NEWSLETTER - COVID-19 LEVEL 4 RESTRICTIONS
From the SAIA Board
Dear SAIA Member
The South African Institute of Auctioneers (SAIA) is currently awaiting clarity from the Department of Trade and Industry (DTI) regarding the hosting of public auction sales. We have made submissions to the pertinent government departments, explaining the significance of our industry, and providing motivation as too why our industry should conduct its business within the framework of the level 4 Covid-19 restrictions. We have received acknowledgment that our correspondence was received and the assurance that it is receiving due attention.
The current regulations (Regulation No. 43258 of April 20th, 2020) lack clarity and their ambiguity lends itself to a broad assortment of interpretations. Other than for livestock auctioneers who have been allowed to operate, without clarity and determinations from the DTI, we are, unfortunately, as a body, are put into a position where not only can we not give firm advice, but in the advice we give, we are forced to adopt a more conservative approach to providing information and support to our associates.
As a group, the executives we have been carefully reviewing the current situation regarding the Covid-19 regulations. Whilst there are no firm answers, we do have several concerns for auctioneers wishing to operate during this period. What becomes incredibly important to us as a group, is that the actions of some auctioneers during this period can materially hurt all of us. We are also very aware that we are all businesses who are fighting for our survival during an extremely difficult period. For each of our members, the way in which you go forward, and what you choose to do is ultimately your responsibility. We however always caution you to make certain that, you have taken advice and operate within all the constraints of the regulations.
Although core to many of our businesses, no live auction with a crowd should be taking place. The regulation’s Section 23 Paragraph 1 clearly states that ‘All gatherings are banned’. This makes it clear that a public auction would certainly not be allowed. Fortunately, we do not see any issue with conducting online-based auctions that require no crowds. We know that several members may not have this capacity, and the SAIA team can offer advice to companies or individuals requiring it.
Issues such as viewing and dispatching are however much more difficult to interpret with the regulations provided. The board do feel that to a great extent these activities are not allowed, however, based on our reading of the regulations, certain asset classes under very specific circumstances (where you are providing a service/product that is critical and you have all the necessary paperwork) may be allowable. Our further reading of the regulation leads us to believe that physical viewing is not be allowed unless, once again, there are extremely specific circumstances that force it. Finally, in our interpretation, no items should be dispatched except under the above specified conditions. Unfortunately, many buyers and sellers may have to wait for changes to the regulations. On the flip side, it is also our opinion that attending to most clients’ sites right now would also contravene the regulations (unless once again under the above specific circumstances) and auctioneers need to look to alternative methods.
We are aware that several Financial Institutions have resumed hosting online vehicle auctions as part of their essential services processes. We cannot comment on the banking sector, which have their own operating environment, however, we remind our members that Auctioneers do not fall under the same regulations as banks. Our opinion is that you most likely would be falling foul of the law should you choose to provide an end-to-end solution with delivery taking place.
It should be further noted that those members who support providers to the essential services sector are bound to meet and conform to the current regulations as specified by the Department of Health. A comprehensive Covid-19 continuity plan must be created, a responsible person delegated, the plan implemented, and a copy available should it be requested. Failure to do so contravenes the law.
Without confirmation of the DTI, we cannot confirm the above, and it is our opinion as a board. We are not legal experts and despite our efforts, we cannot be responsible for any action any member may take because of our opinions. The SAIA board implores our members to work forward with extreme caution and that members not only familiarize themselves with the regulation but also take legal advice. We do not want our members to contravene the law and ask that at all times you work on the side of caution.
Irrespective of the DTI, we wish to make it clear that SAIA condemns physical live auctions and are in support of alternative methods that are allowable under the current regulations. Not only are physical auctions clearly contravening the law, but it is also dead against the spirit of the lockdown. Making buyers travel un-necessarily and organizing gatherings is unacceptable.
The board believes that it will be a long time before normalcy returns to auctions and implore our members to quickly start looking at alternative methods to provide a platform to protect your business going forward.
As more information comes to light, we will keep you up to date. In closing, whilst we await clarification, as an association, we are committed to offer support and uphold the rule of law. We expect the same from the members that we represent.
SAIA is committed to updating our members on any developments that may affect our current standing.
The SAIA Board