The trade and industry department is gearing up to implement three far-reaching pieces of legislation to afford consumers better protection, improve competition and properly regulate companies.

The three bills were finalised by Parliament last week and will become law once signed by President Kgalema Motlanthe.

Briefing the media on Thursday, Trade and Industry Minister Mandisi Mpahlwa said the bills would be introduced over a period of time.

"Laws are judged to be good when the implementation strategy is in place and effective," he said.

The bills were expected to be fully effective in mid 2010.

Mpahlwa said the Competition Amendment Bill was intended to strengthen existing provisions of the Act in fighting collusion (complex monopolies) and cartels which undermined competitiveness of downstream industries and robbed consumers.

Among other things, the bill introduced a criminal sanction regime against individuals found guilty of causing a firm to engage in price fixing, output restriction, market allocation and collusive tendering.

An individual could face up to 10-years imprisonment or a fine of R500,000 or both.

"This severe penalty serves as a signal that cartel activities will not be tolerated and those involved in this harmful practice will be severely punished," he said.

The bill also improved on market inquiry provisions which allowed the Competition Commission to proactively investigate markets and increase market transparency by enquiring on impediments to competition which resulted in consumer harm.

The Consumer Protection Bill sought to prevent harm to and enhance economic welfare of consumers in South Africa.

"To achieve this, the bill adopts a rights-based approach aimed at asserting consumer rights when transacting with suppliers," Mpahlwa said.

These included the right to product safety and quality, to fair and just contract terms, to cancel consumer agreements and long-term contracts, to buy bundled goods separately, to refunds and warranties and to receive documents written in plain and understandable language.

It further enhanced consumer choice by requiring disclosure and information on prices.

The third bill, the Companies Bill, was aimed at overhauling the current Companies Act of 1973.

Mpahlwa said the need to review the existing company law regime was necessitated, by among others, outdated company legislation, globalisation and the advent of democracy, the scourge of company scandals, developments in financial reporting standards, the need to ease the regulatory burden -- especially for small businesses -- increasing market transparency and simplification of company registration and maintenance.

"The bill emphasises simplification of registration of companies and alleviates overregulation on companies."

Among other things, companies, large and small, would be required to prepare annual financial statements to encourage sound financial management, ensure sustainability of companies of all sizes and to comply with other regulatory requirements.

However, the regulatory burden would be reduced by exempting certain categories of companies from having their annual financials audited or reviewed. There would also be differential reporting standards -- small companies would comply with less onerous standards.

The bill also introduced the concept of a "business rescue" process, which was a departure from the judicial management currently existing.

"There is no doubt that rescuing the company that is in financial distress is in the best interest of a company, the workers, creditors and the economy as a whole.
"The purpose therefore is to be able to rescue a company before it gets to liquidation stage," he said.