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Local Government: Municipal Finance Management Act, 2003 (Act No. 56 of 2003)


Municipal Supply Chain Management Regulations, 2005

Chapter 2: Framework for Supply Chain Management Policies

Part 3: Logistics, Disposal, Risk and Performance Management

41. Risk management


(1) A supply chain management policy must provide for an effective system of risk management for the identification, consideration and avoidance of potential risks in the supply chain management system.


(2) Risk management must include—
(a) the identification of risks on a case-by-case basis;
(b) the allocation of risks to the party best suited to manage such risks;
(c) acceptance of the cost of the risk where the cost of transferring the risk is greater than that of retaining it;
(d) the management of risks in a pro-active manner and the provision of adequate cover for residual risks; and
(e) the assignment of relative risks to the contracting parties through clear and unambiguous contract documentation.