Appointment process of ICASA Councillors; Communications & Telecommunications BRRRs

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Communications and Digital Technologies

22 October 2019
Chairperson: Mr B Maneli (ANC)
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Meeting Summary

Available here once adopted: BRRR 2019 

The Portfolio Committee on Communications met on 22 October 2019 to discuss three matters: the adoption of the Budgetary Review and Recommendations Reports for the Departments of Communications and Telecommunications & Postal Services; consideration of the 1st Quarterly Reports for the two departments; and the appointment process of the councillors for the Independent Communications Authority of South Africa Council.

The two draft Budgetary Review and Recommendations Reports for 2019 were discussed and adopted by the majority of members, after amendment.

The Committee had considered the 2019/2020 1st Quarter Performance and Expenditure Reports of the two departments in a meeting on 3 September 2019. After discussion, the Committee adopted reports compiled on the 1st quarter performances of the two departments.

After considering a presentation on the legal requirements for nominations of qualified people to five vacancies on the council of the Independent Communications Authority of South Africa, a majority of the Committee endorsed a proposal that a sub-committee be constituted to take the matter forward. The Committee Secretariat was asked to engage with the Parliamentary Legal Advisors on the nomination process to prevent any legal issues arising from the decisions of the Committee.

Meeting report

It its draft Budgetary Review and Recommendation Report (BRRR) for the Department of Telecommunications and Postal Services (DTPS) in 2019, the Committee considered the financial and non-financial performance of the DTPS for the 2018-2019 financial year. Entities reviewed were Sentech, the State Information Technology Agency (SITA), Broadband Infraco, the Universal Service Access Agency of South Africa (USAASA), the Universal Service Access Fund (USAF), the South African Post Office (SAPO) and the National Electronic Media Institute of South Africa (NEMISA).

The purpose of the report its set out in the Money Bills Procedures and Related Matters Amendment Act (Act 9 of 2009). The Money Bills Acts sets out the process that Parliament can follow to make recommendations to the Finance Minister as well as the Minister responsible for communications (including telecommunications and postal services).

The DTPS received an unqualified audit opinion for the 2018/2019 financial year, but with material findings by the Auditor-General on the usefulness and reliability of programmes that related to Information and communications technology(ICT) policy on research and capacity development; ICT enterprise development; state-owned company (SOC) oversight; and ICT infrastructure support. SAPO and SITA continued to provide challenges.
 
Discussion
 
The Chairperson informed the Committee that the observations on page 54 that related to the. BRRR had to be discussed and considered in tandem with page 59 as these would form the basis of the Committee's report that would be tabled in the National Assembly for consideration and adoption. He called on members for their inputs.
 
Mr C MacKenzie (DA) referred to 11.1 (i) that dealt with the effective action needed for the improvement of financial statements of the DPTS. He recalled that the Committee conveyed to the DPTS that capacity within the department that dealt with financial statements had to be strengthened. The Director-General (DG) of the DPTS had been asked a question specifically related to this. He proposed that 11.1 (i) should thus refer to the capacity to deal with and improve financial reporting within the DPTS.
 
On the South African Post Office (SAPO), Mr Mackenzie noted that it was important to highlight that the fraud allegations mentioned in 11.2 (i) related to social grant payments and grant cards. It would be improper to make it seem as if this point referred to general fraud within the DPTS.
 
The Chairperson asked Members whether there was agreement on the proposals by Mr MacKenzie. Members agreed to the proposals for amendment.
 
Mr L Mokoena (EFF) stated that he recalled that the Committee agreed to assist the POSA in the entity's quest to have its banking license application expedited and not just monitored.
 
Ms N Kubheka (ANC) stated that according to her recollection, the Postbank license matter had been finalised.
 
The Chairperson thanked Mr Mokoena for the input and informed the meeting that there had been consensus on the limitation on the functioning of state entities of the newly configured department in the private business space. The Department of Communication (DoC) and the DPTS were currently involved in a merger over which the Committee had to play a monitoring and oversight role.
 
Mr L Molala (ANC) referred to page 60, point 11.4 (ii) that dealt with the appointment of a new Board Chairperson for SITA. He stated that clarity was needed on whether it was the Committee's role to ensure that SITA had a new Board Chairperson.
 
The Chairperson replied that the appointment of the SITA Chairperson was not a Committee competency.

Mr Molala commented on 11.4 (vi) that the presentations by the Board Chairperson and the Chief Executive Officer (CEO) of SITA did not speak to one another. He seemed to recall that the CEO painted a rosy picture whereas the Chairperson had been forthright about the apparent crisis at the SITA. Mr Molala felt that this had to be included in the report.
 
On point 11.4 (xi), he added that it was also important for the SITA to provide details on the continued irregular expenditure and where it originated. This should be brought up during a follow-up meeting with the SITA.
 
The Committee next considered the 2019 draft Budgetary Review and Recommendation Report for the DoC.
Entities reviewed were the Government Communication and Information System (GCIS), the Films and Publications Board (FPB), the Independent Communications Authority of South Africa (ICASA), the Media Development and Diversity Agency (MDDA) and the South African Broadcasting Corporation (SABC).

The GCIS and the FPB both received unqualified opinions with no findings (a clean audit outcome) for 2018-2019 from the AGSA.

The MDDA achieved 80% of targets it set for itself. The SABC posted a financial loss of R482, 4 million. Factors that contributed to the financial loss, included a decline in advertising revenue, penalties for late payments on overdue accounts and a loss on sports broadcasting rights. The SABC received a qualified audit opinion.

The Committee commended the SABC for an honest, reliable and informative presentation on the reduction in irregular and fruitless & wasteful expenditure. The Committee recommended that the SABC should ensure that action plans be implemented to mitigate the AGSA’s findings.

Discussion
 
On the Committee's observations on the FPB, the Chairperson noted that whilst the FPB attained a clean audit for the first time in 20 years, there had still been issues related to the deliverable targets. The Committee also took notice of the new irregular expenditure incurred and reported by the FPB.
 
Ms P van Damme (DA) added that the observations and recommendations pertained to the FPB
 
Ms P Faku (ANC) raised the expenditure on the board. There had been a sharp increase in remuneration for the FPB Board.
 
On the observations related to the SABC, Ms van Damme noted that the report did not capture the insufficient funding allocated for Digital Terrestrial Television (DTT) and saw this as a critical point that had to be made. A budget had to be allocated and on top of that, technology had moved along at a rapid pace. In her view, the Ministry had to redraft the policy to include new technologies. Ms van Damme stated that the public had been very worried about continued bailouts to state-owned enterprises and that there had to be a clear point that the Committee will conduct proper oversight over expenditure at the SABC. She proposed that the SABC be asked to submit progress reports to the Committee every two months as this would also send a message to the general public that Parliament was conducting proper oversight over how public funds are spent. This will also provide Parliament with a mechanism to hold the SABC to account for the deliverables they promised.
 
The Chairperson replied that the bailout to the SABC had been linked to certain conditions set by the National Treasury (NT). One of these preconditions had been linked to the turnaround strategy that had to be implemented by the SABC. These were sufficient.
 
Ms van Damme disagreed with the Chairperson's assessment on predetermined outcomes versus conditions set by NT. There had to be a strong emphasis on public finance expenditure, as the SABC cannot continuously come back to Parliament for bailouts.
 
The Chairperson stated that the SABC had faced continued challenges and the Committee had a duty
to ensure that the SABC spent the bailout on the pre-determined allocations.

Mr Molala noted that both Ms van Damme and the Chairperson alluded to the same thing.
 
The Committee agreed that the recommendations should include timelines to be set for the SABC on its expenditure of the bailout.
 
Every time the SABC Board met with the Committee, contradictory statements had been made by Board members that did not attend the Committee meetings. The Committee had to be emphatic about cohesion among the SABC Board.
 
Ms Faku agreed that emphasis had to be placed on cohesion as some board members who did not attend Committee meetings tended to issue their own media statements afterward. She requested that all board members attend Committee meetings.
 
The Chairperson noted that the observation could include the lack of cohesion among Board members and that the recommendation could include an oversight visit to the SABC. He recalled that during previous Committee meetings, Members had commented on the large delegation compositions.
 
Members supported the intervention by the Chairperson.
 
On the MDDA, the Chairperson stated that the recommendations comprised a combination of previous recommendations made.
 
Mr Molala added that SITA had also informed the Committee of the need for close protection for high-level executives. He called on Members to be cognisant of these requests and treat them equally.
 
Ms van Damme recalled that the chief legal advisor of the SABC had been assassinated after he launched an investigation into corrupt activities at the broadcaster. She appealed to the Minister of Police and the Police Commissioner to conduct a threat assessment.
 
The Chairperson replied that a general threat assessment had to be done that included the concerns raised by the MDDA. He seemed to recall that the MDDA mentioned the security issues as a follow-up question and that it had not been raised in the MDDA's presentation to the Committee.

He further added that the 5th Parliament already began a process that had to be concluded by the 6th Parliament. The MDDA functioned with only 5 board members at that time. The Committee had to engage with the Minister in the Presidency on the issues raised in the report.

The Chairperson asked Members to adopt both BRRRs with amendments.

Ms Mthembu proposed the adoption of the DTPS report with amendments made and Ms Faku seconded.
 
Ms van Damme indicated that the DA would like to reserve its opinion.

Ms Kubheka moved for the adoption of the DoC report with amendments and Ms Faku seconded.
 
Quarterly Reports

The Committee had considered the 2019/2020 1st Quarter Performance and Expenditure Report of the DoC in a meeting on 3 September 2019.

The Committee expressed concern with the DoC's only achieving 50% of their targets and that there had been no clear plan in place on the implementation of the Broadcasting Digital Migration (BDM) policy.

On DoC's entities such as ICASA, it noted that only 71% of targets had been achieved, yet the entity was undergoing another restructuring process. The FPB achieved only 70% of its targets, the MDDA had not funded any community-based programmes for the period under review and Brand South Africa experienced a leadership vacuum.

The Committee further noted that ICASA should appear before Parliament to present revised and final Sports Rights Regulations once this process had been completed.

The Minister of Communications had also been requested to report back to the Committee on her engagement with the SABC Board and on how to address the continued infighting. The Committee noted the large delegation from DoC and its entities at the meeting.
 
Discussion

The Chairperson noted that an updated version of the DoC Q1 report had been provided to members.

Ms N Kubheka (ANC) noted that there had been an update provided on the budget for Brand South Africa as the DoC still was the oversight department.

The Chairperson informed the meeting that Brand South Africa was still undergoing a legal process to transfer the budget.

He put the report up for adoption by the Committee.

Mr Mackenzie moved for the adoption of the Q1 Doc Report, and Ms Kubheka seconded.

The Committee had considered the 2019-2020 1st Quarter Performance and Expenditure Report of the DTPS at a meeting on 3 September 2019.

The report provided an overview of the presentations made by the DTPS and included an update on progress made by entities within the DTPS that delivered on their mandates and targets.

The Committee noted that the DTPS achieved 95% of its targets and commended, with a few exceptions, the sterling performance of DTPS entities.

The Committee took note of the challenges experienced by DTPS in respect of the filling of vacancies as a result of the merger with the DoC and decried continued challenges at SITA.

The Committee recommended calling NT to provide a rationale for the unbundling of the Postbank from the SAPO. It recommended that the DTPS had to limit the number of officials that attended Committee meetings.

Discussion

Mr Mackenzie stated that the report mentioned seven entities administered by the DTPS but named eight. He proposed that it be changed to eight public entities.
 
The remarks on SAPO and the Postbank should accurately reflect SAPO's view that it might incur challenges with operating as a going concern.

Mr MacKenzie's recommendations were agreed upon by Committee members.

On 8. (i), Mr Mackenzie noted that the Committee called on NT to provide a rationale for the separation of the Postbank from the SAPO.

The Chairperson replied that it had been covered in the Committee resolution.

Mr Molala stated that most recommendations had no timelines attached and this worried him. The Committee had to affix timelines.

He noted that 8. (xvii) dealt with set top boxes (STB's). He called on the Committee to interrogate how these STBs had been distributed and come up with alternative means.

Mr Mokoena pointed towards the different views on the direction of the SAPO and Postbank by the former CEO Mr Mark Barnes, NT and the DoC. He felt that it seemed as if the Committee agreed with NT and not the DoC when no such decision had been taken.

The Chairperson informed that once the Committee adopted a report, it would be sent to the DoC Ministry for comment.
 
The Chairperson called for the adoption of the draft reports of the Committee on the 2019/20 1st Quarter Performance and Expenditure Reports of the DPTS and the DoC.

Mr Molala moved for the adoption with amendments ,and Ms Faku seconded.
 
Road Map for the Appointment of ICASA Councillors

Mr Mbo Maleka (Content Advisor: PC Communications) briefed the Committee on the road map that had to be followed by the Committee for the appointment of ICASA Councillors.
 
A vacancy arose when the previous Chairperson of ICASA was removed/resigned and there were an additional five vacancies on the Council that had to be filled.
 
Advertisements had been sent out on 5 September 2019 with the cut off date for all applications received set for 27 September 2019.
 
It will take about three to five days to check qualifications domestically and about three weeks for international qualifications.
 
According to the ICASA Act, the National Assembly (NA) must submit the names of one and a half times the number of people for consideration to the Minister of Communications and Digital Services. Applicants for five posts (3x5) would be invited for interviews and a total of 8 names had to be submitted to the Minister for consideration.
 
In the case of the ICASA Council, Sections 5-9 of the ICASA Act prescribed the constitution of and appointment of councillors to the Council, the conditions for disqualification, their terms of office and removal from office.
 
The ICASA Council is considered as the highest decision-making body of ICASA and consists of eight members and the Chairperson.
 
ICASA Councillors are appointed by the Minister upon approval by the NA, subject to the principles such as public participation in the nomination process, transparency, openness and the publication of a shortlist of candidates.
 
The NA may invite technical experts that could assist in the selection, evaluation and appointment processes of the councillors.

Discussion
 
The Chairperson noted that the Committee had been given guidance on the number of people to be shortlisted for the vacancies, but also on how Members should take the consultation process forward.

Mr Mackenzie asked the Committee Secretariat whether there had been an estimation of how many people applied thus far.

Mr Thembinkosi Ngoma (Committee Secretary, PC Communications) said that several applications had been received. Of these, there had been a mixture of suitably qualified candidates versus those that sought internships and other forms of employment.

He said that about 75% of applications had been captured and that an exact figure would be provided to Members within the next week.
 
Mr Mackenzie added that he would just like a ball park figure or estimation such as 1 000 applications or 20 and that the Secretariat could still provide an accurate figure at a later stage.
 
Mr Ngoma replied that 75 nominations had been received.
 
Mr Mokoena stated that this meant that it was 75% out of 100 applications. He also wanted to be briefed on the short listing process.
 
The Chairperson noted that it was important to consider that the Secretariat had been seized with other work as well and that the Committee would be provided with the relevant information.

Mr Molala stated that the presentation pointed towards the panel being constituted by the Committee. He wanted clarity on the role of technical experts in this process.
 
Mr Maleka replied that the appointment of ICASA councillors had always been an internally managed process. However this did not preclude the Committee from taking another route that was in line with the prescripts of the ICASA Act.
 
Mr Ngoma added that on previous occasions, the Committee decided to establish a subcommittee that dealt with statutory appointments, and that NA rules made provisions for this.

Ms Kubheka noted that she had been covered as Mr Ngoma already pointed out that a subcommittee could be established to deal with the ICASA appointment process.

The Chairperson stated that the presentation had been clear on the framework that had to be followed and that the Committee had to develop a way forward, especially on how exceptions and disqualifications would be dealt with.

He called on Mr Maleka to engage with the Parliamentary Legal Advisors on the ICASA process to prevent any legal issues arising from an appointment or non-appointment for that matter.

Mr Maleka said all applicants had to be vetted by State Security as well and that this also took time to finalise.

Mr Mokoena asked that the initial stages of short listing should not be handled by politicians and informed that he did not have an issue with the proposal that three candidates are invited per day for interviews.

Ms van Damme disagreed with Mr Mokoena and noted that the NA had to conduct the short listing by combing through all the CVs.

Mr Molala pointed towards the number of applicants shortlisted for interviews and commented that if the Committee nominated eight candidates and they failed their security vetting, the Committee would be faced with a challenge. He sought clarity on the right formula. He further added that the Parliament could not abscond on its role and thus such a process could not be delegated to outside parties. If the process became muddled, who would shoulder ultimate responsibility, he asked. He supported the view that the Committee had to establish a subcommittee that should deal with the process that included all political parties proportionally.

Ms Kubheka added that she had been covered by Mr Molala's comments that a subcommittee was best suited to deal with the process.

Ms van Damme noted that Members had to operate within the criteria set out by the ICASA Act.

Mr Ngoma replied that the Committee had the responsibility to shortlist, interview and nominate candidates and that the Secretariat's role was to shift through all applications and make sure that these applications met the criteria for short listing.

Mr Maleka added that the process was similar to that of the SABC Board nominations and the Committee had the right to decide on the process, subject to the Act and that the three people to be interviewed per day had been a guideline.

Mr Mokoena stated that this clarified everything and that the Committee only had to decide on whether a subcommittee would be formed.

The Chairperson concluded the discussion and noted that the Committee would be guided by the Act and that a subcommittee would be best suited to deal with the process as the Committee had other work to attend to as well. Many Members also served on different committees and thus might not be able to attend a full Committee process. He reiterated the need for Mr Maleka to engage with the Parliamentary legal advisors.

Ms van Damme expressed a dissenting view, but the majority of members agreed that a subcommittee had to be established that could drive the ICASA process forward.

The Chairperson made a subsequent ruling that a subcommittee had to be established.

The meeting was adjourned.
 

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