Media Diversity & Development Agency: Strategic plan 2012, Annual Report 2011, progress report

NCOP Public Enterprises and Communication

28 August 2012
Chairperson: Ms M Themba (ANC; Mpumalanga)
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Meeting Summary

The Chairperson emphasised, in her opening remarks, that this Committee expected at all times that delegations would be headed by the Accounting Officer, or another very senior official who would be able to answer the Committee’s questions. Several Members also stressed that it was important to ensure greater involvement of the NCOP, particularly since it represented the provinces where so much work took place on the ground, in matters such as oversight visits and regular reporting.

The Media Development and Diversity Agency (MDDA) gave a briefing on its strategic plan for 2012 and its Annual Report for 2010/11 (noting that the next Annual Report 2011/12 would be published on 30 August and that it would cover many of the issues that Members had raised). MDDA was a statutory body, funded by the fiscus as well as levies on media owners. It aimed to provide access to the media information for all South Africans, and to promote media development and diversity, by providing financial and practical support to community and small commercial projects, as well as leveraging resources and advocacy. MDDA had consistently achieved clean audits during its eight years of operations. It had, over the  years, supported 407 different projects and entered partnership agreements with major media roleplayers, as well as established relationships with various government departments. It promoted all forms of mass communication, including radio, television, e-media and other communications platforms, and primarily funded communication in marginalised languages. It was hoping to increase the status of historically disadvantaged universities offering media studies, so that they could become centres of excellence. Community radio was growing in relevance and popularity and MDDA urged that it be used not only to entertain, but also to educate. Whilst there was a decline in funding for print media, this form of media would remain relevant for many years, and MDDA was considering the possibility of arranging low-interest loans from the National Empowerment Fund. Overall, MDDA noted its greatest challenge as sufficient funding, and it was considering various options to increase its revenue, in conjunction with National Treasury. Some of its initiatives in offering support were described, and the budgets and projects in the provinces were outlined. There had been some underspending, largely due to vacancies remaining unfilled. Although the Parliamentary Indaba in 2011 had managed to get the MDDA and Government Communication and Information Systems working together, it had been urged to focus on diversity in the print media, and it was noted that the Competition Commission needed to investigate complaints of anti-competitive behaviour in this industry.

Members felt that the MDDA needed to report more frequently to this Committee, and it would be valuable for it to promote greater knowledge about Parliament itself and how it operated. They also encouraged greater communication via district municipalities, and one Member cautioned that whilst diversity was something that could be encouraged, this should not be stretched to the point that it would promote tribalism and racism, and detract from promoting a common national identity. Members enquired how MDDA promoted open access to information, They enquired how many applications were made to and approved by MDDA, how it judged its successes and whether it promoted best practices and provided toolkits for projects supported. Questions were asked on how it supported its own staff, whether it believed it cold achieve its targets, whether it had any responsibility over cartoons, and how many jobs its activities had created.

Meeting report

Chairperson’s opening remarks
The Chairperson welcomed the delegation from the Media Development and Diversity Agency (MDDA) and hoped that it would be able to identify and address what was happening in the provinces, and how the Committee could assist.

The Chairperson noted that Government Communication and Information Systems (GCIS) was represented by an “Acting Chief Executive Officer”, and asked how long that acting appointment had been in place. Upon hearing that the acting appointment was made only for the day, the Chairperson commented that this was not acceptable, and stressed that the Accounting Officer of an organisation was expected to attend.

A GCIS delegate explained that the permanent Chief Executive Officer and other board members were attending another meeting, but today’s delegation would be able to answer questions, as it comprised of decision makers in the organisation

The Chairperson reiterated that the Chief Executive Officer of GCIS was expected to be present. Members wanted to analyse and debate matters in the presence of senior management.

Mr Lumko Mtimde, Chief Executive Officer, Media Development and Diversity Agency, requested, and received permission to speak at this point. He noted that the full decision-making management team of MDDA was present, and he did not believe that the absence of the Chief Executive Officer of GCIS would hinder the presentation.

Media Diversity & Development Agency: Strategic plan 2012, Annual Report 2011, progress report Mr Lumko Mtimde tabled the MDDA’s strategic plan and report. He noted that MDDA was a statutory body, but it was funded also through partnerships with private partners. It derived its mandate from sections 16 and 32 of the Constitution, which provided for freedom of expression, and since 2002 it had been attempting to promote and enable media access to all people, including the historically disadvantaged communities. MDDA also aimed to promote media development and diversity in South Africa by providing financial and other support to community and small commercial media projects.

Locally, the media was owned by four main stream media conglomerates, namely, Caxton CTP, Naspers/ Independent News, Avusa (formerly Johnnic) and Media24. Until MDDA was established, there had been limited opportunity for emerging firms to enter the media market. MDDA had asked the mainstream media not to refer to themselves as “community owned” as they were essentially privately-owned.

MDDA aimed to ensure that the population would have a diverse choice of media. It did this by providing subsidies and grants to individual media projects, and by leveraging resources to empower technical assistance and capacitate media diversity.

MDDA’s stakeholders fell into three main groups. Firstly, its funders included government, via National Treasury, and those paying broadcast service licenses, and the print media owners. MDDA’s direct partners included government departments, Independent Communications Authority of South Africa (ICASA) and similar bodies. The third group included beneficiaries in the community and small commercial media).

Mr Mtimde noted that in 2010/11 (the period covered by the latest Annual Report that was published), MDDA had been in operation for eight years, and it had had eight clean audits. By March 2012, it had supported 407 different projects, and had partnership agreements with major media role players such as Avusa and Independent News (see slides 10 to 18 for further details).

MDDA’s primary objectives were to encourage ownership and control of, and access to media, by historically disadvantaged cultural groups. “Media” included all forms of mass communication, including radio, television, e-media and other communications platforms. It also aimed to ensure that all citizens could access this media in their own language. The projects that MDDA funded, both in radio and print media, were promoting indigenous languages, and not English, in an attempt to actively redress the past marginalisation of diversified cultures. The relevance of community radio relevance was increasing and would continue to grow with MDDA’s support.  

Mr Mtimde briefly outlined the challenges, and said that shortage of money was the greatest challenge. The funding regulations stipulated that no more than 10% of the funding should be used for research and administration. However, this sometimes was difficult. In relation to revenue he said that each of the “big four” media houses contributed only R1 million annually. However, MDDA had been in discussion with National Treasury (NT) in an attempt to get the print media industry to contribute more funding to the MDDA empowerment drive, and this might even require changes to the legislation. Some of the funding would come from the Department of Communications and GCIS needed to be included.

The Chief Financial Officer, MDDA, tabled the performance indicators, as set out in slides 19 to 27. He reiterated that MDDA was a funding agency that processed applications from funders to intended beneficiaries. Three community radio projects, which were not using English, and were not mainstream, had been funded during the first quarter of the 2011/2012 financial year.

MDDA faced some limitations in the print media mandate, because of the decline in the funding for print media. MDDA was now considering whether low interest loans might be arranged for small commercial printers, possibly through the National Empowerment Fund (NEF).

MDDA intended to launch a pilot project using historically-black universities as future Centres of Excellence in media studies; for instance, the University of Limpopo could eventually reach the status that Rhodes and Wits Universities had held

MDDA had, over the past eight years, been attempting to keep track of the direct and indirect jobs that it had funded, as well as the number of people who had been empowered. In future, other monitoring and evaluation processes would also be used, in accordance with national guidelines. Some of the indicators that MDDA wanted to track included trends of ownership, which companies owned others, and the role of women. Within the next quarter, it was aiming to finalise further reports.

MDDA, in addition to providing financial support, also provided support in other forms, including online support to various sectors, for instance in booking government advertising online. MDDA also worked with other government media to promote partnerships with various departments, one example being the Literacy Project for Juveniles in Correctional Services.

MDDA also wanted to be able to guide programme content, to ensure that entities that were funded not only provided entertainment, but also played a role in informing their listeners. The trends indicated that community radio was increasing in popularity, and people wanted to hear more about local events and to have a local flavour to their radio. The possibilities for educating communities included education sessions on the role of the Independent Electoral Commission (IEC) and HIV awareness training.

The Chief Financial Officer then tabled the provincial comparisons of expenditure on slides 23 and 24. These indicated the approved budget in each province, and the number of active MDDA projects. The online booking system would operate in all provinces in the current financial year. He stressed again that every citizen must have access to communications.

Mr Mtimde read out the content of slides 32 to 35 (see attached presentation) word for word. He noted that MDDA had underspent across various programmes, and made specific mention of the underspending on salaries, because vacancies were not yet filled. The staff complement was detailed on slide 36, and he showed the employment trends over a three-year period.

Mr Mtimde reminded Members that MDDA’s revenue was sourced from both government allocations, and levies on broadcasters and independent print media. The three-year Medium Term Expenditure Framework (MTEF) figures for revenue showed an annual increment, of about R2.3 million, between the 2011 and 2013 financial years. Expenditure was expected also to rise, by about R1.3 million, over the same period (see attached presentation, slide 37).

The Chief Financial Officer recapped that MDDA’s continuing challenge was financing, but said that there were a number of other challenges. The transformation of the print media, in order to meet diversity requirements, was one of the biggest challenges. The Parliamentary Indaba of 2011 had managed to get the GCIS and MDDA working together, but the Competition Commission needed to prioritise investigation of possible anti-competitive behaviour in the print media. In addition, GCIS and MDDA needed to engage with National Treasury on a  possible amendment of the Money Bills Amendment Procedure Act, either to provide for obligatory and additional contributions to MDDA by the four mainstream print media, or to establish a marketing procurement agency, to facilitate small media access to government communications and advertising. MDDA could increase its role if contributions were to be increased.

It was noted that in South Africa, the size of the print media was very small in comparison to the population, and in comparison to other countries. Although there was consensus that online and e-media were the way to go in the long term, it was still recognised that for the foreseeable future, print media had to be transformed, as most South Africans would be reading hard copy print for many years. Even today, there were many areas where no newspapers were available, including the Chief Financial Office’s own village near Kokstad. It was difficult for people to develop their entrepreneurial spirit without access to  newspapers, and it was surprising, and incorrect, that eighteen years after democracy, print media should still be largely owned by four mainstream groups. Only 14% of the print media was owned by historically disadvantaged persons.

The continuing disparities had led Parliament, in June 2012, to call for another indaba specifically focusing on the print media. MDDA was exploring the possibility of a Print Media Charter, but there was the likelihood that this may be criticised as yet another way of trying to regulate the media. MDDA, however, had argued consistently that it was not concerned with content, but with ownership issues. It was clear that a strong transformational programme was needed, whether this was in a statutory or voluntary or charter form. MDDA, not GCIS, had been asked to drive the process and to report back by September 2012. A transformation agenda must be set, as set out on slides 43 to 53.

Mr Mtimde expressed his gratitude for the support from both the National Assembly and the NCOP, the Presidency and outgoing GCIS officer, Mr Jimmy Manyi.

Discussion
Mr M Sibande (ANC, Mpumalanga) asked who initiated the oversight visits, the MDDA or the Portfolio Committee. He was concerned that the Select Committee on Labour and Public Enterprises had not been included in the oversight visits.

Mr Mtimde referred Members to the list of funders and stakeholders, set out on slide 12, and said that the MDDA’s funding covered communication with the Portfolio or Select Committee. However, for practical purposes, it dealt mostly with the Portfolio Committee on Communications.

The Chairperson commented that the MDDA needed to account more frequently to this Select Committee, pointing out that much of the MDDA’s work was done in the provinces. MDDA would do well to inform the public, by way of both the community radio and print outreach education programmes, about the work of the two houses of Parliament. Government had to educate the communities at large as to what Parliament did, what the roles and functions of the two Houses were, and to emphasise that the NCOP represented the provinces. There tended to be monopolisation of information at national level.  

Mr Sibande enquired why the MDDA did not engage with district municipalities, saying that if they were not used, it would be impossible to correct the distorted views that reached people in the deep rural areas, or to fill the knowledge gaps. He later expanded that it was vital also to ensure diversity and to establish a radio without borders that would allow everyone to hear the same type of matter, not just local matters, to foster nation building or a sense of national common identity. He would like to see a common knowledge base, provided equally to all, that would unite and not divide the people. He was worried that too great an emphasis on diversity could have an unintended consequence of promoting tribalism and racism. He suggested the MDDA needed to take responsibility for “an old style in approaching the future”.

The Chief Financial Officer said that MDDA was supporting local stations also in becoming available online, through audio-streaming, analogue radio and digital streaming for the internet. MDDA was convinced that SABC must be part of the solution as it could provide universal coverage, with UkhosiFM as one example. It must be remembered that the funding was targeted to community stations, so something like KFM would not be funded. He also noted the distinction between public and commercial broadcasters.

He also expanded that MDDA supported the notion of the engagement with the district municipality, but it must be remembered that it was not MDDA who granted licenses unilaterally. MDDA could only fund stations, not register or licence them. Registration of businesses was done by South African Revenue Services, and licences were approved by ICASA.

Mr Sibande called for more detail on slide 27.

The Chief Financial Officer said that there was funding in Maputoland, but there was also funding for other areas such as studios and training. Local business would tend to advertise through the local stations, but it was not local business exclusively that was funding the stations.

Mr H Groenewald (DA, North West) asked how many languages had been identified by MDDA for targeted funding.

Mr Mtimde responded that MDDA promoted the use of all eleven languages.

Mr Groenewald referred to slide 26 and asked for an explanation of “other” projects.

Mr Mtimde said that this included media research projects.

Mr Groenewald asked how the MDDA felt about the question of the public’s open access to information, and why this Committee had not become involved on the debate around the sharing of information.

The Chairperson raised a point of order and said that this Committee could not discuss either the Protection of State Information Bill or the Jimmy Manyi issues.

Mr Sibande agreed with the Chairperson that this was not the correct forum for these debates.

Mr Groenewald and Phumla Williams, Chief Financial Officer, GCIS, commented that they did not agree with these comments.

The Chief Financial Officer, MDDA, noted that the MDDA promoted access to information by abiding with the MDDA Act. However, it had no responsibility around the administration of the Promotion of Access to Information Act.

Mr J Bekker (DA, Western Cape) noted that MDDA had funded 343 projects, but wanted to know how many applications for funding it had received. He noted that a very high capital investment had been made into MDDA, and more detail was needed as to how the allocations of funding were made. He also enquired whether any of the projects funded had collapsed, and how it judged its success rate.

The Chief Financial Officer noted that if all the applications were to be supported, MDDA would need to have R64 million available, whereas it was in fact only able to support R6 million of requests. All applications had been processes, but not all were funded. He drew attention to the lists of those funded, on slide 13, and said that some were sponsored to the amount of R15 000, which was enough to make or break those firms. There was a turnaround time of about six months for applications.

Mr Mtimde said that the answers to Mr Bekker’s questions were on page 52 of his detailed presentation.

Mr Bekker asked if the MDDA had considered developing a toolkit for each project, and whether it issued any best practice guidelines for future projects.

Mr Bekker asked for more detail on the conditions of service for MDDA’s own staff, in particular whether there were staff retention plans in place, and whether the financial management aspects also extended to maintaining the governance records.

The Chief Financial Officer noted that MDDA was not as competitive in the market as it should be, but was hoping to improve on this front. It was a matter that would be discussed in January 2013 by the Board.

Mr Bekker noted the target to have one project in each district over the next three years and asked whether now, at the mid-term mark, MDDA believed that it would reach its targets by 2014.

Mr A Nyambi (ANC, Mpumalanga) asked who bore responsibility for art galleries.  

Mr Mtimde confirmed that the MDDA was not responsible for the art galleries.

Mr Nyambi responded to this that in other countries, cartoons were regarded as part of the media and he wanted to know if cartoons fell under GCIS or the MDDA mandate.

Mr Sibande asked who in essence was funding the projects listed on page 11 of the presentation. He believed that many may have been funded by the local business community in the area.

Mr R Tau (ANC, Northern Cape) asked what MDDA had funded in the Northern Cape. He wanted to know whether indigenous people from that area were funded, particularly the most disadvantaged ethnic groups.

The Chairperson agreed that whilst the MDDA had said that its funding covered previously-disadvantage communities, more detail was needed so that the Committee could ascertain what had happened over the past ten years. She suggested that it might be useful for the Committee to conduct site meetings. She also enquired who had been “instructing” the activities of MDDA, and also how many jobs had been created since inception of MDDA.

The Chief Financial Officer answered, in regard to creation of jobs, that often training was an ongoing process, in which universities were involved. The numbers of jobs created were still being assessed. MDDA had begun to quantify them into direct and indirect jobs. Over 300 direct jobs had been created, where MDDA paid the operational costs for the first twelve months. However, a distributor, for instance, would be regarded as an indirect job, and that was far more difficult to quantify. He noted that the Annual Report for 2011/12 would contain more details on this.

In answer to questions on the funding, the Chief Financial Officer explained that MDDA should essentially be seen as a project director. It did not provide funding itself, but provided “project loans” by way of a 100% grant. He told Mr Bekker that MDDA assisted in marketing, and it did produce a tool kit which provided a simplified marketing technique or strategy that could be adapted for use in local situations. MDDA also helped to engage with government to promote other sources of revenue for community media. For instance, it had made submissions to government and to GCIS, and had emphasised that if the GCIS wanted to spend money to promote media diversity, then all public, commercial and community media must be able to access these funds. The MDDA’s Annual Report for 2011/12 was being published on 30 August 2012, and it contained more detail on this. MDDA itself used best practices and tried to foster them in others. Radio Riverside, for example, had been asked to visit communities to share its experiences with newcomers to the industry.

Mr K Sinclair (COPE, Northern Cape) asked if  MDDA was reluctant to fund projects in Afrikaans and English.

Mr Mtimde said that unless this was very strongly motivated, MDDA did not usually fund English and Afrikaans programmes, but tended to focus on the marginalised languages.

The Chairperson asked MDDA how the Select Committee could assist in its endeavours.

Mr Mtimde said that he appreciated this, and MDDA would approach the Committee when it needed assistance.

The meeting was adjourned.


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