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LABOUR AND PUBLIC ENTERPRISE SELECT COMMITTEE
12 April 2000
INDEPENDENT COMMUICATIONS AUTHORITY OF SOUTH AFRICA BILL (TABLED AS THE SOUTH AFRICAN COMMUNICATIONS REGULATORY AUTHORITY BILL)
Documents handed out:
South African Communications Regulatory Authority Bill
The committee was given a clause by clause briefing on the SACRA bill as well as a detailed background on the need for one regulatory authority and the process leading up to the tabling of the Bill. Concerns of members included the apparent neglect of the NCOP in certain parliamentary processes, the absence of any reference to gender equality on the Council, and the staffing arrangements, given the merger of IBA and SATRA.
Mr Joe Mjwara, the acting Director-General of the Department of Communications and Mr Mongezi Tshongweni, Senior Manager in the Office of the Director General gave the presentation. The original draft of the SACRA Bill was presented and discussed. The Chairperson, Mr Fenyane, noted that since parliamentary rules required the Bill to satisfy all the processes in the National Assembly before it came to the NCOP, the meeting would be informal. The Bill had to be tabled in the plenary session of Parliament where it was introduced, before it could formally be discussed by the NCOP. Mr Mjwara introduced the Bill, giving background and explaining the need for it.
At the time of the Codesa negotiations already, the idea of setting up an independent institution to regulate Broadcasting and Telecommunications was first mooted. During those discussions there was general agreement that there needed to be one regulatory authority rather than two to look into matters of Broadcasting and Telecommunications. There were reasons as to why this process to establish one regulator did not proceed at that time. The first reason was that there was a need and urgency to control the broadcasting element of the industry because of the impact of broadcasting in terms of the holding of free and fair elections. It was a fact that the elections could only be certified to be free and fair if the media had desisted from playing the role it had played in the past - at that time the SABC was the mouthpiece of Government. There was a necessity to put into place an institutional framework to remove the SABC and other media agencies from the sphere of Government as a matter of extreme urgency. Thus in 1993 the IBA Act was put into place. It focused all its attention to monitoring and regulating broadcasting as well as opening the airwaves to more role-players. It was only in 1996 that it became possible to concentrate on Telecommunications. A White Paper, which dealt with issues of the regulation of Telecommunications, was then introduced. The Telecommunications Act subsequently became Law in 1996 after extensive consultation. The idea of one regulator was addressed in this White Paper and was considered desirable and was envisaged as a long-term objective. Late in 1997 Cabinet gave its approval to the idea of the merger of the two entities and it asked the Department of Communications to initiate a process which would lead to the merger of the two bodies.
The Department initiated a study of a similar regulator which had been converged, in Canada. A team of representatives from the Department and the two regulators were set up to go and study how this regulator was functioning and how it was structured. The team came back with a report and recommended to Government that Government sought the assistance of a Mr Alan Darling, who was the CEO of the Canadian merged body who had been responsible for merging the two bodies in Canada. Mr Alan Darling then came to SA and worked here for six months with the Department, the a IBA and the SATRA. He produced a report, which endorsed the need for the merger of IBA and SATRA. He mapped out his proposed design of this merged body and the issues, which needed to be reflected in law.
After this there was a Draft Convergence Discussion Document which was discussed among various Government Departments. This document also highlighted the need to move towards this converged entity. In February 2000 the Bill was introduced and numerous submissions thereon were received. Not a single submission questioned the wisdom and the need to establish one regulatory authority.
At a level of convergence, it would no longer make any difference whether one was a Telecoms operator or a Broadcasting Operator. The infrastructure of these operators could be used to offer services, which they previously could not offer. So the two markets were increasingly coming together to offer the same things. Telkom for instance could use its facilities currently owned to offer Broadcasting services. The SABC, if allowed, could also offer telephone services.
It was thus necessary to create more opportunities, in view of massive mergers between companies like CNN and On Line America, which were coming together to produce probably one of the biggest companies on earth. To be able to compete in a global market, a framework both at a policy and regulatory level was needed to encourage South African Companies to adapt to technological changes and advancement which South Africa faced.
Mr Mongezi Tshongweni dealt with the clauses of the Bill.
KEY PROVISIONS OF THE BILL
Â· To provide for the merger of the current regulators [SATRA and IBA]
Â· To provide for the appointment and workings of the reduced council
Â· To provide for the transfer of personnel and assets from the current
regulators to the new regulator
Â· The remaining provisions of the underlying statues, remain unaltered
REASONS FOR NEW BILL
Â· In the previous millennium, broadcasting and telecommunications were
separate definite spheres of operation
Â· Convergence of technologies makes this clear distinction disappear
Â· A new merged regulatory authority was therefore necessary
Â· About two years ago Cabinet resolved to merge the two regulators
PROVISIONS OF THE BILL
Â· This contains the customary definitions most of which emanate from the underlying statutes
Â· This stipulates the objects of the Act, namely to regulate broadcasting telecommunications through
an independent authority, as required in terms of section 19201 the Constitution
Â· This clause establishes the South African Communications Regulatory Authority
This clause deals with the functions of the Authority
Â· This clause deals with the establishment of the Council, which consists of 5-7 members,
one of whom is the Chairperson
Â· The procedure for appointment follows that prescribed in the underlying statutes (which are repealed)
Â· The difference between this Bill and the underlying statutes is that a selection committee is appointed by the Parliamentary Portfolio Committee, who will conduct the public hearing and make recommendations to the President for the appointment of Councillors
Â· Qualifications for appointment as councillors, are prescribed in this clause. It follows the provisions of the underlying statutes, which are repeated
Â· The terms of office is prescribed as 4 years, and a councillor may be re-appointed
Â· This deals with the removal from office of councillors
Â· Deals with the filling of vacancies that may arise during the term of the council
Â· Remuneration of councillors is determined by the Minister with the approval of the Minister of Finance
Â· Meetings of the council are regulated in terms of this clause
Â· Prescribes the procedure at meetings of the council if a councillor has a conflict of interest
Â· It deals with the validity of proceedings in the event of technical problems, such as a vacancy in the council
Â· Stipulates that the new authority must perform the duties of the former authorities, prescribed in the underlying statutes
Â· Provides for the appointment of staff to assist the Authority in the performance of its tasks
Â· It provides that the Authority operates in terms of the provisions of the Public Finance Management Act, 1999
Â· Financing of the Authority
Â· The Authority is financed from money appropriated from Parliament in terms of the Departmental Budget
Â· Income must he paid into the National Revenue Fund
Â· The CEO is the accounting officer
Â· The Authority must keen proper books of all transactions
Â· Accounts of the Authority must he audited by the Auditor General
Â· Council must submit an annual report within three months of the end of the financial year
Â· The Minister must table a copy thereof in Parliament within 30 days of receipt
Â· Deals with the establishment of standing and special committees to assist the council
Â· This includes the Broadcasting Monitoring and Complaints Committee, to be chaired by a councillor
Â· it deals with the dis-establishment of the IBA & SATRA and for the phasing out of the terms of office of the councillors of the former authorities
Â· it deals with the transfer of staff of the former authorities to SACRA
Â· it deals with the transfer of assets, rights, liabilities & obligations of the former
Authorities to SACRA
Â· Deals with pending manners which the former Authorities had to attend to
Â· Repeals laws as specified in schedule 1
Â· It deals mainly with the repeal of certain sections and amendments of other sections of
the underlying statutes
Â· Provides that in the event of a conflict between this Act and an underlying statute, this Act
Â· Provides the title of the Act, which will come into operation on a date to be fixed by the President by proclamation in the Gazelle
Ms C Botha (DP Free State) wanted clarity on the statement by Mr Mjwara that Telkom could for instance go into broadcasting and the SABC into Telecommunications.
Mr Mjwara said that he was referring to the technological know-how and capabilities. The infrastructure which was being using for telecommunication services, could also be used for broadcasting purposes and vice versa. The law did not allow for this at the moment but the technical capacity already existed.
Ms Botha asked whether the kind of convergence of the regulators could also occur between the two entities. Would the laws allow them both to deal in both spheres?
Mr Mjwara said that how one defined the markets in the future was the challenge. It had to be decided whether there would still be a division between broadcasting and telecoms or whether for example broadcasters would be vertically intergrated with other companies. The issue would be for example, what type of alliances the SABC would enter into in the long term. The global market was one where progressive services could be offered, which combined visual broadcasting services with internet telephony, fixed line or mobile telephony. South Africa's markets had to respond to this and in order to accomplish this the regulations had to decrease to allow for more investments and more services of this kind. If this was not done South Africa would be left behind in terms of the global march and our sectors would not be as competitive as others.
Ms Botha said that in terms of section 18, councilors who would not be re-employed would be dealt with in terms of section 189 of the LRA. She wanted to know what the position would be with staff. Even though it seemed as though all staff would be transferred, she failed to see how this would happen in practice. What provision had been made for surplus staff (since there had been no reference to the LRA in respect of them).
Mr Tshongweni referred to section14 where it said that the staff of the authorities would be transferred from IBA to the new authority and from SATRA to the new authority as if they had been employed by the new authority. This meant that the staff would continue with their tasks with respect to broadcasting and also with their tasks with respect to telecoms. He said that a similar question had been posed during the consultative process where it was agreed that there did not have to be legislation on administrative issues of how the new body would deal with staff matters after the merger, because once there was legislation, the new body would be tied in the sense that they would not be able to take decisions as required by their operational needs at that time. With respect to the law, the staff of the authorities would be transferred to the new bodies as if nothing had happened and their rights and benefits would stay in tact. In terms how staff was re-deployed within the authority, it was the authority who had to decide.
He said that if there were administrative problems relating to staff, arising from the merger, they would be addressed through the LRA. Section 18 in respect to councillors was included since there had been different ideas with respect to whether councillors were in fact subjected to the LRA or common law, in terms of the contracts which existed.
The Chairperson asked whether there would be retrenchments.
Mr Tshongweni said that in terms of the legislative processes and what had been reflected in the Bill the Department did not anticipate any retrenchments. However the authority would do its administrative tasks as required by operational needs at that time.
Ms September (ANC) wanted to know in terms of the gender question, whether women would be given priority in dealing with the composition of the board. Her worry was that it was only men who presented to the committee so she wanted to know from the Department how they would address the gender issue.
Mr Tshongweni said that the Bill tried to address this situation through section 5(3)(b) where it stated that persons appointed to the council had to be persons who were representative of a broad cross section of the population of the Republic. He said that this implicitly dealt with the gender isse which could be "read into" this.
Ms September said that she wanted to make it clear to the department that it was not clear that this section in fact addressed gender.
The Chairperson felt that Ms September had a case. He said that when the committee formally considered the Bill it could possibly consider including an amendment clause, which addressed equity. He suggested that it be looked at again at that stage.
Dr P Nel (NNP Free State) referred to clause 5 regarding the composition of the Council. This clause deals with the establishment of the Council, which consists of 5-7 members. This clause had been amended in the new draft to say that of the Council would consist of 7 members. He wanted to know how this figure compared with the two current authorities.
Mr Tshongweni said that presently the IBA and SATRA had 7 councillors each. He said that the reason for envisaging the new Council, to consist of only 5-7 members was that it was not believed that the work of the council would increase in terms of decision making. It was felt that there should rather be more staff. In addition the council did have the powers to appoint as many committees as it needed to assist them in the execution of their tasks.
Ms B Dlulane (ANC Eastern Cape) was very concerned about clause 5 which stated: "The Council consists of no fewer than five and no more than seven councillors appointed by the President on the advice of the Portfolio Committee on Communications of the National Assembly according toâ€¦." She wanted to know why the NCOP in the form of the Select Committee on Labour and Public Enterprises did not feature. She asked whether it was not part of Parliament.
Mr Tshongweni said that the Department was guided and bound by the Constitution in terms of the role of the NCOP and its committees and also the joint rules as they existed today.
The Chairperson felt that the new body was not a Chapter 9 constitutional institution and thus the committee could consider an amendment in this regard.
Mr Nel asked, in relation to clause 17 on standing and special committees, whether officials from the Department would be allowed to serve on these committees because of their expertise and qualifications.
Mr Mjwara said that their had been considerable debate around this question - whether public servants should be excluded from organisations such as this simply because they were part of the Public Service. According to the Constitution, public servants were independent of party political considerations. It was a requirement that they functioned in this way. Taking into consideration the body (which would itself be independent from party political influences, there was some symmetry between the Public Service and a body of this nature. If one barred public servants from sitting on this body, one would actually bar members of staff of the Authority itself because they themselves fell within the public sector in terms of their contracts and remuneration. Thus the PFMA is applicable to them inasmuch as it is to the Public Service. Only the Authority could decide who it wanted to allow sit on the committees. It was also the authority who received the recommendations from the experts who were sitting there. If the authority thus decided that it did from time to time need public servants to come and sit in the committees, there was nothing in the law, which barred members of the public service from sitting in the committees.
Mr Tshongweni added that the Public Service had persons with certain expertise, which one would find difficult to draw from the private sector for instance. This was the reason for the inclusion of public employees to the committees, however the role of the public servants in these committees would be more of a contributory one in terms of discussions, which would occur. They would not have a role in decision making, because this had to be done by the council at the end of the day. There was also the possibility of saving money by drawing in public servants since they would either not be paid or would just receive a minimal allowance from their Department since they were paid by the Department anyway. Thus the inclusion of public servants would be more of a benefit than a disadvantage to the authority.
The chairperson had a problem with section 11, which said that the chairperson would decide where to hold meetings. He asked what would happen if the Chairperson wanted a meeting to take place in London?
Mr Mjwara said that since this would be a local body, it operated within the confines of the borders of the Republic of South Africa. The entire Act was only operational within the borders of the Republic of South Africa. If the chairperson wanted to hold meetings in London, it would be difficult to implement the relevant sections of the Act.
The Chairperson said that the Department should join the committee in its formal deliberations on the Bill. It asked the Department to re-look at the PFMA to make sure the Bill did not omit important clauses since this could result in unnecessary litigation.
The meeting was adjourned.
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