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NATIONAL RESEARCH FOUNDATION ACT 23 OF 1998

(English text signed by the President)

ACT

To provide for the promotion of research, both basic and applied, and the
extension and transfer of knowledge in the various fields of science and
technology and indigenous technology; and for this purpose to provide fo
r the
establishment of a National Research F oundation; and to provide for incidental
matters.

In this Act, unless the c ontext otherwise indicates-

‘Board’ means the Board referred to in section 6;

‘chairperson’ means the person appoi nted as chairperson of the Board
under section 6 (1) (a) (i);

‘division’ means a division of the Foundation established under section 12;

‘executive management committee’ means the executive management
committee referred to in section 9;

‘Foundation’ means the National Res earch Foundation, established by
section 2;

‘FRD’ means the Foundation for Research Development, established by
section 2 of the Research Development Act, 1990 (Act 75 of 1990);

‘HSRC’ means the Human Sciences Research Council, established by
section 2 of the Human Sciences Research Act, 1968 (Act 23 of 1968);

‘Minister’ means the Minister of Ar ts, Culture, Science and Technology;

‘national facilities’ means facilities contemplated in section 5;

‘president’ means the person appointed as the chief executive officer of
the Foundation under section 10;

‘regulation’ means a regul ation made under this Act;

‘research’ means the generation, preservation, augmentation and
improvement of knowledge by means of scientific investigations and methods in
the field of science and technology;

‘research institution’ means any organisation practising research, as
recognised by the Board, with primary emph asis on institutions in the tertiary
education sector;

‘science’ includes the natural scien ces, engineering sciences, medical
sciences, agricultural sciences, social sciences and humanities;

‘technology’ includes indigenous technology, and means knowledge
accumulated through research or obser vation, and the practical application
thereof;

‘this Act’ includes a regulation.

There is established, as from a date fixed by the President of the Republic
of South Africa by proclamation in the Ga zette, a juristic person to be known as
the National Research Foundation.

The object of the Foundation is to support and promote research through
funding, human resource development and the provision of the necessary
research facilities in order to facilitat e the creation of knowledge, innovation and
development in all fields of scienc e and technology, including indigenous
knowledge and thereby to contribute to the im provement of the quality of life of all
the people of the Republic.

(1) The functions of the Foundation are to-

(a) promote the development of appropriate human resources
and research capacity in the areas of science and technology;

(b) stimulate, promote, support and protect research in the field
of indigenous technology;

(c) obtain funds for resear ch, both locally and abroad;

(d) allocate funds for research and promote multi-disciplinary
collaboration through the divisions;

(e) promote and support research by the awarding of contracts,
grants, scholarships or bursaries to persons or research institutions;

(f) evaluate the status and needs of research;

(g) provide financial support fo r the acquisition or establishment
of research facilities by research institutions;

(h) review research proposals and results promoted by the
Foundation;

(i) promote the transfer of technology and the implementation
of research results and findings;

(j) facilitate and promote nati onally and internationally liaison
between researchers and research institutions;

(k) promote participation in in ternational scientific activities
through maintaining membership of appropriate international science
organisations;

(l) make available scientific knowledge or technology through
any medium;

(m) administer, support and m onitor the operation of national
facilities;

(n) promote the provision of an information infrastructure linking
research institutions to facilitate co-oper ation and sharing of research information
and knowledge;

(o) compile and maintain a national registry of research funded
by the Foundation;

(p) initiate liaison with structures involved in the protection of
intellectual property rights.

(2) In order to achieve it s object the Foundation may-

(a) make grants to persons or re search institutions for research,
research infrastructure and the development of human resources;

(b) co-operate or enter into agreements with any person,
institution, government or administration;

(c) subject to section 5 (3), purchase or otherwise acquire or
possess, hire, alienate, let, pledge or otherwise encumber movable and, with the
approval of the Minister, gr anted with the concurrence of the Minister of Finance,
also immovable property;

(d) with the approval of th e Minister, granted with the
concurrence of the Minister of Finance, raise money by way of loans from any
source, on such terms and conditions and against such security as may be
agreed upon;

(e) generally, do everything which is necessary to achieve its
object.

(3) In addition to its other functions in terms of this Act the Foundation
must-

(a) undertake or procure the undertaking of such investigations
and research relating to its object as the Minister may assign to it;

(b) advise the Minister and, if so required, the Minister of
Education through the Minist er, in regard to research relating to its object.

(4) The Foundation may not itself c onduct research other than research
regarding the efficient and effective execut ion of its functions referred to in
subsection (1).

(1) The Minister may by notice in the Gazette determine a research
facility as a national facility under the control of the Foundation.

(2) Any researcher or research instit ution may, subject to such conditions
as the Foundation may determine, apply to utilise a national facility for research
or instruction.

(3) The Foundation may not acquire, or manage the operation of, any
research facility other than a national fa cility placed under the control of the
Foundation under subsection (1).

(1) The Foundation acts through a board consisting of-

(a) subject to subsection (2)-

(i) a chairperson, appointed by the Minister;

(ii) not fewer than nine but not more than eleven other
members, appointed by the Minister, after consultation with the Minister of
Education; and

(b) the president, by virt ue of his or her office.

(2) (a) For the purposes of appointi ng the members of the Board referred
to in subsection (1) (a), the Minister must appoint a panel which must compile a
shortlist of candidates of no more than 20 names.

(b) The panel must compile the shor tlist after following a transparent and
competitive nomination process.

(c) The members of the Board referr ed to in subsection (1) (a) must be
appointed by the Minister after consultati on with the relevant committees of the
National Assembly and the National Counc il of Provinces and after consideration
of the shortlist of candidates.

(3) The members of the Board mu st all be persons who have achieved
distinction in the field of research and technology, research and technology
management, business, public affairs or civil society.

(4) The members referred to in subsection (1) (a) are appointed in their
personal capacities, but the Minister must ensure that they are broadly
representative of the following sectors:

(a) Tertiary education;

(b) business;

(c) agricultural and environmental sciences;

(d) health sciences;

(e) natural sciences and engineering;

(f) social sciences and humanities;

(g) civil society.

(5) The Board must be reconstituted every three years in accordance with
the process referred to in subsection (2).

(6) A member of the Board must vacate his or her office if-

(a) he or she resigns;

(b) the Minister terminates hi s or her period of office whenever
sufficient reason exists therefor;

(c) he or she is absent from th ree consecutive meetings of the
Board without the permission of the chairperson;

(d) he or she is in terms of the Electoral Act, 1993 (Act 202 of
1993), nominated as a candidate for election as a member of Parliament or a
provincial legislature.

(7) (a) Subject to subs ections (3) and (4), the Minister may appoint any
person to fill a vacancy which occurs with regard to a member appointed by him
or her.

(b) A person appointed under paragraph (a) must occupy his or her office
for the unexpired portion of the term of of fice of his or her predecessor.

(8) A member of the Board, other t han the president or a person who is in
the full-time employment of the State, must be appointed on such conditions of
service and must receive such remuneration or allowances, or remuneration and
allowances, as the Minister may, with the concurrence of the Minister of Finance,
determine.

(1) The chairperson or, in his or her absence, a member of the Board
elected by the members present, must pr eside at a meeting of the Board.

(2) The Board meets at the times and places determined by itself.
However, the first meeting of the B oard must be held at a time and place
determined by the chairperson.

(3) The chairperson may at any ti me convene a special meeting of the
Board, and he or she must determine t he time and place of the meeting.

(4) The quorum for a meeting of the Board is the majority of its members.

(5) A decision of the Board must be tak en by resolution of the majority of
the members present at any meeting of the Board, and, in the event of an
equality of votes, the person presiding has a casting vote in addition to his or her
deliberative vote.

(6) Subject to the approval of the chairperson, any person may attend or
take part, but may not vote, in a meeting of the Board.

(1) The Board may nominate one or more committees which may, subject
to the instructions of the Board, perfo rm those functions of the Board which the
Board may determine.

(2) A committee must consist of su ch number of members of the Board
and of the staff of the Foundation (if any) as the B oard may consider necessary,
and the Board may at any time dissolv e or reconstitute the committee.

(3) If a committee consists of more than one member, the Board must
designate a member of that comm ittee as chairperson thereof.

(4) The Board is not absolved fr om the performance of any function
entrusted to any committee in terms of this section.

(1) The executive management committ ee of the Foundation must consist
of-

(a) the president, as chairperson;

(b) the heads of the divisions; and, if necessary,

(c) any other member of t he staff of the Foundation appointed
by the president.

(2) The executive management co mmittee is responsible for the
management of the affairs of the Foundation in accordance with the object, policy
and instructions of the Board.

(1) The Board must appoint a chief executive officer for the Foundation,
who will also be the president of the F oundation. The appointment must be made
after following a transparent and co mpetitive nomination process.

(2) The president must report to the Board on those affairs which the
Board may require.

(3) The president must be appointed or reappointed for such period, but
not exceeding five years, and subject to such conditions, including conditions
relating to the payment of remunerati on and allowances, as the Board may,
subject to section 13 (2), determine.

(4) (a) Whenever the president is abs ent or unable to carry out his or her
duties, or whenever there is a vacancy in the office of the president, the Board
may appoint any person in the service of the Foundation to act as president.

(b) The acting president has all the powers and performs all the duties of
the president.

(1) The president is the accounting officer responsible for the accounting
of all money received by the Foundation, the utilisation thereof and the property
of the Foundation.

(2) (a) The accounting officer may-

(i) delegate to an employee of the Foundation a power
conferred upon the accounting officer by or under this Act; or

(ii) authorise such employee to perform a duty assigned by or
under this Act to the accounting officer.

(b) Any delegation or authorisation under paragraph (a) does not prohibit
the exercise of the power in question or the performance of the duty in question
by the accounting officer himself or herself.

The Board may, after consultation with the Minister, establish or
disestablish organisational divisions for di fferent research fields. However, as
soon as possible after the commencement of this Act there must at least be
established separate divisions for-

(a) the natural sciences and engineering;

(b) the social sciences and humanities;

(c) the health sciences;

(d) the agricultural and environmental sciences; and

(e) national facilities.

(1) Subject to subsection (2)-

(a) the president may on such conditions as the Board may
determine appoint such employees, or receive on secondment such persons, as
are necessary to enable the Foundati on to perform its functions, but

(b) the Board must on such conditions as it may determine
appoint, or receive on secondment, a head for each division.

(2) The Foundation must pay to it s staff out of its funds such
remuneration, allowances, subsidies and other benefits as the Board may
determine in accordance with a system approv ed for that purpose by the Minister
with the concurrence of the Minister of Finance.

(3) (a) The Board may with the consent of an employee on such
conditions as the Board may determine second the employee either for a
particular service or for a period of time to the service of a department of State,
the government of any province, territory or country, or a person in or outside the
Republic.

(b) That employee’s rights, privileges and benefits by virtue of his or her
conditions of service as an employee of the Foundation may not be adversely
affected by the secondment.

The Foundation may on such conditions and against such security as it
may consider fit-

(a) provide collateral security, including guarantees, to a
registered financial institution in respect of a loan granted to an employee by that
financial institution, to enable that employee to acqu ire or improve immovable
property for residential purpose;

(b) establish or institute bursary schemes for purposes of study
or other similar undertakings or schemes which in its opinion may be beneficial to
its employees;

(c) provide money to an employee to enable him or her to
become a member of a pension fund approved by the Board or to have a break
in service on account of approved leave without full pay reckoned as pensionable
service.

(1) The Foundation-

(a) must for purposes of t he Associated Institutions Pension
Fund Act, 1963 (Act 41 of 1963), be regarded as being an associated institution,
but

(b) may, under the Pension Funds Act, 1956 (Act 24 of 1956),
establish any other pension fund for its employees.

(2) The amount a person in the serv ice of the Foundation is entitled to
receive from a pension fund contemplated in subsection (1) (b) on the date on
which he or she becomes a member t hereof, may not be less than the amount
which he or she was entitled to receive as a member of any pension fund of the
Foundation immediately before jo ining the new pension fund.

(3) For the purposes of this sectio n and of item 1 and, unless the context
otherwise indicates, item 2 of the Schedule to this Act ‘pension fund’ means any
pension or provident fund or scheme est ablished in terms of any pension law.

The Schedule to this Act applies to all employees of the FRD and of the
Centre for Science Development of the HSRC transferred to the Foundation as
contemplated in that Schedule.

(1) The funds of the Foundation consist of-

(a) money appropriated by Parliament;

(b) money paid to the Foundat ion by users of the national
facilities and of products of national facilities;

(c) donations or contributions made to the Foundation;

(d) fees paid to the Foundation in terms of subsection (4);

(e) interest on investm ents of the Foundation; and

(f) income derived from any other source.

(2) (a) The Foundation must utilise it s funds to cover costs in connection
with the performance of its functions in terms of this Act.

(b) The Foundation must utilise any money contemplated in subsection (1)
(a) in accordance with the statement re ferred to in subsection (3) (a).

(c) The Foundation must utilise any donations or contributions
contemplated in subsection (1) (c) in accordance with the conditions imposed by
the donor or contributor in question.

(3) (a) The Foundation mu st in each financial year, at a time determined
by the Minister, submit a statement of the Foundation’s estimated income and
expenditure projected over the following three financia l years to the Minister for
his or her approval, granted with the concu rrence of the Minister of Finance.

(b) The Foundation may in any financial year submit supplementary
statements of the Foundation’s estimated expenditure for that financial year, to
the Minister for approval, grant ed with the concurrence of the Minister of Finance.

(c) The Foundation may not enter into any financial commitment beyond
its approved budget and its accumulated reserves.

(4) The Foundation may, in respect of any work completed or service
rendered by it under this Act, or for the use of rights consequent upon any
discoveries, inventions or improvements, charge such fees or make such other
financial arrangements as it may deem fit. However, the Foundation must
recover the full cost of the use of its facilit ies in respect of such work or service.

(5) The Foundation may invest any unexpended portion of its funds with
the Corporation for Public Deposits or, with the approval of the Minister, granted
with the concurrence of the Minister of Finance, dispose thereof in any other
manner.

(6) The Foundation may establish such reserve funds, and deposit therein
such amounts, as the Mini ster may with the concurrence of the Minister of
Finance approve.

(1) The Auditor-General must audit the financial statements of the
Foundation.

(2) The Foundation must-

(a) furnish to the Minister t he information which he or she may
require in connection with the activities and financial position of the Foundation;
and

(b) submit to the Minister an annual report containing a balance
sheet, a statement of inco me and expenditure certified by the Auditor-General
and such other particulars as the Minister may require.

(3) The Minister must table the annual report in Parliament within 14 days
after the receipt thereof if Parliament is then in ordinary session or, if Parliament
is not then in ordinary session, within 14 days after the commencement of its
following ordinary session.

(1) The rights in respect of any inv ention, discovery or improvement by a
person in the course of studies or re search in respect of which he or she
received any financial support from t he Foundation, must be determined by
agreement between the Foundati on and that person or his or her employer, or
both that person and the employer.

(2) The Foundation must, with regard to studies or research supported by
the Foundation-

(a) acknowledge any invention, discovery or improvement in
respect of indigenous knowledge and te chnology held by any person or
community; and

(b) protect any rights of that person or community arising from
the invention, discovery or improvement.

(1) The accounting officer must dete rmine the amount of loss or damage if
a person who is or was in the servic e of the Foundation caused the Foundation
any loss or damage bec ause that person-

(a) failed to collect money due to the Foundation for the
collection of which he or she is or was responsible;

(b) is or was responsible for an irregular payment of money of
the Foundation or for a payment of such money not supported by a proper
voucher;

(c) is or was responsible for fruitless expenditure of money of
the Foundation owing to failure to carry out his or her duties;

(d) is or was responsible for a deficiency in, or the destruction
of, or any damage to, the Foundation’s m oney, stamps, face value documents
and forms having a potential value, secu rities, equipment, stores or any other
property of the Foundation;

(e) is or was responsible for a claim against the Foundation
owing to failure to carry out his or her duties.

(2) The accounting officer may-

(a) enter into an agreement with the person who caused the
loss or damage for the repaym ent to the Foundation of the whole or any part of
the amount determined in terms of subsection (1); or

(b) by notice in writing order the person who caused the loss or
damage to pay to the Foundation, within 30 days from the date of the notice, the
whole or any part of the amount determi ned in terms of subsection (1).

(3) If a person fails to pay in accordance with the agreement contemplated
in subsection (2) (a) or to comply wit h a notice contemplated in subsection (2)
(b), the Foundation may recover the amount by legal process.

(1) The Board may-

(a) delegate to the chairpers on, the president or any other
member of the staff of the Foundation any power conf erred upon the Board by or
under this Act, on such conditions as the Board may determine; or

(b) authorise the chairperson, the president or such other
member of the staff to per form any duty assigned to the Board by or under this
Act.

(2) The president may-

(a) delegate to a member of the staff of the Foundation any
power conferred upon the president by or under this Act; or

(b) authorise such member of the staff to perform any duty
assigned to the president by or under this Act.

(3) Any delegation or authorisation under subsection (1) or (2) does not
prohibit the exercise of the power or per formance of the duty in question by the
Board or the president, as the case may be.

(1) The Board must within 180 days after its first meeting complete the
structural organisation of the Foundation in accordance with the operational
requirements of the Foundation.

(2) The structural organisation and any subsequent reorganisation must
be carried out in accordance with section 189 and any other applicable
provisions of the Labour Relati ons Act, 1995 (Act 66 of 1995).

The Minister may, after consultati on with the Board, make regulations
regarding-

(a) the filling of casual vacancies on the Board and the
appointment of persons to act for absent members;

(b) the procedure at m eetings of the Board;

(c) the method and frequency of reports on Board meetings to
be submitted to the Minister; and

(d) in general, any matter in respect of which the Minister deems
it necessary or expedient to make regulatio ns in order to achieve the objects of
this Act.

(1) The Research Development Act, 1990 (Act 75 of 1990), is hereby
repealed.

(2) Anything done under the Act referred to in subsection (1) must be
regarded as having been done under the co rresponding provision of this Act.

This Act is called the National Research Foundation Act, 1998, and takes

effect on a date fixed by the President of the Republic by proclamation in the
Gazette.

Schedule
TRANSITIONAL PROVISIONS

1 Staff of FRD and of Centre for Science Development

(1) (a) Every person who was in the service of the FRD and the Centr
e
For Science Development of the HSRC immediately before the commencement
of this Act and who was then engaged in fu nctions now vested in the Foundation
must, as from the commencement, be transferred to the service of the
Foundation.

(b) Every person so transferred mu st be regarded as being appointed in
terms of section 13 (1).

(2) If, for the purposes of this item, the question arises whether any person
was engaged in functions now vested in the Foundation, that question must be
decided by the Minister or, if that person feels aggrieved by the decision, in terms
of the Arbitration Act, 1965 (Act 42 of 1965).

(3) The remuneration and other terms and conditions of service of any
person transferred as contemplated in s ubitem (1) may not be less favourable
than the remuneration, terms and c onditions applicable to that person
immediately before the comm encement of this Act and he or she remains entitled
to all rights, benefits and privileges to wh ich he or she was entitled immediately
before that date, including-

(a) membership of a pension fund;

(b) membership of a medical aid scheme;

(c) employer contributions in connection with such membership;

(d) accrued pensionable service;

(e) accrued leave benefits; and

(f) retirement at a specific age.

(4) (a) Every person transferred as contemplated in subitem (1) remains
subject to any decisions, proceedings, rulings and directions applicable to that
person immediately before the commencement of this Act.

(b) Any proceedings against such a person which were instituted
immediately before the commenc ement of this Act, must be disposed of as if this
Act had not been enacted.

(5) (a) The person who was president of the FRD immediately before the
commencement of this Act must be transferred to the service of the Foundation
as the interim president of the Foundati on until a president is appointed in terms
of section 10 (1).

(b) Subitem (4) is also applicable to the interim president with the changes
required by the context.

2 Pension matters

(1) Any person transferred to the serv ice of the Foundation in terms of
item 1 (1) who is a member of the Human Sciences Research Council Pension
Fund, must before a date determined by the Board after consultation with the
HSRC, in writing exercise an option to-

(a) remain a member of t hat fund, and from the date of
exercising the option that person mu st, notwithstanding any other law, be
regarded as being a dormant member of that pension fund and become a
member of any existing pensi on fund of the Foundation; or

(b) become a member of any pension fund established under
section 15.

(2) In the case where a person elec ts under subitem (1) (b) to become a
member of a pension fund established under section 15, and his or her pension
benefits are transferred to any pens ion fund of the Foundation-

(a) that person’s membership of the pension fund from which his
or her benefits are transfe rred terminates and he or she has no further claim
against that pension fund;

(b) the pension fund from wh ich the person’s benefits are
transferred must pay to the pension fund of which he or she becomes a member,
an amount equal to the full actuarial liability of that fund in respect of that person
as on the date of the transfer, plus intere st calculated at the bank rate from the
date of the transfer to the date of payment thereof;

(c) the pension fund from wh ich the person’s benefits are
transferred must cede any claim which it may have against the person to the
pension fund of which he or she becomes a member.

(3) For the purposes of this item-

(a) the actuarial liability of a pension fund in respect of a specific
member or group of member s of the fund, means the actuarial liability, as
determined by an actuary instructed by the HSRC, with regard to the said
member or group of members of the fund; and

(b) bank rate means the rate determined under section 10 (2) of
the South African Reserve Bank Act, 1989 (Act 90 of 1989).

(4) For the purposes of the Inco me Tax Act, 1962 (Act 58 of 1962), no
change of employer must be regarded as having taken place when employment
is taken up at the Foundation by persons in terms of item 1 (1) and (5), and the
position of those persons in respect of the phasing-in of tax levied on benefits or
advantages derived by reason of employment or the holding of any office as
contemplated in Schedule 7 to the Income Tax Act, 1962, must be regarded as
remaining unchanged.

3 Passing of certain assets and liabilities to Foundation

(1) All assets, rights, liabilities and obligations which, immediately prior to
the commencement of this Act vest in t he FRD, and all assets, rights, liabilities
and obligations which, in the opinion of t he Minister after consultation with the
HSRC, immediately prior to the commencement of this Act vest in the Centre for
Science Development of the HSRC, or to which the FRD or the said Centre are
then subject in connection with functions which after the said commencement are
entrusted to the Foundation, pass to the Foundation.

(2) Upon the coming into force of this Act, the HSRC must pay to the
Foundation the net current value of all accumulated leave standing to the credit
of each person who was in the service of the Centre for Science Development of
the HSRC immediately bef ore the commencement of this Act and who is
transferred to the service of the Foundation in terms of item 1 (1).

(3) The registrar of deeds must make the necessary entries or
endorsements for the transfer of any property in terms of subitem (1), and no
office fee or other charge is payable in respect of that entry or endorsement.

(4) Any reference to the FRD in any other Act must be interpreted as a
reference to the Foundation established by this Act.