Page 48 - IRMSA Risk Report 2020

4.3.4
CHANGES IN LEGISL ATION AND REGUL ATIONS

DUE TO IMBALANCES OF THE PAST, LACK OF SKILLS AND / OR LACK OF CONSULTATION (NEGATIVELY IMPACTED BY
COMPETING OBJECTIVES OF PRIVATE VS PUBLIC OR LABOUR) THERE MAY BE UNMANAGEABLE PROLIFERATION OF
LEGISLATION AND REGULATIONS, ALBEIT WELL INTENDED, THAT TYPICALLY HAVE UNINTENDED CONSEQUENCES
THAT INADVERTENTLY IMPACT ECONOMIC GROWTH.

SCENARIOS FLAGS RISK RANKING OVER LAST 5 YEARS
Leadership RANKING SCALE
Institutional capacity 10 9 8 7 6 5 4 3 2 1
Politics
SPRING OF HOPE
Social cohesion
National policy

FAKE IT TILL WE MAKE IT...OR NOT? Service delivery ANNUAL RANKING
Inequality 2015 2016 2017 2018 2019 2020
NOT
NOT
NOT
NOT
Economy RANKED RANKED RANKED RANKED
PERPETUAL HANGOVER
Global trends
Climate
A key aspect moving up the rankings, is “ease of doing business”. This is especially relevant to rankings related to “starting a
business” in SA. The challenge SA faces is the revision of both key legislation that has not been changed since 1994 and new
legislation that tries to address past imbalances. Both need to be examined in the current economic climate. Unintended
consequences must be addressed – including a concentration of power at ministerial level.

TOP 5 CHALLENGES TO ACHIEVING TOP 5 RISK TREATMENT OPTIONS AND
TARGETS OPPORTUNITIES
1. Unconstitutional changes to legislation and regulations to serve 1. Robust and open debate and obtaining inputs from relevant
different (political) agendas. stakeholders before promulgating legislation.
2. Regulators’ lack of proper analysis of the impact/s of proposed 2. Active lobbying by affected parties and stakeholders to influence
legislative changes. the legislative changes to achieve a mutually beneficial outcome.
3. Political-based legislative and regulatory changes that serve 3. The performance of scenario analyses to demonstrate and
personal and political agendas and significantly alter the business understand the impact of legislative changes.
prospects of one or more industries and companies. 4. Companies should ensure appropriate governance and focus on
4. Lack of mutual understanding between regulators and those regulatory programmes and pre-empting legislative changes, e.g.
being regulated about the expectations from regulators and have sufficient resources, such as software/systems (“regtech”),
business processes and related challenges. and staff to monitor and ensure not only appropriate responses to
5. Companies are unprepared for/unaware of legislative changes. legislative changes but also that a compliance culture is in place.
5. Companies should ensure that business strategy is aligned with
regulatory change and take future sustainability into account.

FAC TS AND FIGURES

• In terms of ease of doing business, SA ranks 84th of 199 countries for 2019/2020.
• For starting a business, SA ranks 139th of 199 countries, which does not bode well the country’s strategy for Small Medium and Micro
Enterprises and entrepreneurship to assist in reducing unemployment.

Source: World Bank: Doing business survey 2020.