Independent Communications Authority Bill: discussion

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Communications

05 April 2000
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Meeting report

COMMUNICATIONS PORTFOLIO COMMITTEE
5 March 2000
SACRA BILL: DISCUSSION
 


Documents Handed Out
:
 

South African Communications Regulatory Authority
Proposed Amendment to SACRA Bill
IBA Councillors Annual Remuneration Packages (see Appendix 1)
Further submission-Freedom of Expression Institute and the National Community Radio Forum (see Appendix 2)
Submission by Department of State Expenditure (see Appendix 3)

SUMMARY
The committee attempted to finalise the proposed amendments to the South African Communications Regulatory Authority (SACRA) Bill.

The Democratic Party strongly urged the size of the Council be increased to nine members, as was suggested by the Darling Report. The ANC were adamant, however, that the size of the Council not exceed seven members. The IFP suggested that the committee comprise of a minimum of seven and a maximum of nine councillors. The ANC and DP could not agree.

The IFP strongly opposed Members of Parliament and public servants being able to serve as members of standing or special committees. It was argued their involvement would directly infringe on the independence of the Authority, and be a conduit by which the Department could "capture" the regulator. The ANC dismissed the IFP position. The Chair suggested a compromise position where provincial legislators and members of Parliament would be excluded from sitting on these committees, but public servants would not. The IFP did not agree.

It was decided to change the name of the new Authority to the Independent Communications Authority of South Africa (ICASA), and to have the Council work under the "lot system."

MINUTES
Mr Kekana (Chairperson) stated it was important that the committee complete its review of the SACRA Bill and finalise all amendments.

Clause 1: Definitions
There was some discussion over whether a definition of "appointing body" should be included in this section. The Department of Communications was concerned that the definition proposed by the State Law Advisors was not clear in stating the appointing body was the Portfolio Committee of Communications, and not the President. The Chair concurred with the Department, and advised that they refer to the Independent Broadcasting Act and the Telecommunications Act to see how it was defined. Mr Hoon, the State Law Advisor responded that it may not be necessary to include the term as it was only referred to once in the Bill.

Clause 2: Object of Act
The DP put forth two requests. First, that reference to the Authority include both mention of independence and impartiality to ensure that it would be viewed as a self-standing Constitutional body, and secondly, that 2(b) clearly indicate that telecommunications were regulated in the public interest. The committee agreed to both changes.

Clause 3: Establishment of South African Communications Regulatory Authority
Debate focused around which name should be given to the new Authority. Both the committee and interested parties had found the acronym SACRA to be problematic for a variety of reasons. The IFP suggested that the new Authority be called the Independent Communications Authority (ICA). The Department of Communications and the ANC argued it was necessary that the name include South Africa, and felt that Independent Communications Authority of South Africa (ICASA) was more appropriate. The committee agreed to ICASA being the name of the new Authority.

The ANC suggested that a new subsection be included which stated:
(c)The Authority shall function without any interference of other bias from political groupings of communication.

Ms Smuts (DP) remarked that the ANC suggestion was inadequate as it did not address the impartiality of the Authority, or mention interference from the government. The Chair felt the Government would be included as part of a political grouping. Ms Smuts was unconvinced and asked that the State Law Advisors redraft the subsection and refer to section 181(2) of the Constitution in their formulation.

Clause 5: Constitution of and appointment of councillors to Council
Ms Smuts (DP) strongly urged that the number of councillors be increased to nine members. The Freedom Front (FF) and the Inkatha Freedom Party (IFP) were also in favor of increasing the size of the Council. The ANC were adamant, however, that the size of the Council not exceed seven members. Dr Mulder (FF) reminded the ANC that the current combined total of councillors sitting on the IBA and Satra Boards was twelve members, and that they were already overworked and unable to carry out their mandates. It was also argued that a reduced Council would not devote adequate attention to the broadcasting industry. Mr Mongwaketse (ANC) refuted these arguments stating that a larger Council would mean lengthier deliberations and prolonged outcomes on decisions. Ms Vos (IFP) was unconvinced that the Council would function properly with only seven members and suggested that the committee comprise on a minimum of seven and a maximum of nine councillors. The ANC would not agree.

It was agreed that persons appointed to the Council possess qualifications and expertise in the fields of media, journalism, education, and entertainment in addition to the criteria listed under 5(3)(b)(ii).

Clause 6: Disqualification
On the basis of Mr Pieterse's (ANC) persistence, the State Law Advisors redrafted 6(1)(j) to address the issue of gender-specific crimes and non-payment of maintenance. The proposed amendment makes reference to the Domestic Violence Act, 1998. Ms Magazi (ANC) stated the ANC wanted specific mention of the Maintenance Act to be included in the amendment. Ms Smuts (DP) argued the ANC's position stating that the Bill could not make reference to some Acts, while excluding others. Mr Hoon agreed, advising that even including the Maintenance Act would be problematic, since councillors who were unable to pay maintenance for a short period due to financial hardships would be excluded from serving on the Council, even if they had repaid those maintenance fees. It was agreed that the subsection remain as is, and that gender-specific crimes and maintenance fall under offences of dishonesty.

The committee also agreed to an additional subsection that states a person may not be appointed as a councillor if they have been sentenced to a period of imprisonment of not less than one year without the option of a fine, since the commencement of the Constitution. It was felt the new subsection would sufficiently encompass gender-specific crimes and the non-payment of maintenance.

Clause 7: Terms of Office
The committee agreed to omit subsection (1) and substitute it for the proposed amendment which outlined the "lot system". Under this system, the Chairperson would sit for a period of five years, and councillors for four years, with one half of the total number of councillors vacating their office two years after this Bill would take effect. The remaining three councillors would vacate their offices on a date two years later, and alternately every four years thereafter.

Ms Vos (IFP) reiterated her concern from previous meetings as to whether councillors would be allowed to hold directorships while serving on the Council. Mr Hoon replied that councillors would not be able to hold directorships if they received allowances or remuneration for those positions. Ms Smuts (DP) felt that there needed to be clarity on what the committee wanted expressed regarding other remunerative employment. It was suggested that councillors must not hold positions that either are in conflict with the Authority, or take away from the time needed to perform the functions of the Authority. The Chair asked the Law Advisors to create a clause that included these two principles. It was also agreed that councillors would be limited to two terms.

Clause 8: Removal from office
Clause 8 was rejected in favor of the proposed amended clause. The new clause, which was taken from the IBA Act, gives power to the Council to decide whether the reasonable circumstances for a councillor's absence from a meeting are justifiable. Originally, the role was specific to the Chairperson. The new clause also grants the President power to suspend a councillor from office after the start of proceedings by the appointing body for the removal of that councillor, and to remove a councillor upon adoption by the National Assembly calling for that councillors removal.

Clause 9: Vacancies
Ms Vos (IFP) asked that a provision be made that persons appointed to fill a vacancy not just fulfill the remainder of the predecessor's term. Mr Hoon felt that to change the current structure would cause "practical difficulties" under the lot system. Ms Vos responded that the person then be appointed for the remainder of the term and for an additional two years to maintain the lot system. The Chair asked the State Law Advisors to consider this option.

Clause 10: Remuneration
The committee agreed to the proposed amendment that the allowances and remuneration of the councillors should be determined only in consultation with the Minister of Finance, and not with his approval, and that this be done "subject to national legislation envisaged in section 219(5) of the Constitution."

Clause 11: Meetings of Council
After some debate as to the how a substitute Chairperson would be appointed in the absence of the appointed Chairperson, it was decided to use the clause in the IBA Act that deals with this matter.

It was also agreed to extend the period in which a Chairperson, after receiving a request, from two days to seven days.

Clause 12: Conflicting interests

The committee agreed that the fine for councillors found guilty of an offence pertaining to conflicting interests as outlined in subsections (1) or (2), be set at R250 000 or imprisonment not exceeding five years, or both.

Clause 13: Validity of proceedings
The committee was unhappy with the current wording of the clause, and found the proposed amendment to be equally problematic. The proposed amendment was section 16 of the Telecommunications Act. The committee agreed that the clause must be redrafted, and that the IBA Act be used as a guide.

Clause 15: Financing of and accounting by Authority
The committee agreed to reject the current clause in favor of the proposed amendment. Following other amendments to the Bill, it was decided that the responsibility to issue and sign cheques drawn by the Authority be given to the Council as a whole, instead of just the Chairperson. The Chair felt that it was important that on all matters, decisions were made by the entire Council, and not only the Chairperson.

Clause 16: Annual report
Ms Smuts (DP) stated the Council must not report to the Minister, arguing that the whole idea behind constitutional institutions is to be protected from financial interference from the Executive. Mr Hoon suggested that the Council could submit their annual reports to Parliament, as was outlined in section 40(1)(e) of the Public Finance Management Act, 1999. The Committee agreed that annual reports must be submitted to Parliament.

Clause 17: Standing and special committees
Ms Vos (IFP) was strongly opposed to members of standing or special committees not being subjected to the disqualification's outlined in 6(1)(e) to (k). The involvement of Members of Parliament or public servants in these committees would create political interference and would directly infringe on the independence of the Authority. It was argued that their involvement would be a conduit by which the Department could "capture" the regulator. Mr Nel (ANC) dismissed the IFP position, arguing that members appointed from the broadcasting and telecommunications industry would also influence the Authority and cause "industry capture". The Chair suggested a compromise position where provincial legislators, and members of Parliament would be excluded from sitting on these committees, but public servants were not. Ms Vos (IFP) did not agree.

Clause 18: Dissolution of IBA and SATRA, and the first meeting of Council
There was further debate as to whether councillors should be dealt with in accordance with section 189 of the Labour Relations Act, 1995. Adv Smuts, the State Law Advisor, said that since councillors were not considered employees they could not be dealt with in accordance with the Labour Relations Act. The proposed amendment allocated the responsibility of negotiating the terms and conditions of terminating a councillor's contract to the appointing body. The Chair found the new clause problematic as it would mean that the Portfolio Committee on Communications, as the appointing body, would have to be involved in the negotiations. Mr Hoon responded that since the committee recommended the councillors there was no one else to handle the negotiations. A representative from IBA advised that the Minister in consultation with the Minister of Finance should handle the negotiations, since they were the ones responsible for setting the terms for remuneration. The Committee agreed to the proposed clause with the change.

Clause 20: Passing of assets and liabilities to Authority
The committee agreed to the proposed amendment that the IBA Act and Telecommunications Act will now be referred to as the "underlying statutes."

Clauses 21 through 24 were agreed to as stated. The meeting was adjourned.

BENEFIT

CHAIRPERSON

COUNCILLORS

Basic Salary

R256 587 p.a.

R197 466 p.a.

Service Bonus

R19 885 p.a.

R15 303 p.a.

Home owners-allowance

R13 212 p.a.

R13 212 p.a.

Medical contribution

R8 064 p.a.

R8 064 p.a.

Pension allowance

R32 073 p.a.

R24,683 p.a.

Vehicle allowance

R87 881 p.a.

R66 089 p.a.

Special allowances

None

None

 

COUNCILLORS

CHAIRPERSON

BENEFIT

IBA ACTUAL PACKAGE

(Since 31 March 1994)

APPROVED PACKAGE ACCORDING TO MANUAL

(1 July 1997)

IBA ACTUAL PACKAGE

(Since 31 March 1994)

APPROVED PACKAGE ACORDING TO MANUAL

(1 July 1997)

Basic salary

155 328

197 466

201 686

256 587

Service bonus

12 038

15 303

15 531

19 885

Home Owners allowance

7 344

10 008

7 344

10 008

Medical

9 000

7 920

9 000

7 920

Vehicle allowance

51 804

61 725

68 892

82 062

Pension allowance

19 416

24 683

25 212

32073

Special N-P allowances

65 070

-

83 745

-

TOTAL

R320 000

R317 105

R411 520

R408 535

Appendix 2:

National Community Radio Forum (NCRF) and the Freedom of Expression Institute (FXI)

Appendix 3:



4 April 2000

Find below some additional comments and formulations on the SACRA Bill, as raised and discussed in our oral submission of 17 March 2000.

1. Financing options for SACRA

As soon as possible after the establishment of SACRA, we recommend that it holds a public enquiry into financing options for the Authority. The options recommended in our first submission to the Portfolio Committee could be canvassed there. The course of action around the financing of the Authority would then be determined by the outcome of the enquiry, which could involve an amendment to s.15 of the SACRA Bill.

The reason for this suggestion is that we feel there has been insufficient time to debate the various financing options for the Authority, and that a dedicated hearing would provide the most appropriate platform. The efficacy of a service fee levied on the industry would be a particularly important focus of this enquiry.

2. Independence of the Authority
We recommend that s. 3(2) and (3) of the IBA Act be included in the SACRA Bill.

3. Criteria for appointment of Councillors
We suggest the following wording:

(3) Persons appointed to the Council must be persons who -
(a) are committed to fairness, freedom of expression, openness and accountability on the part of those entrusted with the governance of a public service; and
(b) when viewed collectively -
(i) are representative of a broad cross-section of the population of the Republic;
(ii) possess qualifications, expertise and experience in the fields of, amongst others, broadcasting and telecommunications policy, engineering, technology, frequency band planning. law, economics, business practice, finance, journalism, education, entertainment and community development work.

DEPARTMENT OF STATE EXPENDITURE

FORMAL DELIBERATIONS ON THE SOUTH AFRICAN COMMUNICATIONS REGULATORY AUTHORITY BILL

  1. Our telephone conversation on 3 April 2000 in the above regard refers.
  2. The Public Finance Management Act (PFMA) came into effect on 1 April 2000, applying, amongst other, to constitutional institutions and those public entities listed in Schedule 2 and 3 of the PFMA. The Independent Broadcasting Authority has been listed as a constitutional institution on Schedule 1 of the PFMA, and the SA Telecommunications Regulatory Authority as a public entity listed on Schedule 3 of the PFMA. In terms of the Bill under discussion, the SA Communications Regulatory Authority (SACRA) to be established will be regarded as a constitutional institution.
  3. Sections 15 and 16 of the SA Communications Regulatory Authority Bill regulate financing, accounting and reporting requirements of the SACRA. The following provides a short comparison between the financial, accounting and reporting requirements of the PFMA and the SACRA Bill:
  4. Financial implications for the State

PFMA

SACRA BILL

COMMENTS

Section 13(1)

All money received by the national government must be paid into the National Revenue Fund

 

Section 15(4)

All revenue received by the Authority must be paid into the National Revenue Fund

 

In accordance with PFMA requirements

Section 36(2)(b)

The chief executive officer of a constitutional institution must be the accounting officer for that institution

Section 15(6)

The chief executive officer of the Authority is the accounting officer for the Authority and is charged with the responsibility of ensuring that all moneys received and payments made on behalf of the Authority are duly accounted for

 

 

In accordance with PFMA requirements

Sections 38 and 40

General and reporting responsibilities of accounting officers

Section 15(7)

Requirement to keep records in accordance with established accounting practice, principles and procedures, per financial year for accounting and reporting purposes

 

PFMA has additional requirements for accounting officers of constitutional institutions than those stated in the Bill. The PFMA also refers to generally recognised accounting practice, not established accounting practice

Section 40

Reporting responsibilities of accounting officers

Sections 15(8) and (9)

Requirements of and contents of annual financial statement

 

 

PFMA has additional requirements for accounting officers of constitutional institutions than those stated in the Bill

Sections 40(1)(c) and (e)

Accounting officers must submit financial statements within two months after the end of the financial year to the Auditor-General for auditing, and to the relevant treasury to prepare consolidated financial statements; and

the accounting officer must submit the institution's annual report and audited financial statement to Parliament within one month after receipt of the Auditor-General's audit report

Section 16

Reporting requirements, including submission of financial reports to the Minister within 3 months after year-end, and tabling by the Minister, of the Authority's annual report within 30 days after receipt by the Minister in Parliament.

 

The requirements of section 16 are interpreted as not being in accordance with that of the PFMA.

Due to the fact that the PFMA also applies to constitutional institutions, it stands to reason that the new Treasury Regulations issued in terms of the PFMA will also be applicable to the SACRA.

According to the memorandum on the objectives of the SACRA Bill, no additional financial implications will result for the State. However, the merger of the SATRA and IBA may lead to savings for the State and should be declared.

G GULSTON

DEPUTY DIRECTOR GENERAL: EXPENDITURE CONTROL

 

Appendix 1:

IBA COUNCILLORS: ANNUAL RENUMERATION PACKAGES

(as of 21/1/99)

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