Independent Communications Authority of South Africa

AD HOC COMMITTEE ON THE REVIEW OF STATE INSTITUTIONS SUPPORTING CONSTITUTIONAL DEMOCRACY
2O February 2007
INDEPENDENT COMMUNICATIONS AUTHORITY OF SOUTH AFRICA

Chairperson: Prof K Asmal (ANC)

Documents handed out:
ICASA response document Part 1 & Part 2
Annexures Part 1 & Part 2

Relevant documents:
Terms of Reference
ICASA Amendment Act (2006)
Electronic Communications Act (2005)

Audio Recording of the meeting: Part1 and Part2

SUMMARY
The Independent Communications Authority of South Africa was the sixth body to appear before the Committee. As with other bodies the Committee’s interaction was guided by the terms of reference as well as ICASA’s responses to the questionnaire. The major points of discussion related to ICASA’s institutional organisation, its role in its budget process, its internal processes as well as the quality of its interaction with Parliament through the Communications Portfolio Committee. The appropriateness of the addition of postal services to its mandate and the circumstances surrounding the resignation of the chief operating officer were also raised. ICASA noted that although it met with the Department of Communications and National Treasury, it could hardly influence its budget allocation. The Committee would deliberate on the Chapter 9’s budgetary process and Prof Asmal raised the possibility of Parliament playing a greater role in this. ICASA also clarified that it did have a disclosure process for both administrative staff and councillors and that the register was public and available on request.

Prof Asmal’s opening remarks
Prof Asmal welcomed the Independent Communications Authority of South Africa (ICASA) delegation which comprised Mr Paris Mashile (Chairperson) and his advisor Mr M Baloyi, Mr Stan Mamaregane (Acting CFO), as well as the councillors Mr J van Rooyen, Mr M Zokwe, Ms B Ntombela, Ms T Cohen, Mr Masiza, Ms M Mohlala and Mr Nkuna. He noted that various Members of Parliament, especially from the Communications Portfolio Committee were present. He pointed out that as far as process was concerned, all bodies appearing before the Committee were treated identically. Questioning was not done in a partisan, party political fashion. The Committee’ questioning was informed by its terms of reference and the 25 point questionnaire it had sent out towards the end of 2006. When reporting to Parliament the Committee would make general observations, followed by a systematic look at each one of the eleven bodies. The Committee had also studied their annual reports, response submission and other documentation.

Discussion
Prof Asmal said that all Members considered the constitutional provisions to be enormously important. Some of ICASA’s work was profoundly technical and it now had jurisdiction over electronic communications, broadcast communications and the post office. He thus asked the Mr Mashile to take a few minutes to explain exactly what ICASA did.

Mr Mashile explained that ICASA was a regulator in the broadcasting industry and as such created a playing field for operators in the telecommunications, broadcasting and postal industries. They provided licences and developed regulations and policies that contributed to a competitive environment in which service operators could operate.

A competitive environment provided a myriad services at competitive prices and ICASA created ex-ante regulation that created such a competitive playing field. It also issued frequencies, which as a scarce resource had to be managed and equitably allocated. This was one of the biggest challenges facing ICASA.

It also had to ensure that universal access and services were provided, especially to the marginalised sectors of the community. ICASA as the regulator had to become the hub in the Information and Communication Technology (ICT) sector. The Minister of Communications set the policies, Parliament set the law and ICASA as the regulator operated within the confines of the legislation.

The ICASA Amendment Act (No 3 of 2006) empowered them to do what they had to do and the Electronic Communications Act (No 36 of 2005) defined the kind of services ICASA had to regulate.

Due to advances in technology there was much convergence of networks and services: one no longer spoke of vertically integrated licences. Separate network and services licences were now necessary. The Electronic Communications Act (ECA) allowed for the necessary competition in networks and services.

ICASA, in its competitive safeguards, had to make sure that there was no anti-competitive behaviour and had to determine who the significant market players were in order to impose certain obligations or create pro competitive avenues. This enabled ICASA to contribute to the socio economic enhancement of the country. The objects of the ECA stated that there were a myriad of social issues that ICASA had to have as an outcome in their regulation. These included job creation, empowering the historically disadvantaged and encouraging foreign direct investment. The ICT sector had been calculated as contributing about 6% of the gross domestic product (GDP). ICASA collected about R1,5 billion annually in revenue from licensing and frequency. This money was submitted directly to National Treasury.

Prof Asmal summarised that ICASA was thus a regulatory body with fixed minimum terms, had the socio-economic function of delivering to the previously marginalised, allocated frequencies, and gave advice to the Minister when asked. Had Mr Mashile left anything out?

Mr Mashile said that ICASA also assured that the playing field was even.

Prof Asmal pointed out that Mr Mashile had forgotten to list that ICASA supervised the control of their licensees to see whether they carried out their mandate.

Mr Mashile added that ICASA also tried to ensure that in issuing licences, it created a plurality and diversity so that even the marginalised communities were included.

Prof Asmal pointed out that ICASA had an agreement with the Competition Commission to prevent the accumulation of too many radio stations in one area.

Ms D Smuts (DA) wondered whether the delegation would agree that the basic reason ICASA existed as a licensing and rule-making body, was in the interest of free speech. Newspapers were not licensed or regulated but due to the scarcity of frequency it was important to do this in the case of broadcasting. Up until recently, frequency had been a finite public resource. Those who got frequency licences could be required to observe licence conditions which rested on two principles contained in the Constitution: fairness and diversity of opinion in broadcasting. If one had only a few broadcasters, one had to ensure plurality of opinion.

She said that due to technological developments and convergence it was necessary to regulate telecommunications solely within ICASA’s jurisdiction. Voice-, video- and data- broadcasting and telecommunications had become indistinguishable and it followed that telecommunications had to be treated the same. Technological developments had, in her opinion, brought to life the right to impact and receive information because every citizen now could receive as much information as he or she wanted.

Prof Asmal pointed out that ICASA had three major statutes that established what had just been said. It also had additional functions and could have agreements with the Minister of Finance to raise money in different ways. This was a very important fact and would be returned to later. He pointed out that Mr Mashila had not mentioned the South African Post Office (SAPO) as yet.

Mr Mashile responded that SAPO was incorporated in ICASA who now also had postal services under its jurisdiction. SAPO was a monopoly and provided certain services. ICASA issued service licences and determined tariffs.

Prof Asmal asked what kind of licences ICASA issued to SAPO.

Mr Mashile replied that ICASA offered licences for courier and other postal services. DHL and others were also being regulated. They also determined tariffs such as postage and imposed universal service obligations.

Prof Asmal wondered who had regulated and licensed postal services before 2006.

Mr Mashile replied that it was under ambit of the Department of Communications (DOC).

Ms Smuts said that the Committee was tasked with looking at the suitability and appropriateness of ICASA and similar institutions in present day South Africa. This question was, in many ways, answered by the fact that Parliament had “recently legislated both the ECA and the ICASA Amendment Act.” She asked if the addition of postal regulation to ICASA’s function was because it was argued that the post office would increasingly use electronic services and was it appropriate to regulate the postal services.

Mr Mashile replied that the ICASA was “a creature of statute”. ICASA acted within the confines of the law.

Prof Asmal wondered whether the postal service mandate was funded.

Mr Mashile responded that after receiving the added responsibility, there had been requests for an increase in funding. To date there had been no additional allocation.

Prof Asmal noted that ICASA had an advisory body that dealt with stamps.

Ms Ntombela confirmed that there was the Stamp Advisory Body. The Minister appointed the officials serving on it.

Mr J van der Merwe (IFP) said that it appeared as though there was overlap of functions as the DOC was supposed to manage the postal services.

Mr Mashile replied that ICASA’s role was clearly defined in the legislation - ICASA regulated licences and tariffs and saw to it that the licensee met service obligations.

Prof Asmal clarified that a Post Office Board had been appointed to run SAPO while ICASA regulated the tariffs.

Ms Smuts pointed out that the Minister had just taken back the powers that governed the reserve and other postal services. She wondered what ICASA had been left with.

Mr Mashile explained that ICASA set the tariffs for postage. It issued licences and made sure that licensees adhered to the regulations. ICASA determined and approved tariffs on the basis of the post office’s proposals.

Prof Asmal said that there was an advisory body that established what stamps would appear, but was not involved in the minutiae of the design.

Ms Smuts did not think that the Committee needed to spend time on the postage stamps. She was merely using it as an example to show that ICASA had its hands full and she was not sure that they should have received the additional functions.

Prof Asmal asked if it was correct to say that in terms of the regulation of broadcasting and realising national policy objectives, ICASA had by and large been successful. However, as far as telecommunications regulation, they had been far less successful.

Mr Mashile thought that the promulgation of the ECA would result in greater success in the area of telecommunications. There would no longer be a monopoly of the industry. The ECA allowed for competition in networks as well as services.
Prof Asmal pointed out that a commentator had noted that ICASA’s success in broadcasting was largely due to the autonomy it enjoyed under Chapter 9 of the Constitution. Telecommunications was characterised by a range of unintended policy outcomes, job losses in the sector, super profits of its incumbents, increasingly less foreign direct investment and ICASA’s own institutional incapacity to anticipate, regulate, monitor and mitigate these developments. He wondered whether this was a fair comment.

Mr Mashile agreed that it was indeed fair comment.

Ms Smuts elaborated that the Independent Broadcasting Authority (IBA) had been fully in charge of the governance of broadcasting under Section 198. Because it was fully in charge, it had autonomy in opening up the airwaves, which it did. Telecommunications was very different due to the ministerial co-regulation.

Prof Asmal pointed out that the Committee was not meant to provide comment on ICASA ‘s comment but was supposed to allow ICASA to make comments.

Ms Smuts continued saying that Nadia Bulbulia, a former ICASA councillor, had said that the power of co-regulation had had a delaying effect. As a result there had been huge backlogs in what ICASA had wanted to do for liberalising telecommunications. Under the new regime they were in charge of telecommunications and still had a relationship with the Minister in as far as she could set national policy and give them policy directives. ICASA had to consider directives but were not bound by them.

Mr Mashile responded that the role of the Minister vis a vis the regulator was that the former could come up with policy and also consult with ICASA. ICASA could also identify certain areas that could be improved and then advise the minister accordingly. It was clear that when it came to regulation and licensing, the Minister played no role.

Prof Asmal recalled that previously the Minister could veto licences. It was important to note that the executive had thus withdrawn its veto power.

Ms Smuts said that the Minister was, on behalf of the State, the shareholder and manager of nearly 38% of Telkom, the major incumbent, 100% of the major broadcaster and of Sentech. This presented a conflict of interest. The person who held the shares on behalf of the State could not conceivably regulate for the rest of the sector as well, especially not when those were the big players who influenced the fate of the new entrants in telecommunications.

Mr Mashile replied that that was no longer the case. ICASA issued licences, determined the tariffs while the Minister played no role in that. Regulation was referred to the Minister.

Mr S Dithebe (ANC) asked whether ICASA saw their role primarily as that of ensuring that prices were as low as possible and that services were made accessible.

Ms Cohen responded that from ICASA’s mandate, it was clear that it had to do both. Telkom’s monopoly and the duopoly in mobile services made it clear too that access and affordability went hand in hand. The ECA now required a systematic approach to managing the lack of affordability, which was the flipside of accessibility. It was important to note that before the ECA could open the door to increased competition, a number of procedural requirements had to be met: markets had to be defined and a determination of domination in market power had to be given. Only then could one regulate pricing. Prices were not just lowered automatically.

Prof Asmal said that he would not ask why the President had on three occasions mentioned that Telkom’s landline cost was very high because he would then be micro managing ICASA. He took it that the Minister did not interfere with the socio economic application.

Ms Cohen confirmed that that was the case.

Mr van der Merwe disagreed that asking about Telkom’s high rates amounted to micromanagement. He felt that this was of extreme importance to the entire country.

Mr Mashile responded that the high prices were indeed a serious problem and agreed with Ms Cohen that they could not just be lowered. The market was not yet liberal enough to allow competition. ICASA could only take action against those who “misbehaved”. He added that since it was an emerging market, regulation was imperative. Even with regulation itself, it was not easy to succeed in bringing down pricing. ICASA still had to act within the confines of the law and believed that the best way of regulating was through competition. The ECA would assist in achieving this. If there were alternatives, people would have choices as far as services were concerned, and there would be greater pressure on service providers to competitively price.

Mr van der Merwe sought clarity on whether ICASA had to adhere to the policy or not.

Mr Mashile replied that the objects of the Act determined what the policy objectives were. There were certain outcomes that they hoped to achieve through licensing and regulation. This was what he understood as the policy objectives of the country for telecommunications and broadcasting. The government of the day was tasked with creating a better life for all and had to try and do so via communication too. ICASA could only facilitate and ensure that there was a competitive playing field. It was difficult when outcomes were not as expected.

Prof Asmal noted that while the new Act removed the Minister’s veto powers, she still retained significant other powers. These included the co jurisdiction over licensing, spectrum planning, the performance management of councillors, fees, charges in the postal sector and the approval and appointment of consultants. These powers restricted the autonomy of the regulator. He asked if the delegation agreed that there was in fact a conflict of interest.

Mr Mashile responded that while ICASA appointed their local consultants themselves, the Minister appointed foreign consultants. The performance management system was aimed at holding councillors accountable for their actions. Even though ICASA was independent, councillors still had to be accountable to someone.

Prof Asmal pointed out that ICASA was accountable to Parliament and not to the Minster. The Committee had found that very few of the bodies under review were able to handle their internal differences. Some might be beginning to do that now. One understood why the provision had been put in the legislation, but one wanted to know whether it was consistent with the autonomy of ICASA.

Mr Mamaregane responded that there was recognition that the constitutional mandate was limited only to broadcasting issues. The question was whether it would be extended to the other activities that were not of a broadcasting nature.

Prof Asmal pointed out that the Constitution did provide that ICASA was independent and should perform their mandate without fear or favour. The Constitutional Review Committee had proposed that the Constitution be amended to embrace ICASA.

Mr Mamaregane noted that the law stated that the Minister would, in certain cases, play a certain role.

Mr Mashile added that the Minster was only responsible for spectrum that related to security services and that the rest fell under ICASA’s ambit.

Ms Smuts wondered whether the co jurisdiction as far as licences were concerned referred to the invitation to apply for big licences. ICASA could not invite people to build national or provincial networks or supply the big communications services until the Minister had issued an invitation to apply. This was a very big issue and had economic implications.

Prof Asmal said that one could not have a body that was not accountable to the electorate. Moving to institutional capacity, he noted that the new legislation had changed the method of appointment. He wondered whether this was a breech of the ECA. He asked the delegation whether ICASA owed its existence to Parliament or the Minister.

Ms Mohlala responded that according to the legal mandate, ICASA regulated in the public interest. ICASA believed that Parliament was the repository of the public interest because it was elected by the people and represented the view of the majority. ICASA thus believed that they were accountable to Parliament.

Moving to internal arrangements, Prof Asmal asked how it was possible that the CEO could have been suspended in January, had charges brought against her for ten months and then was allowed to resign. The Committee was also interested in how the councillors viewed their mandate. He wondered whether ICASA would like the Committee to recommend that there should be some reference to some criteria for the appointment of councillors.

Mr Mashile felt that that there were already criteria for the appointment of any councillor.

Prof Asmal recalled that a councillor with technical background had chosen not to take up his place. This could be an indication that there was something wrong in the appointment procedure. He wondered whether the process was not a bit informal.

Ms Smuts felt that it would be fairer for a member of parliament to answer that question, since councillors did not play a role in the appointment process.

Mr Mashile responded that the appointment of that particular councillor had been made, but the incumbent had not been satisfied with the remuneration that was offered.

Prof Asmal thought that the fact that the remuneration in a technical area had not been shared with the nominees, was important information to take into account.

Prof Asmal asked the delegation to give an account of ICASA’s interaction with the Communications Portfolio Committee in Parliament. He wondered how many times ICASA had appeared before the Committee and what the nature of those appearances were.

Mr Mashile replied that ICASA appeared before Portfolio Committee about twice a year. He added that since the Portfolio Committee was that week in Gauteng, it would visit ICASA.

Prof Asmal wondered how structured these interactions with Parliament were. A number of commissions felt that Parliament treated them in a “frivolous” way

Mr Mashile replied that the two occasions he had referred to earlier, were formal structured meetings. From time to time they made presentations on how they were progressing in certain specific areas of interest.

Prof Asmal noted that ICASA had made representations on the Electronic Communications Bill. He wondered how receptive the Portfolio Committee to the ICASA submission.

Mr Mashile felt that the Portfolio Committee had considered ICASA’s submission and had fused some of the issues into the Bill.

Prof Asmal questioned why there had only been two meetings for the whole year.

Mr Mashile responded that a number of stakeholders, including ICASA, had made submissions on the Electronic Communications Bill.

Prof Asmal said that ICASA submission was not that of a non-governmental organisation (NGO). It was the principal regulatory body who through that legislative process would have acquired enormous power. He asked if the Portfolio Committee has treated them differently from any of the other people who had made submissions.

Ms Cohen responded that there were formal meetings that were set down in the parliamentary calendar every year. ICASA was required to attend these at the Portfolio Committee’s request. These meetings were very formal and very public. The legislation process was a public process in which ICASA as a stakeholder made a submission. A number of its proposals were accepted, and a number were not. ICASA had for example made very detailed proposals around funding mechanisms for the organisation and those had not found their way into the legislation. ICASA was not a lawmaker and could only make proposals and then implement the Act they were given. She felt that ICASA had been heard, and that matters had been extensively debated on many occasions. She added that when the Portfolio Committee was in the province, they often requested meetings with ICASA to discuss specific issues.

Ms Smuts wondered whether ICASA would welcome the idea of a super committee (in addition to Portfolio Committee perhaps) that would take care of the Chapter 9 institutions.

Mr van Rooyen agreed that independence was important. Section 192 of the Constitution guaranteed this independence. It was a historical fact that telecommunications usually lay with the Minister and he thought it a step in the right direction to hand it over to an independent body. He believed that the ECA and the ICASA Amendment Act also represented positive steps. The ministerial check on councillors could not go much further than checking whether they went to the office.

Prof Asmal repeated Ms Smuts question on whether ICASA was satisfied with the degree of parliamentary supervision it received or whether it would prefer an additional body.

Mr Nkuna responded that there was a dynamic interaction with the Portfolio Committee. The only aspect that was absent was the performance appraisal of councillors. Historically councillors were counted as a collective and presented what ICASA had done as a collective. Now each councillor would have its own performance agreement and the Portfolio Committee would play an important role. The ECA and the ICASA Amendment Act had shuttled in a new dispensation where each and every councillor would be given a set of objectives that they had to achieve. The Portfolio Committee and the Minister would play a role in making sure that individuals were evaluated.

Prof Asmal said that Mr Nkuna was talking of a report card for councillors, while Prof van Rooyen referred to checking up on whether they were at work or not. These were two different matters.

Mr Nkuna said that ICASA was moving into a new dispensation now. They had assessed councillors’ competencies and these would determine what they would be responsible for doing. Parliament should play an important role in the appraisal. At the end of the year it should be possible for Parliament to assess whether objectives had been achieved.

Prof Asmal wondered whether it was ICASA’s collective view that someone would draw up the appraisal form and that Parliament would then publicly go through these forms.

Mr Mashile replied that the Commission shared this view. ICASA had developed a proposal on this and they were yet to submit it. They had analysed the legislation and found that it was necessary for the body to reconsider their strategies. Councillors would now have specific roles. He also pointed out that that if one agreed to a performance management system, there had to be a corresponding allocation of resources, so that one’s delivery could be judged on the resources that had been made available.

Prof Asmal said that the Commission was collectively responsible and collectively accountable. The Committee would require a document indicating how ICASA envisaged this appraisal and reflecting that it was a collective decision. The Committee wanted to know who would draft the appraisal, and whether ICASA was serious about doing it. The Committee would want to put this to other commissions too.

He mentioned that the Towards Ten Years of Freedom Review of 2003 referred to a strong lack of capacity and leadership within the sector. The Committee was interested in what ICASA had since done to develop leadership in this sector.

Ms Cohen said that if one was true to history, ICASA had during the ICASA Amendment Bill process asked for a collective appraisal process and not for an individual one. It was difficult to justify the wisdom of Parliament to have it take a different form. ICASA had proposed a model along the lines of the Civil Aviation Authority which at the time was their benchmark.

Prof Asmal commended the existing document from National Treasury that assisted portfolio committees on how oversight should take place. He realised that it was embarrassing for a body to comment on whether oversight was satisfactory or not. He asked if ICASA had systems in place for dealing with differences of opinion or “real cleavages” between councillors and staff. He also wondered whether the CEO was a member of the commission.

Mr Mashile responded that in terms of the ICASA Act the CEO, who was not a member of the Commission, was appointed by it to assist in carrying out its mandate.

Prof Asmal said that the fact that the CEO was not a member explained some of the difficulties ICASA had historically experienced.

Mr Mashile responded that the CEO was the sole custodian of the Public Finance Management Act (PFMA). The legislation however indicated that he or she would perform administrative tasks under the Commission’s control and supervision. The Commission had to have oversight.

Prod Asmal wondered how the situation could be addressed.

Mr Mashile felt that the legislation would have to be reviewed.

Prof Asmal pointed out that the PFMA applied to government departments and that the director general who was the accounting officer, could receive directions and instructions from the minister. There was no need for the PFMA to be amended to have a proper, rational arrangement, and if that was what ICASA expected they would wait a long time. He added that accountability could work both ways. Although the CEO was accountable to the Commission, the Commission should realise that the CEO was responsible for the day-to-day administration.

Prof Asmal asked if the delegation did not think that having only full time commissioners, meant that those who would like to serve on it on a part-time basis and perhaps had the technical capacity needed, could not do so. He realised that it was a tough question. This related to the efficiency of the body.

Mr Masiza responded that in their submissions to the ECA they had advocated for a reduced number of councillors. They had used the Financial and Fiscal Commission and some Malaysian models as benchmarks.

Prof Asmal said that it had been suggested that there had been a blurring of the distinction between the work of the councillors and that of the staff. Councillors had been accused of interfering in the day-to-day operation of the institution and undermining the CEO. The staff on the other hand might not have had the qualifications, thus necessitating the councillors’ intervention. He wondered whether ICASA would agree that the Commission had in a sense been running the institution.

Mr Mashile responded that the ICASA Act said that councillors had the responsibility of running the organisation. Councillors had to appoint the CEO to assist them in running the administrative side. The Commission was solely responsible for licensing and regulation. In the final analysis if anything went wrong by way of finances for instance, the Commissioners would be accountable even though the CEO handled administration.

Prof Asmal reminded the Commission that it had to look at the efficiency and efficacy of ICASA. It appeared as though ICASA had not worked out a day-to-day system governing the relationship between the commissioners and the full time staff. He again asked how it had been possible to suspend the CEO for ten months, not bring any charges against her and then allow her to resign with some kind of benefit. He wondered what kind of system allowed that to happen.

Mr Mashile explained that they had become aware of certain infractions and wanted to conduct an investigation as soon as possible. The matter was investigated and charges solidified. New matters were uncovered during her suspension. ICASA brought those forth as well. The respective legal representatives could not agree on suitable dates for resolving the matter. By June they had already formulated six charges. As much as he wanted to have the case resolved there were certain difficulties around availability. The CEO finally decided to terminate her contract and serve her three months notice so that she could get on with her life. The Commission decided that they would allow her to resign and in lieu of her serving her three months' notice, they would simply pay her for those three months. He added that she had originally expected ICASA to pay her legal costs. They had refused.

Prof Asmal pointed out that in very many countries, if serious charges were laid, the official in question was suspended without pay. In cases where the charges were less serious, officials were suspended with pay, but were absent from the office. For a layperson, for someone to be suspended for ten months with no charges being brought was beyond the realm of understanding. The Committee was concerned about an institution of such importance operating without a CEO for ten months. If charges were there, they should be charged, and not look for new charges.

Mr Mashile said that initially they investigated two charges and in that process other charges were discovered. He had thought it better to lay the charges together.

Prof Asmal wondered whether the board rather than the Chairperson alone should have taken this decision.

Mr Mashile said that they had records indicating that it had indeed been a board decision.

Ms Smuts felt that the matter had not been exhausted. She said that the absence of the CEO had been a material factor in ICASA’s poor financial performance. The Auditor General's Report showed that the deficit of R43 million was ascribable to the absence of the CEO and CFO. Some of the procurement irregularities, and the fact that staff performance was not measured were also ascribable to that. In addition she had read that the CEO was now suing ICASA for defamation and the CEO's lawyer argued that it was ICASA’s lawyer who was frequently not ready to resolve the matter. Had ICASA defended the action at the Council for Conciliation, Mediation and Arbitration (CCMA) when Ms Jackie Manche disputed that there was a basis for her suspension. She was reinstated after that action. According to her lawyer the agreement made in the end was that there was no substance in the charges made against her and that there would be a joint media statement.

Prof Asmal intervened and said that this was not a trial. The Committee only wanted to establish why the matter had not been resolved and to then draw a conclusion around whether that was an efficient way of running an organisation.

Mr Dithebe noted that ICASA had mentioned that with the ECA coming into operation, there would more multi disciplinary competencies that ICASA would have to deal with. Did ICASA had sufficient self-financing mechanisms to ensure that staff could be retained?

Mr Mashile responded that ICASA was under-resourced financially and was incapable of attracting the right human resource capabilities. This challenge would remain as long as the institution was under-resourced. They had come up with a game plan for addressing the matter. The allocations ICASA obtained was far less than what it needed to fulfil its mandate. The coming into operation of the ECA, which required nine rather than six councillors, as well as the taking on board of postal services would further challenge it as far as paying market related salaries. He added that about 80% of ICASA’s staff had joined the operators. ICASA appeared to serve as a training ground.

Mr Dithebe wondered how the haemorrhage could be ended.

Ms Mashile replied that that would only be done if ICASA had enough resources to retain staff, offer market related salaries, and create an environment that would make people want to work for ICASA. He added that ICASA was beholden to the people who resourced it.

Prof Asmal noted that a licensing officer who should be paid a considerable amount so as to ensure that they did not fall victim to corruption, was paid only R264 000, while a part-time advisor was paid R380 000. Whose permission had to be sought to increase the salaries of licensing officers.

Mr Mamaregane responded that with the ECA coming into effect that had to re-look at their operations. One of the projects currently underway was reviewing people’s job description and benchmarking the different posts within ICASA to gain an understanding of what market related salaries would be. This would form part of the retention strategy. He added that advisors were employed on a full time not part-time basis.

Prof Asmal said that the presidential review in 2003 had found that ICASA had difficulty retaining staff, did not have a mentoring programme to keep staff and instil how important their work was. There were people who were willing to work in an environment that was good even if the remuneration was not that good.

Mr Mamaregane said that the institution was embarking on the process to address some of the shortcomings.

Ms C Johnson (ANC) said that in the submission the Committee had received from the Communications Portfolio Committee there was mention of internal instability due to the high staff turnover. It went on to say that councillor salaries were a major source of concern and that the relevant ministries had since attended to them.

Mr Mamaregane explained that the current process was aimed at cascading those improvements to the level of the staff.

Ms Cohen added that it was important to note that ICASA had last year come to Parliament “cap in hand” to make a submission to National Treasury (through Parliament) that an additional R68 million would be required to implement the ECA. There were no less than 200 regulations and a number of policy papers that needed to be re-gazetted, yet there was no publication budget. Laws were passed without any additional budgetary allocation. Some allocations had been made for addition of postal services and two extra councillors.

She added that although councillor salaries had been increased they were still way below the salaries of other regulators within their own sector. There were also no benefits attached to these salaries. That notwithstanding, ICASA had begun the process but how that would be funded was still to be seen. Additional allocations would have to be made otherwise the ability to fulfil the mandate would be somewhat compromised.

Ms S Rajbally (MF) asked if ICASA had done a survey to see if, in some areas of their institution, there was over employment and overpayment. Was there any job sharing within the institution.

Ms Mamaregane responded that as part of the institution revising its work plan, it had looked at the resources that were available. They were now at the stage of looked at the work people did and the value attached to that work. That would inform the remuneration strategy.

Mr Dithebe asked if over-reliance on international consultancies had impacted on ICASA’s resources.

Mr Mashile responded that ICASA operated within a very dynamic sector where knowledge had to be constantly updated. One needed to be up to date with the latest technological developments. From time to time they needed to call on experts with international experience. ICASA then customised that information to the South African environment. If an international consultant came to help them, then skilling of their officials had to form part of the agreement. He assured the Committee that from time to time they did use consultants from South Africa.

Ms Smuts agreed that ICASA ought to have access to absolutely all the consultancies they needed and that the Minister ought to have nothing to do with it. She also agreed that councillors’ salaries had to be very high. Section 219 of the Constitution required that councillors and judges and commissioners of other bodies had to be dealt with separately. She was also in favour of a huge budget, as well as cost recovery for the institution. However, she did not think that it was only poaching by the sector that had resulted in ICASA losing its entire general management and other senior staff. The CFO was under police investigation. The loss of all these people was a serious reflection. The institution had to express to the Committee what it was that made it so difficult for them to run ICASA. People had been required to write exit reports, which the council had given to an independent consultant.

Prof Asmal also wondered what had caused the effective breakdown.

Mr Mashile replied that all the general managers had left for greener pastures. He could supply information to that effect. The Committee had to bear in mind that they were operating in an environment where companies had to fulfil Black Economic Empowerment (BEE) requirements and the few black professionals were in demand. Most of them “serve sufficient time” to gain knowledge and experience to then move on to better companies with better remuneration. Some started their own companies, while many went to operators.

Prof Asmal pointed out that the exit affected the credibility of the organisation. If in 2003 they had discovered that their professional staff were being poached, they could have decided to work with a smaller group of professionals who would then be much better paid. What public pressure had been generated to ensure having a streamlined base of better paid, more competent professionals who would stay with the institution, like the South African Revenue Service that did not lose staff.

Mr Mashile responded that ICASA grew from the coming together of the South African Telecommunications Regulatory Authority (SATRA) and the IBA and thus had a particular legacy. It was not easy to retrench people who had been employed within those two bodies. Given the high unemployment rate, trimming and streamlining had to be done cautiously.

Prof Asmal interrupted to say that ICASA had enormous influence in the area of anti-competitive behaviour and regulation. He mentioned that the liquidator of a well known company had just had to retrench 200 staff. ICASA had enormous political and public service power. It was not a social security outfit but a regulatory body.

Ms Smuts noted that each councillor had an advisor and a personal assistant. This stemmed from the old IBA organisational structure. Did the delegation not think that that presented difficulties? ICASA had highly skilled general managers who worked on certain recommendations and sent that to the councillors who sometimes worked with the advisors. Did the presence of advisors not contribute to the institution’s structural difficulties?

Mr Mashile responded that ICASA did take a look at this historical structure. During the IBA days there had not been sufficiently resourced people to help with the activities of licensing etc. The Commission now realised that the general managers were actually advisors because they brought recommendations to councillors. The redeployment of the advisors had thus been considered.

Prof Asmal wondered whether advisors were appointed permanently or on contract.

Mr Mashile explained that they were on contracts that were attached to those of the councillor.

Prof Asmal sought clarity on ICASA’s relationships with other bodies.

Mr van Rooyen replied that all the Chapter 9 bodies had the Bill of Rights as a basis. ICASA was unique in that it had a range of functions that other bodies did not share: legislative, judicial, administrative, policy making, licensing and regulatory functions. He thought that contact between Chapter 9 institutions would be useful. Councillors did often make speeches at human rights occasions - Councillor Masiza was very active in this regard. ICASA had spent some money as far as the World Summit on Children was concerned.

Prof Asmal pointed out that broadcasting complaints were sent to the Broadcasting Complaints Commission (BCC). ICASA thus did have a relationship with at least one other body.

Mr van Rooyen replied that in accordance with the ruling by the IBA in 1995, the National Association of Broadcasters had set up its own disciplinary body. This operated in a similar way to Advertising South Africa (ASA) and the Press ombudsman. The scope of the Communications Complaints Commission (CCC), which would come into operation on 1 March was much wider than it was before.

In reply to Prof Asmal asking how the CCC would function, Mr van Rooyen explained that the CCC would act on complaints referred to it by the council. It could even give legal advice. The council could refer matters to the CCC for resolution. A complaint would go to the CCC who would decide on its merits. It would then advise council as to the sanction and council would take the final decision.

Prof Asmal pointed out that ICASA was the most litigated commission because there was so much money involved. Telkom brought most complaints and cases. He asked whether it was not possible to work out a process of arbitration rather than going to court for such long periods. This would contribute to their efficacy of their work.

Mr van Rooyen said that the CCC would not have an enquiring function, which would interfere with its judicial function. It would be independent with an independent chairperson who was an experienced lawyer.

Prof Asmal wondered why there was so much litigation against ICASA.

Mr van Rooyen responded that there was big money at stake. Radio Pretoria had lost all its cases against ICASA over the last five years.

Prof Asmal pointed out that in arbitration things were decided very quickly. Legal recourse would be taken when it was necessary. A huge amount of public money and resources as well as opportunities were lost through litigation.

Mr van Rooyen replied that if arbitration could be worked into the Act, the situation might change. Since arbitration was not provided for in the Act they took the ordinary course and took ICASA on review.

Prof Asmal said that this should be indicated in the next Annual Report to Parliament.

Ms Mohlala responded that the concern Prof Asmal raised had been noted and that the Portfolio Committee had taken cognisance of it. The ECA now provided that a decision of the regulator would be valid and binding until set aside by a court of law. This would prevent operators from taking the regulator to court for long periods of time so that decision could not be of any force and effect.

Ms Cohen said that the nature of the interest determined how a matter could be resolved. A visit to the Financial and Fiscal Commission in 2006 confirmed that almost none of their substantive decisions had gone unchallenged. As far as ICASA’s relationship with other Chapter 9 institutions, there was no overlap outside of shared values. ICASA did have a relationship with the Competition Commission which was governed by a memorandum of understanding. Broadcasting cases were content related and linked to licence conditions, while the telecommunications litigation was invariably around pricing, price caps, etc.

Steering the discussion to ICASA’s financing, Prof Asmal noted that the regulator recommended that it should have authority to keep some of the fees for funding. Obviously that could not be done autonomously because they had to be accountable to someone. He wondered how seriously ICASA had pursued the idea. He said it was clear that Parliament would have to play a central role in the bodies’ budgets. He asked the delegation to explain its budget process.

Mr Mamaregane explained that different business units considered their respective medium term expenditure framework (MTEF) priorities, once those were developed, they were sent to Council for approval.

Mr Masiza explained that once ICASA had finalised their budget, it was taken to the Department of Communications who in turn took it to National Treasury.

Prof Asmal wondered whether the DOC discussed the budget with ICASA prior to taking it to National Treasury.

Mr Mamaregane explained that ICASA interacted with the Director General and the CFO. The DOC was ICASA’s link with National Treasury.

Ms Johnson asked if the DOC was merely ICASA’s “post box” or whether the DOC appeared before National Treasury on its behalf.

Mr Mamaregane replied that DOC was part of the discussions with National Treasury.

Prof Asmal noted that ICASA worked out their budgetary arrangements, which were sent to the DOC who arranged a meeting with National Treasury, to which ICASA was invited.

Mr Mamaregane explained that at the meeting with National Treasury and the DOC, ICASA presented its budgetary needs and business plan. There would be some debate.

Mr Masiza said that at the one meeting they had attended with the CEO, they were told how much funds were available across the departments. There was no way that ICASA could then argue for the amount they needed. National Treasury told them what amount was available and said that they needed to operated within those limits. They had so far met with the National Treasury only once.

Prof Asmal said that if Parliament dealt with National Treasury on the bodies’ behalf, it might well be told that there was a certain amount available and it would then decide how to allocate it amongst the bodies.

Mr Dithebe wondered whether it would thus be safe to assume that the meeting with National Treasury and the DOC was merely a formality and that whatever allocation they were to receive was a fait accompli.

Mr Mamaregane replied that it was not always a fait accompli. In some instances they could convince National Treasury to increase the allocation.

Prof Asmal wondered what the institutional memory of the Council was.

The delegation’s institutional memory ranged from two months to seven years.

Mr Mamaregane said that it was mostly the CFO and the CEO that met with National Treasury and the DOC. A council member was usually delegated to accompany them.

Prof Asmal wondered whether their ideas had been suggested to the other role players.

Mr Mamaregane replied that the suggestions had been made but had not found their way into the ICASA Amendment Act. It was an ongoing process.

Ms Mohlala said that ICASA had made submissions in the ICASA Amendment process, to the Department as well as to the Ministry. The submission had often been repeated but had unfortunately not been taken on board. She thought that that was largely due to concerns about the accounting mechanism that had to be put in place.

Prof Asmal wondered whether ICASA had considered what would happen if for one year their income from licensing was very meagre. The Committee was interested in whether they had considered the proposal adequately. He requested them to supply the Committee with a document that explained how they would practically go about realising the idea.

Ms Smuts thought it necessary that some comparative work also be included. She suggested the United Kingdom’s Communications Act. This was an old issue that had been dealt with in Parliament. It was precisely because of this issue that the ICASA Amendment Act now included saying that the Minister of Communications together with the Minister of Finance could also channel other moneys.

Prof Asmal asked to whom councillors made their disclosures of outside interests. He wondered where these disclosures were vested, who gave consent and how often these disclosures were updated. He found it curious that ICASA had a public as well as a confidential register.

Ms Mohlala responded that ICASA had a code of conduct, which specified the way in which each councillor had to disclose interests. It also indicated what needed to be disclosed. Directorships within the telecommunications, broadcasting and postal sector were prohibited. Initially ICASA had not had a process for staff members to disclose their interests, but the code of conduct had now been extended to them. Specific procedures governed their disclosures. The register was kept by the CEO. One was expected to update the declarations annually or when ever it became necessary. She denied that there was a private register.

Dr J Delport (DA) wondered whether only directorships or all interests were covered.

Ms Mohlala replied that all interests and gifts received from the sector had to be disclosed.

Prof Asmal said that Parliament’s disclosures were in the public domain. The Institute for Democracy in South Africa (IDASA) used to publish them once year but had now lost interest in doing so. He wondered who had access to the register if the CEO kept it.

Mr Mamaregane replied that it was available on request. ICASA might have to consider making it public.

Prof Asmal said that the Committee would consider whether disclosure of interests should be published in annual reports.

Ms Smuts pointed out that councillors should not develop any interests.

Prof Asmal said that that one should try to keep this area, which to his knowledge had so far been mercifully free of corruption, to remain so.

Mr Dithebe wondered how ICASA dealt with complaints from the public about the cost of telephony. Was ICASA certain that the public knew that it could lodge complaints about that?

Mr Masiza replied that due to financial constraints ICASA had not been able to make available an 0800 number to give the public easy access to them. It had also not been able to establish provincial offices that would bring them closer to the public. ICASA was trying to address this matter. Those lucky enough to be able to lodge a complaint, could expect a resolution within three to fourteen days. ICASA wanted to reduce the number of days.

Prof Asmal said that the Committee had found that bodies “loved regional offices” but often did not consider the cost and supervision these offices required. He suggested that ICASA rather be well-publicised and made leaflets available such as in every social security office.

Mr Dithebe said that almost every community would like to have its own community radio station. He wondered what ICASA had done to make sure that people had the necessary information to make an application for a radio station.

Mr Masiza responded that ICASA had outreach programmes. They tried to visit a province each month to address broadcasting and telecommunications issues. They normally took the electricity regulator along, since there was no point in advertising their services if people did not have access to electricity.

Ms Smuts said that the ICASA Amendment Act made provision that five technical experts could be invited sit with the relevant portfolio committee when they interviewed councillors. That was based on the Independent Electoral Commission (IEC) model where a "pre legislated body" did all the public invitation interviewing and then submitted a shortlist to Parliament. The majority of the members on the Committee simply declined to exercise the option of inviting these technical experts. She wondered whether the delegation thought an outside panel, would be a good idea.

Prof Asmal felt that the question related to policy matters for Parliament and could not be answered by the councillors.

Mr van Rooyen wondered of he could address a matter related to the defamation case against ICASA that was raised earlier. He felt that that this was necessary since there was a media presence at the meeting. He said that the case had been warded off. There was also never any indication from ICASA that the charges brought against Ms Manche had been unfounded.

Prof Asmal ruled Mr van Rooyen was out of order. The Committee was exercising an oversight role and was not sitting in judgement. The matter of principle in that case was the long time it took to resolve the matter. What happened in a court of law was ICASA’s own business.

He dissuaded members of the Committee from raising matters that bore no relevance to what they were tasked with doing. He added that irrespective of whether something was a true reflection or not, the press would report whatever it wanted too.

He summarised that the major areas the Committee was interested in was the institutional design of the agency, whether it was adequately resourced, whether there was skill development as well as the efficiency and legitimacy of the regulator. The Committee would also consider the political will to create an accountable, independent regulator, which the sector could respect, as well as whether ICASA was performing its function within the requirements of a developmental state.

Prof Asmal thanked ICASA for its participation and said that the Committee might have to recall them, perhaps for a closed session.

The meeting was adjourned.