food safety standards are built on the three pillars of the government, consumers, and industry and trade.

Liability

 
38. Set out the legal requirements to establish the liability of producers and suppliers for defective or contaminated food ingredients that cause damage, in relation to:
  • Tort.

  • Product liability.

The following five essential elements must be proved to establish liability under the law of a delict (tort law).

Conduct. The conduct must be:

  • The act of a human being.

  • Be performed voluntarily.

  • A positive or negative act.

Wrongfulness. The following two questions must be posed: If the answer to both is yes, the conduct is wrongful:

  • Is there a legally recognised interest that has been infringed?

  • Was the legally recognised interest infringed wrongfully or in a manner which can be deemed as unreasonable?

Fault. This can be intentional (dolus) or negligent (culpa).

Intention is present when an individual intentionally and purposefully commits an act known to be wrong.

Negligence is established by the three-part test as formulated in Kruger v Coetzee 1966 (2) SA 428 (AD). The test/standard to be applied is that of a reasonable man. If both of the following questions are answered in the affirmative, negligence is present:

  • Would a reasonable person have foreseen the conduct causing damage? And if so.

  • Could any steps have been taken to avoid this damage.

Causation. A causal connection must exist between the conduct and the resultant damage. Ultimately, the conduct must cause the damage. The connection cannot be too remote. Therefore, remoteness is a key inquiry.

Damage. This must be suffered by the claiming party. South Africa recognises patrimonial and non-patrimonial loss.

These elements must be proved, on a balance of probabilities, by the claiming party.

Product liability

The Consumer Protection Act No. 68 of 2008 (CPA) introduced strict liability into the food industry in South Africa. Section 61 of the CPA provides for liability for damage caused by goods (which includes "anything marketed for human consumption").

Section 61 of the CPA provides that the producer or importer, distributor or retailer of goods is liable for any harm, as described in subsection (5), caused wholly or partly due to:

  • Supplying unsafe goods.

  • A product failure, defect or hazard in goods.

  • Inadequate instructions or warnings provided to the consumer pertaining to any hazard arising from or associated with the use of goods.

This is irrespective of whether the harm resulted from any negligence on the part of the producer, importer, distributor or retailer, as the case may be. Fault is therefore not a requirement for liability of a producer, importer, distributor or retailer under the Consumer Protection Act (strict liability).

Further, section 61 of the CPA provides that a producer, importer, distributor and/or retailer are jointly and severally liable to the consumer for liability under section 61.

 
39. Which defences are available to the producer and/or supplier to avoid liability? For instance, is market-entry prior government approval a legal defence against product liability and under which conditions?

The Consumer Protection Act No. 68 of 2008 (CPA) provides defences for a producer, importer, distributor or retailer, if any of the following apply (section 61(4)):

  • The unsafe product characteristic, failure, defect or hazard that results in harm is wholly attributable to compliance with a public regulation.

  • The alleged unsafe product characteristic, failure, defect or hazard:

    • did not exist in the goods at the time it was supplied by that person to another person alleged to be liable; or

    • was wholly attributable to compliance by that person with instructions provided by the person who supplied the goods to that person.

  • It is unreasonable to expect the distributor or retailer to have discovered the unsafe product characteristic, failure, defect or hazard, having regard to that person's role in marketing the goods to consumers.

  • The claim for damages is brought later than three years.

The producer, importer, distributor or retailer must prove one of these defences. Producers and importers under the CPA are particularly exposed to the no-fault liability regime of the CPA, and are advised to ensure that they have sufficient product liability cover and insurance in place which properly indemnifies them.

Further, the courts are also empowered by the CPA to:

  • Assess whether any harm has been proven and adequately mitigated.

  • Determine the extent and monetary value of any damages, including economic loss.

  • Apportion liability among persons who are found to be jointly and severally liable.

 
40. Which types of damage are generally compensated by civil courts in food safety liability cases? For instance loss of value, reparation costs, loss of revenue, and personal injury. Are punitive damages available?

Section 61(5) of the Consumer Protection Act No. 68 of 2008 (CPA) provides that harm for which a person can be held liable includes:

  • The death of, or injury to, a natural person.

  • An illness of a natural person.

  • Any loss of, or physical damage to, any property, whether movable or immovable.

  • Any economic loss that results from harm contemplated in the above points.

At common law, damages in delict are broadly divided into three categories:

  • Patrimonial damages, including medical costs, loss of income and the cost of repairs, which in turn fall under the heading of special damages.

  • Non-patrimonial damages, including pain and suffering, disfigurement, loss of amenities and injury to personality, which fall under the heading of general damages.

  • Pure economic harm, which is not connected to any physical injury or damage to property.

Punitive damages are not recognised in South Africa.

 
41. Summarise landmark or recent cases that have defined the law and practice in this sector.

In Freddy Hirsch Group (Pty) Ltd v Chickenland Proprietary Limited (20/10) [2011] ZASCA 22 (17 March 2011), the Supreme Court of Appeal dismissed an appeal by the Freddy Hirsch Group Proprietary Limited (Hirsch).

In January 2004 a product of Chickenland Proprietary Limited (Chickenland) was found to contain Sudan 1, a red dye used in colouring solvents, oils, waxes and shoe and floor polishes, and considered to be a genotoxic carcinogen rendering it unfit for human consumption. It is banned by the World Health Organisation and is not permitted in foodstuffs in South Africa and most other countries. The Chickenland Group was obliged by the Food Standards Agency of the UK to place newspaper advertisements informing consumers of their finding and were given 48 hours to withdraw any contaminated products from all supermarket shelves in the UK. A worldwide recall of Chickenland's products followed.

A dispute arose and Hirsch caused summons to be issued against Chickenland for payment of ZAR1,368,861.69 in respect of goods sold and delivered by it to Chickenland. Chickenland admitted the claim, but counterclaimed against Hirsch for damages for breach of contract and delict. Each counterclaim succeeded in the first instance court.

The Supreme Court of Appeal held that Hirsch knew that the product was required for export purposes and that the spice packs had to comply with the legislative and other industry standards in the destination country. Accordingly, so the Supreme Court of Appeal concluded, the parties contemplated when they contracted that, if the spice packs were delivered by Hirsch with an illegal contaminant, Chickenland would be obliged to recall and replace all of the products affected by that contaminant that it, in turn, had supplied to its distributors, and that Hirsch would be taken to have assumed liability for all such costs directly linked to that recall and replacement. It followed that Chickenland had established Hirsch's liability for those special damages.

Hirsch contended that being a delictual claim for pure economic loss by Chickenland the court had to be satisfied that Hirsch's conduct was wrongful. The Supreme Court of Appeal, after referring to various considerations of policy, including the fact that Hirsch had released a prohibited foodstuff into the market, concluded that Hirsch's conduct was indeed wrongful. It accordingly dismissed the appeal.

 

Online resources

Department of Environmental Affairs, South Africa

W www.environment.gov.za

Description Official website of the Department of Environmental Affairs of South Africa.

Juta Law

W www.jutalaw.co.za

Description One of South Africa's leading online resources for freely available legislation and legal precedents.

Department of Agriculture, Forestry and Fisheries, South Africa

W www.daff.gov.za

Description Official website of the Department of Agriculture of South Africa.



Contributor profiles

Andrea Opperman, Associate

Van Der Merwe Dorning and Associates Incorporated t/a VDMA

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