SOUTH AFRICA Law and Practice Contributed by: Professor Michael Katz, Matthew Morrison, Madison Liebmann and Sinovuyo Damane, ENS
8.4 Key Disclosure Requirements for AI Use There are currently no mandatory disclosure require - ments relating to AI in South Africa and accordingly, any disclosure requirements in relation to AI arise out of companies’ existing frameworks for disclosures in relation to risks, strategy, governance and the volun - tary adherence to the King V principles relating to AI.
content sufficiently to infringe third-party intellectual property rights. Organisations face risks of exposing confidential information through insecure AI systems. Where AI systems are linked to the processing of per - sonal information, organisations face additional liabili - ty for breaching the Protection of Personal Information Act, No C4 of 2013 (POPIA). Enforcement Third parties who have suffered loss from AI govern - ance failures may take action against the company. To the extent directors have breached their fiduci - ary duties in the context of AI usage, they may be held liable to the company through Section 77 of the Companies Act. Although fiduciary duties are owed by directors to the company and not to individual shareholders, Section 165 extends legal standing to shareholders, directors and other persons the court permits, allowing them to demand that the company commence or continue legal proceedings to protect its legal interests.
637 CHAMBERS.COM
Powered by FlippingBook