Committee Report on SATRA

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Communications and Digital Technologies

09 November 1999
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COMMUNICATIONS PORTFOLIO COMMITTEE
9 November 1999
COMMITTEE REPORT ON SATRA



The Committee Report on SATRA appeared in the ATC of 10 November 1999.

Report of the Portfolio Committee on Communications on Satra, dated 9 November 1999, as follows:
The Portfolio Committee on Communications, having conducted a fact-finding exercise into alleged irregularities, corruption and maladministration amongst councillors at the South African Telecommunications Regulatory Authority (Satra), reports as follows:

A. Introduction
Satra was established in terms of the Telecommunications Act, No 103 of 1996 (hereafter referred to as the Act). The primary object of the Act is to provide for the regulation and control of telecommunication matters in the public interest (section 2 of the Act).

In terms of section 5(3) of the Act, Satra must be independent and impartial in the performance of its functions. Section 6 provides that Satra must be governed and represented by a Council, which consists of a chairperson and between three and five other councillors. The present Council consists of a chairperson and five other councillors.

The President, on recommendation of the parliamentary committees on communications, appoints the Council. In terms of section 12, a councillor may be removed from office by the President on grounds of misconduct, incapacity, unauthorised absence from three consecutive council meetings, performing outside remunerative work or failure to disclose conflicts of interest.

B. Committee procedures
During a presentation by the Satra Council to the Committee on 7 September 1999, they informed the Committee that there were problems being experienced by the regulator, and that they had taken certain steps to address these problems. Some of these problems were highlighted in media reports, in particular the leaked Satra internal forensic report, entitled the Gobodo Report, containing allegations of nepotism, maladministration and corruption within Satra, and levelled at its Chairperson.

The Committee raised concerns about these reports and the consequences that they would have on the stability of the regulatory environment in the country.
The Committee unanimously passed a resolution to meet the Satra Council in a closed session to engage the Council on matters pertaining to the functioning of Satra as a telecommunications regulator.

The Committee invited the full Council of Satra to attend various closed meetings. These meetings took place at Parliament and in the offices of the Department of Communications in Pretoria. Rule 152 of the National Assembly guided the Committee in taking a decision to close the meetings to the public and the media.

Satra is currently engaged in an important process of licensing a third cellular operator.
The Democratic Party did not attend the last closed meeting of the Committee on 22 October 1999, and indicated that it had approached the Public Protector to investigate allegations purporting to be a conflict of interest by certain councillors of Satra in the third cellular process.

C. Meetings with Satra Council
The Satra Council met the Committee in a closed session in March 1999, and on this occasion an undertaking was given by the full Council to address all the problems being experienced by the regulator. Subsequently, it became apparent that these issues had not been resolved satisfactorily, and the Committee was deeply concerned about the resurfacing of allegations of nepotism, corruption and other irregularities within Satra.
In order to assist in solving these internal problems, three closed meetings with the Council were held on 17 September 1999, 1 October 1999 and 22 October 1999.

The meeting of 17 September 1999 received an apology on behalf of the Chairperson of Satra, who was out of the country. The meeting of 1 October was organised to give the Chairperson of Satra an opportunity to appear before the Committee.

The Chairperson of Satra alleged that, despite having informed the Chairperson of the Committee in a telephonic conversation on 10 September 1999 that he would not be in the country, the Council was invited to a meeting on 17 September 1999.

The Chairperson of Satra stated in the meeting of 1 October 1999 that he therefore had no confidence in the Chairperson of the Portfolio Committee on Communications.

The Chairperson of the Committee denied that this conversation ever took place and placed on record his itemised billing for that date in the meeting of 22 October 1999.
The SABC reported that Satra's Chairperson had "failed" to show up at the meeting of 17 September 1999. The Chairperson of Satra also accused the SABC of broadcasting malicious stories about him to the nation. He requested the Chairperson of the Committee to respond to the SABC report, and to inform them as to why he could not attend that meeting. The Chairperson of the Committee indicated that he was not responsible for SABC news bulletins and therefore could not interfere in the content of the SABC broadcasts.

The Chairperson of Satra said that he was denied access to the discussions at the closed meeting of 17 September 1999, where he was not present, and that he therefore reserved his rights on all matters raised at that meeting.
He questioned the motive of the Committee's fact-finding exercise when the Minister was dealing with the same investigation.

The following issues came to light at these meetings:
1. Media report leaks
The Committee expressed its concern regarding leaks to the media on confidential matters raised and discussed at its closed meetings. It furthermore expressed its desire that methods be found to deal with the application of the parliamentary Rules appropriately.

The Chairperson of Satra was quoted in a number of newspaper articles, referring to matters raised in his submission at the closed meeting of 1 October 1999. However, he denied ever speaking to the media after the said closed meeting.

2. Correspondence from concerned staff
Correspondence from concerned staff members, covering various issues ranging from allegations of corruption and nepotism to sexism and favouritism, were sent anonymously. It was clear from this correspondence that the Satra staff were polarised and were taking sides in the tensions within the Council.

3. Report of Gobodo Incorporated
The Satra Council commissioned a firm of chartered accountants, Gobodo Incorporated, to investigate the apparent leaking of confidential information regarding Satra to the press. The leaked information reported in the City Press newspaper contained allegations of nepotism, maladministration and corruption that were levelled against the Chairperson of Satra.

Gobodo Incorporated investigated the leak to the City Press, but failed to identify the source of the leak. The report of Gobodo Incorporated was tabled by the Satra Council in September 1998. It came to the notice of the public a year later, when it was leaked to the media.
The Gobodo Report raised a number of substantive issues that were cause for concern.

4. Minister's investigations
The Minister of Communications briefed the Committee on 1 October 1999 to clarify the nature and scope of the investigation.

According to the briefing, the Satra Council took a resolution, requesting that the substantive issues raised in the report of Gobodo Incorporated be investigated.
This investigation is currently under way, and Gobodo Incorporated is conducting the probe. Satra councillors have subsequently expressed the view that this investigation should be widened.

D. Allegations and issues raised by various councillors in meetings
1. Decision-making in Council of Satra
(1) There is a discourse among certain Satra councillors on the interpretation of certain provisions of the Telecommunications Act, and in particular section 6, regarding decision-making by the Council and the role of the Chairperson of Satra. The delegation of authority on matters that are subject to a Council decision is also contentious.
(2) Four of the first Satra councillors appointed in 1997 have accused the Chairperson of Satra to have taken decisions without Council approval, as required by section 6 of the Telecommunications Act. This included decisions on tenders and the appointment of staff, in particular that of the current Chief Executive Officer of Satra.
(3) The Chairperson of Satra has been accused of failing to call special Council meetings when there is a dire need, as identified by the Council. Certain councillors felt that there is a feeling of powerlessness and lack of trust in the Council, due to a flawed decision-making practice.
(4) The Chairperson of Satra is alleged to have removed agenda items raised in a Council meeting by councillors, and according to him he has "the right" to determine the agenda. The Chairperson was accused of not calling meetings of Council for a period of three months after a dispute relating to the third cellular tender.
(5) It is alleged that the Chairperson, as the appointed spokesperson of Satra, raised matters in the media without consulting the Council. It was felt that this undermined the authority of the Council, as matters raised in the public on behalf of Satra presented its viewpoint, although councillors might not have endorsed it.
(6) It is alleged that the Chairperson of Satra instructed finance staff to deduct the cost of a legal opinion from a councillor's salary who sought that legal opinion on the powers of the Chairperson and the powers of the Council regarding decision-making, and on "who Satra is". It is alleged that this deduction was done without the Council's approval.
(7) The Chairperson of Satra alleged that one councillor has over the years ruined the morale of staff at Satra.
(8) All councillors do not have the same understanding of the powers of the Chairperson regarding matters of administration, the appointment of staff, media liaison and tendering procedures.
(9) Councillors said that the lack of clarity on governance and leadership issues in the Satra Council is of critical concern.

2. Contention on tendering procedures
(1) The tendering procedures at Satra are the responsibility of the Tender Committee and the Evaluation Committee. However, there is an allegation that the Chairperson of Satra tampered with the procedure without any appropriate Council resolution.
(2) There is a dispute as to whether the Council approved an amendment to the tender procedure document presented to the meeting by the Chairperson of Satra.

3. Allegations on third cellular licence process
(1) Allegations were specifically made in relation to the third cellular process. It is alleged that certain problems within the Council started when the third cellular process commenced.
It is alleged that the Chairperson of Satra unilaterally awarded tender ST00017 to a company called Afcent, despite a resolution of the Council to delay the awarding of the tender. The Chairperson has, however, disputed this allegation and has indicated that he was acting on established tender procedures adopted by the Council.

(2) The awarding of tender ST00017 to Afcent, a consultant to advise the Satra Council on the third cellular process, is a point of contention within the Council.
As a result, the Satra Council redefined the scope of work of Afcent and limited it to providing "some analysis tools but not the comparative assessment of all the applications".
Members of staff that are not members of the Communication Workers Union, an apparent bidder, are entrusted with the responsibility to oversee the evaluation, licensing process and time-frames. A project director, reporting directly to the Chief Executive Officer, liaises between the Council, Afcent and other outside parties.

(3) The Chairperson of Satra accused one councillor of being the courier for one bidder, and two councillors of harassing the tender staff by constantly inquiring about the progress on a tender.
The Chairperson of Satra alleged that a few councillors wished to have Satra scuttle its own rules to give a tender to a company called Zader to advise the Satra Council on the third cellular licence, and that the same company is now an applicant before Satra for a third cellular licence.

4. Further issues raised
(1) The Chairperson of Satra alleged that he has been a subject of much clandestine and public smearing of his upright and professional reputation gained over three decades.
(2) The Chairperson of Satra alleged that his relatives and a staff member received anonymous harassment calls and death threats. He said that the first inkling that trouble was brewing for him, first came from a conversation with the Director-General of Communications.
(3) The Chairperson of Satra alleged that some councillors were fostering an unfavourable climate that could only do harm to the economy and public interest.
(4) The Chairperson of Satra alleged that some councillors had a complete disregard for fiscal responsibility, including the waste of financial resources on wall pictures. He had to stop State property from being installed in the home of a councillor, and Satra's vehicles and a driver had been used for domestic chores of a councillor.
(5) The Chairperson of Satra alleged that certain councillors and some civil servants showed ethnic favouritism and therefore denied equal rights to opportunities for all people to participate in the country's mainstream economy.

E. Conclusions
On the basis of the information gathered by the Committee, we are of the view that the Satra Council and its staff are riddled with tensions and suspicions, and these have the potential to undermine the stability of the telecommunications sector.
The information before the Committee further suggests that -
1. decision-making at Satra is defective;
2. the tendering procedure at Satra is vague; and
3. there are no clear guidelines regarding the appointment of staff.
The Committee also noted with concern that the problems identified in the meetings will affect the viability of the merger of the Independent Broadcasting Authority and Satra in the year 2000.
The Committee has also noted that the scope of the Minister's investigation is limited to issues raised in the Gobodo Report. Satra councillors expressed the view that the present environment is not sustainable and tensions within the Council tamper with the work of Satra.

F. Recommendations
The Committee hereby recommends that -
1. the Auditor-General urgently conduct an audit of Satra's activities for the period 1998 to date, with special attention being paid to the allegations raised;
2. the relevant Executive Authority be requested to take urgent steps to safeguard public confidence in the Satra Council, and to restore its credibility pertaining to decision-making, including evaluating the conduct of each individual councillor's behaviour and performance in office.

Report to be considered.
 

 

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