South African National Space Agency Bill [B20-2008]: Department Response to Public Submissions

Science and Technology

09 June 2008
Chairperson: Mr G Oliphant (ANC)
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Meeting Summary

The Department of Science and Technology gave its response to the submissions on the South African National Space Agency Bill made by CM Space Investments, the University of the Western Cape, the South African Astronomical Observatory, Marcom Aeronautics & Space, CSIR, Sunspace, Telkom, Eskom and Sentech. Relatively minor amendments had been requested. Issues relating to the recognition of BEE and the development of SMMEs, as well as concerns about the funding of the Agency were addressed. The retention of the term “astronomy” and the insertion of the term “geodesy” were discussed and would require finalization. Generally, strong support for the Bill was indicated by most submissions, although a few organizations voiced their concern about overlap. Sentech had asked for an exclusion protecting the activities which were already undertaken by a public entity in terms of a licence or authorization. Eskom asked for the exclusion of certain activities from the ambit of the Agency. 

The Committee was hesitant to approve the Bill immediately as the strategy and policy road map was not yet in place and there were concerns about funding. They requested information on the space budgets of similar sized countries, clarity on licence fees and the efficacy of these. They asked to view the business case which had been presented to National Treasury, and further engagement with Sunspace and the Sumbandila satellite project.

Meeting report

Ms Pontsho Maruping, Chief Director: Space Science & Technology, DST, took the Committtee through the Department’s response document. Most of these related to the definition of terms, such as the term “industrial development” encompassing the creation and development of SMMEs. The word “dispose” in clauses 4(2) and 5(2)(b) was to be used in its literal meaning and related to the disposal of assets, which would be conducted in accordance with policy to be developed by the Department.

On the inclusion of public private partnerships, the Bill provided for the entering into an agreement with any person. Government procurement policy would include BBBEE. The sentiments expressed in the submissions from the University of Cape Town (UCT), the South African Astronomical Observatory (SAAO) and Marcom were noted. Each of these raised the possibility of working closer with concomitant international agencies and the opportunity to work more effectively and collectively towards the development of world class space capabilities and aerospace products.

The request by the South African Astronomical Observatory to include the term “geodesy” was accommodated by the over-arching term of space science. In response to the CSIR, the DST confirmed that the Agency would perform both the roles of funding and coordinating vehicles. Questions of clarity on other issues were to be addressed in the Regulations, according to policy and subject to United Nations agreements. These stipulated space development for the purposes of non-military and non-defensive purposes only. A Schedule 3A business model had been proposed for the Agency in terms of Public Finance Management Act. This had been necessitated by the fact that more than fifty percent of revenue would be generated by other sources. This state of affairs would probably continue for the first ten years.

Sunspace raised the concern that the National Space Agency (SANSA) and
Technology Innovation Agency (TIA) had overlapping mandates. Ms Maruping explained that the space industry already operated in a highly regulated environment and that the development of technology had to be managed throughout the value chain. It would endeavour also to support and create an environment that was conducive to industrial development while not seeking to compete with private industry.

Questions on the roles of the Space Agency and the Space Council were raised by Telkom. Ms Pontsho Maruping explained that the Council was a regulatory body while the Agency would implement and fund space programmes. Eskom had raised a concern about overlapping astronomy activities. It also raised the matter of possible conflict of interest being caused by the monitoring of the Board by a committee appointed by the Board itself. She said that the agency would focus primarily on space-based astronomy or interfaces between space and ground astronomy. Sentech asked for the insertion of a clause which would exclude the Agency from engaging in activities which were already undertaken by a public entity in terms of a licence or authorization. An amendment to this effect was proposed.

Discussion
Mr Oliphant commented that all institutions and universities that had made submissions should be included in the Department’s response document. He asked what the transitional arrangements entailed and the duration thereof.

Ms Maruping replied that the Telecommunications Act had been promulgated before South African National Space Agency. The latter would focus its activities on creating new capacity and technological ability. It could necessarily change how things had been done in the past, but existing agencies would be allowed to continue with the work with which they were currently engaged. The South African National Space Agency would be engaged with these agencies in time within the scope of its role, which would be to coordinate space activities. Their discussions with Sentech centred mainly round negotiations for transformer capacity. The DST viewed Sentech’s activities largely as service activities and this was not what the Agency would be pursuing.

A representative from Sentech said they were concerned that the insertion they requested had been interpreted by DST to be only a “transitional provision” and not permanent.

Mr Oliphant said this position would have to be clarified.

Mr Mazula from CM Space Investments indicated that he was satisfied with the response they had received.

Mr Oliphant suggested that the definition of “space science”, as including the science of geodesy, be stated in the definitions of the Bill.

Dr P Whitelock, from SAAO, said that it was not normal in scientific terms to categorize astronomy as part of space science and that generally it was stated separately. The term ‘space science’ did, however, include the science of geodesy.

Mr Oliphant asked where these definitions were derived from and whether there was an international precedent for them.

Mr Morkel was concerned that the draft Bill would give rise to a confirmed strategy, although it was still in a state of flux and subject to change. Clarity on the status of the Bill was needed. Various submissions had referred to funding concerns. It appeared the Agency wanted to fulfil a funding as well as coordinating role, although there was still no clarity on how this would be structured. The strategy document indicated a budget reaching a half billion by 2012. This could potentially indicate the creation of a bureaucracy. He asked whether the Agency intended budgeting for individual missions and project manage them.

Ms Maruping replied that policy and the strategy were straightforward in the sense that space technology was very well defined worldwide and that it was regulated by international bodies and agreements. The policy document was therefore more of a broad statement of intent. The strategy took that intent and focused it on specific goals. There was no danger that the policy would be inconsistent with the strategy. The two would be presented to Cabinet together.
 
Mr Oliphant commented that the Bill was being submitted in a vacuum, where neither policy nor strategy had yet been approved. The workshops referred to would only take place in July, while the Bill needed approving in the meantime. This was not a desirable state of affairs. He asked for more clarity on the operation of the Space Council. The question regarding funding had not really been addressed. The figures put forward were astronomical and needed to be defendable.

Ms Maruping replied that the Bill indicated the Agency would undertake, through four key aspects, to facilitate the development of space missions, develop technology platforms, which were mission specific and to develop human capital and capabilities. The strategy had been written from a utility perspective. Inter-governmental requirement surveys had been done to determine what was needed to increase effective functioning and which of those requirements could be solved by space capabilities. Public comment had been allowed on the strategy. The Department did not envision the Agency becoming large and cumbersome. It would simply be required to implement centres of competence and act as an interface between institutions and organizations in order to facilitate the creation of critical masses where they were needed and where there was too little activity at present. The Agency would operate on a project-driven basis, but these would probably entail fairly big missions. Some of the activities of the Agency would fall outside the ambit of a schedule 3(a) agency and would have to be stipulated by exemptions.

Ms Maruping said the targets were based on an analysis of similar-sized countries and their implementation of space programs as a percentage of their GDP. The cost of satellite development was quantifiable. A gap in the technology of High Resolution Imagery had been identified, which would be costly to fill as South Africa would have to develop not only the technology, but also the human capital and capability as well as re-establish the infrastructure necessary for its development. She said they had estimated how much it would take to launch the Sumbandile-sat. She agreed the Bill was being proposed in a vacuum environment in the absence of policy and strategy. The policy had taken much longer to finalise than had been anticipated, partly as a result of the engagement with other related departments. The policy did re-emphasize the need for an Agency. The Business Case had already been submitted to the National Treasury, in which the role of the Agency had been stipulated and the budget had been motivated.

Mr J Blanche (DA) congratulated the presenters on the quality of their input.

Ms Ngcobo asked why the use of a transitional provision was justified.

Ms Maruping replied that she was surprised by the input from Sentech. The Bill had been gazetted last year in October, and this issue was only now being raised. The Bill would not affect the Electronic Communications Bill or the Sentech Bill on the issue of the acquisition of satellite data. The Agency would not be focusing on communication services and their activities did not coincide with those of Sentech. In a few instances, the activities did entail the use of space satellite data in the same way as Sentech. One such instance had been the development of a small communication payload for a micro-satellite, which was used for the tracking of animals and which transmitted short messages to certain communities. Similar pilot projects would be continued.


Dr Boni Mehlomakulu, Deputy Director General: Research, Development and Implementation (RDI), said it was difficult to accommodate Sentech entirely, but their existing licensing would continue. Similarly when the TIA Bill had been put forward for approval certain stakeholders wanted to know if this would affect their activities. The Regulations would define the exact powers of the Agency, which would not be involved with electronic services and electronic network services. This was the general stance behind the transitional provision suggested in Clause 5(1)(d), as it would be the function of the Agency to coordinate. The provision was not intended to be permanent.

Mr Oliphant asked that the issue be dealt with in the next meeting as effectively this could mean that Sentech might be in jeopardy of its continued existence when its licence expires. This was not defendable.
 
Mr Bengu questioned the role of coordination the Agency was supposed to play in an arena where space and technology work was already underway. How was the Bill placed in the midst of existing operations.

Mr Oliphant suggested that the Department needed time to confer on the matter of a transitional Bill and that members would return to this issue. He asked that the next meeting include a so-called space-scape by the Department, which would also go some way towards answering the questions by members on the current situation for space activities in the country and the environment in which the Agency would be operating.

Mr Morkel asked for an organogram of the Agency by the next meeting, especially as it had been decided to categorize the Agency as a Schedule 3(a) body according to PFMA classification. He asked if the organogram would reveal a fairly flat structure especially due to the relationships it intended forming, as referred to in Clause 5(2)(c) and given the project based nature of the work. This clause referred to the establishment of companies for the developing or exploiting of any invention or working “in collaboration with any person to establish such a company; and acquire an interest in any company or other juristic person undertaking the development or exploitation of an invention or technological space innovation”. It also posed the question whether these relationships would be finite.

Ms Maruping agreed the categorization of the Agency as a Schedule 3(a) body required certain exemptions in respect of that very clause. She mentioned the example of the satellite applications centre, which had been proposed for inclusion into the activities of the Agency. Part of the activities of the centre was the tracking of satellites and data, which to some small extent made up a commercial activity. It had been discussed with National Treasury that the revenue generated by these commercial ventures be ring-fenced specifically for activities of the satellite applications centre. The exemptions to the Schedule 3(a) categorization would be very specific. The biggest limitation to categorizing it differently was that it would not be able to generate its own funds for some time. Eventually it was envisioned that the Agency would transfer some of the technology that is developed to other industries and be able to sell this to them or to enter into partnerships with them, although this was essentially not the primary object of the activities of the Agency.

Mr Oliphant said they still needed to clarify the strategy and policy road map. They needed the information regarding the analysis done on similar sized countries and their space budgets. Further clarity was needed on licence fees and the efficacy of these. Unless the business case, which had been presented to National Treasury, was confidential, the Committee would like this information. He suggested that further engagement with Sunspace and the Sumbandila satellite project would be helpful in addressing some of their issues and give them some idea on where they fitted into the space-scape of South Africa. He asked that the proposed amendments and definitions be finalised. A copy of the full presentation would be required to send to all stakeholders.

He said there remained the National Research Foundation process, which related to the disagreements between the legislature and the executive on the appointment of boards. This would have to be addressed at the next meeting.

The meeting was adjourned.

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