Committee Report: deliberations continued

Meeting report

Committee Report: deliberations continued
The Committee continued its deliberations on the report on the SABC board inquiry into the fitness of the SABC board. They began at section 14.3.

Section 14.3: Legal Status and Governance.

Regarding 14.3.1, Mr S Swart (ACDP) stated that the ad hoc committee should refer to the legal opinion drafted by legal advisors. This advice makes it clear that the Broadcasting Act takes precedence of the Companies Act.  This opinion is decisive and has been provided electronically; it should form part of the report.

The Chairperson agreed that the wording should refer to the legal opinion and mentioned that the Committee shares the view of the legal experts.

Ms M Khoza (ANC) stressed that the committee position must not be ambiguous.

Mr N Khubisa (NFP) agreed: Subsection 14.3.1 must stipulate that the Broadcasting Act supersedes any other Act in this regard [there was no objection so the motion carried. From here on in this report if no objection is mentioned the reader can assume the motion was carried].

Subsection 14.3.2 was agreed upon as it stood.

The Chairperson pointed to section 14.3.3. The intention is that there must be no encroachment of the shareholder onto the roles of the board; there must be a clear division of roles. It is unclear if this point is necessary given the previous paragraphs.

Ms J Killian (ANC) felt that 14.3.3 must be retained but clarified in how it differred from the previous points. There must be a clear understanding of the respective roles of the shareholder, the board and management of the SABC. The shareholder in this case refers to shareholders, parliament and the executive. The Committee should also include that the board must be regulated in line with King lll Accounting Principles to ensure no undue encroachment on matters that pertain to the board.

Mr Swart reminded Members that the “principle legislation” referred to in the report refers to the Broadcasting Act. However, the Memorandum of Incorporation (MoI) was regulated by the Companies Act. The point is that there must be alignment with the Broadcasting Act as well as the Companies Act where both apply. The principle legislation is the Broadcasting Act and this pertains to governance, but the Companies Act will also apply where relevant. The report must specify this.

Mr F Mokoena (EFF) felt that somewhere in the section, such as 14.4.1, it must be specified that the report refers to the Broadcasting Act as is. It should remain unchanged.

Mr J Mahlangu (ANC) recommend that instead of using the phrase “King lll” the report should rather specify “King Code” this captures any updates that may happen to the King Code principles. For example, at the time King lV already existed.

Ms P Van Damme (DA) felt that the Broadcasting Act was not explicit about the role of the shareholder. This role was normally clarified in the MoI. She suggested that the Committee add to paragraph 14.3.2 to specify that the MoI must be amended in order to also clarify the role of the shareholder vis-a-vis the board and SABC’s management.

The Chairperson and members felt that the treatment of the principle Act in the report must remain as is going forward especially when the matter is handed on to the Portfolio Committee on Commuinications and others.

The Chairperson explained that SABC gets some funding from the fiscus but mostly from advertising. The previous discussions of the Committee had suggested that the SABC needed sustainable funding to function. This was the intention of paragraph 14.3.4.

Ms F Loliwe (ANC) felt that the ad hoc committee should emphasise the public mandate of the SABC. After the word “sustainability” it should include “with particular emphasis on the funding of the SABC’s public mandate”.

Mr M Waters (DA) agreed that the paragraph was necessary. The report should stipulate that the Portfolio Committee on Communications should review the funding model. This way there is a particular body that is responsible.

Mr H Chauke (ANC) felt that the paragraph should emphasise the point that the company is publicly funded. Even if the allocation from the public is small it is important to stipulate that there is public funding. Because SABC is publicly funded, it must be accountable to government.

Ms Khoza felt that the report should emphasise that while the SABC can be sustained by its public funding mandate, the company should remain competitive as a commercial entity. This should be done as part of the effort to ensure its long-term financial sustainability.

Mr Khubisa added to the paragraph that the Portfolio Committee on Communications should ensure that the funding model of the SABC is well regulated.

Mr Swart felt that the issue went to the heart of the ad hoc committee’s mandate which is to look at the financial state and stability of the SABC. The Auditor General’s (AGs) report was published on 31 March 2016. The performance management report subsequent to that indicated that there has been further deterioration since the AGs report.  Both reports are relevant to the discussion. In their written submission, the SOS Coalition referred to a looming financial crisis at SABC.

The Chairperson felt that Mr Swart would have to come with a more concise version of this suggestion.

Mr N Kwankwa (ANC) agreed that it should be concise. He clarified that the SABC gets a balance of private and public funding which helped ensure the financial sustainability of the entity. Regardless of this mix they were still accountable to the public. The mix needed to be sustainable.

Ms Loliwe agreed that the report must be succinct. She urged that the ad hoc committee should not overdo its recommendations and “dictate” what the Portfolio Committee should do when it is really their work.

Ms Killian felt that there should be a short recommendation added under the accountability section. It was part of the SABC’s responsibilities to report to the AG including any shortcomings. Perhaps it would be a good idea to request that the Portfolio Committee calls the SABC board to reflect on its financial sustainability. This was not too wordy and was helpful.

The Committee moved on to paragraph 14.3.5.

Mr Mokoena stated that the archives belong to the National Film and Video Library (NFVL). This library fell under the Department of Arts and Culture (DAC).  As such they do not belong to the SABC. There was a plan by the NFVL to rehouse the archives but there was no space so they were left at the SABC. Seeing as the archives were under the stewardship of DAC, the recommendation should be that the Department must conduct an investigation into the status of the archives, takes steps where necessary, and map out a way to secure them for the future.

Mr Khubisa had read that certain content had been sold to Multichoice. In the upcoming Bill, it should be well legislated that the public are the custodians of the monies received for any material sold.

Mr Waters stated that Legal opinion was that the SABC must give broad access to the archives and not just to Multichoice. Therefore, the SABC breached the policy. Paragraph 14.3.5 stated that Parliament needs to consider policy with regards to the archives. So, the ad hoc committee should “tighten up” this clause and suggest that the Portfolio Committee on Communications deals with this matter and adjust the policy where possible. It is up to Portfolio Committee on Communications to decide if the archives should be moved under the custodianship of the Department of Arts and Culture.

Ms Kilian stated that the ad hoc committee needed to mention this. She added that the report should make specific reference to the relevant section of the Broadcasting Act, which is section 8 J.  She agreed that the executive of Parliament needs to reconsider the policy of the management of the SABC archives and libraries, which should be in line with Section 8 J of the Broadcasting Act. This is not dictating to the Portfolio Committee but suggesting that they check if management is complying with the Act. She supported giving the responsibility to the Portfolio Committee on Communications.

The Chairperson pointed out that the committee can include the above discussion by stating that Section 8 J must be implemented in full. A point can be added stating that joint or alternative custodianship is a possibility. He reminded members that the recommendations should make sure to pass responsibilities onto permanent bodies.

Section 14.4: Corporate Governance.

The committee moved on to Section 14.4, Corporate Governance.

Mr Smith explained that the section discussed the role of the administration as opposed to the role of the board (where “the administration” refers to the Chief Executive Officer, the Chief Financial Officer, and so on).

The Committee agreed that paragraphs 14.4.1, 14.4.2 and 14.4.4 could be deleted as they were covered elsewhere.

The Chairperson reminded members that they had previously agreed to delete 14.4.3.

The Committee discussed paragraph14.4.5. When the Independent Communications Authority of South Africa (ICASA) met with the ad hoc committee it had requested that the chairperson specifically withdraw the comment that had mentioned the issue of not airing the student protests. This is a censorship matter. Censorship matters in any form must be dealt with expeditiously. That was the intention of 14.4.5.

Mr Mahlangu felt that the matter should fall under the board responsibility section.

Mr Waters was relieved to hear that there would be a request to remove the policy of not showing destruction of property. It was important to ensure that the SABC reports news fairly and freely without intimidation. This was essential and the report should ensure that the policy was not re-implemented at a later stage.

Ms Kilian wanted to refer the censorship issue to the Portfolio Committee on Communications to ensure that everything was “properly in place”.  Specifically, the paragraph should state that the Portfolio Committee should invite the SABC board and ICASA to ensure that all remaining issues relating to policy implementation and or correction are done where necessary with specific regard to alleged censorship and irregular editorial decisions taken. There should be a new presentation to the Portfolio Committee.

Mr Mokoena suggested that the report state that the effectiveness of the advisory body is overseen by the Portfolio Committee. The Portfolio Committee must implement the part of the Broadcasting Act that relates to public participation in order to create a more socially responsible editorial team.

Mr Waters wanted to change the word “alleged” in Ms Kilian’s recommendation. The censorship happened – it was not alleged. Mr Hlaudi Motsoeneng stated in several platforms that he was doing it.

The Chairperson stated that the practise of changing the company organogram on a regular basis to serve unfit purposes was not acceptable. This particular problem must be noted in 14.4.6.

Mr Mokoena felt that the paragraph had been covered previously in points discussing the MoI, but the Committee moved to keep the paragraph for emphasis.

Ms Kilian suggested that at the beginning of section 14.4.6 the following should be inserted: “changes to the delegation of authority framework, and haphazard changes to the reporting lines of the administrative staff of the SABC must be reviewed with the intended aim of strengthening corporate governance”. It was a very serious challenge and the ad hoc committee should take the stance that the delegation of authority framework must be reviewed.

On 14.4.7, Chairperson felt that the process of vetting must not be underestimated. Involvement of the State Security Agency (SSA) for actions other than vetting should be frowned upon.

Ms Van Damme felt the Committee needed to be firm. The involvement of state security fighting battels on behalf of the executives at SABC was a problem. The Minister of State Security should investigate and table a report detailing why the SSA was involved in the SABC at all.

Ms Kilian recommended that the following be added: the SABC board should instruct management to provide clarity on the involvement or alleged involvement of the SSA. The report should retain the second sentence about fast tracking.

Mr Waters suggested that a sentence be adding saying that the Portfolio Committee on communications may wish to refer the matter to the Inspector General of Intelligence should irregular usage of theSSA be found.

Mr Khubisa stated that while vetting was important it must not be abused. Vetting should be fast tracked. 

Mr Waters stated that the Inspector General should do an inspection and report back to the Portfolio Committee on Communications. The investigation should not be performed by the inspector general and it should be reported to the portfolio committee on communications, as this committee is open to the public.

The Chairperson decided that the report would indicate that the Inspector General should do the inspection and report to Parliament.

Mr Mokoena wanted to add that there should be a turnaround strategy that looked particularly at local content and the management of artist royalties.

The Chairperson decided that this issue would be dealt with in the next meeting.

Mr Swart added on that point that the advisory board can also advise on content. This could be added to Mr Mokoena’s recommendation.

Dr Khoza felt that the issue of local content was tied to financial sustainability.

Section 14.5: Accountability

The Chairperson moved on to 14.5.1. There was clearly a case of attempts being made to provide misleading evidence.  A legal opinion was available on the sanctions relevant for misleading parliament.

Ms Van Damme asked if the report could be explicit in this section about which legislation was relied on in this regard. This would be section 2 of the Powers, Privileges and Immunities of Parliament and Provincial Legislators Act. It was preferable to include the actual text from this section.

Ms Kilian suggested that the Committee specify which entity should decide the sanctions: The Evidence Leader at Parliament Legal Services should compile a list of individuals who are possibly guilty in terms Section 2 of the Powers and Privileges Act within 60 days after the report is adopted.

Mr Swart explained that the individuals must be identified first before they can be sanctioned. Therefore, there must be an inquiry first. Protection should also exist for the person who provides the evidence.

Mr Khubisa stated that the legal team could assist the ad hoc committee. There may be other legislation that is above the Powers and Privileges Act.

Mr Waters pointed out to Mr Swart that the sentence already mentions that the witnesses have been found guilty.

Mr Swart accepted this explanation.

Ms Kilain suggested that the responsibility be given to the Evidence Leader at Parliament Legal Services who can then compile the list and submit it to Parliament which will most likely refer that to the Powers and Privileges Committee.

The Committee agreed and moved on to 14.5.2.

Ms Kilian wanted to retain this paragraph. It was an important matter. The report should say the following: SABC is the public broadcaster and as a company under the Public Finance Management Act (PFMA) it is therefore accountable to Parliament.

Mr Chauke suggested that the committee remove the line that says the SABC is partly funded by the national fiscus.

The Committee agreed that 14.5.3 was satisfactory as it stood. Regarding 14.4.6 it was decided that the following be added at the end of the sentence: “must be adhered to and monitored by the Portfolio Committee on Communications and the Standing Committee on Public Accounts (SCOPA)”. It was decided that 14.4.5 was unnecessary and could be removed.   

Section 14.6: Journalistic ethics and related matters

Regarding section 14.6.1, Ms Kilian recommended that paragraph 14.6.1 reads as follows: As SABC is the Public Broadcaster established in terms of the Broadcasting Act, the SABC must in terms of the Charter at all times adhere to the highest standards of journalism, with editorial independence being uppermost.

Regarding 14.6.2, Ms Van Damme requested that the report specify that the revised editorial policy [that lead to the censorship] is withdrawn and that public consultation is conducted. This will revive faith in the SABC. There were several witnesses that said there was insufficient consultation with the public before that editorial policy was finalised. This is the justification for removing the policy. She explained that the improper consulations were the fault of the previous board of the SABC. If there is an instruction it should go to the interim board of SABC and not necessarily to the Portfolio Committee.

Mr Chauke felt this was an issue for the Portfolio Committee to decide on. He suggested that it was not necessary and preferred to leave 14.6.2 as it was.

Mr Waters pointed out that the Minister of Communications had previously indicated that the policy did not need to be provided to Parliament. The Portfolio Committee however can exercise its oversight role in this regard.

The Committee ultimately decided that Ms Van Damme’s point would be included in a separate bullet, stating that the issue of the editorial policy must be referred to the Portfolio Committee on Communications.

Ms Van Damme pointed out the typo in 14.6.3. The sentence should read: “…a fair environment free of intimidation…”. The SABC 8 provided a list of “henchmen” in the SABC – people who were beholden to the CEO and implemented his decisions. This list has been provided to the Committee. Can this list be added to the report in order to ensure the environment is free of intimidation and so on? Can these names be listed and a request sent for an investigation into their appointment at the SABC?

The Committee agreed to this.

Mr Khubisa suggested adding parliamentary oversight to 14.6.3. Parliament – via the Portfolio Committee on Communications - must ensure these points are followed through on.

Mr Chauke felt that the clause should also request that there be efforts to raise the morale of the staff at SABC. This is an area that needs the attention of the board.

Mr Swart said that a separate bullet was necessary that protects specific people including the SABC 8. Acts of violence and threats against SABC staff relating to their work should be followed by police investigation and protection if necessary.

Mr Mokoena mentioned allegations that “someone is running the SABC from outside”. Perhaps the board should investigate this?

Mr Kwankwa felt that the allegation was untested and therefore not watertight to be put in the report.

Mr Chauke felt that current the SABC had no leadership.  The report should emphasise the stabilisation of the institution in terms of accountability and leadership as a priority first. Then the concern can turn to sorting out whatever outside influences do or do not exist.

Ultimately it was agreed not to include an additional point as Mr Swart had suggested.

Mr Waters felt that non-violent forms of intimidation should also be included in Swart’s suggestion.

Section 14.7: Parliamentary Oversight

Ms Khoza felt that there should be a point that calls for proper oversight and potentially the training of members of Parliament to better understand their roles as members.

The Chairperson mentioned that 14.7.1 should probably refer to the Broadcasting Act.

Ms Kilian stated that problems had arisen from an amended MoI that was not in line with the Broadcasting Act. The problem is that the ad hoc committee can not instruct the Portfolio Committee to reject the Act. But they must work through the Act bearing in mind the constitutional and legislative principles that guide the public broadcaster.

Ms Loliwe felt that the Portfolio Committee was more suited to deal with the issue.

Mr Swart started that if the new Broadcasting Amendment Bill (which proposed to take the power of Parliament to appoint SABC board members) passes the ad hoc committee’s view will change. The ad hoc committee can stress its view and suggest that the power of Parliament to appoint the SABC board should not be removed. This does not mean the other committees are bound it is just our suggestion.

Mr Mokoena explained that the Minister of Communications was trying to amend the Broadcasting Act to give hiring and firing powers to herself. This is an attempt to centralise power around her office. He felt that it was appropriate to ask the Portfolio Committee to investigate the centralisation of power.

Mr Chauke wanted to add that the Portfolio Committee should also take into consideration the constitutional imperatives and recommendations that had been made on this matter. He felt the committee could emphasise that it had been decided that the Broadcasting Act trumps other Acts when it comes to the legal framework of the SABC.

Mr Waters felt that power was being centralised within the Ministry which goes against the principles Mr Chauke was talking about. 

Ms Van Damme agreed that it should be stated that Broadcasting Act is the supreme law covering the SABC and that any amendment can not go against the spirit of the existing Broadcasting Act and that the amendment must be constitutional.

The Committee decided that 14.7.2. was correct as is.

Regarding 14.7.3, Mr Waters felt that a reference to the content of 14.8 was relevant to this point. The two points are related and should perhaps be combined or at least refer to each other. He felt that 14.7.4 could be stronger. For instance, if an individual is found to have been influencing the SABC in contravention of law charges are laid against those people. It is not enough to just state that the report condemns this act. Parliament must be responsible for pursuing these cases.  

Mr Chauke wanted to expose and deal with instances of political interference. There is an important role of the public in these matters and in exposing them. The report must include a line that acknowledges the role of the public in exposing undue influences in the SABC.

Dr Khoza reiterated that there should be training programme that capacitates members in this area of oversight.

Section 14.8: Other

The Committee decided that 14.8.1, 14.8.2 and 14.8.3 had been dealt with previously.

Regarding 14.8.4, Mr Waters added “…in his personal capacity as per the relevant court order” to the end of the sentence.

Regarding 14.8.5, Mr Swart requested that the word “sanctions” be changed to “consequences” for clarity.

Mr Chauke mentioned the allegation that certain lawyers appointed by the SABC board had at the time been struck off the lawyers roll. If this is true it is separate matter and a higher criminal charge of fraud. This is something the ad hoc committee can not ignore. The report from legal advisors on this matter should be deliberated on next week.

Members felt that 14.8.6 was poorly worded and needed to be clearer in that it is specifically dealing with contradictions. The situation was that there was contradictory evidence between witness Ngubane who said there was no political interference and witness Tshabalala who said there was political interference. 14.8.6 was supposed to flag that this was contradictory and that the legal team must investigate this issue.         

Mr Waters suggested adding an additional paragraph which would be 14.8.7. He reminded members that Mr Ben Ngubane was the chair of Eskom board as well as being chair of the SABC board. The Committee believed he provided misleading information to Parliament. Should the report not suggest that the Portfolio Committee of Public Enterprises investigate if he is fit to serve as chairperson of the Eskom board?

[There is a period here where the speech was missed because the mic was not used].

Mr Mahlangu stated that the Portfolio Committee of Public Enterprises would not have been exposed to the operations of Mr Ngubane. He felt that it should rather be the ad hoc committee’s role to identify how Ngubane failed to adhere to the law.

Dr Khoza felt that it may be necessary to add some evidence in the report if such issues are going to be raised. The relevant place could be in 14.8.1 for example.

The Chairperson felt like this issue could wait until after the Committee had received feedback on the draft report as it was still a draft and could be refined later.

Mr Kwanwa agreed with Mr Waters in that the leadership of Mr Ngubane was under question and that it was no clear that he was fit to remain on the board. A recommendation should be made, even after comments on the draft are received, that suggests that the Portfolio Committee on Public Enterprises investigates Ngubane.

Ms Van Damme agreed with previous comments and felt that it may be necessary to outright recommend that Ngubane can not serve on the Eskom board. This would require a reading of the Eskom Act with regard to this issue. 

Mr Khubisa felt that Mr Ngubane was indeed not capable of running Eskom. He also agreed that the ad hoc committee needed to look at the Eskom Act.

Mr Swart agreed with Mr Waters but felt the phrasing was important so that the ad hoc committee did not overstep its mandate. It should read that the committee is considering referring this matter to the Public Enterprises committee. This gives individuals a chance to respond before the ad hoc committee makes a final finding.

Ms Loliwe felt that this may be beyond the mandate of the ad hoc committee. She did not view his appointment on the Eskom board as relevant to their mandate to investigate the SABC board.

Ms Kilian felt that any recommendation should be grounded on observations that have been recorded in the report. In this regard, there is of yet nothing of substance captured that is available to the Committee. She suggested adding an observation of unease about the evidence from previous board chairpersons which contradicted evidence by the Public Protector’s report. This approach at least anchors the sense of unease. This is within the committee’s mandate. She felt it was sufficient to say that the portfolio committee on enterprise should consider the evidence brought by the incumbent chair and should take appropriate action.

Mr Waters argued strongly that the ad hoc committee should recommend an inspection into Mr Ngubane. He agreed that the recommendation must be anchored in observations. He felt that the Committee had agreed that the evidence of the previous chairs of the SABC board had contradicted the Public Protectors report and that it was important that the report reflect this consensus. This also gives previous SABC chairs an opportunity to respond to the report. He reminded members that Parliament itself would consider whether or not the suggestions of the report fell within the mandate of the ad hoc committee. He felt it would be a greater error if the ad hoc committee did not make this recommendation. Parliament can then decide on this recommendation and they may reject it.

Mr Mokoena then spoke about introducing another new paragraph, which would become 14.8.8. He brought up state capture and the possibility that the SABC has been captured by the same interest group. Considering the evidence given in various reports, the possibility of SABC capture should be investigated by the Portfolio Committee.

Mr Chauke felt that the accounting authority should deal with matters to do with undue influence at the SABC. He pointed out that state capture is a different issue to “undue influence” and that the report already had a section on undue influence. As such any addition, by Mr Mokoena should fall under the section on interference.

Mr Kwankwa felt that the issue had been covered in previous discussions in the report. Let it be the accounting authority that inspects these issues as is already indicated in the report. Adding this at the end of the report would contradict the fact that it has already been covered by various elements of the report.

Ms Loliwe seconded the argument that the issue was already captured in the report. 

The Committee decided to drop Mr Mokoena’s proposal.

Mr Mahlangu felt that the travel costs incurred by the SABC delegates who met with the Committee on 7 December 2016 should be paid by the delegates themselves. 

Mr Swart agreed that this was reasonable but felt it may be unfair if the staff member was instructed to come to Parliament. It would be necessary to gain that information first. 

Mr Mokena suggested that there should be disciplinary action against those who publicly went against the parliamentary call. 

The Committee agreed to request that the SABC board recover funds where possible from the spending. They will know who was part of the delegation.

Mr Mahlangu’s second point was that the policy for supplying non-executive board members with vehicles should be reviewed. This is part of a culture of wasteful expenditure. The information should also be sent to SARS.

It was decided that the new board would review the policy.

Mr Chauke proposed that an oversight function of current SABC leadership by the ad hoc committee should be implemented [while the ad hoc committee exists]. A high-level meeting with SABC leadership could be useful.

It was agreed that this recommendation be included and passed to Parliament for consideration.

The Chairperson gave an overview of the situation. The entire report had been read. He explained that there would be a report detailing all the issues that were not agreed upon. The Committee would then consider these matters again and produce a third report with their conclusions. The Committee planned to adopt the report by that Friday, the 27th of January 2017. The report detailing the issues that were not agreed on would be available to members by the following day, Wednesday the 25th. On the Thursday, these matters could be discussed leaving Friday for the adoption of the report.

The Chairperson stated that the lawyers needed to look at the report and put in their inputs. The draft should be sent to Members as soon as possible.

There was a brief discussion about whether or not the recommendations should be sent to all those involved or if they should be omitted. It was decided that these could be left out until Thursday’s deliberations.

Mr Chauke stated that it was a public and open process and must be available seeing as ultimately it will be open to the public when finished. There were no objections.

The meeting was adjourned.