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Agricultural Produce Agents Act, 1992 (Act No. 12 of 1992)

Rules

Rules in respect of Export Agents, 2017

Part II : Code of Conduct for Export Agents and Employees

 

3. General Duties of Export Agents and Employees

 

(1) Every export agent and every employee owes a fiduciary duty too his principal and must, therefore, at all times render his services—
(a) honestly and in good faith;
(b) with due skill, care and diligence reasonably expected of a person—
(i) carrying out the same functions in relation to the principal as those carried out by that export agent or that employee, whichever is the case; and
(ii) having the general knowledge, skill and experience of that export agent or that employee, whichever is the case; and
(c) subject to the provisions of rule 3(8) below, in the best interests of his principal or principals.

 

(2) Subject to the provisions of these rules, an export agent and an employee must at all times avoid a conflict of interest between his and/or his employer's personal interests and the interests of their principal, and this involves that he must—
(a) not make secret profits and he must account to his principal for profits;
(b) not misappropriate opportunities intended for his principal;
(c) not unreasonably compete with his principal;
(d) disclose financial interests and ownership interests;
(e) communicate to his principal at the earliest opportunity any relevant information that comes to his attention, unless he reasonably believes that such information is immaterial to the principal or is generally available to the public, or known to his principal.

 

(3) that export agent and that employee must avoid and where this is not possible, mitigate and disclose in writing any conflict of interest between the export agent and his principal.

 

(4) that export agent and that employee must, in writing, and within 10 (ten) business days after he has been employed or mandated by his principal or if he is already so employed or mandated, at the earliest reasonable opportunity—
(a) disclose to his principal the nature and extent of any conflict of interest in respect of that principal to be used for purposes of this rule until changed or withdrawn by further notice from that export agent or employee, including—
(i) the measures taken or to be taken, in accordance with the conflict of interest management policy of the export agent referred to in rule 5(2), to avoid or mitigate the conflict;
(ii) any financial interest, other than an immaterial financial interest, that the export agent and/or any of his employees may have or may become eligible for, including its general nature and any material information relating thereto;
(iii) the nature of any relationship or arrangement with a third party that gives rise to a conflict of interest, in sufficient detail to his principal to enable the principal to understand the exact nature and extent of the relationship or arrangement and the nature and extent of the conflict of interest;
(b) inform his principal of the conflict of interest management policy referred to in rule 5(2) and how it may be accessed.

 

(5) When an export agent or an employee renders a service to his principal, the export agent and the employee involved must not directly or indirectly deal in any fresh produce of his principal for his own benefit, account or interest to the detriment of his principal.

 

(6) A export agent shall maintain an impartial approach in practising his occupation, and for this purpose be free of any influence or relationship that, either directly or indirectly, could impair his judgement or independence.

 

(7) A export agent shall maintain such integrity and objectivity in the practising of his occupation as is necessary to enable him to apply unbiased judgment and objective consideration in forming an opinion or arriving at decisions.

 

(8) An export agent shall not unduly discriminate between principals.

 

4. Financial Interests

 

(1) An export agent or its employees may only receive or offer the following financial interest from or to a third party—
(a) any consideration, if the receipt or payment of that consideration has been specifically agreed to by a principal in writing following proper disclosure of that interest in the manner contemplated in rule 3(4)(a)(iii) or, despite having been approved without proper disclosure of that interest, it has subsequently been ratified by the principal concerned in writing following proper disclosure of that interest; provided however that such approval may be withdrawn at the discretion of that principal on giving that export agent at feast 40 (forty) business days' written notice of his intention to do so; provided further that notwithstanding anything to the contrary herein under no circumstances whatsoever shall an export agent or an employee be permitted, after having received the notice referred to above, to sell his principal's fresh produce to or, procure, for and on behalf of his principal, services from a business or juristic person in which the export agent or employee or a person related to that export agent or that employee has a financial interest.
(b) fees or remuneration for the rendering of a service to a third party, which fees or remuneration are reasonably commensurate to the service being rendered;
(c) subject to any other law, an immaterial financial interest; and
(d) a financial interest, not referred to under sub-rules (a) to (c) above, for which a consideration, fair value or remuneration that is reasonably commensurate to the value of the financial interest, is paid, promised or given or offered by that export agent or employee at the time of receipt thereof.

 

(2) A export agent may not give, and may not offer any financial interest to an employee of that export agent for giving, or promising or offering—
(a) undue preference to the quantity of business secured for the export agent to the detriment of the quality of the service rendered to principals; or
(b) undue preference in whatever manner to a specific principal or to the fresh produce of a specific principal, to the detriment of another principal represented by that export agent.

 

(3) When an export agent or an employee acquires a financial interest in any agreement or other matter in which his principal has a material interest, or knows that a related person has acquired a financial interest in that matter, after the agreement or other matter has been approved by the principal concerned, the export agent or employee, as the case may be, must promptly disclose to the principal concerned, the nature and extent of that interest, and the material circumstances relating to the export agent's or employee' s or a related person's acquisition of that interest.

 

5. Conflict of interest management policy

 

(1) Every export agent, other than an employee, must adopt, maintain and implement a conflict of interest management policy that complies with the provisions of the rules, and a copy thereof must be made available to the Registrar once it has been adopted in terms of rule 5(3) below.

 

(2) A conflict of interest management policy must—
(a) provide for the management of conflicts of interest;
(b) include mechanisms for the identification of conflicts of interest;
(c) include measures for the avoidance of conflicts of interest, and where avoidance is not possible, the reasons therefore and the measures for the mitigation of such conflicts of interest;
(d) include measures for the disclosure of conflicts of interest;
(e) include processes, procedures and internal controls to facilitate compliance with the policy; and
(f) describe consequences of non -compliance with the policy by the export agent's employees;
(g) include a list of all its related persons;
(h) include the names of any third parties in which the export agent holds an ownership interest or a financial interest;
(i) include the names of any third parties that hold an ownership interest or a financial interest in the export agent;
(j) include the nature and extent of the ownership interest referred to in sub-rules (h) and (i); and
(k) be drafted in an easily comprehensible form and manner.

 

(3) A conflict of interest management policy must be adopted by the sole proprietor of an export agent, the board of directors of an export agent which is a company or, in the case where an export agent is not a company, the governing body of that export agent.

 

(4) An export agent must ensure that its employees are aware of the contents of its conflict of interest management policy and provide for appropriate training and educational material in this regard.

 

(5) An export agent must continuously monitor compliance with its conflict of interest management policy and annually conduct a review of the policy.

 

(6) An export agent must inform his principals in writing that he has adopted a conflict of interest management policy and ensure that it is made available to his principals at their written request, and is also easily accessible for public inspection at all reasonable times.

 

(7) An export agent or employee may not avoid, limit or circumvent or attempt to avoid, limit or circumvent compliance with this rule through an associate or an arrangement involving an associate.

 

(8) The export agent must, on an annual basis and before 31 August of each year, provide the Registrar with a written report on the export agents conflict of interest management policy, such report to deal with the matters referred to in rule 5(2)(f) to (j) and rule 5(6) above, and must include a statement confirming compliance with rule 5(5) above, and if any changes have been made to the conflict of interest management policy, such changes must be brought to the attention of the Registrar.

 

(9) The report referred to in sub-rule (8) must report on at least the implementation, monitoring and compliance with, and the accessibility of the conflict of interest management policy.

 

6. Other duties of Export Agents and Employees

 

(1) When an export agent or an employee renders services to his principal—
(a) representations made and information provided to a principal by the export agent or the employee—
(i) must be factually correct;
(ii) must be provided in plain language, avoid uncertainty or confusion and not be misleading;
(iii) must be adequate and appropriate in the circumstances of the particular type of service, taking into account the level of knowledge of the principal;
(iv) must be provided timeously so as to afford the principal reasonably sufficient time to make an informed decision;
(v) may, subject to the provisions of these rules, be provided orally and, at the principal's written request, confirmed in writing within a reasonable time after such request;
(vi) must, where provided in writing or by means of standard forms or format, be in a clear and readable print size, spacing and format;
(vii) must, as regards all amounts, sums, values, charges, fees, remuneration or monetary obligations mentioned or referred to therein and payable to a third party or to the export agent, be reflected in specific monetary terms; Provided that where any such amount, sum, value, charge, fee, remuneration or monetary obligation is not reasonably pre-determinable, its basis of calculation must be adequately described; and
(viii) need not be duplicated or repeated to the same principal unless material or significant changes affecting that principal occur, or the nature of the service renders it necessary, in which case a disclosure of the changes to the principal must be made without delay.
(b) he must disclose to his principal whether the export agent holds guarantees or professional indemnity or fidelity insurance cover or not and if so, the nature and extent thereof;
(c) he must disclose to his principal particulars of the countries where it is envisaged that marketing will take place;
(d) he must disclose to his principal by way of a separate disclosure (and not merely disclosure of an all-inclusive fee or charge) of any charges and fees to be levied against the principal for any service rendered or to be rendered, including—
(i) the amount, rate or basis of calculation and the frequency of payment thereof;
(ii) particulars of the identity of the recipient of such fees or charges, but only if so demanded by his principal in writing and then, within 20 (twenty) business days of that written demand; and
(iii) the services or other purpose for which each fee or charge is levied;
(iv) the nature, extent and frequency of any incentive, remuneration, consideration, commission, fee, rebate or brokerages ('valuable consideration'), which will or may become payable to the export agent, or an employee or person related to the export agent or employee directly or indirectly, by any third party, or for which the export agent, employee or person related to the export agent or employee, may become eligible, as a result of rendering of the services, as well as the identity of the third party providing or offering the valuable consideration and the manner in which it will be applied;
(e) the services must be rendered in accordance with the contractual relationship and reasonable requests or instructions of the principal, which must be executed as soon as reasonably possible and with due regard to the interests of the principal which must be afforded appropriate priority over any interests of the export agent and the employee;
(f) all transactions of whatever nature concluded on behalf of his principal must be accurately and timeously accounted for; and

 

(2) An export agent and an employee must—
(a) in making contact arrangements, and in all communications and dealings with his principal, act honourably, professionally and with due regard to the convenience of his principal; and
(b) at the commencement of any contact, visit or call initiated by the export agent, explain the purpose thereof.

 

(3) Notwithstanding the provisions of rule 6(1) above, the export agent shall within 10 (ten) business days of being mandated by his principal procure that he and his principal execute and sign a service level agreement setting out the terms and conditions governing their relationship or in the absence of such signed service level agreement the export agent must communicate in writing to his principal the terms and conditions governing their relationship which shall as a minimum include (but not be limited to) the following:
(a) the identity of the export agent and each representative of the export agent if the export agent is a juristic person and the registration number (if any), physical address, postal address, telephone number, e-mail address, facsimile number, VAT registration number and export registration number of the export agent;
(b) the identity of the principal and each representative of the principal if the principal is a juristic person and the registration number (if any), physical address, postal address, telephone number, e -mail address, facsimile number and VAT registration number of the principal;
(c) the duties, responsibilities and risk attributable to each party;
(d) the nature, manner and basis in which the price payable for fresh produce is to be calculated, and if the export agent and the principal agree on a minimum guaranteed price, this fact should be stipulated on a separate document which is to be signed by both parties and which document should as a minimum stipulate who bears the risk should the minimum guaranteed price not be achieved;
(e) the export agent's requirements pertaining to quality, size, variety, volumes and timing of fresh produce to be delivered to the export agent;
(f) the liability of the principal and/or export agent for damages and/or losses suffered by the principal;
(g) full particulars of the insurance (as contemplated in rule 10(3)) held by the export agent;
(h) full and comprehensive details of the payment terms; and
(i) the particulars referred to in rule 6(1)(c)(v) above.

 

(4) An export agent must have appropriate procedures and systems in place to—
(a) record such verbal and written communications and reports relating to a service rendered to a principal as are contemplated in the Act or in these Rules;
(b) store and retrieve such records and any other material documentation relating to the principal or services rendered to the principal; and
(c) keep such records, reports and documentation safe from destruction.

 

(5) All such records must be kept for a period of five years after the rendering of the service concerned.

 

(6) Export agents are not required to keep the records at their premises, but must ensure that they are available for inspection within 5 (five) business days of the Registrar's request.

 

(7) Records may be kept in an appropriate electronic or recorded format, which are accessible and readily reducible to written or printed form.

 

(8) An export agent and an employee may not disclose any confidential information acquired or obtained from a principal in regard to such principal, unless the prior written consent of the principal has been obtained or disclosure of the information is required in the public interest or under any law.

 

(9) An export agent shall maintain his knowledge and skills at such a level that he is able to conduct his business in accordance with the applicable laws, regulations and rules as well as the technical and professional standards common to his occupation.

 

(10) An export agent shall—
(a) ensure that his employees comply with the laws, regulations and rules applicable to his occupation, and for that purpose he shall—
(i) provide the necessary training to his employees;
(ii) adequately supervise his employees;
(iii) procure that each export agent and each employee shall attend all regulatory courses and pass all regulatory examinations or training set by or on behalf of the Council within the period determined by the Registrar, but in the case of an export agent, not later than 12 (twelve) months after the export agent has been issued with a registration certificate.
(b) bring to the attention of the Council and other responsible authorities any non-compliance or suspected non-compliance of applicable laws, regulations or rules by his employee or by any other export agent and shall furnish the Council with copies of all documentation which could be used to support such alleged non-compliance or suspected non-compliance;
(c) at all times whilst acting on behalf of his principal, act in a transparent manner.

 

7. Information about Service Providers

 

(1) An export agent must, on demand, whenever his principal or the Registrar so requests in writing, furnish the principal or the Registrar, as the case may be in writing, with full particulars of the following information about all service providers contracted or utilised on behalf of or for the benefit of the principal during the previous 3 (three) years:
(a) name, physical location, and postal, telephone and e-mail contact details of the service provider;
(b) the nature and extent of his or a related person's contractual relationship with that service provider (if any), and whether the export agent has contractual relationships with other service providers;
(c) where applicable, the fact that the export agent—
(i) directly or indirectly holds more than 10% (ten percent) of the relevant service provider's shares, or has any equivalent substantial financial interest in the service provider;
(ii) during the preceding 12 (twelve) month period received more than 30% (thirty percent) of his total income, including commission, from the service provider, and the export agent must convey any changes thereafter in regard to such information at the earliest opportunity to the principal and the Registrar.

 

(2) An export agent must, where the relevant, terms of employment or mandate enables such export agent to provide principals with services in respect of a choice of service providers, exercise judgment objectively in the interest of the principal concerned.

 

(3) An export agent may not, in dealing with a principal, compare different service providers and/or export agents, unless the differing characteristics of each are made clear, and may not make inaccurate, unfair or unsubstantiated criticisms of any service provider and/or export agent.

 

8. Information about services rendered

 

(1) Subject to the provisions of these rules, an export agent must, in addition to normal statements of account, at the written request of his principal, provide his principal with a copy of the latest report referred to in rule 40 (2) below.

 

(2) No export agent may in the course of the rendering of a service request any principal to sign any written or printed form or document unless all essential details required to be inserted thereon by the principal or on behalf of the principal have already been inserted.

 

9. Access to information

 

(1) In the event of any other public regulation requiring a person acting as an export agent to keep and retain the information referred to in these Rules then such export agent shall be deemed to have complied with the provisions of these Rules if and to the extent that the said export agent complied with the said public that such public regulation is regard not less onerous than these Rules.

 

(2) The rights of access to information set out in these rules are in addition to, and not in substitution for, any rights a principal may have to access information in terms of—
(a) section 32 of the Constitution of the Republic of South Africa, 1996;
(b) the Promotion of Access to Information Act, 2000 (Act 2 of 2000); or
(c) any other public regulation.

 

10. Risk Management

 

Control measures

 

(1) A export agent must at all times have, and effectively employ such resources, procedures and appropriate technological systems that can reasonably be expected to eliminate as far as reasonably possible, the risk that principals will suffer financial loss or damage through theft, fraud, other dishonest acts, negligence or other culpable omissions.

 

Specific control objectives

 

(2) A export agent, excluding an employee, must, without limiting the generality of sub-rule (1), structure his internal control procedures so as to provide reasonable assurance that—
(a) the relevant business can be carried on in an orderly and efficient manner;
(b) financial and other information used or provided by the export agent will be reliable;
(c) all funds will be properly and timeously accounted for; and
(d) all applicable laws and rules will be complied with.

 

(3) An export agent must—
(a) display a certified copy of each registration certificate issued to him and to every employee in a prominent and durable manner within every business premises of the export agent;
(b) ensure that a reference to the fact that such a registration certificate is held by such export agent, is contained in all business documentation, advertisements and other promotional material;
(c) ensure that all registration certificates are at all times immediately or within a reasonable time available for production to any person requesting proof of registration under authority of a law or for the purpose of entering into a business relationship with the export agent.

 

Insurance

 

(4) An export agent shall, to the extent reasonably required by his principal and at his principal's expense, maintain in force a suitable guarantee acceptable to his principal or professional indemnity or fidelity insurance cover, to cover his principal against—
(a) the risk of losses or damages suffered due to theft committed by the export agent or his staff of any monies or fresh produce entrusted by or on behalf of his principals to him;
(b) the risk of losses or damages suffered due to dishonest conduct by an export agent or his staff insofar as such conduct relates to monies or fresh produce;
(c) loss or damage to fresh produce, in transport between the points of origin and final destination;
(d) loss, damage or injury caused wholly or partially as a consequence of any defect or hazard in the fresh produce or its packaging or as a consequence of supplying any unsafe fresh produce and arising from product liability to the extent possible and shall cause the principal to be named as a co- insured in any insurance cover taken out in terms of sub-rule (3)(a) above.

 

(5) Full details of the guarantee or insurance cover obtained, must be provided in writing by the export agent upon written request by the principal or the Council and such details are to include a copy of the certificate of insurance or guarantee (as the case may be), and provided further that any change in such details shall forthwith be communicated by the export agent to his principal and to the Council.

 

(6) In the event of a claim, the export agent shall process the claim fully and use all reasonable endeavours to succeed in such claim. The cost of any excess deductible from the claim value shall be for the principal's account.

 

(7) The export agent may, on behalf of his principal, take out credit insurance in respect of all sales of the principal's fresh produce. Such insurance shall be sufficient to indemnify the principal for the full gross selling price of the fresh produce sold and delivered to the purchaser thereof, and shall render the insurer liable to indemnify the principal should the purchaser concerned fail to pay the principal within the period prescribed in rule 36(1) below, irrespective of the cause of such non-payment.

 

11. Remuneration

 

(1) No export agent may claim remuneration in an amount or at a higher price, rate or scale than the agreed remuneration, unless the prior written approval of the principal has been obtained.

 

(2) A export agent shall not—
(a) overreach his principal in any manner whatsoever;
(b) charge remuneration or recover costs or expenses at an amount, rate or scale which in the view of the Council is unreasonably high, having regard to all relevant circumstances;
(c) present any remuneration as a cost or an expense which is not normally regarded as a cost or expense.

 

12. Acceptance of Gifts

 

No export agent or a member of his family shall otherwise than in accordance with generally accepted business practises accept any goods, service or hospitality that results or could result in a conflict of interest or an impairment of his independent judgement in the practising of his occupation.

 

13. Financial Obligations

 

An export agent shall at all times ensure that financial obligations incurred by him will not impair or cause to impair his independence.

 

14. Publicity and Advertisement

 

(1) An export agent may by means of publicity and advertisements bring his business and the nature of the services rendered by him to the notice of the public, provided—
(a) a due sense of responsibility towards the fresh produce industry and the public is displayed therein; and
(b) the contents and presentation thereof in the opinion of the Council, bear testimony of good taste, and
(c) the export agent concerned does not draw comparisons with or disparage the services of other export agents or markets.

 

(2) An advertisement by any export agent must—
(a) not contain any statement, promise or forecast which is fraudulent, untrue or misleading;
(b) if it contains—
(i) performance data (including awards and rankings), include references to their source and date;
(ii) illustrations, forecasts or hypothetical data—
(aa) contain support in the form of clearly stated basic assumptions (including but not limited to any relevant assumptions in respect of performance, turnover, costs and charges) with a reasonable prospect of being met under current circumstances; and
(bb) make it clear that they are not guaranteed and are provided for illustrative purposes only.
(iii) information about past performances, also contain a warning that past performances are not necessarily indicative of future performances; and

 

15. Canvassing and Touting

 

An export agent may canvass far business on condition that he does not—

(a) propagate any false or misleading or questionable information of any nature whatsoever;
(b) interfere directly or indirectly with the sale, handling or inspection of fresh produce entrusted for sale to another export agent;
(c) directly or indirectly influence purchasers not to buy certain fresh products, or fresh produce of a certain class, standard or type, or not to buy fresh produce from a certain export agent, or from a certain principal, unless he can show good cause therefore.

 

16. Relations with other Export Agents, Principals and the Council

 

(1) The behaviour of an export agent towards other export agents, his principals and the Council shall be of such nature that it will foster co-operation and good relations.

 

(2) An export agent shall not, express any malicious or unfounded criticism on the activities of another export agent.

 

(3) No export agent shall receive, accept or handle any fresh produce dispatched to or intended for delivery to or sale by another export agent unless such other export agent does not have a representative to accept the delivery, and then only after all reasonable attempts have been made to notify the export agent concerned of that delivery.