South African Communications Regulatory Authority Bill: hearings

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17 March 2000
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Meeting Summary

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Meeting report

17 March 2000


Documents Handed Out:

MultiChoice Africa and MNet joint submission
National Community Radio Forum (NCRF) and the Freedom of Expression Institute (FXI) joint submission

Two joint submissions on the South African Communications Regulatory Authority (SACRA) Bill were made to the committee: MultiChoice Africa and MNet and the other by the National Community Radio Forum (NCRF) and the Freedom of Expression Institute (FXI).

MultiChoice/MNet Submission
Ms Clarissa Mack, General Manager of Regulatory Affairs for MultiChoice, Ms Amanda Armstrong, legal consultant, and Mr Kwezi Mtengenya, Director of Regulatory Affairs for MNet briefed the committee on their views of the SACRA Bill.

(Q) Mr Makunyane (ANC) asked how would it differ if the Authority were to receive funding from other sources? This was in response to their claim that the Authority in receiving funding solely from Parliament, compromised its independence.

(A) Ms Mack responded that the problem with funding that came solely from Parliament was that is was subjected to the volatility of the Budget. Money that was collected from fees attained through other businesses would result in increased economic certainty for the Authority, and eliminate the fear of "industry-capture." The problem with the current Independent Broadcasting Authority (IBA) Act was that it dealt only with political interference and not with interference from non-governmental organizations (NGOs) and other external investors.

(Q) Mr Makunyane (ANC) asked why they felt the Minister's involvement in the applications, renewals, and registering of licences would raise doubt in the international community as far as investing was concerned?

(A) Ms Armstrong replied that under the IBA Act, no provision was made for the Minister to exercise any power surrounding the granting or renewing of licences, and that this should continue under the SACRA Bill. It was also not "international best practice" to have political involvement in these processes, as foreign investors would be wary of an Authority that had such considerable political influence.

The Chair, Mr N Kekana, refuted Ms Mack's reply saying "there is no way that the Department can say to SATRA, 'We are not giving you money'." He argued that the Department could never be in a position to withhold funding from the South African Telecommunications Regulatory Authority (SATRA), since under the Appropriations Bill that is tabled in Parliament each year, SATRA fell under Vote 5: Communications Department Budget. He added that the Courts had clearly established that Parliament could not dictate the activities of the Authority, and that the transfer of funds did not constitute control, since they were done by the State Expenditure Department.

Ms Mack responded that the Constitutional Court had made it clear in the decision of New National Party (NNP) of South Africa v Government of the Republic of South Africa and others, 1999, that it was inappropriate for the Department to make funds available from its own budget to independent institutions for the performance of certain functions. She argued that money appropriated for the new Authority should not come through the Department (Vote 5), but that the Authority go through the State Expenditure for their budget.

The Chair said that this was problematic since the State Expenditure was a Department itself.

Ms Armstrong stated that they were faced with two problems. First, that the budget of the Authority was submitted to the Minister, which meant that it had to be "routed" through the Department, and secondly, that the Authority only received funding from Parliament. Additional funding from imposing service fees would correct the second problem and would also allow for an increase in the Authority's budget in line with Section 13 of the Public Finance Management Act. She added that the IBA and SATRA budgets had consistently been insufficient to meet their constitutional mandates, and that additional funds would be needed in order to meet present international standards for regulatory authorities.

Mr Mjwara, Senior General Manager of Broadcasting Policy for the Department of Communications, criticized M-Net for quoting only one decision of the Constitutional Courts, stating that conflicting arguments had also been made by Constitutional Courts both in South Africa, and around the world. He added there were no constitutional requirements to deal with telecommunications and broadcasting in the same way, and that it was crucial that this be constantly applied to the entire convergence process. What was necessary was for new policy approaches to deal with the convergence technology, parliamentary mechanisms to ensure that Parliament would have the capacity to deal with the new Authority, and an institutional framework, so that SACRA could accomplish the aims set out in the Bill.

Ms Mack dismissed Mr Mjwara's criticism that other Constitutional Courts had made conflicting arguments, saying there was no jurisprudence on the question of independence. This was new legal ground, and there were no other examples that dealt with those exact circumstances.

Ms Armstrong noted that if the new Authority was identified as a constitutional institution, then all that was required was to amend Chapter Five of the Public Finance Management Act, since it did not address how the Authority's budget would be prepared. All other issues were dealt with clearly in that Act.

The Chair said the State Expenditure Office, the Auditor-General, and the Department of Communications would be invited to discuss these issues before the committee.

Ms Smuts (DP) noted the suggestion in their submission that they required more time to address Chapter Nine of the IBA Act, and Chapter Eleven of the Telecommunications Act in connection with this Bill. She asked that they be allowed to make a further submission on these chapters, and to include amendments that might arise from the deleted sections.

The Chair agreed, but stated that only written submissions would be welcomed.

(Q) The Chair asked if he was clear in understanding that since they felt councillors were not considered employees, they were not subject to the Labour Relations Act (LRA)?

(A) Ms Armstrong replied that the LRA was inapplicable, as present councillors were appointed to their offices by the President in terms of Section 4 of the IBA Act and Section 9 on the Telecommunications Act. Since the councillors were under the legitimate expectation that they would remain in office for a certain period of time, they must be dealt with equitably through negotiations with IBA and SATRA to determine the terms and conditions of removal from office. It was proposed that the councillors who would not be appointed to the new SACRA Council must be allowed to complete the work of any pending proceedings before the existing Councils.

Mr Mjwara agreed that the councilors must be allowed to finish the work that was before them, and the Department would negotiate these terms with them. He added that before the Councils were dissolved, a position paper would be produced so that the new Council could continue their work.

NCRF/FXI Submission
Mr Nkopane Maphiri, and Mr Jusi Tshose from NCRF, and Ms Jane Duncan, from FXI, briefed the committee on their views of the SACRA Bill.

(Q) Ms Smuts (DP) asked for comment from the Department on how the five to seven members that would make up the Council not delay the issuing of licences further?

(A) Mr Mjwara responded that the delays were not a result of indecision on behalf of the Council, but from legal issues and procedures surrounding the different kinds of licences. He added that SATRA was able to fulfill all its functions with a five to seven member Council, but that he would not object to the new Council having up to nine members as suggested in the Darling Report.

The Chair noted that all submissions had stated the need for a larger Council.

(Q) Ms Vos (IFP) asked if the Department had done an audit to determine the cost of having "high-powered support staff" for the Council, and what amount of the Budget had been allocated to this?

The Chair asked that only questions specific to the presentation be asked. No answer was given.

(Q) Mr Makunyane (ANC) asked for clarification on their point that "regulatory-capture" could arise from more than just councillors having direct interests in the industry?

(A) Ms Duncan responded that "regulatory capture" could occur from high-power businesses bringing in lawyers to overwhelm the Regulator in an attempt to shift its focus. Due to the fact that small businesses, or businesses with a wide membership base would be unable to compete on the same level, the Regulator would not hear all submissions, and be too heavily influenced by that one player.

(Q) Ms Vos (IFP) asked for their opinion of imposing a jail-term along with the fine for councillors who were found guilty of an offence due to conflicting interests?

(A) Mr Maphiri felt a jail term was "too heavy-handed", but was in favour of increasing the amount of the fine.

(Q) Ms Magazi (ANC) asked why, in clause 8: Removal from office, they wanted the wording to be changed in 8(1f) to on any other good grounds shown, instead of 'any other good reason'?

(A) Ms Duncan replied that they felt the existing provision was too broad, and needed to be defined in a way that had greater legal meaning through relevant case law.

(Q) A committee member asked what problems had the NCRF experienced with the Regulatory Authority, and what were their views on service fees?

(A) Mr Tshose responded that they had experienced three substantial problems. First, the renewal of licences every four years. There needed to be longer licence periods, or assurance that licences would be maintained, so that more long-term investors could be secured. Secondly, the closure of some of the IBA offices made it more difficult to interact with the Authority, and thirdly, the monitoring process does not fulfill the functions that it was set out to do. On service fees, Mr Tshose supported them, but stated that the money should go directly to the Authority, and not into the National Revenue Fund (NRF), so that it could more easily carry out its mandate.

Ms Mack added the reason the Authority was so under-funded was that it was not retaining the money it was getting from licencing and application fees, because they were going directly into the NRF. This made the Authority dependent on the Minister to allocate the funds back to them.

The Chair stated that a yearly report must be produced outlining the "plight" of community radio stations.

The meeting was adjourned.



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