ANNUAL PERFORMANCE PLAN

2013 / 14 – 2015/16

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TABLE OF CONTENT

Acronyms --------------------------------------------------------------------------------------------------------------- i

FOREWORD BY THE EXECUTIVE AUTHORITY ----------------------------------------------------------- ii

Official Sign-off ------------------------------------------------------------------------------------------------------ iii

PART A: STRATEGIC OVERVIEW ------------------------------------------------------------------------------ 4

1. Introduction ---------------------------------------------------------------------------------------- 4

2. Situational Analysis--------------------------------------------------------------------------------- 6

3. Performance Delivery Environment ----------------------------------------------------------------- 8

3.3 Regulatory trends --------------------------------------------------------------------------------- 10

4. Organisational environment ----------------------------------------------------------------------- 14

5. Revisions of legislative and policy mandates ------------------------------------------------------- 16

6. Overview of 2013/14 budget and MTEF estimates ------------------------------------------------- 19

PART B: PROGRAMME PLANS ------------------------------------------------------------------------------- 21

7. Programmes -------------------------------------------------------------------------------------- 22 7.1 Programme 1: Business Regulation and Reputation -------------------------------------------- 22 7.2 Programme 2: Innovation and Creativity Promotion ------------------------------------------- 25 7.3 Programme 3: Service Delivery and Access ----------------------------------------------------- 27

ANNEXURE D -------------------------------------------------------------------------------------------------------- 34

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Acronyms Abbreviation Description

CC Close Corporation CIPC Companies and Intellectual Property Commission CIPRO Companies and Intellectual Property Registration Office CIT Corporate Identity Theft

DAC Department of Arts and Culture DST Department of Science and Technology IK Indigenous Knowledge IP Intellectual Property

IPAP3 Industrial Policy Action Plan MoU Memorandum of Understanding MTEF Medium Term Expenditure Framework

MTSF Medium Term Strategic Framework NIPMO National Intellectual Property Management Office OCIPE Office of Companies and Intellectual property Enforcement SARS South African Revenue Service

the dti The Department of Trade and Industry TIA Technology Innovation Agency WIPO World Intellectual property Organisation WTO World Trade Organisation

Note: Customer is spelled with a capital C throughout the document to highlight the new focus of CIPC on Customer Service and Excellence.

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FOREWORD BY THE EXECUTIVE AUTHORITY

„The new Companies Act is a major piece of legislation and reform, which has a number of features to it (and) will certainly improve the environment for business operation in South Africa‟

Minister of Trade and Industry – Rob Davies

The Companies Act, 2008 (Act 71 of 2008) establishes a modern environment for companies. It creates a forward-looking regulatory framework that provides for simple, easy company registration and enhanced governance and disclosure standards for businesses. While the law creates the framework and the instruments, its implementation is largely in the hands of the institutions established by the Act, namely the Companies and Intellectual Property Commission (CIPC), the Companies Tribunal, the Takeover Regulation Panel and the Financial Reporting Standards Council. In order to achieve the objectives of the Companies Act, 2008, it is imperative that the world-class legislation is matched by world-class implementation. The CIPC was established in May 2011. Although a new entity, CIPC incorporated two pre-existing institutions, namely the Companies and Intellectual Property Registration Office (CIPRO) and the Office of Companies and Intellectual Property Enforcement (OCIPE). In today‟s globalized, hypercompetitive economy, a nation‟s wealth is significantly influenced by its level of innovation and the Intellectual Property (IP) that is developed and registered by its citizens. The CIPC therefore has another important element to its mandate. It administers, regulates and protects South Africa‟s Intellectual Property assets in accordance with the provisions of a range of legislation enacted over a number of decades. Since its inception, CIPC has faced many challenges. These have included ICT systems unable tocope with organisational requirements, a large backlog of company registration applications and an organisational culture that was insufficiently oriented towards service delivery. In its first year of operation the CIPC has focused on addressing these challenges. Company registration backlogs have been eradicated, business processes have been improved, IT systems have been stabilized and enhanced and service standards successfully implemented. These initiatives have all contributed to establishing a solid foundation for the world-class implementation of the Companies Act, 2008 as well as other laws it administers. The CIPC has reviewed its corporate strategy, its operational model, culture and structure. Initiatives are also underway to further grow and develop the CIPC‟s human capital. This will contribute significantly to the creation of an enabling environment to support the full implementation of all legislation that falls within the CIPC‟s mandate. This Annual Performance Plan (APP) sets out the journey that CIPC will embark upon over the period 2013 / 14 to 2015/16 to achieve world class implementation of the objectives set out in the Companies Act, 2008, and to provide an enabling and facilitative environment for entrepreneurship, investment and innovation in the broader South African society. It is in line with the dti’s objective of „Ensuring an economy that benefits all.‟ I look forward to seeing the results of the implementation of this plan. ________________________ Dr Rob Davies Minister of the dti

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Official Sign-off

It is hereby certified that this Annual Performance Plan:

Was developed by the management of the Companies and Intellectual Property Commission

(CIPC) under the guidance of the Commissioner, Ms Astrid Ludin

Was prepared in line with the current Strategic Plan of the Commission.

Accurately reflects the performance targets which the Commission will endeavour to achieve given

the resources made available in the budget for 2013 /2014.

Ms Astrid Ludin Signature Accounting Authority Approved by Dr Rob Davies Signature Executive Authority

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PART A: STRATEGIC OVERVIEW

1. Introduction

CIPC Annual Performance Plan (APP) 2013/14, which covers the period 1 April 2013 to 31 March 2014, emanates from CIPC Strategic Plan 2013/14 – 2017/18. This strategy sets out the journey that CIPC is embarking on to achieve world class implementation of the objectives set out in the Companies Act 2008, Act No. 71 of 2008 (as amended) and to provide an enabling and facilitative environment for entrepreneurship, investment and innovation in the broader South African society. The APP sets outs what the institution intends doing in the upcoming financial year (2013/14) and the Medium Term Expenditure Framework (MTEF) period (2013/14 – 2015/16). It outlines performance indicators and targets for budget programmes to assist CIPC in realising the goals and objectives set out in its Strategic Plan 2013/14 – 2017/18. It includes a quarterly breakdown of performance targets for the period 01 April 2013 – 31 March 2014. It is also informed by government‟s long term plan, Medium Term Strategic Framework (MTSF), the National Planning Commission‟s Vision 2030 and National Development Plan, the Department of Trade and Industry‟s (the dti) as well as the Department of Arts and Culture‟s (DAC) and Department of Science and Technology‟s (DST) strategic direction. The plan builds on the foundation that the CIPC has put in place during 2012/13 in terms of emphasizing service delivery and operational excellence and expanding its range of services to encompass its broader regulatory mandate. During the course of the past year, the CIPC has eradicated the serious backlogs experienced in the registration of companies and other entities, improved turnaround times for Names Reservation and has continued to deliver exceptional service to its Intellectual Property Customers. Through the introduction of on-line registration of companies, it has commenced the process of enabling electronic transacting that will in time greatly improve operational efficiency, accuracy and Customer responsiveness. IT systems remain a priority focus for the CIPC going forward. Business Rescue has also been successfully introduced and a number of entities, including a number of well known brand names, are currently undergoing the Business Rescue process. Internally the CIPC has grown in confidence and competence with a better alignment of business processes resulting in improved workflow and greater efficiency. This has also contributed to an improvement in the overall image and reputation of the organisation. In 2013 / 14 CIPC will focus on the following:

Encouraging good governance and credible corporate citizenship through focussing on promoting awareness and greater voluntary compliance with the requirements of company legislation, in particular with respect to filing requirements on matters that the public places reliance on.

Significantly expanding its compliance monitoring functions, particularly with respect to disclosure requirements and financial reporting standards.

Through focused strategies, education and expanded collaboration and partnership initiatives with other agencies such as South African Receiver of Revenue (SARS) and National Intellectual Property Management Office (NIPMO), CIPC will focus on the protection of important assets such as intellectual property products and brands from being misappropriated, as well as promoting greater corporate compliance.

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Introducing and bedding down a new operating model to improve the direct accessibility of the CIPC. In particular, a new model for its customer service centres will be introduced, as well as a new approach to the call centre and telephone service.

Enhancing organisational capacity through the implementation of the new CIPC organisational structure and the implementation of a Human Resource strategy and competency framework, as well as an aggressive strategy to improve the internal and external reliability, speed and availability of ICT systems and electronic channels.

Improving teamwork and collaboration in the institution to enhance the service provided to clients of the CIPC.

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

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2. Situational Analysis

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

The deepening global financial crisis – our major trading partners‟ economies are in recession, the future of the Eurozone remains uncertain, a climate of austerity is prevalent. This all has resulted in a slowdown in investment and trade. Scandals such as the fixing of the LIBOR rate have also resulted in an increased scrutiny of corporate governance practices;

The economic slowdown in South Africa – this has increased the number of companies that have filed for bankruptcy and de-registration. The CIPC‟s role in Business Rescue will need to continue to develop and the impact of the de-registration process on other government agencies such as SARS will need to be mitigated;

Importance of effective regulation reinforced – CIPC is both a service provider and a regulator. There is a need to strengthen CIPC‟s regulatory role with the acquisition of the appropriate intelligence, risk analysis and mitigation and enforcement competencies. The CIPC has developed a culture of responsiveness to the needs of its Customers. This focus must not allow it to become subservient to the entities it regulates and must ensure that it avoids regulatory „capture‟;

Emergence of knowledge and innovation as key strategic assets / differentiators for private and public sector organizations. Recent global court cases between Apple and Samsung have stressed the importance of IP as a significant business asset and have highlighted the high stakes involved in IP protection;

Intellectual property (IP) is viewed as key strategic asset at both business and national level. It is important to grow South Africa‟s (SA) stock of IP and protect indigenous knowledge from exploitation. The CIPC works closely with World Intellectual property Organisation (WIPO) to ensure that global IP standards are implemented in South Africa and that global best practice is reflected in the changing IP legislative and policy environment. An imperative for the CIPC is to attract the registration of IP from African countries, and in particular from countries within SADC;

An increased focus on enabling Co-operatives as a result of 2102 being „The Year of the Co-operative‟, globally and in South Africa will result in the CIPC deepening its capacity to support Co-operatives in their establishment and governance;

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

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

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Developing new access channels through smart phones and the utilisation of social media are immediate areas of focus for CIPC;

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

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

CIPC has been brought into being within the context of a world in economic recession. At a global level, governance and regulatory failures, fiscal crises, global imbalances and shifts in economic power have all created a challenging environment of uncertainty and high risk. At a national level, the challenges of creating decent jobs, maintaining economic growth and dealing effectively with crime and corruption have all contributed additional impetus to the accelerated development of CIPC. The CIPC will continue its external focus on better understanding its role and in institutionalising its mandate. It will continue to do this mindful of its obligations as an important member of a community of government departments and agencies with which it shares a purpose to contribute to the economic and social well being of all South Africans.

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3. Performance Delivery Environment

3.1 The economic context The economic forecast has not changed since the drafting of the previous CIPC APP. If anything, the world has slipped into a deeper recession and the global outlook for economic recovery remains bleak. The global recession has led to an environment of heightened economic uncertainty, with projections for growth in world GDP for 2013 and 2014 being revised down significantly. Growth in world trade volumes has slowed sharply and the direct impact is starting to be felt in the South African economy, which traditionally lags such trends. African economic growth continues to outperform traditional economies and this remains a positive factor for the South African economy. Policies in regions and major economies have moved to stabilize financial and economic activity in some major economic regions and policies are expected to remain supportive of a global recovery. A stronger recovery in much of the world economy should be expected from 2014 as employment levels recover, productivity and household incomes rise, and debt levels of firms and households in key economies fall. It is expected that slow growth will continue in South Africa over the foreseeable future, as the world economy recovers. Historically, the growth in the number of applications for company and intellectual property registration has been closely linked to domestic and global growth. In the context of the current economic outlook, it is expected that growth in registration of companies and intellectual property will be limited and will closely track the changes in the local and global economy, unless there is a particular policy focus and concerted effort in particular areas to stimulate local demand for registration. This may be the case with Co-operatives, where there is a concerted government drive for new registrations.

3.2 The small business landscape

Most large and medium sized businesses, if not all, can be expected to have registered their corporate entities. Furthermore, large businesses can safely be assumed to have trade marked their brands. The small business sector therefore represents the largely “unserved” or “underserved” registration market for corporate registration and for intellectual property rights, where such registration is applicable and appropriate. According to a recent survey of Small Businesses in South Africa (FinScope Small Business Survey 2010), an estimated 5.9 million small businesses operated in South Africa in 2010, owned by roughly 5.5 million small business owners. Small business owners were defined as being 16 years and older, perceiving themselves to be business owners or generating an income through small business activities and employing less than 200 employees. According to the survey, the biggest concentration of small business owners is in Gauteng (23%), Eastern Cape (15%), and KwaZulu-Natal (14%), followed by the North West (13%) and Limpopo (10%). The survey also measured levels of business registration. 17.3% of small business owners claimed that their businesses were registered, but only 8.3% claimed to be registered with CIPRO. Business owners who claimed to have registered their business did not appear to see much value in registering their businesses:

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

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

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

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

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The most frequently mentioned reasons for not registering businesses included:

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

“don‟t know how to register” (18% of unregistered businesses);

“don‟t have money to register” (18% of owners of unregistered businesses);

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

It is clear that rigorous, in depth and more regular research into understanding the challenges and opportunities facing small business is essential. The CIPC will continue to encourage and fund, where appropriate, such research. In particular, a better understanding of the interplay between registration and long-term business success needs to be developed. The survey indicated that there are number of businesses that fall in BSM 6-8which means that they operate in a formal environment without being registered. It is the aim of CIPC to encourage such businesses, i.e. existing but not yet registered, to formalize through CIPC registration. The formalisation of businesses does appear to have benefits to the fiscus and contributes to a more effective regulatory environment. From the data presented, there appears to be substantial opportunity for the registration and formalisation of small businesses. CIPC recognises that for many small businesses there may be limited incentives for formalisation, which must in turn outweigh the compliance obligations. The challenges and unintended consequences of de-registration also need to be better understood. A positive value proposition for small businesses to encourage their formalisation is required. Education and awareness in this segment is therefore a priority. There is clearly a need for information on how to register, as well as easy access to registration services. Most of the potential for formalisation would come from service providing businesses, especially where public procurement is involved. Targeted interventions will need to be pursued in this regard. There is also a clear need to encourage the registration of Intellectual Property that has been developed as a result of public funding. Initiatives will be explored with the Technology Innovation Agency (TIA) , NIPMO and other relevant stakeholders to ensure that there is a coherent, aligned response to this challenge.

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3.3 Regulatory trends

3.3.1 Ease of doing business „Enabling private sector growth – and ensuring that poor people can participate in its benefits – requires a regulatory environment where new entrants with drive and good ideas, regardless of their gender or ethnic origin, can get started in business and where firms can invest and grow, generating more jobs.‟

Janamitra Devan The World Bank Group

Internationally, the ease of doing business is an important differentiator of countries and attractor for global capital. The World Bank and the International Finance Corporation (IFC) conduct an annual survey, which ranks economies on their ease of doing business from 1 to 183. The ease of doing business index averages country‟s percentile ranking across 10 topics, which are outlined below.

South Africa was ranked 35th of out 183 countries in the 2012 „Doing business in a more transparent world‟ survey. South Africa compares favourably overall and in most categories when compared to economies of similar size and composition. Sub Saharan Africa has also progressed significantly. The report notes that „a record number of governments in Sub-Saharan Africa changed their economy‟s regulatory environment to make it easier for domestic firms to start up and operate in a region where relatively little attention was paid to the regulatory environment only eight years ago.‟ South Africa should aim to maintain and improve its ranking. CIPC is committed to increasing the ease of doing business in South Africa by reducing the compliance burden, in particular the burden of excessive administration, which has a significant impact on small business. CIPC has an impact on the ease of starting a business, the protection of investors and resolving insolvency (through business rescue). There is also potential to impact positively on the ranking of paying taxes if the relationship between CIPC and SARS can be further strengthened. CIPC should therefore be aiming to positively impact on the applicable scores. In light of the positive shift in Sub-Saharan Africa, the CIPC will also explore what role it can play at a regional level to contribute to the capabilities of other African countries and to harmonise and ease the regulatory burden. The CIPC supports the initiatives for South Africa to host a regional „Ease of Doing Business‟ conference in 2013 / 2014. This will contribute to a greater awareness of the challenge and to the generation of innovative ideas and solutions that may well be applicable to the workings of the CIPC. 3.3.2 Corporate governance and disclosure regulation

The global financial crisis and failures of large corporates, such as Enron and Arthur Andersen, has created a renewed focus on credible regulation and good governance. The LIBOR fixing scandal in the United Kingdom again emphasised the need for such a focus. The South African corporate regulatory environment needs to be respected as a credible, safe and secure environment that promotes good corporate governance and protects corporate and intellectual property rights. The CIPC, as custodian of the Companies Act and as an enforcer of Intellectual property rights has an important role to play in this regard. Financial reporting standards have received much attention internationally. South Africa has also revised its legislative regime in this regard and established a statutory scheme. The challenge, however, relates to its implementation and the pro-active compliance monitoring that it requires.

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Internationally, corporate regulators have adopted an XBRL system, which allows financial statements to be lodged in a particular format, thus making compliance monitoring simpler for the regulators and given the companies that have submitted credibility. XBRL is still in its infancy in South Africa, but in some other jurisdictions, is very well established. The new Companies Act, 2008 creates a regime that facilitates enhanced enforcement and compliance monitoring. The World Bank survey rated South Africa 10 out of 183 in respect of protecting investors. It is important that a culture of corporate compliance is fostered and that smaller businesses in particular are made aware of the compliance and governance obligations. In the coming year, CIPC will strengthen its capability to deliver an effective compliance monitoring function. This will commence with a focus on communication and education and then expand into visible monitoring and enforcement in line with a comprehensive Risk Based Approach. This should over time translate into innovations in both relevant policy and legislation. 3.3.3 Identity theft and fraud

Identity theft is a well-known fraud that has received a lot of attention. Corporate identity theft is a less known variation of identity theft, practised in much the same way. According to Reuters, “corporate identity theft (CIT) is the fraudulent and deliberate misrepresentation of a company‟s identity”. It occurs when a person or a group take on a company‟s identity for the purposes of extracting money, data or any other kind of information from the organisation in order to profit through illegal means. The internet has made corporations, banks and regulators more susceptible to identity theft by making information more accessible. This includes statutory documents, patents, trademarks, web domains as well as information that the company volunteers about itself. Company logos and websites can be easily downloaded and replicated if steps are not taken to protect content. Another way in which corporate identity theft is perpetrated is by changing the names of directors or the registered business address of a company by submitting the required forms to regulators and it can be hard to detect and difficult to reverse once completed. Identity theft has been prevalent in South Africa for several years. It has affected individuals financially through illicit access to their bank accounts, credit obtained by someone else in their name and many other ways. Corporate identity theft is also on the increase and is manifesting in many different ways. Public registries are used to obtain and falsify information. In 2010, a number of instances were identified and publicised where directors had been illegally changed at CIPRO, first electronically and then with the assistance of internal staff. The corporate identity theft was committed to redirect tax refunds from the South African Revenue Services (SARS). Other instances of identity theft have also been discovered. These have included attempts to falsify the identity of incorporators, which directly impact on the person. South Africa is not the only jurisdiction that has experienced corporate identity theft. The UK Companies House maintains on its website that between 50-100 cases of identity fraud occur every month. The institution encourages electronic filing to prevent corporate identity theft. The UK Companies House offers protected online filing, which enables companies to protect themselves from unauthorized changes to their company‟s records, including documents for the appointment, termination, or change of particulars of company officers and the change of the registered office. The dangers of identity theft have a major impact on institutions such as corporate and intellectual property registries and it affects the manner in which identity is verified, information security is

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maintained, the security of the channels used to access the registries, the way in which information is disclosed by the registry and how paper-based documentation is disposed of1. As the CIPC migrates to more electronic channels to register and change information, more direct safeguards can be built into the process including sms confirmations of access or changes to information. The CIPC will continue to be vigilant in this regard and strengthen all internal processes to reduce the potential for illegal acts. 3.3.4 Redefining the role of intellectual property rights and regulation

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

Investment in intangible assets today outstrips investment in tangible assets. The global trade in IP licenses alone is estimated at more than R7 trillion per annum. This equates to over 5% of world trade. The Hargreaves Report in the United Kingdom has highlighted the need for countries to modernise both their IP legislative frameworks and regulatory regimes. Globalisation, technological changes, as well as the emergence of low-cost manufacturers in developing countries such as China have fundamentally changed the Intellectual property landscape and are challenging the value of conventional IP rights protection and its enforcement. According to a 2005 report by PricewaterhouseCoopers, entitled Redefining Intellectual Property Value: The Case of China”,

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

At the same time, however, the value of corporations has shifted more and more to intangible assets, namely their intellectual property. According to the PricewaterhouseCoopers study, in 1998, 85% of the value of US corporations was in intangibles, up from 38% in 1982. The study argues that Multinational Companies must therefore find new ways in which to protect their intellectual property that is distinct

1 Where „unknown persons‟ are allegedly involved in the removal of directors or members, the complainants are advised to open criminal

cases with the SAPS. CIPC Investigations will also still continue with a matter if it appears that false information was knowingly provided to the CIPC. Should that be confirmed through the CIPC investigation, the CIPC opens a case with the SAPS to be investigated and also forward it to the National Prosecuting Authority for possible prosecution. Regulation 174 also provides the CIPC with the opportunity to “facilitate the discovery and correction of any error or falsification”. Corrections / reversals of directors have been made following investigations where it was determined that an internal error occurred, In some cases the allegations of the fraudulent removal of directors or members or the removal of directors or members without their knowledge turned out to be disputes between directors or members. CIPC investigations will normally continue in these matters in addition to the SAPS investigations where false information was knowingly provided to the CIPC (see section 215(2)(e) of the Companies Act, No 71 of 2008, as amended.) .

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from the conventional methods. These ways include acquisitions, having a presence in big emerging economies, such as China, with the potential for infringements. The implications for South Africa of these global changes is that there it is unlikely to see a substantial increase in the registration of intellectual property rights from international sources. Any more substantial growth in IP registration will come from local or from African sources. Therefore, while South Africa must continue to support the international Intellectual Property system, and in particular participate in WIPO, it is important that CIPC clearly establishes what role intellectual property rights and their protection can play in South Africa and how it should be better integrated economically. South Africa also has a clear role to play in the development of Intellectual property rights on the African continent and more particularly, in SADEC and SACU countries. Developing a coherent strategy in this regard is an imperative for CIPC in the coming year. The aim should be to encourage the lodging of African applications in South Africa. The substantive examination of patents remains central to the lodging of applications in South Africa and to the stimulation of local innovation and investment. Through a stakeholder roundtable on this matter, CIPC (through the dti) will seek to make a contribution into the appropriate approach to this crucial matter. Given the large scale on which counterfeit goods are manufactured, it is therefore important that South Africa prevents these goods from entering our local markets by continuing the pro-active enforcement at our national and regional borders, while collaborating with local law enforcers to minimize the local production of counterfeits, especially given its impact on our local creative industry. In order to improve the protection for local patents and designs, serious consideration would also have to be given to developing substantive examination capacity in CIPC. Accession to the Madrid Protocol remains a strategic opportunity for South Africa which could contribute to economic growth and investment. Should the decision be taken by the dti and Cabinet to accede to this Protocol, CIPC will be prepared to support its implementation. The Copyright Review Commission concluded its work in 2011 and has made recommendations regarding the changes it believes are necessary. These recommendations are likely to influence the IP policy review and to make a positive contribution to the overall IP industry in South Africa. Similarly the adoption of the Beijing Treaty on Audiovisual Performance is an important milestone in protecting the rights of performers. Preparatory work is being done by CIPC to ensure that South Africa is able to implement rapidly and effectively should a decision to adopt the treaty be taken by government. CIPC will continue to work collaboratively with the DOC, the dti, DoC and other key stakeholders in this regard. 3.3.5 Business rescue The introduction of Business Rescue in 2011 was met with a great deal of scepticism and resistance. It appears that these early fears were not justified and confidence in the process continues to grow with a number of well known companies applying to participate, notably 1Time Airlines. The CIPC continues to support Business Rescue with programmes of education and awareness and through round table meetings and engagement with industry stakeholders. As the process starts to mature, the CIPC will draw implementation lessons and will inform the overall policy and legislative environment. It will also seek to take a more active role in the regulation of Business Rescue Practitioners. Support to Business Rescue is an important area of focus for CIPC in 2013 / 2014.

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4. Organisational environment

CIPC is starting to emerge and develop as an institution as this APP is documented. It has been established in May 2011 through the merger of two pre-existing organisations, the Office of Companies and Intellectual Property Enforcement (OCIPE) and the Companies and Intellectual Property Registration Office (CIPRO). In addition to the challenge of executing its functions as envisaged by the Companies Act, it also has to meet the challenges of merging two organisations, strategically, structurally and culturally. In so doing, it also has to deal with a legacy that has contributed to organisational stagnation, low employee morale and poor service delivery. CIPC is ‘making a fresh start’ in building a capable organisation that has a Customer-centric culture and a workforce that is energised, proud, committed and competent. In its first phase of institution building, CIPC „Prepared for Take-off‟. It has had to go back to basics in understanding who its Customers are, what they value, require and expect and in crafting a strategy that is understood and supported by its people. This has been advanced through the design of effective and efficient business processes, a Customer-focused service delivery model, a strategically-aligned structure, IT enabled systems, appropriate facilities and a „fit for purpose‟ common organisational culture. CIPC is now in its second phase of institution building „In flight Adjustment‟. Learnings have been distilled from the first two years of operation and adjustments have been made to some of the underlying strategic assumptions and approaches. Much success has been achieved in strengthening service levels and responsiveness to Customers, backlogs have been eradicated and the competence and commitment of its people continues to grow. The immediate challenge is to „match and place‟ people into the new approved organisational structure and to deepen core employee competencies, in particular in the regulatory aspects of CIPC‟s work. Much attention is also being paid to embracing technology to enable quicker, easier, secure access to CIPC and to delivering new and unique value through partnerships with channel partners in financial services. These new and unique service offerings focused around a single point of registration should contribute greatly to the reputation and credibility of CIPC in years to come. In essence, the strategic challenge facing CIPC has two components:

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

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

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

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This transformational process to build the required internal capabilities (knowledge, expertise, systems, culture / mind-set) to deliver on these aspirations will require a strategically focused transformation journey that will last for many years to come. Since its inception, CIPC has faced many challenges. These challenges have included IT systems unable to cope with organisational requirements, a large backlog of registration applications and an organisational culture that was insufficiently oriented towards service delivery. As a result, in its first year of operation the Commission has focussed on addressing these immediate challenges. Much progress has been made in addressing registration backlogs, poor employee morale and inefficient business operations. In the past year, CIPC has also established a solid foundation for the world-class implementation of the Companies Act, 2008 as well as other laws it administers. To this end, the Commission has reviewed its corporate strategy, its operational model and its structure. Leadership has spent time on shaping its organisational culture to create an enabling environment for the full implementation of the new legislation. Business processes and internal operations have also been reviewed and a set of service delivery standards developed and launched in January 2012. The current CIPC focus is around accelerating the pace of change. This encompasses innovating the way CIPC works in order to be able to deliver core registration and maintenance services timeously and in accordance with both acceptable standards of quality and the needs of CIPC‟s Customers. At the same time it is focused on establishing the foundation of competent people and systems required to implement new services aimed. This will ensure that CIPC complies with its full legislative mandate and is able to implement accordingly. In a sense this challenge to both „catch up‟ and „get ahead‟ at the same time is analogous to ‘changing the engines on an aeroplane in mid flight!’ In the coming strategic period CIPC will continue to invest in the development of its people and in providing the tools and the enabling environment required to deliver high performance. Today‟s data intensive, round the clock, globalised business environment also requires the appropriate technology investments that allow for intelligent work, informed decision making and seamless, engaging, satisfying and consistent Customer experiences. CIPC is carefully evaluating the investments that will be required, as well as the strategic partnerships that will assist it in delivering on its strategic objectives. CIPC recognizes that it will achieve its goal of organisational excellence over time and that the journey will be based on consistent and continuous improvement in its service delivery and product offering.

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5. Revisions of legislative and policy mandates

CIPC administers all or parts of fifteen (15) pieces of legislation relating to corporate and intellectual property regulation. Its mandate encompasses companies, close corporations, co-operatives, trademarks, patents, designs, aspects of copyright legislation and enforcement of rules and regulations in most of these areas of law. CIPC‟s primary institutional mandate is derived from the Companies Act, 2008, which establishes CIPC as a juristic person. Table 1 summarises the legislative mandate of CIPC in terms of each law it administers. The table also indicates the sectoral application, if any, of the administered law.

Table 1: Summary of the legislative mandate of CIPC

Legislation Mandate Sector

Companies Act, No 71 of 2008 As amended With Regulations

Register companies, business rescue practitioners and corporate names, maintain data, regulate governance of and disclosure by companies, accredit dispute resolution agents; educate and inform about all laws, non-binding opinions and circulars, policy and legislative advice

Economy-wide

Close Corporations Act, No 69 of 1984

Maintain data, regulate governance of and disclosure by close corporations

Economy-wide

Co-operatives Act, No 14 of 2005

Register co-operatives, maintain data, regulate governance of and disclosure by co-operatives

Economy-wide

Share Block Control Act, No 59 of 1980

Regulate conduct and disclosure by share block schemes

Economy-wide

Consumer Protection Act, No 68 of 2008

Register business names Economy-wide

Trademarks Act, No 194 of 1993

Register trademarks, maintain data, resolve disputes

Economy-wide

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

Prevent and enforce the unauthorised use of state emblems

Economy-wide

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

Economy-wide

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

Economy-wide

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

Registration of Cinematography Films Act, No 62 of 1977

Register cinematograph films, maintain data Film industry

Performers Protection Act, No 11 of 1967

Accredit Collecting Societies; regulate their governance, conduct and disclosure

Music industry

Intellectual Property Laws Amendment Bill of 2010

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

Creative industries

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Legislation Mandate Sector

Counterfeit Goods Act, No 37 of 1997

Conduct and co-ordinate search and seizure operations, oversee depots

Economy-wide

CIPC therefore has a substantial legislative compliance role in diverse areas of law. The mandate can be summarized as the registration of corporate entities, the protection of their identity and reputation and the regulation of their conduct and disclosure, as well as the registration and protection of intellectual property rights.

While registration is at the heart of the mandate, it must serve a higher purpose and contribute to the broader policy context. This is the challenge that has confronted corporate and intellectual property registries around the world, as many have struggled to remain economically relevant. For that reason, CIPC has paid particular attention to its policy context in order to gain an understanding of its broader mandate.

The CIPC strategy is aligned to the government-wide medium-term strategic framework, the dti, the Department of Arts and Culture (DAC) and the Department of Science and Technology (DST) strategic plans. The tables below outline CIPC‟s goals, objectives and programmes and indicate how they are aligned to the dti objectives.

Table 2: CIPC goals, strategic objectives and programmes

Goals

Strategic Objectives Programme

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

Strategic Objective 1.1: Encourage the formalisation of South African businesses and their identity

Programme 1: Business Regulation and Reputation

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

To contribute to a knowledge-based economy by promoting innovation, creativity and indigenous cultural expression and knowledge

Strategic Objective 2.1: Promote the protection and commercial exploitation of innovations in key sectors

Programme 2: Innovation & Creativity Promotion

Strategic Objective 2.2: Promote our cultural heritage and support a strong competitive South African creative industry that provides benefits to local artists

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

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

Programme 3: Service Delivery and Access

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

Strategic Objective 3.3: Improve the reputation and organisational performance of CIPC

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CIPC‟s strategy is directly aligned to both IPAP 3 and the Vision of the dti– „A dynamic, industrial, globally competitive South African economy, characterised by inclusive growth and development, decent employment and equity, built on the full potential of all citizens.‟ The strategy corresponds with four of the dti’s strategic objectives. Table 3: Alignment of CIPC Strategy to the dti strategy

Dti Strategic Objective Outcomes CIPC Strategic Outcome Oriented Goals

CIPC Strategic Objectives

„Facilitate broad-based economic participation through targeted interventions to achieve more inclusive growth.‟

o Increased growth in SMME‟s & co-operatives

o Increased access to business development and market access support

o Increased firm level productivity o Increased participation of

previously marginalised people and regions in the mainstream economy

o Balanced spatial development

Goal 3: Strategic Objective 1.1; 3.1

„Facilitate transformation of the economy to promote industrial development, investment, competitiveness and employment creation.‟

o Reduced cost of production in the economy;

o Increased production and export of tradable goods and services;

o Accelerated GDP growth; o Increased competitiveness; o Increased employment

opportunities; and o Increased investments.

Goal 1, 2 & 3 Strategic Objective 1.1

„Create a fair regulatory environment that enables investment, trade and enterprise development, in an equitable and socially responsible manner.‟

o Reduced regulatory compliance costs

o Enforced fair business practices o Reduced regulatory constraints

for Small, Medium and Micro-sized Enterprises (SMMEs)

o Facilitated entry to markets o Enhanced consumer confidence

in markets

Goal 1 and 2 Strategic Objective 1.1; 1.2; 3.1

‘Promote a professional, ethical, dynamic, competitive and customer-focused working environment that ensures effective and efficient service delivery.

o A capable and skilled workforce o Efficient and effective service

delivery o The dti; as a recognised

employer of choice o Increased access to

occupationally-directed training and development opportunities

Goal 3 Strategic Objective 3.2

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6. Overview of 2013/14 budget and MTEF estimates

The Medium Term Revenue and Expenditure estimates for the 2013/2014 Medium Term Expenditure Framework was compiled in line with the National Treasury Medium Term Expenditure Guidelines as required.

In order to work towards the desired future state, three programmes, aligned with the three business goals were developed, namely Service Delivery and Access, Business Regulation and Reputation, and Innovation and Creativity Promotion. The programs were costed accordingly and below is a summary of the MTREF:

Table A.2 Companies and Intellectual Property Commission

Revised

Audited outcome estimate Medium-term

estimate

R thousand

2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16

Service Delivery and Access 422,602

231,552

190,229

248,084

282,484 351,951

406,214

Business Regulations and Reputation 184,563

82,298

85,603

139,900

178,300 188,800

200,000

Innovation and Creativity Promotion 99,380

27,433

41,217

65,600

78,200 82,900

87,800

0 – – – – – – –

0 – – – – – – –

0 – – – – – – –

0 – – – – – – –

0 – – – – – – –

0 – – – – – – –

Other objectives – – – – – – –

Total expense

706,545

341,283

317,049

453,584 538,984

623,651

694,014

Table A.3 Companies and Intellectual Property Commission

Statement of financial performance Revised

Audited outcome estimate Medium-term

estimate

R thousand

2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16

Revenue

Tax revenue – – – – – – –

Non-tax revenue 958,075

483,706

472,703

553,856

534,597 623,651

694,014

Sale of goods and services other than capital assets

851,189

414,491

412,246

336,986

344,615 358,690

370,092

of which:

Administration fees 851,189

414,491

412,246

336,986

344,615 358,690

370,092

Sales by market establishment – – – – – – –

Other sales – – – – – – –

Other non-tax revenue 106,886

69,215

60,457

216,870

189,982 264,961

323,922

Transfers received – – 13,990

4,158

4,387 – –

Total revenue 538,984

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Table A.2 Companies and Intellectual Property Commission

Revised

Audited outcome estimate Medium-term

estimate

R thousand

2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16

958,075 483,706 486,693 558,014 623,651 694,014

Expenses

Current expenses 709,739

341,283

317,049

453,584

538,984 623,651

694,014

Compensation of employees 115,402

132,768

144,927

190,000

220,000 260,000

300,000

Goods and services 589,274

198,909

172,122

263,584

318,984 363,651

394,014

Depreciation 4,942

9,542

– – – – –

Interest, dividends and rent on land 121

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– – – – –

Transfers and subsidies – – – – – – –

Total expenses 709,739

341,283

317,049

453,584

538,984 623,651

694,014

Surplus / (Deficit) 248,336

142,423

169,644

104,430

– – –

Acquisition of assets 50,422

11,135

3,678

93,000

80,000 140,000

190,000

Statement of financial position

Carrying value of assets 122,049

21,593

15,257

108,257

188,257 318,257

398,257

of which:

Acquisition of assets 50,422

11,135

3,678

93,000

80,000 140,000

190,000

Investments – – – – – – –

Inventory 620

834

813

400

350 300

250

Loans – – – – – – –

Accrued investment interest – – – – – – –

Receivables and prepayments 121,032

58,692

49,160

46,675

40,000 35,000

30,000

Cash and cash equivalents 644,501

956,489

1,137,699

920,829

522,959 59,859

22,598

Non-current assets held for sale – – – – – – –

Defined benefit plan assets – – – – – – –

Taxation – – – – – – –

Derivatives financial instruments – – – – – – –

Total assets 888,202

1,037,608

1,202,929

1,076,161

751,566 413,416

451,105

Accumulated surplus/(deficit) 803,878

946,301

1,100,186

989,270

664,776 329,992

371,123

Capital and reserves – – – – – – –

Capital reserve fund – – – – – – –

Borrowings – – – – – – –

Finance lease

699 – – – – – –

Accrued interest – – – – – – –

Deferred income – – – – – – –

Trade and other payables 71,877

78,458

87,656

70,000

65,000 60,000

55,000

Taxation – – – – – – –

Provisions 11,748

12,849

15,087

16,891

21,790 23,424

24,982

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Table A.2 Companies and Intellectual Property Commission

Revised

Audited outcome estimate Medium-term

estimate

R thousand

2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16

Managed funds (e.g.Poverty alleviation fund) – – – – – – –

Derivatives financial instruments – – – – – – –

Total equity and liabilities 888,202

1,037,608

1,202,929

1,076,161

751,566 413,416

451,105

Contingent liabilities – – – – – – –

Accumulated Surplus/(deficit), Capital & Reserves

803,878

946,301

1,100,186

989,270

664,776 329,992

371,123

PART B: PROGRAMME PLANS

Part B presents the CIPC‟s programme performance indicators together with targets. It sets out the specific performance targets that CIPC will aim to achieve in the pursuit of strategic outcomes orientated goals and objectives set out in CIPC‟s strategic plan (Annexure A). The three outcome oriented strategic goals that aim to give effect and substance to the strategy are: 1) To improve the competitiveness of the South African economy by enhancing the reputation of

South African businesses and the South African business environment;

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

3) To promote broader formal economic participation by enhancing service delivery and extending

the reach of CIPC. Table 6: Goals and Goal Statements

Strategic Outcome Oriented Goal 1 Improve the competitiveness of the South African business environment

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

Strategic Outcome Oriented Goal 2 Promote innovation, creativity and indigenous cultural expression

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

Strategic Outcome Oriented Goal 3 Promote broader formal economic participation

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

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7. Programmes

This section outlines for each programme its purpose, strategic objectives, outputs, programme performance indicators, targets for the MTEF period as well as quarterly targets for the 2013/14 year.

7.1 Programme 1: Business Regulation and Reputation

The purpose of the Business Regulation and Reputation programme is to maintain registers of companies and close corporations, co-operatives, directors and delinquent persons, and trademarks, company names and business names, to accredit practitioners and intermediaries, to educate business owners and practitioners and promote and enforce compliance with the legislation.

CIPC is required to monitor compliance with certain requirements of the legislation, such as the submission of annual returns, the rotation of auditors and disclosures in terms of the financial reporting standards and the requirements for prospectuses. Furthermore, CIPC investigates complaints and enforces the provision of the Companies Act, the Close Corporations Act, the Share Block Companies Act and the Co-operatives Act relating to governance and disclosure. Although CIPC is currently conducting investigations into complaints and is deregistering companies and close corporations that have not submitted annual returns, it plans to significantly expand on its compliance monitoring functions. An important function of CIPC, as envisaged in the Companies Act, 2008, is the promotion of awareness about legislation. CIPC envisages a broader role in this regard, as its interactions with enterprises provides the opportunity to create awareness of support measures available to enterprises. The role of education and awareness will be primarily focussed on creating a culture of compliance, greater transparency and higher standards of corporate conduct. This will be achieved by developing publications about the rights and obligations of and opportunities for enterprises, which will be made available to them electronically or in hard copy form upon registration and when making contact with the CIPC or its partners. Another area of focus will be targeted interventions with enterprises that would benefit from incorporation, as well targeted engagements with larger corporate entities and their representatives to clarify points of law and implementation. Finally, education campaigns and events will be developed in partnership with strategic public and private sector institutions. The Business Regulation and Reputation Programme also incorporates a focus on policy and legal matters. This includes support for the prosecution of offences, the interpretation of laws, as well as the proposal of amendments to legislation and regulations. It will also be necessary to continuously track international developments in the areas of corporate governance, disclosure, corporate registration and enforcement and trademarks. Given the importance of internal knowledge of these matters, an internal seminar programme will be initiated, with a specific focus on policy and legislative matters in the national and international context. This will include engagements with practitioners on the implementation of the law and areas of possible improvement. Furthermore, there is also a need to harmonise the implementation of Company law across regulatory agencies. A CEO‟s Forum, focusing specifically on Company law and Corporate Governance will be convened. MOUs with regulatory partners will be concluded as required. These activities are largely new and will require capacity to be built in the organisation. The Business Regulation and Reputation Programme has four main activities, namely:

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maintaining registers of the identity, reputation, management and ownership of enterprises and related practitioners;

monitoring and enforcing the provisions of the Companies Act and related legislation;

promoting awareness of the benefits of formalisation, the compliance obligations of registered business entities, the remedies available to them and the opportunities for economic empowerment and growth; and

providing policy and legal insight and advice on the co-ordination, implementation and impact of the laws.

CIPC will also extend it focus on collaboration with SARS and Statistics South Africa to develop an integrated registration process across government agencies. CIPC‟s aim is to ease the compliance burden of business, facilitate faster and easier registration, exploit the synergies of a „one stop registration‟ process and add greater value to the end user.

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GOAL 1: Improve the competitiveness of the South African business environment

Goal Statement

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

Outputs Performance

Indicator Estimated Performance 2012/13 (Baseline )

Medium Term Targets

2013/14 2014/15 2015/16

Strategic Objective 1.1 Encourage the formalisation of South African businesses and their identity Companies registered manually within the published service standard

% of companies registered manually within the published service standard

95% 85% of companies registered manually within 25 working days

90% 90%

Companies registered electronically within the published service standard

% of companies registered electronically within the published service standard

95% 85% companies registered electronically within 1 working day

90% 90%

Co-operatives registered within the published service standard

% of co-operatives registered within the published service standard

23% 85% of co-operatives registered within 21 working days

90% 90%

Trade marks applications processed within the published service standard

% of trade marks applications processed within the published service standard

90% 85% of trade marks applications processed within 5 working days

90% 90%

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

% compliance with annual return

70% 75% 80% 85%

Investigating non-compliance complaints

% of investigations completed within the published service standard

33% 85% of investigations completed within 135 working days

90% 90%

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7.2 Programme 2: Innovation and Creativity Promotion

The Innovation and Creativity Promotion Programme‟s purpose is primarily to encourage the uptake in the registering of patents, designs, film productions and recording indigenous cultural expressions and knowledge. This programme also oversees the accreditation of distribution agencies for the music industry and monitors the governance of the accredited institutions. In addition, the programme registers patent attorneys that have passed the Patent Board Examination and in future will also be responsible for the registration of intermediaries that transact on behalf of clients. As the intermediaries are primarily specialist lawyers, it is expected that the registration process will not involve intensive scrutiny. The Programme is responsible for monitoring the unauthorised use of private and public intellectual property rights, with a particular focus on the protection of the intellectual property rights holders in the creative industries. These rights holders would also include communities that have registered rights in respect of indigenous cultural expressions and knowledge. CIPC also sees an opportunity to promote local innovation and creativity by creating awareness of the opportunities that could flow from formalising rights through their registration, but also by making available information about opportunities and financing available for commercialisation. CIPC sees a close relationship between the registration of rights and their commercialisation, as envisaged in IPAP3. A focus on certain sectors will also be pursued, which are outlined in IPAP3, namely green industries, agriculture, pharmaceuticals, business processing and creative industries. As innovation is closely linked with educational institutions, CIPC will further expand its relationship with the academic community and institutions of higher learning. CIPC, will, through focused strategies, education and partnership initiatives with others enforcement agencies, notably with NIPMO, TIA and DST focus on the protection of important assets such as intellectual property products and brands from being misappropriated. CIPC will act against counterfeiters and others that do not respect intellectual property rights.

Innovation and Creativity Promotion has four main activities, namely:

To register patents, designs, cinematograph films, indigenous knowledge, terms and cultural expressions of folklore and maintain such efficient and accurate registers

To monitor the unauthorised use of intellectual property rights and compliance with accreditation criteria for accredited intermediaries and to co-ordinate appropriate enforcement actions

To create awareness of the requirements and benefits of registration of intellectual property rights, the remedies available and the opportunities for intellectual property advice, commercialisation and industry development

To provide policy and legal insight and advice on the implementation and impact of the relevant legislation.

In this area, there will be a great need for research and analysis to identify and gauge the impact of

registration of intellectual property rights and further to have basis for intellectual property policy inputs.

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GOAL 2: Promote innovation, creativity and indigenous cultural expression

Goal Statement

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

Outputs Performance Indicator

Estimated Performance 2012/13

Medium Term Targets

2013/14 2014/15 2015/16

Strategic Objective 2.1: Promote the protection and commercial exploitation of innovations in key sectors Patent applications processed within the published service standard

% of patent applications processed within the published service standard

87% 85% of patent applications processed within 5 working days

90% 90%

Design applications processed within the published service standard

% of design applications processed within the published service standard

98% 85% of design applications processed within 5 working days

90% 90%

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

Copyright in film applications processed within the published service standard

% of copyright in film applications processed within the published service standard

64% 85% of copyright in film applications processed within 2 working days

90% 90%

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7.3 Programme3: Service Delivery and Access

The purpose of the programme is to promote better access to and service delivery by CIPC by ensuring that our access channels are secure and easily accessible to all, that the institution has sufficient and appropriate organisational resources to deliver the best possible service and that operational excellence is established in all areas of the organisation. As a public sector regulatory agency rather than a business, CIPC‟s ultimate goal is not to be profitable but is rather focussed on a self-sustaining funding model that delivers sufficient revenue to cover the capital and operating costs of the services it delivers. The emphasis of CIPC business model is equally on the quality of the services it provides, the acceptable speed with which it delivers them and the value that its products, services and solutions generate for customers. CIPC‟s business model focuses on the manner in which it will deliver services, the quality of those services, the fees it will charge to be sustainable and the potential for value addition. In order to deliver on its strategic mandate, CIPC has identified three key resources that it will need to build, develop and / or acquire:

An informed, competent and engaged workforce;

Intelligent Information Technology systems and infrastructure;

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

An estimated 80% of CIPC‟s services are currently delivered through intermediaries- intellectual property legal practitioners, company secretarial services, provincial small business development partners and other associated intermediaries. Customers choose to deal through intermediaries for the sake of convenience, but also because CIPC is difficult to access and navigate. CIPC will be focussing on improving its direct services to customers through its the implementation of a new CIPC is exploring and piloting a new business model which is based on a direct channel and partnership approach which is aimed at meeting customer needs through:

Telephone services – where greater emphasis will be placed on answering calls and resolving customer queries (which might require a call-back service).

Customer faxing documentation

Customers e-mailing documentation2 . CIPC will increase access to its products, services and solutions through the development of indirect channels. These channels will be managed in collaboration with identified service delivery partners. The partners will be identified on the basis of the increased value that the combined services of CIPC and its partners can deliver to its customers. The key principles that will inform the choice of service delivery partners will be a combination of this enhanced value to entrepreneurs and inventors as well as the partners‟ ability to contribute to the increased ease of doing business in South Africa. At all times, the selection of partners will not compromise CIPC‟s operating or customer service standards. Identity verification will be a key required capability, so that the integrity of CIPC‟s information can at all times and through all channels, be consistently relied upon.

2 This is adopted from the Swedish model which involves a large number of volunteers that take calls and resolve

queries to ensure greater service delivery.

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In order to deliver the enhanced services required by its Customers and stakeholders, CIPC will require competent, engaged employees who will deliver high quality work at an acceptable speed of delivery. Operational efficiencies will be enhanced by intelligent, high performance Information Technology systems, which will serve CIPC employees, CIPC customers and their partners and registered intermediaries. CIPC envisages that expenditure on its IT systems will be a consistent feature in its budget over the period of the strategic plan and into the future. Often, expenditure on IT systems is accompanied by a reduction in expenditure on human resources. CIPC does not anticipate that this will be the case over the next five years and expects that its expenditure on human resources will need to increase in order to cater for the expansion of its mandate and improve service delivery. Given the importance and sensitivity of the information held by CIPC and the impact of service delivery on the business sector, CIPC will prioritise information integrity and security, disaster recovery and change management in all its efforts. It will place significant emphasis on pro-actively managing the strategic risks that have been identified, while providing innovative and value-adding services. This programme has three main activities:

1. Provide easy access to credible, reliable and relevant information and advice and secure,

value-added services through service standards, accessibility and complaints handling. 2. Build an enabling and intelligent work environment anchored in a governed and sustainable

organisation by managing our financial resources in a manner that enables operational excellence and ensures efficient, effective and sustainable resource utilisation, implementing high standards of corporate governance and ethics and effective risk management, being an employer of choice; able to attract, retain and develop appropriately skilled employees; ensuring a secure word class organisation.

3. Improve the reputation and organisational performance of CIPC by continuously assessing CIPCs operational performance against service standards, continuously improving and facilitating strategic alignment both internally and externally.

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Goal 3: Promote broader formal economic participation

Goal Statement

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

Outputs Performance Indicator

Estimated Performance 2012/13 (Baseline )

Medium Term Targets

2013/14 2014/15 2015/16

Strategic Objective 3.1: Provide easy access to credible, reliable and relevant information and advice and secure, value-added services Website availability for on-line filings 24/7

% website availability for on-line filings 24/7

Not measured 90% website availability for on-line filings 24/7

95% 95%

Improved Call answer rate

% Call answer rate

28% 50% Call answer rate

70% 95%

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

Expenses covered by operating revenue

% of expenses covered by operating revenue

124% 70% of expenses covered by operating revenue

80% 85%

Strategic Objective 3.3: Improve the reputation and organisational performance of CIPC Neutral media coverage in mainstream

% neutral media coverage in mainstream media

90% 85% neutral media coverage in mainstream media

85% 85%

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8. QUARTERLY TARGETS FOR 2012-02-11

The three tables below outline the quarterly milestones that CIPC developed to help it achieve the targets for year 1 of the annual performance plan. 8.1 Programme 1: Business Regulation and Reputation

GOAL 1: Improve the competitiveness of the South African business environment

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

Outputs3 Performance

Indicator Estimated Performance 2012/13 (Baseline )

Annual Target 2013/14 Quarterly Targets Allocated Budget R‟000

Responsible Business Unit 1st 2nd 3rd 4th

Strategic Objective 1.1 Encourage the formalisation of South African businesses and their identity

Companies registered manually within the published service standard

% of companies registered manually within the published service standard

95% 85% of companies registered manually within 25 working days

85% 85% 85% 85% Companies and CCs

Companies registered electronically within the published service standard

% of companies registered electronically within the published service standard

100% 85% companies registered electronically within 3 working days

85% 85% 85% 85% Companies and CCs

3 All service delivery standards covered in strategic objective 3.

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Outputs3 Performance Indicator

Estimated Performance 2012/13 (Baseline )

Annual Target 2013/14 Quarterly Targets Allocated Budget R‟000

Responsible Business Unit 1st 2nd 3rd 4th

Co-operatives registered within the published service standard

% of co-operatives registered within the published service standard

23% 85% of co-operatives registered within 21 working days

85% 85% 85% 85% Co-operatives

Trade marks applications processed within the published service standard

% of trade marks applications processed within the published service standard

90% 85% of trade marks applications processed within 5 working days

85% 85% 85% 85% Trade Marks

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

Annual return compliance

Annual return compliance rate

70% 75% 75% 75% 75% 75% Companies

Investigating non-compliance complaints

% of investigations completed within the published service standard

33% 85% of investigations completed within 135 working days

85% 85% 85% 85% Compliance

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8.2 Programme 2: Innovation and Creativity Promotion

GOAL 2: Promote innovation, creativity and indigenous cultural expression

Goal Statement

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

Outputs Performance

Indicator Estimated Performance 2012/13

Annual Target 2013/14

Quarterly Targets Allocated Budget R‟000

Responsible Business Unit

1st 2nd 3rd 4th

Strategic Objective 2.1: Promote the protection and commercial exploitation of innovations in key sectors Sub-objective 2.1.1: To promote awareness of the benefits of registration of patents and designs and the opportunities for economic participation in key sectors

Patent applications processed within the published service standard

% of patent applications processed within the published service standard

87% 85% of patent applications processed within 5 working days

85% 85% 85% 85% Patents and Design

Design applications processed within the published service standard

% of design applications processed within the published service standard

98% 85% of design applications processed within 5 working days

85% 85% 85% 85% Patents and Design

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

Copyright in film applications processed within the published service standard

% of copyright in film applications processed within the published service standard

64% 85% of copyright in film applications processed within 2 working days

85% 85% 85% 85% Copyright

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8.3 Programme 3: Service Delivery and Access

Goal 3: Promote broader formal economic participation

Goal Statement

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

Outputs Performance

Indicator Estimated Performance 2012/13 (Baseline )

Annual Target 2013/14

Quarterly Targets Allocated Budget R’000

Responsible Business Unit 1st 2nd 3rd 4th

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

Website availability for on-line filings 24/7

% website availability for on-line filings 24/7

Not measured 90% 90% 90% 90% 90% ICT

Call answer Call answer rate

28% 50% 50% 50% 50% 50% Customer Interface Unit

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

Expenses covered by operating expenditure

% of expenses covered by operating revenue

124% of expenditure covered by operating revenue and reserves

70% 70% 70% 70% 70% Finance

Strategic Objective 3.3: Improve the reputation and organisational performance of CIPC

Neutral media coverage in mainstream media

% neutral media coverage in mainstream media

90% 85% 85% 85% 85% 85% Communication

34

ANNEXURE D

The tabled strategic plan is applicable.