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Intellectual Property Rights from Publicly Financed Research and Development Act, 2008 (Act No. 51 of 2008), South Africa

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Details Details Year of Version 2008 Dates Commenced: August 2, 2010 Published: December 22, 2008 Assented: December 17, 2008 Type of Text IP-related Laws Subject Matter Patents (Inventions), Transfer of Technology, IP Regulatory Body Notes The Intellectual Property Rights from Publicly Financed Research and Development Act 2008 regulates the ownership and exploitation of intellectual property rights which flow from publicly financed research and development.

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Main text(s) Main text(s) English Intellectual Property Rights from Publicly Financed Research and Development Act, 2008 (Act No. 51 of 2008)        
 Intellectual Property Rights from Publicly Financed Research and Development Act 51 of 2008

Government Gazette

REPUBLIC OF SOUTH AFRICA

Vol. 522 Cape Town 22 December 2008 No. 31745

THE PRESIDENCY No. 1402 22 December 2008

It is hereby notified that the President has assented to the following Act, which is hereby published for general information:–

No. 51 of 2008: Intellectual Property Rights from Publicly Financed Research and Development Act, 2008.

AIDS HELPLINE: 0800-123-22 Prevention is the cure

2 No. 31745 GOVERNMENT (fAZETTE. 22 DECEMBER 2008

Ad No. 51, 2008 l~lELLECTlIAL PROPERI\, RIGIITS FROM PUBLICLY FINANCED RESEARCH AND DEVELOPMENf ACT, 2008

(English text signed by the President.) (Assented to 17 December 2008.)

ACT To provide for more effective utilisation of intellectual property emanating from publicly financed research and development; to establish the National Intellectual Property Management Office and the Intellectual Property .'und; to provide for the establishment ofoffices of technology transfer at in...titutions; and to provide for matters connected therewith.

BElT ENACTED hy the Parliament of the Republic of South Africa, as follows:­

Definitions

1. In this Act, unless the context indicates otherwise­ "BBBEE" means broad-hased black economic empowerment as defined in 5 section 1 of the Broad-Based Black Economic EmpowemlCnt Act, 2003 (Act No. 53 of 2003); "commercialisation" means the process by which any intellectual property emanating from publicly financed research and development is or may be adapted or used for any purpose that may provide any benefit to society or commercial use 10 on reasonahle term'>, and "commercialise" shall have a corresponding meaning; "Department" means the Department of Science and Technology; "disclosure" means the provision of full details of potential intellectual property contemplated in section 5 of this Act; "funding agency" means the State or an orgcill of state or a state agency that funds 15 research and deve]opnlCnt; "institution" meflllS­ (a) any higher education institution contemplated in the definition of "higher

education institution" contained in section I of the Higher Education Act, 1997 (Act No. lOt of (997); 20

(b) any statutory institution listed in Schedule 1; and (e) any institution identified as such by the Minister under section 3(2); "intellectual property" means any creation of the mind that is capable of being protected by law from use by any other person, whether in lerm; of South African law or foreign intellectual property law, and includes any rights in such creation, 25 but excludes copyrighted works such all a thesis, dissertation, article, handbook or any other puhlkation which, in the ordinary course or business, is associated with conventional academic work;

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4 No. 31745 OOVERNMENT GAZETrn. 22 DECEMBER 2008

Ad No. SI, 2008 INTELLECTUAL PROPERTY RJUHTS AWM Pl l l3LICLY F1:-.1ANCPJ) RESEARCH AND DEVELOPMENT Aer. 2008

"intellectual property creator" means the person involved in the conception of intellectual property in temlS of this Act and identifiahle as such for the purposes of ohtaining statutory protection and enforcement of intellectual property rights. where applicahle; "intellectual property transaction" means any agreement in respect of intellec­ tua! property emanating from publicly financed research and development, and includes licensing, assignment and any arrangement in which the intellectual property rights governed by this Act are transferred to a third party; "Minister" means the Minister responsihle for the Department; "Nett revenues" means the revenue less the expenses incurred for intellectual property protection and commercialisation of the intellectual property, as may be prescrihed; "NIPMO" means the National Intellectual Property Management OOice estab­ lished by section 8; "otf..,hore" means out..<;ide the l)orders of the Republic; "prescribed" means prescribed hy regulation; "publicly financed research and development" means research and develop­ ment undertaken using any funds allocated by a funding agency but excludes funds allocated for scholarships and bursaries; "recipient" means any person, juristic or non-juristic, that undertakes research and development using funding from a funding agency and includes ,m institution; "regulation" means any regulation made in terms of section 17 of this Act; "revenue" means all income and henefits, including non-monetary benefits, emanating from intellectual property transactions, and includes all actual, non-refundable royalties, other grant of rights and other payments made to the institution or any other entity owned wholly or in part by an institution as a consideration in respect of an intellectual property transaction, but excludes a donation and "gross revenues" shall have a corresponding meaning; "small enterprise" means a small enterprise as defined in section 1of the National Small Enterprise Act, 1996 (Act No. 102 of 1996); "this Act" includes the regulations made in terms of this Act.

Object"! of Act

2. (1) The ohject of this Act is to make provision that intellectual property emanating from puhlicly financed research and development is identified, protected, utilised and commercialised for the benefit of the people of the Republic, whether it be for a social, economic, military or any other benefIt.

(2) This Act furthermore seeks to ensure that­ (a) a recipient of funding from a funding agency assesses, record" and reports on

the benefit for society of publicly financed research [md development; (b) a recipient protects intellectual property emanating from publicly financed

research and development from appropriation and ensures that it is available to the people of the Republic;

(c) a recipient identities commercialisation opportunities for intellectual property emanating from publicly financed research and development;

(d) human ingenuity and creativity are acknowledged and rewarded; (e) the people of the Repuhlic, partil.:ularl y small enterprises and BBBEE entities,

have preferential access to opportunities arising from the production of knowledge from publicly financed research and development and the attendant intellectual property;

(j} following the evaluation of a disclosure, researchers may publish their research findings for the puhlic good; and

6 No. 31745 GOVERNMENT GA:lETTE, 22 DECEMBER 2008

Act No. 51, 2008 INTFLLECTtTAL PROPERTY RIG EITS fROM PUBf.K'LY FINANCED RESEARCH AND DEVELOPMENT ACT, 2008

(g) where necessary, the State may use the results of publicly financed research and development and the attendant intellectual property in the interest of Ihe people of the Republic.

Application of Ad

3. (I) This Act applies to intellectual property emanating from publicly financed 5 research and development.

(2) (a) Subject to paragraph (b), the Minister may, in addition to the institutions to which this Act applies, by notice in the Gazettf', identify any other institution to which this Act applies if he or she is satisl1ed that the institution may develop intellectual property from publicly financed research and development. 10

(b) Any identification contemplated in pamgmph (a) must be done with the concurrence of the Minister responsible for the institution concerned.

Choice in respect of intelledual property

4. (1) Subject to section 15(2), intellectual property emanating from publicly financed research and development shall be owned by the recipient. 15

(2) A recipient that prefers not to retain ownership in its intellectual property or not to obtain statutory protection for the intellectual property must­

(a) make the choice in accordance with the regulations and any guidelines published by NIPMO by notice in the Gazette; and

(b) within the period set out in section 5(1)(e), notify NIPMO of the decision and 20 the reasons therefor.

(3) NIPMO may, within the prescribed period, after considering the reasons provided by the recipient in terms of subsection (2)(b) 1md any prejudice that may be suffered by the State if no statutory protection for the intellectual property is obtained, acquire ownership in the intellectual property and, where applicable, obtain statutory protection 25 for the intellectual property.

(4) (a) Should NIPMO decide not to acquire ownership in the intellectual property in term'> of subsection (3), NIPMO must, in writing, notify the recipient of its decision.

(b) Subject to the reasons given in terms of suhsection (2)(b), and on notification contemplated in paragraph (a), the recipient must give the intellectual property creator 30 the option to acquire ownership in the intellectual property and to obtain statutory protection for the intellectual property, provided thal in the case where a private entity or organisation had provided some funding, such private entity or organisation shall suhject to section 10 first be offered such option before the intellectual property creator.

Management obligations and disclosure duties 35

5. (1) A recipient must­ (a) put in place mechanisms for the identification, protection, development,

management of intellectual property, intellectual property transactions and, where applicable, the commercialisation of intellectual property and appro­ priate capacity-building relating thereto; 40

(b) provide effective and practical measures and procedures for the disclosure of intellectual property and ensure that intellectual property emanating from any puhlicly tinanced research and development is appropriately protected before results of such research and development are puhlished or publicly disclosed hy other means; 45

(e) ensure that personnel involved with the research and development make a disclosure to it within 90 days or such longer period as may be prescribed, of identification hy such personnel of possible intellectual property and before the intellectual property is made public;

(d) assess the intellectual property to determine whether it merits statutory 50 protection and, where appropriate, apply for and use hest efforts to obtain statutory protection in its name;

8 No,31745 GOVERNMEl'T GAZE'ITE, 22 DECEMBER 2008

Ad No. 5t, 2008 INTELLECTUAL PROPERTY RIGIITS FROM PUBJ.ICI.Y FINANCED RESEARCH AND DEVELOPMENT ACr, 2008

(e) refer disclosures for which it elects not to retain ownership or not to obtain statutory protection to NIPMO within 30 days or such longer period as may be prescribed, of it making such an election;

(j) in the case of an institution, manage revenues due to it from intellectual property transactions and the commercialisation thereof, including managing the benefit-sharing arrangements with intellectual property creators at the institution;

(g) negotiate and enter into intellectual property transactions with third parties on intellectual property belonging to the recipient;

(h) report to NlPMO twice a year and as provided for in this Act, on all matters pertaining to the intelle(;tual property contemplated in this Act, including all intellectual property from which it elects to obtain statutory protection and the state of commercialisation thereof, in a manner stipulated by NIPMO;

(i) provide NIPMO with full reasons in respect of any intellectual properly that is not commercialised; and

UJ in respect of an institution, put in place mechanisms to annually a'lsess, record and report to NIPMO on the benefits for society of publicly financed research conducted in thai institution.

Establishment 01' offic:e 01' tec:hnology transl'er at in...titutions

6. (I) Unless determined otherwise by the Minister in consultation with the Minister responsible for higher education, or any other Cabinet minister to which an institution reports, any institution must, within 12 months of the coming into elfect of this Act­

(a) establish and maintain an office of technology transfer; or (b) designate persons or an existing structure within the institution to undertake

the responsibilities of the office of technology transfer, (2) An office of technology transfer is responsible for undertaking the obligations of

the institution in terms of this Act. (3) 1\vo or more institutions may with the concurrence of NIPMO establish a regional

office of technology transfer. (4) (a) NIPMO may, on terms and conditions determined hy it, provide assistance to

institutions for the establishment of offices of technology transfer. (b) The assistanc~ contemplated in paragmph (a) may include­

(0 financial assistance; (ii) co-ordinating the estahlishment of a regional office of technology transfer,

where applicable; and (iii) development of appropriately skilled personnel for the offices of technology

transfer.

Fundions of office of technology transfer

7. (l) The functions of an office of technology transfer must be performed by appropriately qualified personnel whom, when considered collectively, has interdisci­ pUnary knowledge, qualifications and expertise in the identification, protection, management and commercialisation of intelle(;tual property and in intellectual property transactions.

(2) An office of technology transfer mll"t, in respect of publicly linanced research and development­

(a) develop and implement, on behalf of the institution or region, policies for disclosure, identification, protection, development, commercialisation and benefit-sharing arrangements;

(b) receive disclosures of potential intellectual property emanating from puhlicly flnanced research and development;

(c) analyse the disclosures for any commercial potential, the likely success of such commercialisation, the existence and form of the intellectual property rights, the stage of development thereof and the appropriate form for protecting those rights;

(d) attend to all aspects of statutory protection of the intellectual property; (e) refer disclosures to NlPMO on behalf of an institution;

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A('t No. 51, 2008 INTELLECrLlAL PROPERTY RIGHfS FROM PUBLICLY HNANCED RESEARCH AND DEVELOPMENT ACT. 2008

Cf) attend to all aspects of intellectual property transactions and the commercialisation of the intellectual property;

(g) conduct eval uations on the scope of statutory protection of the intellectual property in all geographic territories subject to commercialisation potential of the intellectual property; and

(h) liaise with NIPMO as provided for in this Act.

Establishment of Nationallntelledual Property Management Offiee

8. (1) There is hereby established an office within the Department, called the National Intellectual Property Milllagement Office (NIPMO).

(2) The Minister may, by notice in the Gazette. assign the operation of NI PMO to any public entity whose objects are consistent with NIPMO's functions.

Fundions of NIPMO

9. (1) NIPMO must promote the objects of this Act, which includes the statutory protection, management and commercialisation of the intellectual property referred to it by a recipient in terms of section 4.

(2) NIPMO must ensure that it has the capacity to consider tilly intellectual property referred to it by a recipient in terms of section 4, and to deal with it in accordilllce with this Act.

(3) NIPMO must liaise with the recipients or any other party it deems fit to detennine the viability of­

(a) obtaining statutory protection for the intellectual property referred to it, if it is in the national interest;

(b) concluding any intellectual property transactions; or (c) commercialisation of such intellectual property.

(4) N)PMO must, furthermore­ (a) manage information in respect of intellectual property contemplated in this

Act, including data concerning the recipients; (b) provide incentives to recipients and their intellectual property creators, to

reward them for proactively securing protection for intellectual property illld commercialising it illld, generally, for promoting innovation;

(c) provide assistance to institutions with­ (i) the establishment of offices of technology transfer and related

capacity-building; (ii) intellectual property trilllsactions;

(iii) commercialisation of intellectual property; and (iv) ~illy other matter provided for in this Act;

(d) provide appropriate standards and best practices in consultation with a recipient, without limiting the power of the recipient to act in its own interests in terms of this Act;

(e) develop guidelines for intellectual property transactions involving non-South African entities illld persons, and manage the imr)lementation of such guidelines; and

(j) monitor, evaluate and review the obligations of recipients in terms of this Act. (5) In addition to its other functions, NJPMO may do anything necessary to meet the

objects of this Act and to carry out illlY other function consistent with those objects that may be prescribed.

(6) Any administrative decision of NJPMO that adversely affects a recipient must be dealt with in terms of the Promotion of Administrative Justice Act, 2000 (Act No.3 of 2000).

12 No. 31745 GOVERNMENT GAZEllE. 22 DECEMBER 2008

Act No. 51, 2008 INTELLECfUAL PROPERTY RIGI-US FROM PUBLICLY FINANCED RESEARCH AND DEVELOPMENT ACf, 2008

Rights of intellectual property creators in institutions to benefit-sharing

10. (1) Intellectual property creators at llil institution and their heirs are granted a specific right to a portion of the revenues that accrue to the institution from their intellectual property in term'> of this Act until such right expires.

(2) Intellectual property creators at an institution and their heirs are entitled to the 5 following benefit-sharing:

((I) at least 20 per cent of the revenues accruing to the institution from such intellectual property for the first one million rllild of revenues, or such higher amount as the Minister may prescribe; and

(b) thereafter, at least 30 per cent of the nett revenues accruing to the institution 10 from such intellectual property.

(3) The benefits contemplated in subsection (2) must be shared in equal proportions between the qualifying intellectual property creators or their heirs unless otherwise agreed between those creators and the recipient or determined in accordance with institutional policies. 15

(4) The benefits to intellectual property creators and their heirs contemplated in subsection (2)(a) must be a first calIon the applicable revenue ahead of any institutional distribution.

(5) The recipient may distribute the balance of the revenues generated by intellectual property as it deems fit, but must apportion part of it for funding, among other things- 20

(a) more research and development; (b) the operations of the office of technology transfer; and (c) statutory protection of intellectual property.

(6) (a) This section prevails over a provision of a law mentioned in the second column of Schedule 1 existing at the commencement of this Act to the extent that it is 25 inconsistent with such a provision.

(b) Despite paragraph (a), any arrangement relating to benefit-sharing that existed at the commencement of this Act by virtue of a provision contemplated in that paragraph continues in terms of that provision as if this section had not been enacted.

Conditions for intellectual property transaction.. 30

11. (1) The recipient determines the nature and conditions of intellectual property transactions relating to any intellectual property held by it, but must take into account the following:

(a) Preference must be given to non-exclusive licensing; (b) preference must be given to BBBEE entities llild small enterprises; 35 (c) preference must be given to parties that seek to use the intellectual property in

ways that provide optimal bene11ts to the economy llild quality of life of the people of the Republic;

(d) exclusive licence holders must undertake, where feasible, to mllilufacture. process and otherwise commercialise within the Republic; 40

(e) each intellectual property trllilsaction must provide the State with an irrevocable and royalty-free licence authorising the State to use or have the intellectual property used throughout the world for the health, security and emergency needs of the Republic;

(j) if a holder of an exclusive licence is unable to continue with the 45 commercialisation of the intellectual property within the Repuhlic during the duration of the licence and the recipient wishes to retain the exclusive licence, the recipient must furnish NIPMO with full reasons for retaining exclusivity;

(g) a recipient must supply the reasons contemplated in paragraph (/) within 30 days of it becoming aware that the holder of the licence is unable to continue 50 commercialising the intellectual property, or such extended time as may be agreed upon with NIPMO; and

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14 No. 31745 GOVERN'MENT GAZE1TE, 22 DECEMBER 2008

Act No. 51, 2008 INTELLEC11JAL PROPERTY RIGHfS FROM PUBLICLY FINANCED RESEARCH AND DEVELOPMENT ACf. 2008

(h) NIPMO may request that the exclusive licence contemplated in paragraph (j) be converted to a non-exclusive licence if a recipient fails to furnish the reasons within the period contemplated in paragraph (g), or if NIPMO is not satisfied with such reasons.

(2) Each intellectual property transaction must contain a condition to the effect that, should a party fail to commercialise the intellectual property to the benefit of the people of the Republic, the State is entitled to exercise the rights contemplated in section 14.

(3) (a) Each intellectual property transaction involving assignment of intellectual property by an institution to a small enterprise in return for shareholding as a consideration must contain a condition providing that in the event of the liquidation of that small enterprise, the intellectual property shall revert to the institution.

(b) The Minister may prescribe the terms and conditions for other intellectual property transactions involving assignment of intellectual property by a recipient.

Restrictions on offshore intellectual property transactions

12. (1) Offshore intellectual property transactions are subject to the following conditions:

(a) A recipient must advise NIPMO of its intention to conclude an intellectual property transaction offshore;

(b) subject to paragraph (c), offshore intellectual property transactions may occur only in accordance with prescribed regulations and any guidelines contem­ plated in section 9(4)(e); and

(c) any intellectual property transaction which does not comply with the regulations and guidelines requires prior approval of NIPMO.

(2) A recipient wishing to undertake an intellectual property transaction offshore in the form of an assignment or exclusive licence must satisfy NIPMO that­

(a) there is insufficient capacity in the Republic to develop or commercialise the intellectual property locally; and

(b) the Republic will benefit from such offshore transaction.

Intellectual Property Fund

13. (1) There is hereby established an Intellectual Property Fund to be managed by NIPMO.

(2) The purpose of the Intellectual Property Fund is to-­ (a) provide financial support to institutions for the statutory protection and

maintenance of intellectual property rights, subject to subsection (3); (b) finance any costs incurred by NIPMO for obtaining statutory protection of the

intellectual property; and (c) finance any costs incurred by NIPMO when acting in terms of section 14.

(3) An institution may recover the costs incurred in obtaining statutory protection for the intellectual property contemplated in this Act from the Intellectual Property Fund­

(a) to the extent determined by NIPMO; and (b) on such terms as may be determined by NIPMO.

Acquisition of intellectual property rights by State

14. (1) The rights acquired by the State in terms of this section are additional to the rights granted to the State in terms of any other legislation in the Republic.

(2) NIPMO must conduct reviews of non-commercialised intellectual property in consultation with the recipients.

(3) If a review contemplated in subsection (2) shows that the intellectual property in question can be commercialised, NIPMO must engage in further consultations

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16 No. 31745 GOVER..~MENT GAZETfE, 22 DECEMBER 2008

Act No. 51, 2008 INTELLECfUAL PROPERTY RIGHTS FROM PUBLICLY HNANCED RESEARCH AND DEVELOPMENT ACT, 2008

with the recipient in an endeavour to ensure that the intellectual property is commercialised.

(4) NIPMO may require a recipient to grant a licence in any field of use to any person on reasonable terms if, after the consultations contemplated in subsection (3)­

(a) the intellectual property is still not being commercialised; or (b) no agreement can be reached with the recipient.

(5) NIPMO may, on behalf of the State, demand the assignment of rights to any intellectual property if a recipient fails to make a disclosure to NIPMO as provided for in this Act.

Co-operation between private entities or organisations and institutions

15. (1) A private entity or organisation may become an exclusive licensee of intellectual property emanating from publicly financed research and development undertaken at an institution if such private entity or organisation has the capacity to manage and commercialise the intellectual property in a manner that benefits the Republic.

(2) Any private entity or organisation may become a co-owner of the intellectual property emanating from publicly financed research and development undertaken at an institution if ­

(aJ there has been a contribution of resources, which may include relevant background intellectual property by the private entity or organisation;

(b) there is joint intellectual property creatorship; (c) appropriate arrangements are made for benefit-sharing for intellectual

property creators at the institution; and (d) the institution and the private entity or organisation conclude an agreement for

the commercialisation of the intellectual property. (3) Should the private entity or organisation mentioned in subsection (1) or (2) not

commercialise the intellectual property, the provisions of section 14 of this Act shall apply with the changes required by the context.

(4) (a) Any research and development undertaken at an institution and funded by a private entity or organisation on a full cost basis shall not be deemed to be publicly financed research and development and the provisions of this Act shall not apply thereto.

(b) For the purposes of paragraph (a) "full cost" means the full cost of undertaking research and development as determined in accordance with international financial reporting standards, and includes all applicable direct and indirect cost as may be prescribed.

(5) For the purposes of this section, private entity or organisation includes a private sector company, a public entity, an international research organisation, an educational institution or an international funding or donor organisation.

Confidentiality

16. Employees of NIPMO and the offices of technology transfer may not disclose any information in regard to any matter which may come to their knowledge in terms of this Act, or any work arising from the implementation of this Act, or by virtue of the office held by them to any person, except­

(a) in so far as the provisions of the Constitution of the Republic of South Africa, 1996, the Promotion of Access to Information Act, 2000 (Act No.2 of 2000), and this Act require or provide for the publication ofor access by the public or any interested person to information relating to such matter;

(b) in so far as it may be necessary for the effective governance and management of NIPMO or the offices of technology transfer, or for the purpose of due and proper performance of any function in terms of this Act; or

(c) upon an order of a competent court.

IS No. 31745 GOVERNMENT GAZETTE. 22 DECEMBER 200S

Act No. 51, 2008 INTELLECIUAL PROPERTY RIGI-ITS FROM PUBLICLY FINANCED RESEARCH AND DEVELOPMENT ACT. 200S

Regulation..

17. The Minister may make regulations regarding­ (a) any matter that mayor must be prescribed in tenus of this Act; and (b) any ancillary or incidental administrative or procedural matter that it is

necessary to prescribe for the proper implementation or administration of this 5 Act.

Short title and commencement

18. This Act is called the Intellectual Property Rights from Publicly Financed Research and Development Act, 2008, and takes effect on a date determined by the President by proclamation in the Gazelle. 10

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Act No. 51, 2008 INTELLECTUAL PROPERTY RIGHTS FROM PUBLICLY FINANCED RESEARCH AND DEVELOPMENT ACT. 2008

SCHEDULEl

(Section 1: Paragraph (b) ofdefinition of "institution ")

Institution Founding law HUll ~ Sciences Research Act, 1968 (Act No. 23 of Council

~ Research Act, 1971 (Act No. 34 of 1971)Water Research Commission Council for Scientific and Scientific Research Council Act, 1988 (Act No. 46 of Industrial Research 1988) Council for Mineral Mineral Technology Act, 1989 (Act No. 30 of 1989) Technology Agricultural Research Agricultural Research Act, 1990 (Act No. 86 of 1990) Council South African Medical South African Medical Research Council Act, 1991 (Act Research Council No. 58 of 1991) South African Bureau of Standards Act, 1993 (Act No. 29 of 1993) Standards Council for Geoscience Geoscience Act, 1993 (Act No. 100 of 1993) National Research National Research Foundation Act, 1998 (Act No. 23 of Foundation 1998) South African Nuclear Nuclear Energy Act, 1999 (Act No. 46 of 1999) Energy Corporation, Limited

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