Media Development & Diversity Agency 2013/14 Annual Report, State of Community Radio Stations around the country

Meeting report

Chairperson's opening remarks
The Chairperson welcomed visitors and delegates from the Department of Communications (DOC) and the Media Development and Diversity Agency (MDDA). She announced that in the following week, there would be a joint meeting with the Committee of Telecommunications and Postal Services, on Digital Terrestrial Television (DTT) readiness.

She noted that it was particularly gratifying for this Committee to receive a report on the state of community radio stations around the country because when the Committee visited some of them, it had been worried, and hoped that the gaps identified had since been closed.

She pointed out to the MDDA that it should have known of the date for submission of the Annual Report, and for this Committee to receive that report only in March instead of in November was not acceptable.

Ms V van Dyk (DA) added that the Committee must receive documents on time to be able to interrogate them.

The Chairperson clarified that the MDDA report was received by the Members last year, but only two to three slides were now added. However, the state of community radio stations report was submitted as a result of the swop of programmes. The Minister was supposed to deliver a report on the state of SABC and was unfortunately sick, so that meeting had been substituted with today's programme, originally scheduled for 17 March.

MDDA Annual Report 2013/14
Ms Duduzile Nchoba, Acting Chief Executive Officer, MDDA, acknowledged the late submission of the report, sincerely apologised and promised the Committee it would not happen again.

She stated that MDDA received a clean audit for the eleventh consecutive year. She then proceeded to set out some highlights for the year, which included:
- a  total of 570 media projects supported with MDDA grants worth R275 million
- more than 2 021 individuals trained and skilled
- more than 247 bursaries granted for media studies
- community and small commercial newspapers and magazines produced in indigenous languages
- research work produced and published on media topics
- signal distribution costs for community broadcasting discounted.

Challenges included demands for funding that outweighed available resources, and an increase in applications without additional funding

The major source of revenue came from broadcasting partners, about 52% which left a lot to be desired given that, in terms of the Electronic Communications Act (ECA), that money must be contributed to ICASA.

Discussion
Ms van Dyk asked why there was a huge turnaround in employees. She asked why the position of the CEO had not yet been filled since July 2014. She asked why the other vacancies were also not filled despite MDDA spending large sums of money on advertising the vacancies.

The Chairperson said MDDA was set up by an Act of Parliament to diversify the media and the presentation left a lot to be desired, starting with the late submission of the annual report. This was not a matter of "sorry and pass on". The Department of Communications was neglecting MDDA, as there was too much aloofness shown towards it, and, given the lack of top executives in MDDA, the Committee had the impression that nobody was really driving it forward. She asked whether the DOC had direct responsibility for MDDA. It seemed to be in a sorry state, having 13 vacancies out of a staff complement of 19. The clean audit was good news but the Committee was more interested in outcomes. Given that MDDA and Government Communications and Information System (GCIS) were now under DOC, she asked for comment from the DOC as to what was going to be the future strategy to address the visibly glaring areas of advertising revenue and revenue from broadcast partners.

Mr Donald Liphoko, Acting Director General, DOC, replied that when DOC took over the functions for GCIS and set up a branch of policy oversight, it was inadequately capacitated. The staff that used to be on oversight remained in Postal Services and Telecommunications until that unit had transferred. In relation to audit and finance, a Deputy Director from DOC was assisting MDDA. DOC had seconded an acting CEO to MDDA while the search for a new one was being done, and although this was ongoing, he admitted that the efforts to find a replacement perhaps were not sufficient. DOC and its other entities were doing strategic alignment together and sharing views. It would be setting up a series of forums, starting with the CFO forum, for financial accountability purposes, as well as having CEO forums. These forums would be used to manage coordination in the Department. The budgeting would be centralised and DOC would then transfer funds to all entities, rather than following the approach used before, when each had its own budget vote. DOC was to launch a book on transformation in the media as it related to both ownership and control. The succession planning in MDDA had not been firm enough, because DOC believed that when people were employed in an organisation, they were committed and the mass exodus from that organisation had caught MDDA off guard.

Mr R Tseli (ANC) asked whether jobs created by community radio stations were temporary or permanent. The fact of community radio stations relying on government funding alone was worrying. He asked how MDDA conducted its outreach programmes so that people could understand the kind of work it did. He asked if black shareholders in media houses were coming to transform the sector or whether any entrance was just for compliance purposes. He asked what kind of support community radio stations would get to ensure SARS compliance.

Ms Phelisa Nkomo, Chairperson, MDDA Board, said vacancies were a worrying phenomenon but said that the MDDA was receiving support from DOC. Some of the filling of the vacancies had been done, merely waiting endorsement by the board. While MDDA sought to enhance transformation, there had been exclusion around linguistics, with most applications now received in English only, yet there was a  need to promote the use of indigenous languages. PrintMedia had invited MDDA to their meetings to explain why they should continue funding MDDA. Tangibles were measured, based on applications received. Jobs could be created directly or indirectly. Indirect jobs were not permanent and were only there as a result of the multiplier effect, based on the standing needs of a community radio station. There was a need to discuss what exactly having black shareholders meant and whether it resulted in integration and transformation of the media automatically.

Mr Talifhani Khubana, Acting Chief Financial Officer, MDDA, said outreach programmes were done in every province a year. The MDDA would also join with DOC as it conducted its outreach programmes, to showcase the work that MDDA does. The failure to retain staff was leading to an increase in advertising revenue as the MDDA had to continuously advertise vacancies. 

Mr Lindinkosi Ndibongo, Acting Project Director, MDDA, said MDDA was working closely with the SARS training unit and it would be invited by SARS to training workshops, especially with NPO and section 21 companies which had different tax clearance procedures. Many community radios got much of their revenue from government departments, who were slow to pay, and this created a particular hurdle for the community stations in trying to obtain tax clearances and annual returns from SARS.

State of community radio stations briefing
Mr Collin Mashile, Chief Director, DOC, said that DOC was intending to drive a broadcasting system that preserved, informed and reflected the cultural heritage of all South Africans, with a view to achieving 70% content that reflected South Africans. The White Paper on Broadcasting Policy (1998) and the National Development Plan both emphasised the need to support community broadcasting, both legislatively and materially, to sustain it.

There were over 210 community radio stations reaching an audience of 8.6 million listeners weekly, five community televisions licensed in South Africa with 12 million viewers weekly, and 75% of the radio and one television station received support from government. Notwithstanding the governance challenges that bedevilled the sector, the critical question was how to sustain the sector in the years to come, as current experience suggested that struggling community media may not survive without government funding support. DOC was working hard to prepare the community media sector for the future, and making it fit for the times and diverse audiences it served. The ICT Policy Review Panel highlighted that the community broadcast sector must provide a distinct broadcasting service dealing specifically with issues not normally dealt with by other broadcasting services, covering the area in question. The section of the ECA dealing with class licenses, while ensuring quick turnaround time for decisions on registration (a 60 days limit) also set out the regulator’s responsibility to scrutinise applications to ensure that they met all the envisaged objectives and requirements for the sector. The Act did not empower the authority to suspend, revoke or refuse to renew a class license, even if the licensee had, for example, violated legislative, regulatory and licensing requirements. Community media had been and continued to go through turbulent years, affected by changes in technology, complex competitive environment and audience needs. There were also challenges of corporate governance, unaccountability and abuse of state funds, lack of support from government and municipalities and non-availability of frequencies for new licensees.

Discussion
Mr Tseli said DOC must do an audit to ensure that government departments, municipalities and state entities would advertise through community media to enhance their sustainability. The abuse and unaccountability of state funding by community media should not wait for a review of legislation. He asked why DOC was interested in assisting new radio stations whilst existing ones were struggling. It was unreasonable to have many radio stations with many problems. The gap of not being able to revoke licenses also needed to be looked into.

Ms N Ndongeni (ANC) asked MDDA to detail the progress it had made in addressing supply chain management and human resource challenges. She asked if it had any strategy to help struggling community radio stations. She asked how much the external audit was costing MDDA.

The Chairperson asked DOC how it intended to work with the National School of Government, and the Sector Education and Training Authorities (SETAs) in the country.

Mr Norman Munzhelele, Deputy Director General, DOC, replied that DOC had identified challenges faced by radio stations. The problem of licenses emerged from the provision that if ICASA did not send a reply to the applicant within 60 days, that person could start operating a community radio because it was not permitted to deny any application. The problem was that there were now too many community radio stations that although licensed were not broadcasting, because of limited spectrum frequencies. Old community radio stations must reach a level of financial sustainability. However, technology was changing whilst at the same time the budget to assist community radios was decreasing. There was a need to balance the sustainability of existing radio stations with opening new ones as well.

Mr Mashile added that in some cases, community radio stations did not want to account for how they used their money. If they had been given money by MDDA and requested to account, they would run to DOC to ask for money too. However, the time of "double dipping" was now over and any community radio that did that would be precluded from getting money over the next five years.

Another problem was that when community radios had conflicts, the ultimate resolution often depended on who was the strongest. There was, when balancing new and old stations, a need to give priority to areas that had not had existing radio stations, whilst also upgrading and having new ones as well. Some community radio stations had unsustainable business plans.

Mr Liphoke replied that he would be able to provide a breakdown of government advertising spend through GCIS in the next few weeks. The Minister had been visiting Premiers' offices around the provinces and speaking with municipal communicators, highlighting the importance of supporting community media. MDDA had started a database to be able to identify community radios struggling to comply with the Public Finance Management Act. Brand SA and GCIS had been doing a study on what was involved in "being South African" and self identification, which would be reported back to the Committee later. SABC must have equipment to broadcast in South Africa as well as in the global world especially on sports such as the ICC World Cup, which played an important role in bringing communities together.

Ms Nkomo replied that there was a need to think about the social dynamics which had been happening in South Africa over the past 20 years. Diversification, transformation and inclusivity were undermined if community radio stations were not sustainable. MDDA would be undertaking an organisation review for the next 20 years.

Mr Khubana reported that R1.3 million was used for the audit, of which R633 000 was used for internal audit.

Mr Ndibongo replied that there were also some entrepreneurs who established community radio stations as a means of survival. However, for any newspaper to survive, it needed advertising revenue. MDDA had managed to open four new newspapers per year since 2008.

The Chair said the presentation was fruitful and thanked officials from DOC and the MDDA.

Other business
The Chairperson summarised that the Committee would be holding further interviews for SABC, MDDA and ICASA, and this may fall outside the programme of the Committee, and warned Members that they may need to attend some meetings to finalise issues even during constituency weeks. 

The meeting was adjourned