Regulation of Interception of Communications and Provision of Communication-related Information Amendment Bill [B38-2010]: briefing and adoption

Meeting report

Department of Justice and Constitutional Development (DoJCD) briefing
Adv Deon Rudman, Deputy Director-General: Legislative Development, DoJCD, briefed the Committee on the Regulation of Interception of Communications and Provision of Communication-related Information Amendment Bill [B38-2010]. The purpose of the Bill was to amend the Regulation of Interception of Communications and Provision of Communication-related Information Act 2002 so as to extend the period within which the information of customers must be recorded and stored.

Adv Rudman explained that the Act had been amended previously. Certain information had been required from mobile telephone network operators. Originally this information was to be given through a paper-based system, but the mobile operators had suggested an electronic system. This amendment had come into effect on 01 July 2009 with a deadline for registration of Subscriber Identity Modules (SIM) cards and personal information of customers by 31 December 2010.

At the beginning of the year the mobile operators had said they would not meet deadline, after which they had to disconnect customers who had failed to register.

When the legislation had been passed by Parliament, there was a resolution that the Department must report on implementation. The Department had reported in June 2010 that mobile operators could not meet the deadline. The Department had in its report dealt with the possible extension but Parliament had not yet considered the report. The Department had decided that on the basis of the information provided to it that it should recommend an extension until 30 June 2011. The Bill providing for this had been tabled in Parliament the previous week.

The Department had considered the needs of the police and other law enforcement agencies since they used the legislation providing for interception more than most and they had supported an extension of six months. The Department had also provided the reasons why the extension of the deadline should be favourably considered, and had the approval of Cabinet.

Adv Rudman said that there remained some 10 million mobile telephone customers who remained unregistered, mainly in the rural areas. The mobile operators would explain further.

Vodacom submission
Mr Nkateko Nyoka, Vodacom Executive Director: Legal and Regulatory, advised the Committee that the mobile industry would not make a joint submission. However, Vodacom and MTN had a huge base and would be the worst affected if the deadline for cell phone customers to register their Subscriber Identity Module (SIM) cards in terms of the Regulation of Interception of Communications and Provision of Communication- Related Information Act (RICA) were not to be extended. The industry sought an extension until 30 June 2011.

Vodacom’s agenda for its submission was its initiatives since August 2009, which included public education and awareness campaigns, its challenges and its plans for the future. Vodacom reported on progress to date, gave figures for registrations of active customers and an estimate of the number who had yet to register – some 4.6 million active customers still needed to register.

Registrations per day had decreased for a time, Vodacom had now observed a change of attitude of its customers and registrations had recently picked up. Vodacom had given incentives to trade partners and paid bonuses when they met their monthly targets. Vodacom also encouraged customers by offers of free airtime.

Educating people about RICA was a challenge much greater than expected. Vodacom had also noted that customers in rural communities were not exposed to the conventional mass media other than community radio while post-paid or contract customers did not think they had to register. Notwithstanding Vodacom's vetting of potential customers’ creditworthiness before accepting them as contract customers, prepaid customers still had to register in terms of the law. Vodacom’s original initiative had been directed to prepaid customers, but post-paid customers were now being targeted also.

Pre-paid electricity accounts, for example, did not reflect an address. Many prepaid customers, when they received post, did not receive it at a physical address but a post box number. The important point was that most of Vodacom’s prepaid customers lived in rural communities to which the operators lacked convenient access.

Vodacom had, in August 2010, launched a product to expedite registration in terms of RICA. Vodacom had begun a campaign of targeted registrations: the company was visiting office parks and offices of the Department of Home Affairs and local municipalities where the company was confident that members of the target clientele would have the required documentation with them. Vodacom had also deployed “foot solders” to visit people in the areas where they lived. Moreover, Vodacom had launched a new product – a form on which customers could obtain certification from a traditional leader or equivalent as proof of address, and was visiting customers in their communities to encourage and facilitate registration.

Vodacom assured the Committee that it would not hesitate to disconnect customers who failed to register by the 31 December 2010 deadline, but regretted the necessity to cut off so many South Africans' means of communication, since mobile telephones had become a vehicle for empowering people. With this mobile telephone tool, South Africa now had an additional avenue for creating jobs. Moreover, prepaid airtime was a distinctly South African innovation.

Vodacom felt that the correct balance between meeting the requirements of law enforcement and avoiding the cutting of services while reaching out to people who had historically been excluded from the mainstream economy, was to ask for six months more – until 30 June 2010.

Vodacom noted that it was the first time that the country had had to register 45 million SIM cards, and made comparisons with the Financial Intelligence Centre Act 2001(FICA) process 10 years previously. The Committee had to consider the magnitude of the problem. The period of 18 months had originally seemed like a long period but it seemed now that there was a need for some form of indulgence. Vodacom would continue with its campaigns but Vodacom would be more aggressive. It acknowledged that there would be absolutely no chance of a further extension.

MTN submission
Mr Robert Madzonga, Executive, Chief Corporate Services Officer, Mobile Telephone Network (MTN), said that the key challenges that Vodacom faced were similar to MTN's. 25% of MTN's prepaid customers had not registered and many post-paid had failed to do so. MTN had launched radio and print media campaigns and as the global sponsor of the World Cup had taken the opportunity to register its subscribers at the fan parks and had give them airtime as an incentive. MTN also took RICA to the people by using Mr Delivery to register MTN's customers in their homes when they took delivery of their food. MTN used short message service (SMS) campaigns. MTN was currently coming up with innovative campaigns featuring sports personalities and went to public venues and rural areas, and to homes to establish RICA points of presence where individuals could register their friends and family. MTN also offered the chance to register at spaza shops at which the shopkeeper could register the customer through the shopkeeper's cell phone – an innovative way to register the people. MTN had spent millions of rands in giving out merchandise.

MTN noted the challenges faced by the Department of Homes Affairs, where 500 000 Identity (ID) Documents had not been collected, while people who wanted to register in terms of RICA could not do so for want of the necessary documentation.

In the informal settlements there were those who did not receive post and did not want to be registered. Some vendors had stopped selling prepaid SIM cards because of the fear of robberies - this reduced the number of points at which customers could register, so MTN had asked some customers to offer their homes as registration points.

MTN found the need for face to face verification to be a difficulty; in some cases the niqab [covering of the face] was a problem but MTN acknowledged that it must respect this custom.

If the six months extension was granted, MTN would use software to pinpoint the areas where many unregistered customers remained. MTN would set up registration points there at offices of the Department of Home Affairs. MTN aimed to capture the majority of law abiding customers. MTN would regard those who, in spite of these efforts, would not register within the six-month extension as a lost cause.

Discussion
Mr L Landers (ANC) opposed the Bill. He explained that the purpose of the RICA had nothing to do with the mobile operators' bottom line.

Mr Masongo replied that even though it was not part of MTN's bottom line, MTN had sent out free SMS messages on the gun laws. MTN had received many awards for assisting the Government in combating crime.

Mr Landers was unimpressed with Vodacom. It had showed Members its initiatives, but the RICA Act had become law beforehand, while Vodacom had been busy for only a year. So Members should not be surprised at the shortfall in registrations.

Mr Landers was not convinced by the challenges of the informal settlements. When the banks were required to register their customers under the FICA, they did not complain. He rejected the mobile operators’ apologies, and stated that they had never accepted the reasons for the RICA.

Vodacom acknowledged that the mobile operating companies were listed entities and that it was their responsibility to comply with the law.

Mr Landers asked what initiatives the mobile operators had taken prior to the RICA Act. He asked why the mobile telephone operators had not registered their post-paid or contract customers then. That was his difficulty: 2002 was the year of the original Act, but they took their initiatives only in 2009.

Vodacom acknowledged that it had not done much before the effective date of RICA for the mobile customers; however, it explained that investors needed regulatory certainty before parting with their money. An investor would not invest in Vodacom until it had certainty of legislative stability. In April 2010 Vodacom had told Department of Justice its problem which the Department translated into a report that it tabled with Parliament for consideration. Vodacom would comply with the law and should not be seen as an opposition to Government. It was Government's partner.

Mr Masongo replied that it was important to note that mobile operators had a geographic location system. There had been so many cases that MTN could mention in which MTN had given its cooperation to the police. It had assisted the Federal Bureau of Investigation (FBI) and Interpol after the World Cup. MTN supported the Government in combating crime and had piloted the appropriate software to assist the registration process.

Mr Landers asked why SIM cards could be bought without producing identity documents. There were many things that the mobile operators should have done but which they had not done.

Vodacom replied that the reality was that no one could buy a SIM card without giving personal details and producing an identification document and proof of residence. Moreover, even if bought without such proof, a SIM card would not be activated without a copy of the identity document and proof of residence.

Vodacom reiterated that the network would not activate a SIM card until it had been registered.

Mr Landers said that Vodacom had done as little as possible.

Vodacom acknowledged that RICA dated from 2002 but the part of the RICA legislation that applied to mobile operators did not become effective until 2008, but even so the implementation date had depended on a proclamation from the Department of Justice and Constitutional Development; it was proclaimed only in June 2009.

Vodacom emphasised investors' consideration of regulatory stability. Investors asked when the operator was legally bound; the chances for securing funds for a project such as registration had been remote until certainty was brought about in June 2009, not withstanding Vodacom's prior intention to comply.

Vodacom had captured about 80% of its customers. This was quite a phenomenal success.
Vodacom maintained that when making a comparison with banks, it was important to know the quantum of the problem. There were many exceptions to the FICA. However, all SIM cards had to be registered if they were not to be disconnected. It was necessary to balance this against the economic reality.

Vodacom maintained that if it disconnected the unregistered SIM cards, then Vodacom would disable a large number of people who owned a small business and were dependent on a mobile phone. There was an increase in data traffic, and more and more people were using a cellular phone.

Mr Landers noted MTN's plea that it was faced with Muslim women who declined to reveal their faces. MTN should show some respect; he hardly imagined that a Muslim customer of a bank had to remove her niqab to prove her identity. He was tempted to propose that all users of the RICA registration system appear before the Committee. These service providers had gone to Cabinet but they were not the only stakeholders. He contested the fear that if services were terminated as a penalty for failure to register, then existing customer information would be lost.

Mr J Jeffery (ANC) would be “a lot milder”. However, he did not know why registrations when contract (post-paid) customers upgraded their telephones had not been done earlier.

Mr Jeffery observed that many people had more than one SIM card.

Vodacom responded that taking that even so, 70% of South Africans were connected. Until one had exhausted all avenues it was hard to know who had two or more SIM cards. One of the positive developments of the RICA process was that the mobile operators could identify who their good customers were. The sixth month extension period would enable them to have greater clarity.

Mr Jeffery suggested a message by SMS or a temporary disconnection as a warning.

Mr Jeffery asked what the mobile operators had done to prepare for a rush of disconnected customers who suddenly wanted to register.

Mr Jeffery thought that Vodacom's product – a new form to capture proof of residential address – was a useful innovation.

Mr Jeffery asked if the mobile operators had gone to the universities, colleges and schools, since the students could be traced through their student registrations.

Ms D Smuts (DA) said that it was thanks to the mobile operators that South Africans had communications and economic empowerment. She also paid tribute to the South African genius of pre-paid airtime which made it possible for many people to have phones. The deadline must be extended; it would be wicked to cut off customers, especially those in the rural areas. Those who would refuse to register would be the criminals. Was the purpose to cut off the criminals? However, people must obey the law of the land. She pleaded for an extension. Perhaps Mr Landers might ask himself about the difficulties in registering voters.

Prof L Ndabandaba (ANC) asked if the mobile operators made use of the media with a big readership in the rural areas. Using the media would make registration quicker. He supported the extension of the deadline for the sake of order in the country.

Vodacom responded that not all South Africans had access to conventional media. It would use community radio rigorously. Media alone, however, would not help Vodacom achieve its objective. It would triangulate its customers and deploy agents in that community. Furthermore, Vodacom would emphasise that the vital tool of the mobile telephone would be meaningless without registering before 30 June 2011.

Mr Masongo replied that MTN used community radio extensively. He had also taken part in a South African Broadcasting Corporation (SABC) programme on why it was necessary to register.

Mr Masongo added that MTN now visited the people in their communities and even in their houses.

Mr Ntapane (UDM) aligned himself with Landers; however, he said that it was necessary to give this extension for the sake of South Africa.

Mr S Swart (ACDP) said there had been enough time to register. He asked why the mobile operators had not increased the visibility of their awareness campaigns six months previously. He suggested that the law enforcement agencies should be allowed to say why they did not oppose the extension and why they were worried that existing information on customers would be lost if those customers were disconnected. He, nevertheless, supported an extension.

Adv S Holomisa (ANC) objected that rural communities were identified as a particular problem. There were places where people gathered together on a regular basis and he could not see why the two companies were unaware of those facilities. The rural people should not be presented as a problem, since they managed to obtain the things that they needed even if they lacked street addresses. This extension was necessary otherwise people would suffer. However, slackness was unacceptable.

Mr Pakamile Pongasana, Managing Executive, Vodacom, said that he was from Transkei and that Vodacom had seen rural areas as problematic. To begin with, Vodacom had expected people from the rural areas to go to a shop with proof of address to register. This approach, Vodacom later realised, was not the best way, hence the design of an address form to be endorsed by a chief instead of an affidavit. With this form one could obtain a signature and then go and register. Vodacom acknowledged that it had learned slowly in that area. It was possible that one would find a number of people answering to one address and it had to be asked if law enforcers would see that as a problem. It was important that one did not consider rural people as difficult people to deal with.

Ms Smuts said that an enormous number of people did not have postal addresses.

Mr Landers asked Ms Smuts how the banks had addressed that problem.

The Acting Chairperson suggested a message to customers indicating what would happen if they did not register. He also suggested a voice message, similar to that of Telkom when it suspended a subscriber for an unpaid bill, to say that the mobile operator would not restore service until the customer had registered. 

Mr Jeffery asked what the mobile operators were planning for 01 July 2011.

Ms Hester Marais, Executive Head: Commercial, Vodacom, said that there was provision for registration after the disconnection date.

Mr Jeffery suggested that they might get more response if they started cutting people off for an hour. It would also be good if a telephonic voice warned customers if they had not registered in terms of RICA.

Ms Marais replied that Vodacom could examine the possibility of temporary disconnection.

Mr Jeffery said that the Committee had little choice but to adopt the Bill. 01 January was a bad time to cut people off.

Mr Masongo appealed that to cut off customers would be a catastrophe, even though it did have the mechanism to disconnect.

Mr Jeffery said that the mobile operators had not said why they had not, until June this year, required the contract customers to register when they upgraded. It would have been very easy to register them when upgrading. MTN had done badly as regards registering post-paid (contract) customers.

Ms Marais said that Vodacom had since June this year implemented the legislation.

Prof Ndabandaba accepted that Vodacom and MTN were rivals in business, but he was concerned by the absence of Cell-C.

Ms Smuts suggested that Adv Rudman should draft a law to the effect that a mobile operator must deactivate, rather than blacklist the SIM card immediately when a customer had notified it that his or her telephone had been stolen, otherwise criminals used the SIM card and caused the victim to incur huge telephone bills.

The Department replied that it was first necessary to report the loss to the police. Thereafter the police would notify the mobile operator.

The Chairperson detected some consensus among the Members.

Mr Jeffery asked when MTN had begun to register post-paid customers.

Mr Masongo replied that MTN had treated them the same but there had been confusion since post-paid customers had assumed that MTN already had all their details. Such customers had challenged MTN to offer an easier process than having to give the same information over again.

Mr Jeffery asked when MTN had begun to register customers when they upgraded.

Mr Masongo replied that MTN now registered such customers simultaneously.

Mr Jeffery noted MTN's response.

The Chairperson observed a consensus towards adoption; he said that Members must vote.

Ms Smuts moved the motion to adopt the Bill.

Prof Ndabandaba seconded.

The Bill was adopted.

The meeting was adjourned.