Corporate immigration in South Africa
August 2014 | 10QUESTIONS | EMPLOYMENT LAW
financierworldwide.com
FW speaks with Angelika Yakovchuk, a partner at WerthSchröderInc Attorneys, about corporate immigration in South Africa.
FW: How would you describe the environment for corporate immigration in South Africa? What trends are being developed as a result of new Immigration Regulations coming into force on 22 May 2014?
Yakovchuk: Broken down to basics, the environment remains tense for two main reasons. Firstly, much negative publicity had been generated post implementation of regulations. Most of it may be filtered out, remaining with a small dose of real issues of concern. Secondly, there are numerous organisations that have not implemented proper planning or paid due cognisance, of the upcoming reforms – the drafts of new laws had been made available to the public way in advance of the reform – and very few commentaries were offered to the government at the time. The challenges that these companies, as well as the large numbers of foreigners they employ, are now facing are largely the consequence of disregarding the upcoming regulations. Fail to plan, plan to fail is a phrase relevant to the current climate.
FW: Would you say that corporate immigration policies in your country are relatively open or closed to foreign nationals? What are the underlying reasons behind this?
Yakovchuk: Although there are some specific limitations, compared to rules of many other jurisdictions, particularly those among the developed countries, South African immigration policies remain open. According to the Deputy Director General of the Department of Home Affairs (DHA), Immigration Services, the South African Immigration Act is a “liberal Act, there is a visa for any occasion”. There is no doubt in the accuracy of this statement – whether you are a volunteer who still needs to earn living whilst in South Africa, a multinational investor, or simply need to attend a day conference in Johannesburg, the Immigration Act caters for these and any other legitimate needs. South African immigration policy serves as a platform for, and is designed to aid, foreign investment. The limiting effect is observed in the application of the policy, and there are historical reasons for it, such as corruption and a lack of government resources, among other challenges. That said, the DHA is making a major effort to eradicate these and similar challenges are starting to bear fruit. At the same time, South Africa’s immigration policy serves as a protective cover for the local labour force. It is nothing short of ridiculous to hear criticism in this regard. The fact that the government has put measures in place not only to protect, but also to advance the opportunities of local people via international interest in local job market, is an achievement, not otherwise. And there is a healthy balance between protectionist and globalised approaches.
“Whether you are a volunteer who still needs to earn a living whilst in South Africa, a multinational investor, or simply need to attend a day conference in Johannesburg, the Immigration Act caters for these needs.”
FW: Could you discuss the main provisions of the new reforms?
Yakovchuk: The first point I would highlight is the fact that new reforms envisage greater security. No one would argue that a secure economy largely depends on a secure country. New provisions are better enabling international secondment assignments and facilitating critical skills required in South Africa to advance any fast developing business segments – for example, the energy sector, infrastructure, construction, agriculture or academia – reserving visas for legitimate categories of specialists. In addition, South Africa prides itself on its numerous internationally recognised tertiary institutions, and immigration reform has made it efficient to study in South Africa and supports the studies of foreign students.
FW: What factors have driven the new reforms? What issues are they designed to address, and how confident are you of their success?
Yakovchuk: Reform has been driven by the recognition of the extent of the abuse of previous policy, as well as the objectives of better border control, enhancement of security prerogatives, advancement of opportunities to legitimate investors, and the need to afford more protection to local labour market. Although not without resistance, in the short time since their implementation the regulations have begun to succeed in their objectives.
FW: How have the reforms been received by the business community? What are the major concerns or criticisms, if any?
Yakovchuk: Those who have ignored the new reform are finding themselves in dire circumstances. The symptoms are seen in numerous cases currently facing the DHA. The trends have become obvious. However, companies that have paid due regard to the government initiative, which was made known long before the regulations were implemented, continue to operate fairly uninterrupted. Criticism is mainly bedded in a lack of understanding and lack of insight into the provisions of the Immigration Act and its regulations. However, the reader is reminded of the DHA’s objectives, and that is to facilitate the contribution of foreign companies to the South African economy, trade standards, globalisation and local labour market, while at the same time ensuring security considerations and that the practice does not adversely impact on existing labour standards and the rights and expectations of South African workers.
“Criticism is mainly bedded in a lack of understanding and lack of insight into the provisions of the Immigration Act and its regulations.”
FW: In light of the reforms, what considerations should companies make when designing programs and procedures to control and monitor their immigration strategy?
Yakovchuk: Companies have no choice but to plan their foreign labour force in advance, while at the same time develop a skill transfer plans, as prescribed by the new regulations in certain settings. Immigration planning has long ceased to be minor concern and one simply of ‘relocation’ considerations, but is inseparable from, and goes hand in hand with, all other prevalent legal deliberations of foreign investment planning. It is a serious compliance consideration, and those who fail to recognise the rule of immigration law and abide by it, are exposing themselves to considerable risks.
FW: What impact will the reforms have on domestic employers, as they search for skilled foreign workers in a competitive global market? What are the implications for ‘foreign’ firms operating in the region?
Yakovchuk: When a foreigner’s skills are required, whether due to domestic shortage, or because there is a need to place a professional who is acquainted with the corporate culture of the organisation, the answer remains the same – no short cuts, proper planning in advance, and taking into account the necessary and required objectives of skill transfer. Companies will find growth on many levels by respecting the rules of compliance in the same fashion as they would in their home countries or in developed jurisdictions. It is relatively uncomplicated to facilitate the placement of a skilled foreign worker, provided the regulations are interpreted and applied correctly.
FW: What penalties might firms expect for non-compliance?
Yakovchuk: The spectrum of penalties is wide-ranging, from cancelation of existing permits, to criminal sanctions, coupled with bans of entering South Africa, to fiscal penalties varying from relatively small amounts to larger fines. The DHA has an extensive discretion in this regard, assessing each case of non-compliance on its merits.
“When it comes to corporate immigration, South African policy is geared toward facilitating investment, while at the same time protecting the local employment market.”
FW: What final advice can you provide to firms on managing corporate immigration in South Africa?
Yakovchuk: When it comes to corporate immigration, South African policy is geared toward facilitating investment, while at the same time protecting the local employment market. The DHA openly invites to engage in discussion, guides and assists those organisations that work with the DHA, not against it. With well-structured approach and strategy, placement of skilled professionals is easily attainable. Yet, companies that continue to circumvent the rules to cover up for their own shortcomings or those who continue to treat Africa, and South Africa specifically as immature younger sibling, taking advantage, will fall flat. Whilst investors are much needed, their welcome to land of Rainbow Nation, as South Africa is commonly known, is not on a basis of subservience and perpetuating the arrogance. No meaningful interaction would take place, unless and until there is due regard and respect for the country’s laws, to start with. It is time the world view of South Africa takes proper note of the country’s objectives. No amount of previous and current scandalous publicity about the country should be used as paving the way and allowing if not excusing the non-compliance. It is time to shift the focus.
Angelika Yakovchuk is a partner and director of WerthSchröderInc Attorneys. She specialises in government policy compliance with a particular focus on corporate immigration law. Working closely with Department of Home Affairs, and through direct involvement with the Minister of Home Affairs, Ms Yakovchuk played an important role in transformation of national immigration policy. Ms Yakovchuk is vice president of the French-South African Chamber of Commerce & Industry, is on the board of Euro Chamber, and is a member of an advisory committee to Ministerial panel. Ms Yakovchuk can be contacted on +27 (0)11 476 1776 / +27 (0)82 451 9619 or by email: ayakovchuk@werthschroeder.com.
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