Local Government: Municipal Finance Management Act, 2003 (Act No. 56 of 2003)RegulationsMunicipal Supply Chain Management Regulations, 2005Chapter 2: Framework for Supply Chain Management PoliciesPart 3: Logistics, Disposal, Risk and Performance Management41. 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. |