Knowledge Centre

Newsflash: Tobacco Control Act No 19. of 2021

November 11, 2021 By Peo Legal

The Tobacco Control Act No. 19 of 2021 (The Act) will be the primary tobacco control law in Botswana. The Act was passed on October 2021 however, it has not commenced yet. The Act repeals the Control of Smoking Act (Cap 65:04). The Act keeps pace with global tobacco control recommendations and provides for effective regulation of new tobacco products.

The Act governs several aspects of tobacco control including but not limited to licencing, the ban of smoking in public areas or enclosed areas, a ban of retailers displaying cigarettes and prohibition of sale to or by persons of the age of 21.

NOTABLE PROVISIONS

Tobacco Control Committee

The Act establishes the Tobacco Control Committee which will provide oversight in the implementation of the provisions of the Act.

Licensing

The Act provides for four types of licences namely: –

tobacco manufacturing licence;
tobacco importing licence;
tobacco exporting licence; and
tobacco sales licence.

No sale of tobacco or any tobacco products will be permitted without a licence. The licence shall be valid for a period of 1 (one) year from the date of issue. Furthermore, it will be an offence to purchase any tobacco or tobacco product from an unlicensed vendor. The Act provides for the following sanctions:

a manufacturer who sells any tobacco product without a licence will be liable to a fine of BWP750 000 or to imprisonment for a term not exceeding a period of 4 (four) years or to both;
a wholesaler, importer or exporter who sells any tobacco product without a licence will be liable to a fine of not more than BWP5000.00, or to imprisonment for a term not exceeding a period of 6(six) months or to both;
a person who buys tobacco products will be liable to a fine not exceeding BWP2000, or to imprisonment for a term not exceeding 5(five) months or to both.

In addition to the fines and imprisonment, the Tobacco Control Committee may seize or destroy any tobacco or tobacco products sold or manufactured without a licence.

Minimum package size for smoked tobacco products

A manufacturer will not be allowed to distribute or sell any smoked tobacco product unless the tobacco product is contained in a sealed unit packet of at-least 20 sticks.

Sale Restrictions to Persons Under the Age of 21

Persons under the age of 21 will not be allowed to sell or buy cigarettes.

Prohibition of Tobacco Display

Shops and stores will not be allowed to display any tobacco products, including at a point of sale. Any person who contravenes this provision will be liable to a fine not exceeding BWP 1000 000.00 or imprisonment to a term not exceeding 10 (ten) years.

The information contained in this newsflash was intended for our clients and correct to the best of the author’s knowledge at the time of publication. Before making any decision or taking any action, please consult us, at info@peolegal.co.bw or +267 3975779.

Newsflash: Retrenchment Post The State Of Emergency

September 20, 2021 By Peo Legal

In terms of regulation 30E of the Covid-19 Regulations 1 (the Regulation), the retrenchment of employees during the state of emergency is prohibited. The State of Emergency is set to end on 30 September 2021 and therefore the prohibition against retrenchment will be lifted. Employers will be able to commence the retrenchment process in terms of Section 25 of the Employment Act 2 (the Act).

For a retrenchment process to be lawful it must satisfy both procedural and substantive fairness.

Substantive fairness speaks to the commercial or business justification for the retrenchment. In order for an employer to commence the retrenchment process there must be a commercial or business justification for the retrenchment. In the case of Innocent Chinu and 13 others v Pelican Moving Company, the Industrial Court held that “there is no distinction between operational requirements for purposes if making profit and for the purposes of ensuring survival of a business”. Though the employer has the managerial prerogative to economise its business, this prerogative must be exercised fairly 3 . Substantive fairness requires that:

there must be a valid commercial rationale or justification for the retrenchment. If it turns out that the real reason was to victimise them then the commercial rationale for retrenchment does not exist;
employees must, in good time, be given relevant information in order for them to understand the reasons why their company is considering retrenchment; and
the employer must consider ways to avoid retrenchment or minimise its effects. The employer must show that all other alternative steps to prevent retrenchment or limit its scope have been duly considered and implemented.

Procedural fairness relates to the procedure followed by the employer prior to retrenching an employee. Procedural fairness requires that 4 :

a) once the employer forms the intention to retrench employees he shall immediately give written notice of that intention to the Commissioner of Labour and every employee who will or is likely to be directly affected by the retrenchment;

b) the employer must undertake consultations with the employees or union. Consultation must be done in good faith and not simply to afford the employee an opportunity to comment on a decision that has already been taken. The principal purpose of the consultations is threefold 5 :-

for the parties to seek ways of avoiding or averting the need to terminate the employee’s employment;
if the retrenchment proves unavoidable, the parties should consult on a fair
selection criterion and a retrenchment policy to be applied; and
to consult on ways of alleviating the hardships of retrenchment e.g a reasonable severance package and possible alternative employment opportunities within the business.

c) in terminating employment contracts, the employer, wherever reasonably practicable, must comply with the principle of first-in-last-out. In applying this principle the employer must take into account the need for the efficient operation of the company and the ability, experience, skill and qualifications of each employee concerned. Therefore a more skilled employee who recently joined the company may be retained due to the company’s requirements and a longer serving employee who is less skilled may be retrenched;

d) if within six months after retrenchment, the employer seeks to employ workers for occupations which were the subject of the retrenchment, the employer must give priority to the retrenched employees to such extent as it is reasonably practicable. Failure on the part of the employer to observe either procedural fairness or substantive fairness, or both, may invalidate the retrenchment.

Failure on the part of the employer to observe either procedural fairness or substantive fairness, or both, may invalidate the retrenchment.

Should you require any assistance with Employment Law and terminations, please feel free to contact us at info@peolegal.co.bw or +267 3975779.

Can an employer terminate an employee on 14 days’ notice during a probationary period?

August 10, 2021 By Peo Legal

In terms of the Employment Act [Cap 47:01] (the Act), an employee may be employed on a probationary basis. The purpose of probation is to give the employer an opportunity to evaluate the employee’s performance before confirming the appointment. The probationary period should be determined in advance and must be of reasonable duration, determined with reference to the nature of the job and the time it takes to determine the employee’s suitability for continued employment. In the event the employer considers the employee’s performance deficient, the employer may, subject to Section 20 (2) of the Act, terminate the employee’s contract of employment during the probationary period.

Section 20(2) of the Act provides that where a contract of employment is terminated during a probationary period “by either the employer or employee under section 18 or 19 by not less than 14 days’ notice, the contract shall be deemed, for the purposes of this Part, to have been terminated with just cause and neither the employer nor the employee shall be required to give any reasons therefore”

In reconciling section 20 (2) of the Act with section 18 or 19 of the Act which provide for termination aligned to the period within which an employee is paid a wage, the Industrial Court in the case of Diau v Botswana Building Society held that “…s 20(2) does not however suggests that any employee on probation should be given notice of 14 days. If he or she is a monthly paid employee he or she is entitled to a one month’s notice.” The effect of section 20 (2) is not to circumvent sections 18 and 19 of the Act, but to create a minimum threshold in the event that section 18 and 19 provide for a lesser notice period than 14 days. The court in Mosedame held that the conclusion that only 14 days’ notice is required when terminating a contract of employment during a probationary period is incorrect. The notice period applicable during a probationary period is determined by reading section 20 (2) together with sections 18 and 19 of the Act. Therefore, in practice section 20 (2) of the Act as read with section 18 of the Act means the following:

An employee who is paid daily wages or weekly shall be terminated on at least 14 days’ notice during a probationary period.
An employee who is paid every two weeks or monthly must be given at least 14 days or one month’s notice respectively during a probationary period.

The above notice periods will be sufficient for both sections 18 and 20 (2) of the Act as they are “not less than 14 days’ notice“. It is important to remember that the 14 days’ notice period is a minimum threshold and not in addition to the notice period one would have been entitled to.

Should you require any assistance with Employment Law and employment contracts, please feel free to contact us on info@peolegal.co.bw or +267 3975779.

The information contained in this newsflash was intended for our clients and correct to the best of the authors knowledge at the time of publication. Before making any decision or taking any action, you should consult the contacts listed here

Newsflash: The Economic Inclusion Bill, 2021

July 27, 2021 By Peo Legal

The Economic Inclusion Bill, 2021 (the Bill) was published on the 8th of July 2021. The object of the Bill is to promote effective participation of targeted citizens in the economic growth and development of the economy. Currently Botswana does not have standalone citizen economic inclusion legislation, instead citizen economic empowerment provisions are captured across various statutes, policies, initiatives and directives. Through the Economic Empowerment Office, the Bill aims to facilitate enforcement of the economic empowerment laws and initiatives, ensure compliance, foster accountability and the monitoring and evaluation of implementation and compliance. The intention is to develop empowerment programmes that are non-homogenous but target specific.

The Bill applies to all sectors of the economy, public bodies and any private sector employer that plays a significant role in economic empowerment. The Bill proposes the development of an integrated, coordinated and uniform approach to economic transformation and empowerment.

At this juncture, it is unclear if the Bill will have overriding powers in respect of conflicting legislation.

NOTABLE DEFINITIONS

Citizen Owned Enterprise: means an enterprise wholly owned by a targeted citizen or jointly by targeted citizens.

Economic Empowerment: means the capacitation of a targeted person to participate, contribute and benefit from economic growth processes.

Empowerment: means any practice, scheme or programme aimed at enhancing and promoting economic empowerment.

Fronting: means obtaining an economic empowerment initiative, programme or scheme benefit to enable another person, who would otherwise not qualify to obtain such an empowerment benefit.

Public Body: means any office, organisation, establishment or body created by or under any enactment or under powers conferred by any enactment; and includes any enterprise in which government has equity shares or any organisation or body where public moneys are used.

Non-State Actor: means any other entity other than that owned by the State.

Professional body: means an organisation with individual members practising a profession or occupation in which the organisation maintains an oversight over the knowledge, skills, conduct and practice of that profession or occupation.

Targeted citizen: means a citizen whose access to economic resources has been constrained by such various factors as may be determined.

NOTABLE PROVISIONS

In addition to existing provisions relating to reservation of trades, preferential treatment and localisation requirements, some of the proposed provisions in the Bill include the following:-

Ownership of land and property: A public body shall enable ownership of land and property by targeted citizens. This shall include, inter alia:-

providing opportunities to own productive land and assets including businesses; and
providing specific measures and criteria for access to commercial, industrial, civic and community land.

Investment Opportunities: A public body shall create investment opportunities for targeted citizens through, inter alia:-

making assets in the public sector accessible by accelerating the process of privatisation of public institutions and increasing participation in shareholding in Botswana Stock Exchange listed companies; and
prohibiting the allotting, issuing, or transferring of any portion of a private sector enterprise that is owned and controlled by a targeted citizen to a non-citizen or a citizen that is not targeted.

Empowerment Programmes: A public body shall implement economic empowerment programmes to empower targeted citizens through, inter alia:-

promoting economic empowerment investment programmes that lead to inclusiveness and meaningful participation in the economy; and
encouraging partnership between targeted citizens and foreign enterprises at a percentage to be determined from time to time.

Representation of Target Citizens: A public body shall create an enabling environment for representation of targeted citizens in the work force through:-

entrenching assumption of a leadership position for a targeted citizen where there is partnership with foreign investors; and
ensuring that where a targeted citizen qualifies and is available, such citizen is equitably represented at Board and management level in the workforce.

Representation in Professional Bodies: A professional body shall ensure that there is a minimum representation of 50% of citizens in its executive

Capacity Development: A public body shall create an environment that re-focuses the capacity development of targeted citizens towards production of quality products.

Combating Fronting: A public body shall implement economic empowerment laws, policies, initiatives and programmes to combat fronting or corruption, and create capacity to investigate fronting.

Role of Private Sector: A private sector enterprise that is non-citizen owned or non- targeted citizen owned shall, inter alia:-

mentor and share knowledge and technology regarding business development and market penetration with a targeted citizen;
partake in activities that build capacity of targeted citizens; and
develop sector codes and codes of good practice for economic empowerment.

Foreign Investors: Foreign investors shall empower targeted citizens through participation in the value chain and through other measures as the Minister may prescribe.

Economic Empowerment Standards: A public body shall apply economic empowerment standards as may be prescribed, including −

determining qualification criteria for the issuing of licenses, concessions or other authorisations; and
applying preferential treatment to private sector enterprises that achieve applicable economic empowerment of targeted citizens.

Offences and Penalties: A person committing an offence in terms of the Bill may be subjected to a fine not of not less than P5 000 but not exceeding P1 000 000, or to imprisonment for a term of not less than six months, and not exceeding 10 years. A public body, enterprise, member of the private sector or any relevant party committing an offence in terms of the Bill may be subjected to a fine of not less than P5 000 and not exceeding P10 000 000 for organisations. In instances of breach of compliance, the organisation or individual may be blacklisted from bidding for government tenders.

Should you require any assistance with the implications and application of the proposed Bill please feel free to contact us on info@peolegal.co.bw or +267 3975779.

Newsflash: Know Your Customer

July 13, 2021 By Peo Legal

Know Your Customer in terms of the Financial Intelligence Act, 2019.

What is customer due diligence?

In terms of the Financial Intelligence Act, 2019 (FIA Act) “Customer due diligence means the process where relevant information about the customer is collected and evaluated for any potential risk of commission of a financial offence.” This includes obtaining information about who the customer is through Know Your Customer (KYC) forms, independent verification of this information, conducting a risk assessment on the customer and ensuring all information in respect of the customer is kept up to date. Upon the completion of a customer due diligence process, the customer’s risk rating in respect of money laundering, terrorist finance and proliferation is categorised and this rating will determine if any further information is required from the customer.

Who is responsible for conducting customer due diligence?

In terms of Section 14 of the FIA Act, a specified party or accountable institution shall conduct customer due diligence when:-

when establishing a business relationship or concluding a transaction with a customer;
when carrying out a transaction in excess of P10 000. 00 on behalf or on the instruction of a customer or any person, whether conducted as a single transaction or several transactions that appear to be linked;
when carrying out a domestic or international wire transfer;
when there is doubt about the veracity of previously obtained customer identification and data; and
where there is suspicion of a financial offence

Specified institutions are listed in Schedule 1 of the FIA Act and include, but are not limited to, an attorney, an accountant and a bank. An accountable institution is any legal entity incorporated or registered under any law. This means every company or registered entity is required to conduct customer due diligence in accordance with the FIA Act.

A specified party or accountable institution who fails to conduct customer due diligence shall be liable to a fine of BWP1 000 000.

For purposes of KYC a specified or accountable institution is required before conducting a business relationship or carrying out a transaction to:-

establish and verify the identity of a customer, unless the identity of that customer is known and has been verified by the specified party;
establish and verify the identity of the beneficial owner;
collect information to enable understanding of the anticipated purpose and intended nature of the business relationship or transaction; and
obtain approval of senior management where the business relationship or transaction is established in a high-risk jurisdiction or involves a high-risk business.

Where the customer is acting on behalf of another person, the specified party or accountable institution shall establish:- —

the identity of the person on whose behalf the customer is acting;
and verify the customer’s authority to establish the business relationship or to conclude the transaction on behalf of that other person; and
verify the other person’s identity on the basis of documents or information obtained from a reliable source which is independent of both the customer and the person on whose behalf the customer is acting

For purposes of section 16 of the FIA Act, the proof of the identity of the customer shall be through:-

production of a National Identity Card for citizens;
production of a passport for non-citizens;
in relation to a company —
1. a certificate of incorporation or a certificate of registration,
2. trading licence, and
3. ownership and control structure and directors;
a deed of trust; or
such other identity document as the Minister may prescribe from time to time.

Where a specified party had previously established a business relationship with a customer before the coming into force of the FIA Act, the specified party or accountable institution shall apply the customer due diligence measures on that customer.

A person who transacts business with a specified party or accountable institution using false identification documents commits an offence and is liable to a fine not exceeding P500 000 or to imprisonment for a term not exceeding 10 years or to both. A specified party or accountable institution that fails to verify the identity of a customer shall be liable to a fine not exceeding BWP1 000 000 as may be imposed by the supervisory authority.

Though Botswana has made real progress in strengthening its AML/CFT framework, the obligation lies with all registered and incorporated entities to do their part.

For all your compliance, policy, training, AML and KYC needs please feel free to contact us at info@peolegal.co.bw or +267 3975779.