Film and Publication Board Annual Report 2008/09; RSA/Lesotho Agreement on Facilitation of Movement of Citizens

Meeting report

Film and Publication Board Annual Report 2008/09 presentation
Ms Thoko Mpumlwana, Chairperson of the Board, Film and Publication Board, apologised for the absence of the Executive Chair, Mr Leslie Sendile. Ms Mpumlwana noted that the Board was disappointed that the Auditor-General had issued a qualified audit report, mentioning qualifications in seven areas, and forty-one matters of emphasis. However, it was important to understand that the Board had been in legal limbo for at least two years pending legislative amendments in Parliament, which had finally been signed by the President recently. The legislation had thus not been effective for some time. In addition, it took some time to replace the former Chief Executive Officer, and there had also been restructuring in the finance department; Ms Makola had been appointed as the Chief Financial Officer in 2008, but was then moved to the post of Chief Operations Officer, and her replacement had served only a short time before leaving. The challenge of retaining staff caused a lot of instability. Management had now put a retention strategy in place.

She noted that the grant subsidy did not meet the demands that the industry and society placed on the Board. The visibility of filming and publication, both nationally and internationally, were increasing and so were the demands on the organisation. The Board was cooperating with State institutions and government, especially with security structures, and especially moving towards 2010. Another challenge was the floodgates opened by information technology (IT), in the areas of video games, internet communication, and cell phones, that were increasing the exposure of children in schools and at home to all that was available. Societal values were more conservative than some of the criteria put in place and from time to time the FPB had to re-evaluate classifications in line with the updated values permeating society.

Despite the challenging economic climate the industry strove to comply with the FPB requirements, despite the proliferation of illegal material that was putting strain on the Board's compliance monitors, as well as the demands of the security sector, especially the police force.

Ms Yoliswa Makhasi, Chief Executive Officer, FPB, presented the highlights of the past year, as contained in the Annual Report. She noted that the amendments to the Films and Publication Act of 1996 had been signed by the President, but were not yet in force because the regulations were still being developed, but it was hoped the latter would be gazetted before the end of the financial year. The Board was working with the legal team from Department of Home Affairs (DHA) to develop the regulations.

The strategic objectives of the FPB included increasing the organisational capacity, to ensure effective management and implementation of the Act. This was an increasing challenge, especially to do compliance  monitoring of the new media platforms of the Internet, cell phones, and computers. Many computers came with games that were not classified in South Africa. FPB had to reflect contemporary norms and values when using the classification system, and was not sure at what stage it reflected those values and norms. Although there were examiners and guidelines, and the public was invited through advertisements to make input, all kinds of complaints were received from the public. A film rated as PG might not be considered suitable by one parent, whereas another would have no problems. The Board strove very hard to live up to societal expectations and values.

One of main highlights was the implementation of the Programme of Action on Child Protection against Pornography. A National Indaba held in June 2008 was attended by more than two hundred delegates from Government, Non Government Organisations (NGOs), the private sector and international organizations. A Child Protection Unit that really focused on outreach and awareness issues was set up, the Internet hot line and call centre was established, infrastructure was upgraded and there was greater collaboration between the FPB and law enforcement agencies.

In the area of human resources, there were five resignations and a disciplinary hearing that led to the HR Manager being dismissed, and this case was currently at the Commission for Conciliation, Mediation and Arbitration (CCMA). One dispute was lodged with the CCMA regarding salary adjustments, and was referred to the Labour Court for review as the CCMA did not have jurisdiction. One dismissal was carried over from 2007/08, and was currently with the Labour Court. New Managers and Executives were enrolled for the leadership programme, which was further supported by a mentorship programme currently being implemented.

She noted a significant decrease in movies submitted for classification in 2008/09, and attributed the decline in demand to people being able to watch over the Internet without having to go through classification, which was affecting business. It was also the effect of parallel reporting, people who bought directly from countries outside without taking them through the relevant channels for classification, and the effect of piracy.

FPB had commissioned research on a number of issues regarding distributors and raised a number of concerns regarding the definitions, and the packaging of the distributors themselves. The large distributors, such as Nu Metro, argued that they should not be in the same category as a video shop, thus ought to be re-categorised and redefined, so that they were addressed according to their own needs. Parallel reporting was affecting their business. FPB had to operate within the context of South African legislation that aimed at ensuring compliance. There were issues of competition between small players and bigger players in the industry. The smaller players preferred to order directly through the Internet and submit to FPB for classification, whist the bigger players said they had distributors’ rights that allowed them sole rights over that film or publication.

The Compliance Monitoring Statistics showed the effect of employing more compliance monitors. Most of the material confiscated were unclassified DVDs. The police who were supposed to record and destroy such material. There were challenges in terms of training cinema staff because they were just not available. There was a need to have an FPB presence in cinemas, because there were challenges in terms of parents who would allow their children to go into classified movies, even those classified as Parental Guidance (PG), but would complain about the content of the movie.

Mr Jonas Phoshoko, Acting CFO, Film and Publication Board, reported on the financial performance. Personnel expenditure increased due to the employment of an additional ten monitors. FPB recorded a deficit of R8.2 million for the 2008/09 financial year. He then tabled the qualifications and explained the reasons for them. There were assets with low value that FPB was still using, and their cost was not adjusted. There was inaccurate financial reporting of the finance lease. That came from the previous year, where the costs of laptops and desktops were incorrectly recorded. The irregular expenditure arose as a result of appropriate individuals not signing the pages as required by FPB policies, and also contrary to PFMA and Treasury regulations. There had been  inaccurate calculations of the cash flow. The FPB management viewed the issue very seriously. It had established a dedicated committee to oversee the resolution of all audit queries. This Committee reported on a regular basis to Exco and the Audit Committee. It had also ensured that no performance bonuses were paid for the year 2008/09 due to the non-performance of the organisation.
A Management Action Plan was developed to resolve all identified queries and any other weaknesses that may be identified through other systems and processes.

Capacity was strengthened in key areas, particularly HR, Procurement and Finance; where most of the weaknesses were, and FPB had filled all vacant posts in those identified units with adequately skilled individuals, and ensured that all finance staff underwent training to overcome the weaknesses in accounting standards and applicable legislation. Weaknesses in the procurement processes were identified, as were major policy gaps in the organisation's systems. A revised Supply Chain Management policy was approved by the Board and would be implemented in November. A tracking mechanism for non-compliance was developed, especially in the Procurement unit, to enable timeous reporting of irregularities, because part of the reason was irregularities were not disclosed during the year.

The asset management systems were being overhauled; and there was improved staff awareness on internal policies and all applicable legislation, and there were also gaps identified in the existing policies, with an  action plan now in place to develop new policies, with deadlines, so that by end December all identified policies would have been developed and aligned with applicable legislation.

Increased internal audit activity would ensure that any systems not compliant with audit requirements were addressed. The balanced scorecard system was assisting in ensuring that performance information was accurately and timeously reported with evidence required for audit purposes.

Discussion
The Chairperson asked for clarification on the resignation of the former CFO.

Ms Makhasi responded that the reason was linked to incompetence. There was a trend of incorrect reports being presented to the Board, the Audit Committee, and to Exco. One of the reasons for the deficit was because he had kept reporting under spending. The Audit Committee had on several occasions raised the issue of the competence of the CFO.

Mr M Mnqasela (DA) welcomed the report and the delegation's honesty and openness. He noted that one of the major areas of emphasis by the AG – and a major concern – was the issue of cash utilised from operating activities and financing activities. There were also compliance issues around irregular expenditure in relation to property, plant and equipment. This seemed to have developed into a trend. Although he had noted that corrective measures were instituted he still had concerns about the fact that the discrepancies occurred.

Ms Mpumlwana said that the Board was equally concerned about the matters of emphasis received. The Board and Audit Committee had now agreed to work more closely, to get closer operational focus to ensure that systems were put in place.

The inaccurate calculations on the cash flow arose because during the financial year no quarterly or mid year statements were prepared, and financial statements for the year were prepared at the last minute. There was also no internal audit last year because the internal auditor also resigned in June, with the replacement only appointed in about December, so there was a lot on the plate of the Board. During this financial year, quarterly financial statements were prepared and presented to both the Audit Committee and the Board on a quarterly basis, so any deficiencies would be corrected in time.

In regard to the three instances of irregular expenditure reported, one related to expenditure requisition forms that were not signed by certain officials; one related to three quotations not being attached to a requisition, and the third related to the wrong processes followed in appointing consultants. The third was acknowledged during discussions with the Auditor General. The FPB acknowledged that it had been incorrect and had subsequently appointed a Supply Chain Manager. In regard to the signatory issue, she noted that often this kind of matter would usually be picked up before audit, but the AG had obtained the information before it could be corrected. Instructions had since been issued that no matter how urgent, no payments would be made unless all the right signatories had signed. The absence of three quotations related to weaknesses of internal controls within the organisation. The procurement function had since been centralised and the Supply Chain Management would look for quotations.

Mr Mnqasela noted that there seemed to be serious discontent amongst staff, or dislike of some of the measures taken to discipline them, meaning that these issues were taken further. He asked how the Board would ensure those issues were managed and resolved without having to go further. He asked why the HR Manager had been dismissed.

Ms Mpumlwana noted that the risk of staff approaching the CCMA could not be eradicated from any organisation, especially when people were made to feel under pressure when systems were being tightened. They tended either to leave willingly, or to approach the CCMA when disciplined. FPB would try to avoid that but could not guarantee it, as the staff clearly had the right to appeal to the CCMA. One of the cases that would probably be referred there was the issue of performance bonuses. FPB had taken a decision not to pay performance bonuses, because the organisation had a deficit and a qualified audit report, and because policy dictated that performance bonuses would be paid only for exceptional work. There were already a lot of issues with the unions on that point. CCMA matters used up a lot of resources and time from FPB. However,  workers knew their rights and tried very hard to exhaust all their options.

She outlined that although the Board was not involved in interviewing staff, it would receive reports on performance, and had realised something was wrong. During the past year, the CEO had left. Then there was an interim CEO, and the Committee would have been aware of the problems around that. Disciplinary action was taken and she had approached the CCMA.

The HR Manager was dismissed for a number of charges, the first being gross misconduct and fraud. She had manufactured a spreadsheet on performance bonuses, where she allocated herself a bonus payment even though she did not qualify. The issue, when discovered, was discussed with her and fortunately the money was paid back. She also prepared a submission motivating for a salary adjustment for herself and three other staff members without following proper processes. This was not processed. She had approached the CCMA, who did not have jurisdiction, and the matter was then referred to the Labour Court.

Dr A Luthuli (ANC) wondered why matters such as irregular expenditure, and inaccurate calculation on the cash flow, were not recognised earlier. Although measures were put in place after the damage was done, prevention would have been preferable to cure.

Ms P Petersen-Maduna (ANC) asked what monitoring and evaluation tools did FPB use to determine the effectiveness of implementation of the programme of action on child protection against pornography, especially in the rural areas. She also asked what the relationship was between FPB and the police.

Ms Makhasi replied that the performance management and evaluation tools for reports were received on the Internet hot line. For the call centre, there were standard operating procedures and performance standards and turnaround times set. Monthly and quarterly reports were reviewed and corrective measures were implemented. For awareness programmes, FPB did not have a formal evaluation process, but did get feedback from stakeholders and engaged with NGOs and other government departments on a regular basis. It was looking at a formal evaluation mechanism in the new financial year.

The issue around access of pornography to children was a debate that must go on, and one in which Parliament must take a bigger interest. More and more soft porn was available on public platforms such as television, and the major challenge was that it contributed to grooming of children. A study was done by social workers from the Department of Education in Gauteng West. These had found, for example, that children would get into taxis, and their parents believed they were being taken to school. However, the children had an  arrangement with the taxi driver and sexual favours were given to the driver. Children as young as five years were already being thoroughly groomed, and it was worrying how this was being insinuated into their lives across all communities and children of all races. The issue of human trafficking was a very serious issue and was linked to poverty.

She noted that the Board had a very good relationship with the police who were very cooperative. The Board was developing a manual to inform some of the processes and the protocols around how cases would be handled. The South African Police Service (SAPS) had its own manuals but were willing to look also to FPB’s manuals. FPB and SAPS were engaging on the long-outstanding Memorandum of Understanding (MOU).

Ms N Gxowa (ANC) referred to the qualifications. She believed that FPB could have avoided some matters going to the CCMA. She agreed that performance bonuses should only be given for excellent performance. She said that the Portfolio Committee should perhaps assist with monitoring. She wondered if the human trafficking maybe was organised in the shops that sold pornography.

The Chairperson supported Ms Gxowa on the issue of performance bonuses, stating that if was right that full responsibility be taken for the FPB, and that the correct procedures must be followed.

Adv Z Madasa (ANC) emphasised that there were serious matters pertaining to the future of South Africa’s social coherence and attitudes, which required concerted collaboration.

Adv Madasa asked for follow up on the dismissals, asking how an incompetent person could be appointed in the first instance.

Adv Madasa noted that one of the performance targets was develop and implement a stakeholder relations strategy. He asked that more emphasis be put on stakeholder agreements, to ensure tangible outcomes that could be measured. Some stakeholders who had an interest in illegal distribution were powerful and were making money that increased their power. He suggested the need for emphasis and pressure to be placed on them to fulfil their responsibility. The same applied to parents, who should also take responsibility. On the other hand, he appreciated that there were difficulties, with parents not always being present, and child-headed households.

He asked whether public advertisements such as billboards were FPB’s responsibility, as they often contained material unsuitable for child viewing.

Ms Makhasi agreed with the comments. She pointed out that an MOU with stakeholders and law enforcement agencies had been outstanding for the past two years, but there was reluctance to sign on some of the issues. The FPB was therefore working with people, training them and trying to change attitudes, and this was getting a good response. FPB also worked closely with NGOs, especially on the child protection programme. The Advertising Standards Authority dealt with the adverts and billboards.

Ms S Rwexana (COPE) asked for clarity on the five resignations, including the resignation of the CEO. 

Ms T Gasebonwe (ANC) asked what progress had been made on the six cases of child pornography and what were the reasons for refusing registration.

Ms Makhasi noted that in the past year the FPB had investigated about nine cases of child pornography but they were hosted on websites outside South Africa. South Africa could not do much to have the websites closed down, but did work with internet service providers to block them from access by the South African public. The reasons for refusing registration were mostly linked to adult stores who did not comply with other laws.

Mr Mnqasela enquired about the volume of calls to the hot line call centre and the nature of calls received, and asked since when it had been established.

Ms Makhasi responded that this averaged two hundred to three hundred per quarter, most being general public enquiries about FPB issues. There were few calls related to child pornography, which was usually something that people tried to hide.

Mr Mnqasela asked how the deficit for the 2008/09 financial years would be managed to ensure it did not recur.

Ms Makhasi said that management decided to cut operational costs, especially on travel, telephone, and catering for meetings.

Mr Mnqasela pointed out that it seemed that two CFOs had been incompetent and asked what had been put in place to ensure that there was no repetition, and to promote good governance.

Ms Makhasi indicated that Mr Phoshoko, the Finance Manager of FPB, was acting as Chief Finance Officer. The FPB would be interviewing to fill the post of CFO in November. The Board recommended not only assessment at interview, but also integrity checks, especially for positions in procurement, finance and HR. FPB would also verify the qualifications. However, the real test was whether the person could actually perform the job. The pay for the CFO position at FPB was far lower than other CFOs in government and other entities and this was a scarce skill in government.

Dr Luthuli was very concerned about the content of the films. She said the issue of parental responsibility had been discussed, and the challenges were raised, but nobody knew where to take the issues. She asked why these types of films were shown at all. In South Africa, there was much violence shown, even on ordinary advertisements. She wondered if it was not the role of the FPB to bring this to a halt. She asked whether a return to censorship was not the answer. She believed that one of the reasons for children maturing so early was the effect of the film and television shows.

Ms Makhasi noted that prior to 1994 there had been a Censorship Board, but people did not want to continue with this and its negative connotations. However, the shock of what was presently confronting South Africa was leading to a reconsideration of issues. The Broadcasting Complaints Commission covered broadcasting, the print media had its own Ombudsman and she felt that more people should be voicing their concerns to these bodies.

Hon Malusi Gigaba, Deputy Minister of Home Affairs, commented on the resignations, noting that some had been to pursue better careers and opportunities elsewhere. In respect of the dismissals, the FPB agreed that management must set up a proper recruitment and retention strategy to have some continuity, particularly with CFOs. It was not so much the fault of the people hired, as an incompetent recruitment strategy by FPB that created the problems. One way to address this would be to do a competency assessment of the person before approving him or her for the job, particularly at senior management levels, and this would be done in future.

Mr Gigaba said that relationship with the police needed more work, as the MOU had been too long outstanding on minor issues. There were international examples of similar cooperations; nowhere were the police solely responsible for doing the work. FPB did not want powers to arrest, and the police did not want a hotline; instead FPB wished, on receiving a complaint, to refer it to the police and international networks for investigation. 

On the issue of pornography generally, he understood that ETV may have been granted a licence by Independent Communication Authority of South Africa (ICASA) to have a twenty-four hour porn channel, because it was a paid channel. People were confusing the issues. It was not pornography itself that was banned. A person who wanted to watch porn could go to a porn shop and watch it there. However, when a person purchased a television set, that person should not receive pornography without giving permission. Ms Justice Mokgoro had been asked to advise on the possibility of a total ban on pornography in the public media, but she had resigned before responding, and a reminder was sent to the incoming Chairperson of the South African Law Reform Commission, requesting that they take the issue further. Removing pornography from public channels would not amount, in his opinion, to removing people’s right to watch pornography if they wished.

Ms Mpumlwana said the FPB's role was to implement the Act, and whatever was outside the Act would need the guidance of parliamentarians and lobby groups, to push values acceptable to all. The global information highway impacted on everyone, sometimes to the good and sometimes to the detriment of people. She believed that civil society and government organisations all had to work together, especially in regard to protection of children.

Ms Mpumlwana reiterated that the FPB had tried to ask the previous CEO to stay, but could not match the salary that she had been offered elsewhere.

The Deputy Minister then referred to the problem of the deficit, saying that the reality was that the FPB's budget was very low for the work it had to do. Compared to international organisations with the same work, it focused more on educating and this needed a massive budget, particularly in regard to child education. He cited that even NGOs in Europe had more funding. In the past the DHA had diverted funds to assist the FPB, but this was not possible this year. FPB had even tried to leverage internet service providers, Microsoft and other organisations, and was still trying to raise more money to support its work. Only a fraction of the children who should have been reached last year were reached. He noted that in a recent case in Pietermaritzburg, a couple who were using their own children to produce child pornography had won their case on appeal, but it seemed the judge was not aware of the Films and Publication Act, and they were still trading in DVDs showing the children. That case set an unfortunate precedent. He believed FPB also needed a large legal budget to challenge all such matters.

The Deputy Minister commented that the telephone hot line was launched in December 2005 and the Internet hot line was launched in July 2008. During a conference last week, South Africa was applauded for these, which were regarded as amongst the best in the world in terms of infrastructure, and the International Association of Internet Hot Lines wanted to work with the FPB as an entry point to South Africa. Challenges included the proliferation of internet capability in South Africa, and the rapid spread of mobile phones, making it easier for children to access internet and child porn sites, whether deliberately or by accident, and thus being subject to grooming by paedophiles, who would persuade children that this was normal and acceptable. Lack of regulation both in South Africa and the region, and the increase in human trafficking, was making children even more vulnerable. In Brussels, a developed country, the number of children who disappeared without trace was staggering. In Southern Africa the Ministers of Home Affairs had raised the problem of human trafficking, in particular of women and children, who would find themselves taken to different countries where their nationality would not be traced. The internet hotline would assist to identify these problems. However, cyber criminals were very active, and kept changing and intensifying their activities.

Ms Makhasi said that although child trafficking was not within the mandate of the FPB, child pornography had not only to do with the images, but with sexual abuse. Children were often trafficked for the purpose of abuse and making of these images. That was why FPB was becoming involved. The Board had picked up on a number of initiatives, especially focusing around 2010, and was working with the National Prosecuting Authority (NPA), who had organised some initiatives on child trafficking, and with Southern African Development Community (SADC) countries. Department of Social Development (DSD) looked broadly at intensifying the protection of children in the country during 2010, because there had already been reports, confirmed by another report of the NPA, of grooming of children in certain communities. She suggested that South Africa should examine its own state of readiness for child protection in light of 2010, bring together the relevant committee and involve the Local Organising Committee.

Ms Makhasi confirmed that the FPB was underfunded. Although it had developed a strategy for the next five years, it would be expensive to implement. It was proceeding strongly on partnership with State entities. Educating the public did not necessarily include children, and outreach was expensive, so FPB was looking at different mechanisms, especially those reaching out to children, such as exploring a partnership with Mxit or bulk SMS programmes or training of Life Orientation teachers from Department of Education to include these issues in their curriculum.

She highlighted that FPB could classify a movie, such as District Nine, as a 16 age limit. Here, there were appeals about the rating, but the FPB was justified in this because only those older than 16 were likely to have the maturity to understand and appreciate the prejudices highlighted in that film. She explained that XXY ratings were child pornography, and should not be in adult shops. The Appeal Board had ruled that there were some educational films with this rating. FPB would have liked to have the funding to take this further, so that such films could not be hired out.

Adv Madasa was encouraged by what the Deputy Minister had said, and stated that the Committee would encourage and work together with him and FPB in the work of building a new society where vulnerable groups were specifically protected. He was concerned that ICASA issues disclosed a lack of coordination, which was worrying as all should be working together on the same issues.

The Chairperson said that the main challenge was the lack of budget. Because of the nature of the work there were some unfunded mandates. The Committee, although it could not promise success, would certainly motivate for more funding. He suggested that next year it might be useful to hold a debate on the issues.

The Committee voted to accept its Report on the presentation.

RSA / Lesotho Agreement on the Facilitation of Movement of Citizens
The Chairperson explained that the document tabled, setting out the RSA / Lesotho Agreement on the Facilitation of Movement of Citizens, was not for discussion. It was tabled in the previous Parliament. He had read it, and pointed out a number of issues to the Department. If DHA was to pursue this, Lesotho nationals would be able to come to South Africa without a need for travel documents, and would be able to stay in South Africa for six months. He questioned how DHA would be able to account for the people who moved freely, how it could ascertain the numbers and how it could track their exit again after six months. He believed there were a number of material defects in the document. The Committee also thought, in the light of its visits to ports of entry, that it needed more time and information to enable it to produce an agreement of protocol that best served the interest of both countries.

Ms J Terblanche (DA) was concerned that if people in Lesotho did not have proper travel documentation, it might give free rein to those using the Lesotho and the Free State border posts for human trafficking.

The Chairperson agreed that all Members were concerned and the Committee would pursue the matter with the Department, who was looking at it again

Adoption of reports and minutes
The minutes of the meetings dated 10 June 2009; 11 June 2009 and 25 August 2009 were adopted.

The Chairperson thanked Members for their dedication and responsibility during the year’s meetings, and extended his thanks also to the staff, the Committee researcher, other stakeholders and the Parliamentary Monitoring Group.

Ms Terblanche (DA) thanked the Chairperson  for his fair and open leadership, and looked forward to working with him the rest of the term. Ms Z Balindlela (COPE) added that the Chairperson had shown that opposition and majority party members could work together and was setting an excellent precedent in his handling of Committee matters. Adv Madas thanked the Chairperson on behalf of the ANC.

The Chairperson reiterated that this was a multi party democracy in which all public representatives were doing their work. The meeting was adjourned.