Films and Publications Amendment Bill: socio-economic impact assessment system, interim report; MDDA Board member removal

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Communications

23 May 2017
Chairperson: Mr H Maxegwana (ANC)
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Meeting Summary

Parliamentary Legal Services briefed the Committee on the removal of a board member from the Media Development Diversity Agency (MDDA) Board. The board member had been recommended by the Committee in June 2015. A security screening followed which gave him security clearance. However, the State Security Agency came up with a new report contradicting the previous one as it was established that he had a criminal record having been found guilty of culpable homicide in 1998. He was convicted and sentenced without the option of fine for a period of more than one year. This was a sufficient ground for disqualification from being appointed as a board member according to Section 5(f) of the MDDA Act.

A letter from the President had sought the intervention of the Committee to remove recommended candidate from the Board based on his criminal record as the Committee has the power to remove a board member in terms of Section 6 of the Act. However, in this case, this person was not yet appointed by the President and thus there was no need to seek the Committee’s intervention. The person was disqualified from the outset to be recommended as an MDDA board member. He has never assumed these duties and responsibilities. The position thus remained vacant and should be advertised to enable the Board to carry out its work. Members agreed with this legal opinion.

The Department of Planning, Monitoring and Evaluation (DPME) briefed the Committee on the Socio-Economic Impact Assessment System (SEIAS) of the Films and Publication Amendment Bill [B37-2015]. DPME gave background to the SEIAS and its application. The Socio-Economic Impact Assessment System was introduced by Cabinet in February 2015. Its objective is to assist departments to better formulate policies, legislation and regulations to ensure that it is aligned with national priorities; that risks associated with implementation are mitigated and unintended consequences minimised; that implementation costs of the law was reduced; and that the regulatory burden was reduced. The SEIAS came into force on 01 October 2015.

The DPME noted that the SEIAS was process oriented and not compliance oriented in that DPME was always looking at socio-economic costs, benefits and risks and not only at quantifiable economic costs. The application of the SEIAS required undertaking both and an initial and a final impact assessment. The process followed for the this Bill was described. After the impact assessment, the key issues raised included:
• About 53.3% of households had at least one member who had access to internet. It was highly accessed through mobile phones;
• About 80.8% of households had televisions
• There were no strict age restrictions and classifications guidelines for watching movies on DVDs at home, including violent, horror and sexual content. This had observable impact on children aged between 7 and 17.
• Gaming was extremely popular among children aged between 7 and 17. This had no observable impact on thoughts and behaviour as games were viewed as not real.
• Exposure to harmful content could distort early childhood development as it could have diverse psychological and behaviour impacts on children.

DPME noted that, having considered the views of the Portfolio Committee, consultation on the implementation of the proposed Amendment Bill had been limited to government-affected stakeholders, most notably, Department of Basic Education. It was highly likely that the Bill overlapped with other primary legislation such as the Sexual Offences and Related Matters Act and the Child Justice Act. On top of this, it was not clear whether the Amendment Bill would pass constitutional muster.

The DPME noted that failure to fully understand the full cost of implementation was likely to lead to policy and regulatory failure. It noted the concerns raised on the disproportionate effect the regulatory burden would have on small players in the space such as high compliance and implementation costs.

The DPME noted that because changes came with risks, there was a need to manage risks or to have proactive mitigation strategies. Risks that could have an impact on implementation needed to be identified. In that regard, the Department of Communications (DoC) needed to be clear on the institutional arrangements in government with clear functions, roles and responsibilities in the Bill to ensure effective implementation and avoid risk. Potential litigation costs could be avoided by simplifying the dispute resolution mechanism.

The DPME noted that the Bill would be contributing to national priorities in terms of social cohesion, security, and economic inclusion.

The DPME concluding by calling on the DoC to reconsider whether the Bill was in line with the Bill of Rights and subsequent jurisprudence and to address costs and uncertainties related to fee and tariff structure. The potential disproportionate effect ought to be addressed.

Members welcomed the briefing and stated that it responded to their concerns and was in line with the mandate given to the DPME. However, they were unhappy about the failure to share with them the final SEIAS report. Members asked if the Bill could pass the constitutional test, about the regulatory burden of implementation and compliance costs, and on the feasibility of educating children.

The Committee adopted the Motion of Desirability on the Bill and an interim report to the National Assembly requesting that the Committee proceed with proposed amendments not linked to the Amendment Bill but to the original Act. Permission was required according to National Assembly Rule 286(4)(c).

Meeting report

Removal of MDDA Board member
Mr Nathi Mjenxane, Legal Advisor: Parliament, said that Mr Thami Ntenteni was interviewed and recommended by the Committee for the position of MDDA Board member in 2015 A security screening followed which gave him security clearance. However, the State Security Agency came up with a new report contradicting the previous one as it was established that he had a criminal record having been found guilty of culpable homicide in 1998. He was convicted and sentenced without the option of fine for a period of more than one year. This was a sufficient ground for disqualification from being appointed as a board member according to Section 5(f) of the MDDA Act:

“A person may not be appointed as a member of the MDDA Board if he or she has been convicted after the commencement of the Constitution of the Republic South Africa, 1993 (Act no. 200 of 1993) of a crime specified in Schedule 1 to the Criminal Procedure Act, 1977 (Act no. 51 of 1977), and has been sentenced to a period of imprisonment of not less than one year without the option of a fine.”

A letter from the President had sought the intervention of the Committee to remove recommended candidate from the Board based on his criminal record as the Committee has the power to remove a board member in terms of Section 6 of the Act. However, in this case, this person was not yet appointed by the President and thus there was no need to seek the Committee’s intervention. The person was disqualified from the outset to be recommended as an MDDA board member. He has never assumed these duties and responsibilities. The position thus remained vacant and should be advertised to enable the Board to carry out its work. 

Discussion
The Chairperson commented that it was obvious that the position was never filled. Therefore, the Committee would follow the process to fill the vacancy.

Mr M Kalako (ANC) said that it was clear that the position should be filled as soon as possible.

Ms P Van Damme (DA) gave a thumbs up to the legal advice and said that the position should be filled.

The Committee agreed.

Films and Publication Amendment Bill: Socio-Economic Impact Assessment briefing by DPME
Mr Rudi Dicks, DPME Outcome Facilitator, apologised for not being present at the 19 May meeting due to attendance at another parliamentary committee meeting. The Chairperson had noted to him that this revised presentation is fundamentally changed from the 19 May one and this was true. It had been revised from slide seven onwards. He apologised for the late circulation of the revised presentation as Members would have not had time to engage with the presentation.

Ms Van Damme asked if the SEIAS report was an interim or final report. She was referring to the document entitled “Socio-Economic Impact Assessment System (SEIAS): Final Report Assessment Template (Phase 2), 02 December 2016: Films and Publications Amendment Bill, 2015. Was this the DPME’s final report?

Ms Pulane Kole, DPME Chief Director: SEIAS, responded that the SEIAS report was based on an ongoing process. The report submitted to the Committee was dated 13 December 2016. It was noted in the previous meeting that there were changes effected to the Bill that also had to be captured in the SEIAS report. The SEIAS report ran parallel with the Bill. There had been other outstanding issues that needed to be addressed which needed to be worked on together with the Department of Communications (DoC). The impact assessment of the Bill was therefore an ongoing process.

The Chairperson said that the SEIAS report the Committee had was dated 2 and not 13 December 2016.

Ms Kole replied that in the previous week, a 13 December 2016 report was circulated to members by the DoC.

The Chairperson said that that report had not yet been shared with Members. They had never seen it.

Ms Van Damme said that the 2 December 2016 document did not appear to be a report but a mere questionnaire. It was not a DPME analysis report. What was needed was the SEIAS report.

Ms V Van Dyk (DA) asked why DPME stated that the SEIAS report was running parallel with processing of the Bill when the impact assessment should have done prior to the introduction of the revised Bill. This parallel process was making it difficult to deal with the Bill.

Ms C Dudley (ACDP) asked if they were seeking permission from the National Assembly for the Committee to introduce amendments unrelated to the Amendment Bill.

Ms Phumelele Ngema, Legal Advisor: Parliament responded that National Assembly Rule 286(4)(c) states that "the committee, if the Bill amends provisions of legislation, must, if it intends to propose amendments to other provisions of that legislation, seek the permission of the Assembly to do so".  This was discussed in the previous meeting and it was concluded that the permission should be sought in order to proceed with amendments to other provisions of the Act.

The Chairperson agreed.

Mr Dicks responded to Ms Van Damme's question. He said that it looked like Ms Van Damme did not understand the methodology of SEIAS. The DPME had had opportunities to explain to different parliamentary committees the methodology that was used to develop the SEIAS report. The SEIAS was a new methodology that was adopted by government that replaced the old regulatory impact assessment. The regulatory impact assessment suffered from numerous gaps. It was for example not aligned to national priorities and did not assess the risks of the Bill and how those risks could be mitigated. The SEIAS was introduced in February 2015 to ensure that those gaps were closed. SEIAS did not work to reject the Bill but to ensure that the introduced Bill was aligned with national priorities and to access actual costs, including the remuneration of employees and the economic impact on the public at large.

Mr Dicks said the questions that Members might be missing were how risks and other concerns such as unintended consequences) could be mitigated. In order to conduct an effective assessment, consultation was central. The second process relied on a questionnaire template which had no tick boxes. The main question would be what the executive wanted to deal with in introducing the Bill, and what would be the cost on government and society. The cost might be different from small business to big businesses. It looked at how those risks could be managed, how can they be mitigated and how conflict could be resolved without going to court. The questionnaire provided questions that would help an individual to think about all these aspects.

Ms Van Dyk asked if the DoC and other stakeholders make their inputs into the SEIAS report. Are they included in the assessment process?

Ms Kole replied that the SEIAS required each department to make their inputs when an introduced Bill was gazetted for public comment. The Bill was published in August 2015 and the SEIAS came into force thereafter. The assessment could be dragged out if the Bill was committed to the SEIAS from its outset.

Ms Van Damme agreed with the explanation and noted the weaknesses in the application of the SEIAS. However, she had not received a final copy of the critical assessment report.

The Chairperson invited Ms Kole to take the Committee through presentation.

Ms Kole briefed the Committee on the Socio-Economic Impact Assessment System (SEIAS) of the Films and Publication Amendment Bill [B37-2015]. She gave background to the SEIAS and its application. The Socio-Economic Impact Assessment System was introduced by Cabinet in February 2015. Its objective is to assist departments to better formulate policies, legislation and regulations to ensure that it is aligned with national priorities; that risks associated with implementation are mitigated and unintended consequences minimised; that implementation costs of the law was reduced; and that the regulatory burden was reduced. The SEIAS came into force on 01 October 2015.

The SEIAS was process oriented and not compliance oriented in that DPME was always looking at socio-economic costs, benefits and risks and not only at quantifiable economic costs. The application of the SEIAS required undertaking both and an initial and a final impact assessment. The process followed for the this Bill was described (see document). After the impact assessment, the key issues raised included:
• About 53.3% of households had at least one member who had access to internet. It was highly accessed through mobile phones;
• About 80.8% of households had televisions
• There were no strict age restrictions and classifications guidelines for watching movies on DVDs at home, including violent, horror and sexual content. This had observable impact on children aged between 7 and 17.
• Gaming was extremely popular among children aged between 7 and 17. This had no observable impact on thoughts and behaviour as games were viewed as not real.
• Exposure to harmful content could distort early childhood development as it could have diverse psychological and behaviour impacts on children.

Ms Kole noted that, having considered the views of the Portfolio Committee, consultation on the implementation of the proposed Amendment Bill had been limited to government-affected stakeholders, most notably, Department of Basic Education. It was highly likely that the Bill overlapped with other primary legislation such as the Sexual Offences and Related Matters Act and the Child Justice Act. On top of this, it was not clear whether the FPB Amendment Bill would pass constitutional muster.

Ms Kole noted that failure to fully understand the full cost of implementation was likely to lead to policy and regulatory failure. It noted the concerns raised on the disproportionate effect the regulatory burden would have on small players in the space such as high compliance and implementation costs.

Ms Kolo noted that because changes came with risks, there was a need to manage risks or to have proactive mitigation strategies. Risks that could have an impact on implementation needed to be identified. In that regard, the Department of Communications (DoC) needed to be clear on the institutional arrangements in government with clear functions, roles and responsibilities in the Bill to ensure effective implementation and avoid risk. Potential litigation costs could be avoided by simplifying the dispute resolution mechanism.

Ms Kole noted that the Bill would be contributing to national priorities in terms of social cohesion, security, and economic inclusion.

Ms Kole concluding by calling on the DoC to reconsider whether the Bill was in line with the Bill of Rights and subsequent jurisprudence and to address costs and uncertainties related to fee and tariff structure. The potential disproportionate effect ought to be addressed.

Discussion
Ms Van Damme said that the presentation was much better. It reflected what Members had requested. They wanted to hear the DPME views and hoped that more details from the DPME were captured in the 13 December 2016 report. She was looking forward to reading the report. She asked about the regulatory burden with respect to implementation and compliance costs: what were the anticipated costs; how much would it take to implement the Bill? The DoC did not have enough budget and the country was under economic pressure. What did she mean by small player? 

Ms Van Dyk remarked that the UNISA study had been consulted and asked if there were other studies that were consulted. She commented that South Africa was experiencing teacher shortage and asked for a technical analysis of teaching implications, on compliance costs, and the cost for the establishment of the new Directorate, and the cost for the whole process of implementation of the Bill.

Ms Dudley asked about the consequences of the publication of pornography on children and adults generally and commented that this issue was not deeply analysed by the DPME. She welcomed the methodology of the SEIAS and said that the impact assessment should be focused on the impact on children and on adults. On the definition of hate speech, she noted that the definition intended to resolve concerns raised as they pertain to the Bill but it might be in conflict with the old definition and thus create a conflict with section 16 of the Constitution. Section 16 did not prohibit speech but guards against certain categories of hate speech. The Bill had contradictory definitions.

The Chairperson asked if the Bill "did not meet the constitutional muster". He heard her saying so and, if yes, Ms Kole should explain.

Mr Dicks responded that they were careful to choose the words to use. The question was whether the Bill met constitutional muster. The comment was drawn from the submissions that raised the issue of constitutionality. The question needed to be answered by the DoC.

The Chairperson agreed.

Ms Kole responded that more details on the costs were included in the 13 December SEIAS report. The establishment of the Directorate would cost R28 million whereas R130 million would be allocated to the Film and Publication Board. If one looked at these figures, one would not hesitate to conclude that it was a cost effective Bill taking into consideration the financial constraints the country was facing. The issue was also to see whether the Bill was workable and this would be assessed in terms of activities that would be undertaken for implementation. On the cost of education, she was of the view that there were other mechanisms that could be invoked in support of Basic Education. There was no need to appoint new teachers as those who teach Life Skills could incorporate aspects about films and publications. They could use technologies that were used at school. Parents and children could be also addressed when they, for example, attend a school meeting together.

Ms Van Damme said that her questions on costs were not answered.

Mr Kalako said that some of questions were responded but DoC needed to clarify whether the Bill met constitutional muster. He appreciated that the DPME had briefed the Committee on the task it was given.

Mr Dudley said there was sort of tension in relation to the question she had posed about pornography. If there was any recognition of that concern, perhaps, the DPME should have investigated the potential harm caused by the publication of porn.

Mr Dicks responded that the SEIAS was focussed on protecting children from media related products. This was something that was important. There was a need to address the potential question of the costs and this required an engagement with all departments.

The Chairperson said that the DPME had done its job in line with the Committee mandate. The Committee would need to engage with DoC to clear up any confusion and Legal Services needed to look at the SEIAS report.

Motion of Desirability and Interim Report to National Assembly on the Bill
The Committee Secretary read out the Motion of Desirability.

Mr Kalako said that he could not understand the rationale for the Motion of Desirability at this stage.

The Chairperson responded that the motion was a response to the advice received from the Parliamentary Legal Advisor that the Amendment Bill should go back to the National Assembly to seek permission as there was a proposed amendment to the Amendment Bill which dealt with a section in the original Act not contained in the Amendment Bill.

Ms Van Damme asked once the motion was passed, would the Bill return back to the DoC to initiate it de novo or might the Committee might continue to deliberate on it.

Mr Nathi Mjenxane, Parliamentary Legal Advisor, responded that the Committee would carry on with its deliberations of the Bill whilst awaiting the approval of the National Assembly. It was merely a formality.

Ms Dudley asked whether returning the Bill to the National Assembly would necessitate further public participation.

Mr Mjenxane explained that the public consultation had been conducted by the DoC. At this stage the Bill was before the Committee. The Committee enjoyed discretion to refer the Bill back for public consultation.

The Chairperson agreed. He said that the public consultation has been done.

The Secretary read out the motion of desirability to amend the Bill.

This was approved by the Committee.

The Secretary read out the interim report to be submitted to the National Assembly.

This was approved.

Committee Report on Department Budget Vote
The Chairperson noted that there was a quorum as there were six members present.

The Budget Vote Report was considered page by page.

Responding on the question asked by Ms Van Damme, Mr Wandile Mguga, Secretary, responded that the question related to the Minister’s pronouncement regarding reinforcement of the government policy and it was in the context of broader issue around the litigation which was explained in detail on page 4.

Referring to Observations, Ms Van Damme said the report should state that the Minister had to provide clarity on litigation, that is, whether a case law was going to be pursued.

Mr Mguga said that the litigation was related to eTV and that the Minister had responded and sought assistance from Ms Van Damme on how the paragraph could revised to include her comment.

Ms Van Damme said that she was fine.

Referring on page 44, Ms Van Dyk commented that information stating that a report on suspending employees had been delayed should be included. These employees in question were CEO and COO. The Films and Publication Board (FPB) had not submitted its report. The Committee was supposed to know what was going on but it did not.

The Chairperson responded that the issue raised was well captured on page 50. The page dealt with recommendations.

The Chairperson asked Mr Mguga to read through recommendations from page 46.

Mr Mguga read recommendations one by one.

Recommendation 1:
Ms Van Damme said that the recommendation did not state clearly how the transformation would be done.

Mr Mguga said that the recommendation talked about transformation and sought clarity from Ms Van Damme on whether she was talking about the radical economic transformation. The intent was to transform the sector and this was a point of departure for the DcC to create transformation plans and strategies.

Recommendation 2:
Ms Van Damme supported it.

Recommendations from 3 to 14:
There were no comments raised.

On the other recommendations:
Ms Van Damme noted that some recommendations were merely observations. The SABC inquiry report should be included.

Mr Muguga said that the SABC Board was still liaising with the Committee and that it had not ceased to report on its mandate. There were a great progressive in implementing recommendations in the SABC inquiry report. The Minister should seek to restore the sustainability of the Films and Publication Board.

On the recommendation that the FPB should report on its investigation after 30 days of adoption of this report, Ms Van Vyk said that there was no clear reason why the report had not be submitted to the Committee. There was a long period when the report had been requested. The complaint had been brought against the Chairperson of the Board, resulting in his suspension. However, the rumours had it that there was a handshake which was carried out without informing the Committee. Why should the Chairperson be suspended and then be given money to get away?

The Chairperson asked how this concern could be included in the report. Should days be less than 30? It could be a short period than 30 days.

Ms Van Dyk said that her concern should be considered by members to see what was best.

Ms Kalako said that 30 days were a norm and did not have a problem with them. The FPB could however come to brief the Committee prior to 30 days.

After considering all report, the Chairperson asked members if they were supporting the report.

Ms Van Damme welcomed the report and noted that it captures all views and concerns of members. However, she said that she reserved her approval until she consulted her caucus.

Mr Kalako moved to the adoption of the report. He commented that the report would enable the Committee to monitor the DoC.

Ms Matshoba seconded.

The Chairperson said that the report would promote the honesty of the Minister and would empower the Committee to oversee whether the Minister was doing the right thing.  

Meeting was adjourned.

 
 

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