Industrial Licensing Act, 2014

Year of Act: 
Number of Act: 
Date of promulgation: 
05 September 2014


ACT NO. 10 OF 2014



Industrial Licensing Act, 2014


Arrangement of section



1.          Short title and commencement

2.          Interpretation

3.          Objective of this Act

4.          Application for licence

5.          Issuance of licence

6.          MSME development and pioneer industries

7.          Renewal licence

8.          Suspension and cancellation

9.          Merger and acquisition

10.       Display of licence

11.       Records or books to be kept

12.       Director of Industry

13.       Functions of the Director

14.       Liability of merger and director

15.       Extension and exemption

16.       Appeals

17.       Establishment of the industrial licensing Appeal tribunal

18.        Composition

19.       Appointment

20.        Vacation of office

21.        Qualification for appointment as a member

22.        Conduct of members and disclosure of interest

23.        Remuneration of member expenses

24.        Proceedings

25.        Powers

26.        Secrecy and confidentiality of members

27.        Representation

28.        Decision of the Tribunal

29.        Authentication of documents

30.        Correction of errors

31.        Offences and penalties

32.        Regulations

33.        Repeals and savings




ACT NO.  10 OF 2014



Industrial Licensing Act, 2014


An Act to provide for the licensing of industrial enterprises and related matters. Enacted by the Parliament of Lesotho

Short title and commencement



1.         This Act may be cited as Industrial Licensing Act, 2014 and shall come into operation on the date to be determined by the Minister by notice published in the Gazette.





2.          In this Act, unless the context otherwise requires -



"Director"  means the Director of Industry appointed as such in the Min- istry responsible  for trade and industry;


"enterprise"  means an individual, entity or such other juristic person engaged in an industrial  activity;


"industrial  activity" means any action which subjects physical matter to any process which materially changes it in substance, nature, character or appearance,  and includes processing  and assembling  activities;


"licence"  means a document  authorizing the holder to conduct the industrial  activity stated therein;


"medium enterprise"  means an enterprise which employs between 21 and 50 employees  including the owner, with an annual turnover of less than M5,000,000.00;


"member"  means a member of the Tribunal established under section




"micro enterprise"  means an enterprise which employs a maximum of 5 employees including the owner, with an annual turnover of less than



M200,000 .00;



"Minister" means the Minister responsible for trade and industry; "MSME" refers to micro, small and medium enterprises;

"person" includes a juristic person, syndicate or any other entity that may engage in an industrial activity;


"Principal Secretary" means the Principal Secretary for the Ministry responsible for trade and industry;


"small enterprise" means an enterprise which employs between 6 and

21 employees including the owner, with an annual turnover of less than

M1 ,000,000.00;



"Tribunal" means the Industrial Licensing Appeal Tribunal established under section 17.


Objective of this Act



3.          The objective  of this Act  is to promote  private  sector  development through -


(a)        industrial licensing and regulatory framework that facilitates speedy issuing of industrial licences for all sizes of enterprises;


(b)        elimination of  barriers to investment and industrial operations.


Application for licence



4.          A person who intends to engage in an industrial activity shall apply in a prescribed form to the Director for an industrial licence and the application shall be accompanied by -


(a)        impact assessment reports on public health, occupational safety and environmental  issues where necessary;



(b)        information on capital resources available;



(c)        information on the proposed location and activity; (d)        the estimated number of jobs to be created; and

(e)        the prescribed  application fee.


Issuance of licence



5.          (1)         The Director  shall, within 5 working days of the receipt of the application, make a determination  as to whether or not the application referred to in section 4 is approved.


(2)        If the Director fails to make a determination under subsection (1), the Director shall be deemed to have approved the application for the li- cence and shall, upon request by the applicant, issue the cence and shall, upon request by the applicant, issue the licence.


(3)        Notwithstanding   subsections   (1) and (2), the Director may, where necessary, request, in writing, the Principal Secretary to extend the period referred to in subsection (1) for a further 5 days.


(4)        Where the Director makes a request under subsection (3), he or she shall inform the applicant of his or her decision before the expiry of the 5 working days referred to in subsection (1).


(5)        In considering an application for a licence the Director shall take into account the following matters:


(a)        public health and safety;



(b)         national security; and



(c)        environmental protection.



(6)        The Director shall, if satisfied that all the requirements set out in section 4 have been met and upon payment  of the licence fee by the applicant, issue a licence which shall be in a prescribed  form.


(7)        The Director may impose such conditions as he or she may deem




necessary and such conditions  shall be written legibly on such licence.


MSME development and pioneer industries


6.          The Director may where necessary make recommendations to the Min- ister on incentives or other forms of assistance that may be extended to MSMEs and to pioneer industries.ister on incentives or other forms of assistance that may be extended to MSMEs and to pioneer industries.


Renewal of licence


7.          (1)        If the holder of a licence wishes to renew the licence, he or she may submit an application for renewal to the Director within one month before the expiry of the licence.


(2)        Notwithstanding subsection (1), the application for renewal of a licence shall be submitted to the Director at least 7 days before the date of its ex- piry.


(3)        If the licensee fails to submit the licence for renewal -



(a)        within 31 working days after the expiry of such licence, the Director may renew the licence subject to payment of late renewal fee to be prescribed in the regulations;


(b)           after 31 working days of the expiry of such licence, the Director may close the operations in accordance with section 31.


Suspension and cancellation



8.          (1)        A licence issued under this Act shall be valid for the period stated

in it unless suspended or cancelled in accordance with the provisions of this Act.



(2)        The Director may, after giving a hearing to a licensee, suspend or cancel the licence on grounds of -


(a)        ceasure of  business  operations;



(b)           failure to comply with rules and regulations related to health, environment,  occupational  safety and labourlabour






(c)        using the licence for a purpose different from the one it was issued for or for fraudulent  activity;


(d)        failure to comply with licence conditions; or



(e)           contravention of any other law relating to, or connected with, industrial enterprises.


Merger and acquisition



9.          (1)        Where there is a merger or an acquisition, the licences of the en- terprises  involved  may, upon application,  be transferred  to the merged  or ac- quiring enterprise.


(2)        The head of the management of the merged or acquiring enter- prises shall notify the Director of the merger or acquisition within 5 working days after the merger or acquisition becomes effective.


Display of licence



10.       A licensee shall display the licence, at a conspicuous place, on the li- censed premises at all times and produce the licence upon the request by the Di- rector or any officer so authorised by the Director.


Records or books to be kept


11.         (1)        A licensee shall -


(a)           keep, for a period of at least 3 years, such records or books as are necessary  to exhibit the state of affairs of the enterprise and to explain the transactions  and the financial position of the enterprise;


(b)         avail the records or books to the Director as and when

.~                                                               the Director so requires.


(2)        Records or books referred to in subsection (1) include -




(a)        financial statements;



(b)         audit report;



(c)        employment figures;


(d)        source of raw materials and product destination; (e)        operational challenges;  and

(f)         order records and data.



Director of Industry



12.       There is established the Office of the Director  of Industry  within the

Ministry responsible for trade and industry.



Functions of the Director



13. Act.


(1)        The Director shall be responsible for the implementation of this




(2)        The Director shall:



(a)        provide licence application forms and provide advice and assistance in filling an application form;


(b)           receive completed forms and conduct an immediate review and inform the applicant of any missing infor- mation immediately  after such review;


(c)        conduct inspection and prepare inspection report and facilitate inspection and preparation  of impact assess- ment report on public health, occupational health, envi- ronment and labour issues to ease compliance with section 4;labour issues to ease compliance with section 4;


(d)       grant and issue a licence where he or she is satisfied that all the requirements  have been complied with and where the application has not been approved, inform the appli-




cant of the decision within 5 days;




























advise the applicant of further requirements  to be com- plied with under any other law;


record and annually up-date information relating to licensees and the information  shall include industrial activity, employment created, target market and any other related information;


publish a list of enterprises operating without valid licenses, those with outstanding  fmes and those found to have contravened  any law relating to their operations in Lesotho;


conduct training and awareness campaigns in relation to developments  and international  requirements  on indus- trial operations  and international  trade;


design and publish an Industrial Development Activity




(j)          develop risk-based inspection schedules including proc- edures for verification and validation of active licences and risk-based  automatic licence renewals;  and


(k)       do anything in relation to industrial licensing pursuant to the provisions  of this Act or regulations  made there- under.


(3)        The Director may-


(a)            at any reasonable time, conduct an inspection and in so doing may enter any business premises to determine if the  licensee complies with the provisions  of this Act and

..                                                                     licence conditions;


(b)        during the inspection and if the licensee agrees, conduct any other activity of support including support of edu- cational nature and the Director and licensee shall jointly




determine the nature and content of such an activity;


(c)        in conducting the inspections, demand that the licensee-



(i)        produce the licence, permit or certificate required under any other law; and


(ii)           provide information  on the operations of the enterprise and any other relevant information;


(d)       notify a relevant Government  agency of any irregularity or contravention  of any other law identified during the inspection.


Liability of manager and director



14.       (1)        A person  who, at any time,  is managing,  supervising  or con- ducting industrial  operations  on behalf  of the licensee  shall be subject to the same penalties under this Act as the licensee, but this section shall not be inter- preted to relieve the licensee from obligations and penalties to which he or she may be liable to.


(2)        Where the licensee is a company, the Director may require the directors of the company, either jointly or severally, to discharge the obligations and pay all the penalties imposed on the company.


Extension and exemption



15.       The Minister may, upon recommendation of the Director -



(a)        extend the periods of time in respect of which the obli- gations under this Act shall be complied with; and


(b)           exempt micro, small and medium enterprises and a spe- cific category of business from the application of this Act to the extent and on such conditions as may be pre- scribed in the regulations.





16.       (1)         A person -


(a)        whose application for a licence is declined;


j                       (b)         whose licence is cancelled or suspended;

(c)         whose operations have been closed; or



(d)        who is not satisfied with any decision  made  in the exercise of powers under this Act,


may, within  15 days after the decision, lodge an appeal with the Tribunal  and state the reasons for the appeal.


(2)        The Tribunal shall determine an appeal not later than 14 work- ing days after the receipt of notice of appeal, and failure to do so may be deemed to be a decision in favour of the appellant and the Tribunal shall, upon request by the appellant, issue a written statement to the effect that the appeal has been upheld.


(3)        A person who is aggrieved by the decision of the Tribunal under this section shall be entitled to a review of the decision by the Commercial Court.


(4)        The Tribunal may, in considering an appeal, affirm, modify or re- voke a decision made under this Act.


Establishment of the Industrial  Licensing Appeal Tribunal


17.       There is established the Industrial Licensing Appeal Tribunal which shall hear appeals from the decisions of the Director.







.                        The Tribunal shall consist of -



(a)        a chairperson  who shall be an independent legal practi- tioner;





(b)           2 other independent persons with experience, knowledge and expertise in economics and public administration;



(c)        3 alternate persons of similar credentials and integrity who shall serve when any member is not able to partic- ipate in the proceedings.





19. years.


(1)        A member of the Tribunal shall be appointed for a period of 3




(2)        A member shall be appointed by the Minister.



(3)        The Minister shall appoint the Chairperson  after consultation with the Attorney General.


(4)        The Minister shall cause the names of the members to be pub- lished in the Government Gazette.


Vacation of office



20.       A member shall cease to hold office if the member - (a)            dies or resigns;

(b)           is removed from office of trust because of misconduct, or is convicted of fraud or an offence involving dishon- esty or is engaged in dishonourable conduct;


(c)        is declared bankrupt  or insolvent;



(d)        becomes a member of Parliament   or a partisan.



Qualification for appointment as member



21.       A person shall not be appointed as a member if he or she - (a)            is below the age of 18;




(b)        is of unsound mind;



(c)         has in terms of any law in any country -



(i)         been declared insolvent and has not been reha- bilitated or discharged;  or


(ii)        made an assignment  to, arrangement   or compo- sition with his creditors which has not been rescinded or set aside;


(d)       has been convicted of fraud or of an offence involving dishonesty;


(e)        is a member of Parliament or is a partisan; or



(f)          is removed from office of trust because of misconduct.


Conduct of members and disclosure of interest


22.        (1)         A member shall not -



(a)       engage in any activity that may undermine the integrity of the Tribunal;


(b)       participate in any deliberations  concerning a matter in which the member has a financial or other personal interest;


(c)            use any confidential information  obtained in the per- formance  of his or her functions as a member  to pro- cure, directly or indirectly, a financial  or other advan- tage  either personally or for any other person.


(2)        A member who has or acquires any financial or other personal interest, either directly or indirectly, in any matter which is before the Tribunal shall-


(a)       immediately and fully disclose the interest to other members; and





(b)         recuse himself or herself from the proceedings.



(3)        A member who fails to comply with this section commits an of- fence and shall be liable on conviction to a fine of M50000 .00 or imprisonment for a period of one and a half years or both.


Remuneration of member and expenses


23.       A member shall be paid such allowances as the Minister may determine after consultations with the Minister responsible for finance.





24.        (1)        An appeal shall heard by 3 members and where a member is not able to participate for any reason, the chair shall call upon an alternate member to serve.


(2)        The decisions of the Tribunal shall be taken by majority.



(3)        The chair may appoint an expert to assist it in the proceedings and the expert may sit with the Tribunal and assist as requested but is not a mem- ber of the Tribunal.


(4)        Except as provided in this Act and the regulations, the Tribunal shall regulate its own proceedings without procedural formalities but shall ob- serve rules of natural justice.


(5)        The Tribunal shall consider any directive concerning industrial policy given to the Tribunal by written memorandum signed by the Minister.


(6)        The Tribunal shall not be bound by rules of evidence and may in- form itself on any matter as it considers appropriate.


(7)        The Tribunal may, on its initiative make investigations  and in- quiries and seek and receive evidence additional to that tendered by the parties to the proceedings.


(8)        A party to the proceedings  before the Tribunal shall bear his or her own costs and the Tribunal shall not make any order as to costs except where the appeal is found frivolous whereby the Tribunal may order costs against the








25.        The Tribunal shall have the power to -



(a)        summon any person to give evidence before it;



(b)         administer oaths;

(c)        demand production  of documents and data material; (d)        where necessary, because of the confidential  nature

of the evidence or for any other reasons, hear an appeal wholly or partly in camera.


Secrecy and confidentiality requirement of members



26.        (1)        A member shall not disclose information acquired during the proceedings and such information shall be treated as confidential.


(2)        A member who contravenes subsection (1) commits an offence and may upon conviction be liable to a fine of M20, 000.00 and shall forfeit all allowances payable to him.





27.        (1)        An appellant shall appear before the Tribunal personally  and may be represented by a legal practitioner.


(2)        A person appearing before the Tribunal to give evidence or pro- duce documents shall not be excused from answering a question or producing a document on the ground that the answer to the question or production of docu- ment may tend to incriminate the person.



I>                                                                                    (3)        A person who satisfied the Tribunal that they have a substantial

interest in a proceeding  may appear and be heard in that proceeding  and may produce evidence and cross examine witnesses.





Decision of the tribunal



28.       (1)        The decision of the Tribunal shall be given orally and in writing and shall contain the reasons for the decision.


(2)         A party to the proceedings of the Tribunal shall be entitled, upon request, to be given free of charge, the record of the proceedings or the decision of the Tribunal.


Authentication of documents



29.        A document requiring authentication by the Tribunal shall be sufficiently authenticated if it is signed by the chair of the Tribunal.


Correction of errors



30.        The Tribunal shall have powers at any time, by certificate signed by the Chairperson, to correct any error arising from an accidental slip or omission in a decision or order of the Tribunal.


Offences and penalties



31.     (1)        A person who engages in industrial operations without a valid li- cence  commits  an  offence  and  shall  be  liable,  on conviction   to  a fine  of M 1000.00  for each day the contravention  continues or to imprisonment for a pe- riod of 6 months or both.cence  commits  an  offence  and  shall  be  liable,  on conviction   to  a fine  of M 1000.00  for each day the contravention  continues or to imprisonment for a pe- riod of 6 months or both.


(2)        For purposes of subsection (1), a licence issued under this Act is valid unless expired, suspended or cancelled in accordance with the provisions of this Act.


(3)         A person who-



(a)        provides false information  or deliberately withholds

Information required under this Act;



(b)           obstructs or refuses the Director entry or access to the industrial operations or processes;


(c)         fails to-




(i)          renew  a licence;



(ii)         produce   a licence  when  so required;   or


(iii)        comply  with  the Act  or the licence

1                                                                  conditions;


(d)          frustrates   the inspection   or carrying   out of powers   under this Act  or the regulations;


(e)         operates   without   a licence,



commits   an offence  and shall  be liable,  on conviction   to a fine  of M500,  000.00 or imprisonment    for a period   of 3 years  or both.


(4)         The  Director   may,  with  the  assistance   of the  Commissioner    of

Police,  close  an industrial   operation   if the licensee   -



(a)         fails  to renew  the licence  as provided   in section  7; or



(b)         operates   -



(i)          without   a licence;   or



(ii)         with  a suspended    or cancelled   licence.



(5)         The  Court,   before  which   a person   is prosecuted    for  an offence against  this Act  or the regulations,    or licence  conditions   may,  in addition  to any order  upon  conviction   or a determination    that  an offence  has been  committed   -


(a)           order  that  equipment,   appliances   and all assets  used  in the commission    of the  offence  be forfeited   to the State and be disposed   of as  the court  directs;


(b)         order  the licensee  or in the case  of a body  corporate,   a

manager   or director  to undertake   community   work.






32.         (1)        The  Minister   may  make  regulations   for  the purposes   of giving





effect to the objectives of this Act.



(2)        Without prejudice to the generality of subsection (1) the regula- tions may prescribe -


(a)        types of licences which may be based on potential risk to public health, national security or protection  of the en- vironment or any other matter;


(b)       entry threshold for foreign investment  in industrial activities;


(c)        risk based inspection schedules including procedures  for verification and validation of active licenses and risk based automatic renewal;


(d)       application forms and all matters relating to the handling of applications;


(e)        application and licence fees;



(f)         forms to be used for the issue of licences; (g)        the general conditions  attached to licences; (h)         the duration of licences;

(i)             the procedure to be followed where an  enterprise is to be closed under section 31;


U)           all matters relating to operation of the Tribunal;



(k)                         specific regulations for micro, small and medium enter- prises  including conditions  applicable to business re- ferred to in section IS(b); and


(1)                  any other matter required to be prescribed by the Minis- ter under this Act.


(3)            The Minister-




(a)        shall review the fees referred to in subsection (2)(e) and any fee payable under the Act or the regulations made pursuant to this section every 3 years;


(b)       may, by notice published in the Gazette, amend a fine payable under this Act.


Repeals and savings


33.        (1)        The Industrial Licensing Act of 19691   is repealed.



(2)        Notwithstanding the provisions of subsection (1), upon the com- ing into operation of this Act -


(a)        a licence granted under the Industrial Licensing

Act, 1969 shall continue to be in force until its expiry and may be renewed under this Act; and


(b)           any pending application for a licence shall be processed under this Act.







1.         Act No. 27 of 1969








The Parliament   of Lesotho


Statement   of Objects  and  Reasons  of the

Industrial   Licensing  Act, 2014


(Circulated   by the authority   of the Minister

of Trade  and Industry,   Cooperatives   and Marketing)



The Licensing regime for the manufacturing  activities under the Industrial Li- censing Act No. 27 of 1969 has proven to be too long and cumbersome,  time consuming and costly in business  terms and as such a barrier to investment. To create an enabling environment that facilitates manufacturing  activities and in- vestment in Lesotho there was a need for the review of the 1969 Act.


The purpose of the Industrial Licensing Bill, 2014 is to facilitate and promote in- dustrial  development   and  small,  micro  and  medium  enterprises   (SMMES) through a new regulatory regime which is simple, short, cost effective and re- sponsive to the needs of investors. The licensing powers  are vested on the Di- rector of Industry, this makes the licensing procedure  short and simple which consequently will safe time and money for the investors  as applications will be considered as soon as they are lodged.


The Bill encourages SMME development by providing  a possibility of different licence fees for SMMEs. Further, the Minister  is empowered  to exempt some business categories from the application of the Act whereby the Minister could use such powers in favour of SMMEs. This will promote entrepreneurship  and creation of private wealth as the SMMEs will be able to operate easily and with- out too much regulation.














Printed  by the Government   Printer,  P.O. Box 268,  Maseru   100 Lesotho