South African Broadcasting Corporation & Independent Communications Authority of South Africa Annual Reports 2007/8

Meeting report

Opening Comments by Committee
Mr R Pietersen (ANC) objected to the South African Broadcasting Corporation (SABC)  presenting its annual report. He based his objections on a previous motion of no-confidence that the ANC had moved against the SABC Board. He said that he did not recognise the validity of the current Board and that the Chairperson should send them back to Kempton Park.

Ms D Smuts (DA) objected to Mr Pietersen’s proposal, saying that the ANC had no legal grounds for this, given the fact that the National Assembly had rejected the passing of such a motion by the House.

Dr P Mulder (FF+) said that the onus had been on the ANC to resolve its differences with the Board, before the SABC had arrived for the meeting. He expressed his concern at the ANC’s strong-handed tactics and political posturing.

Ms S Vos (IFP) said if the Committee passed Mr Pietersen’s motion, then it would be tantamount to a hijack of the SABC, and would be virtually turning it into a State broadcaster.

Ms L Yengeni (ANC) requested an adjournment of the meeting to provide the ANC with a chance to caucus on the matter.

The Chairperson granted the request.

When the Committee reconvened, Mr K Khumalo (ANC) reported back that the ANC Members had decided to listen to the SABC as it had been mandated to deliver three reports (The Strategic Plan, The Budget and The Annual Report) to the Committee.

 
SABC Annual Report for 2007/08
Ms Kanyisiwe Mkonza, Chairperson, SABC, said that the objective of the SABC was the delivery of public value. She noted that in the last four years there had been substantial growth, the restructuring and repositioning of the SABC, tighter corporate governance, effective administration and focused stakeholder engagements. The objectives of the SABC had been to ensure that content was informative, educational, entertaining, credible and objective as well as supporting the African Renaissance and New Partnership for Africa’s Development (NEPAD) and to secure the support and respect of the SABC stakeholders.

The SABC was also committed to the creation of a financially sustainable and accountable organisation, which also contributed to broad-based economic empowerment. It had also made a commitment to securing relevant technology, equipment and infrastructure to deliver on its mandate. She set out the mandate, which led to the creation of corporate goals and strategies, and then noted the ways in which the SABC had delivered on its mandate through those corporate goals.

Ms Mkonza noted that the SABC had aligned content to new audience segmentation and to platform positioning. There had also been increase in participation of content producers from historically disadvantaged individuals, as well as the Regions. The broader media fraternity had also been consulted with, through Media and Society conferences, and the Board continued its engagement with independent producers to provide leadership and local content targets. The SABC had also embarked on intellectual property research with the production industry to improve trade terms between the SABC and the production industry.

She said that for the 2008/2009 financial year the Board had identified digital migration, stakeholder engagement, 2010 FIFA World Cup, Social Cohesion, the general elections and financial stability as some key priorities.

Discussion
Mr Pietersen said that he questioned the SABC’s ability to effectively manage the License Collection Division as he had encountered several problems with them. He noted that although his own parents had been deceased for eight years now, he was still receiving debt letters addressed to them from the SABC, despite the fact that he had engaged not only the officials but also the Group CEO on the issue. He added that if the SABC failed to rectify the matter then his family would take legal action against them.

Mr Pietersen also said that he did not think that TV License fees should be raised, as many poor people would not be able to afford the increase given the current economic situation.

Mr Gab Mampone, Acting Group CEO, SABC,  replied that the SABC had always striven towards an effective collection system and that an analysis had shown that it had not been the poor who tried to avoid TV license payments, but businesses, government and the middle class. He said that the real challenge had been to investigate the top end of the market, and to impose stricter measures against people and institutions who failed to pay their TV licenses. The bottom end of the market had diminishing returns. He added that there had been no doubt that by effecting marginal increases a lot of pressure would be placed on the SABC. There had been an on-going strategy that ensured that those that could pay actually paid. He said that he would personally follow up the complaint by Mr Petersen.

Mr Robin Nicholson, Chief Financial Officer, SABC, said that after the Broadcasting Act had been changed the South African household database had grown by 35 %, which indicated good penetration of broadcasting services across the board. He noted that even if an increase were to come into effect, the bottom end of the market would be exempted in any case, as people who received grants had been exempted from paying TV licences.

Mr Khumalo said that it was important for him to state why the ANC opposed the current Board. He noted that the Committee had tabled a list of candidates to the Presidency for appointment to the Board, but that these candidates had not finally been appointed to the Board. Mr Khumalo stated that the then-Head of Communications of the ANC, Smuts Ngonyama, who was also a senior official in the Presidency had compiled his own list for submission to the President.

Mr Khumalo noted that several Board Members such as Christine Qunta, Andile Mbeki and Gloria Serobe had not been on the proposed list by the Committee, but due to their relationship with then-President Mbeki they had been finally appointed to the Board.

He said that the ANC had never said that it would conduct a witch-hunt against the Board, but it had concerns regarding the conflict of interest of several of the Board Members, the Group CEO and Smuts Ngonyama, who had joint business ventures. He noted that the ANC had always supported a credible and objective Board of all political persuasions, and that this was evident in the current Board of whom only three had been ANC members.  However, in light of all of the developments the ANC had come to the conclusion that the selection process had been flawed.

Mr Khumalo added that the ANC had raised the issue of objectivity with regards to news coverage, in particular political coverage, the perceived corruption in procurement processes, internal conflicts between management and the Board and the discrepancies in salaries that had resulted in senior staff having been paid huge salaries when compared with junior staff. It was further noted that the SABC had tabled a Memorandum to the Committee, in which the Board undertook to investigate which member had been responsible for the leak of information, yet it seemed that this was never done.

Mr Khumalo further asked what had informed the decision by the SABC to broadcast the convention of the newly formed Congress of the People (COPE), how much it had cost the SABC and what tool had been used to measure the public interest. He also asked who had paid for the COPE advertisement that had been flighted on the SABC as many of the communications companies that the Board worked with were in some way aligned to the COPE. He warned against the Board meddling into the day-to-day running of the SABC as latest media coverage suggested that the Board had been meddling in operational procedures.

Mr Khumalo also asked which criteria had been used by the SABC when those staff who had been accused of fraud and corruption had been cleared by the Courts. He made particular reference to the reinstatement of Sophie Mokoena who had been reinstated by the SABC after she had been charged with fraud and corruption charges.

Ms L Yengeni (ANC) said that the ANC did not have a problem in principle with the SABC broadcasting the National Convention live, as it was news worthy, but questioned the intentions behind it

Ms Mkonza replied that two new policies would be adopted by the Board that would review salaries and that the recommendations were expected soon. She added that the Board found itself in a very challenging position as all political parties alluded to the lack of credible news coverage. Ms Mkonza said that the SABC had been in constant engagement with academic institutions and civil society on how best to ensure that the public broadcaster delivered on its mandate and that the onus had also been on the general public to take part in the debate.

She added that the SABC had and would always provide the platform for all South Africans to express themselves and that SABC editors and executive producers had been told that politics should stay out of the newsroom. She asserted that at no time had there been a person or a group who had determined what should be aired.

Mr Bheki Khumalo, Board Member, SABC,  said that the communication companies that Mr K Khumalo had alluded to had been commissioned for years by the SABC and that the SABC Board News Sub-committee had met with editors and executive producers to discuss issues around objectivity and credibility of the news. He noted that the SABC had issued a public statement on this and that the Independent Communications Authority of South Africa (ICASA) Regulations on Elections would be displayed in all SABC offices as elections were fast approaching.

He added that an independent study had shown that the ANC still received about 60% more coverage then the newly formed COPE, and that it had been normal for the ANC to have received this coverage as it had been the governing party.

Ms Mkonza noted that the SABC Election Communication strategy would be unveiled to political parties on 19 November, after which the SABC planned a nationwide road show.

Mr K Khumalo said that he was uncomfortable with having Mr Bheki Khumalo on the SABC Board, as he was one of the Members that had a conflict of interests. He also complained that he had not fully addressed the questions asked, as many COPE members had been closely aligned to the SABC.

An official from SABC said that the advertisement by the COPE aired on the SABC had been paid for by COPE,  and that there was documentation to verify this. He pointed out that if the SABC ignored pertinent events of public interest it could lose its credibility as well as market share to competitors.

Ms S Vos (IFP) said that she was surprised that the ANC would complain about coverage as they had received a lot of news coverage just before the 2004 elections by having their Policy and Election conferences and rallies streamed live,

Ms Smuts said that it had been incorrect of Mr Bheki Khumalo to say that the Committee supported the names that it had tabled to the Presidency. She pointed out that the DA had only supported one candidate, who did not make it onto the Board. She said that the political parties never reached an agreement on the names, as the ANC had received instructions by Mr Kgalema Motlanthe on which names had to be proposed.

Ms Smuts noted that the CFO had indicated that the SABC had financial problems and said that the SABC had no choice but to focus on core broadcasting services. She asked how the SABC was going to deal with the financial problems. She further stated that the Annual Report (AR) had also indicated that the financial problems could not be attributed to the fraud or negligence on the part of SABC staff, but that these had been due to poor bookkeeping or and the lack of stricter control over expenditure. She said the dire financial outlook had emphasised the need for a saving methodology, and she asked how this would be achieved.

Mr Nicholson replied that the SABC had to change its procurement processes as premature procurement had become a problem. A review of capital expenditure and commitments would be undertaken to identify what could be kept and what should go. He said that problems were exacerbated by the shortfall in funding for the rollout of infrastructure, for Digital Terrestrial Television and for 2010.

Mr Nicholson added that the SABC had looked various matters, such as rationalising those posts that had been filled, and cost management systems. He noted that a SAP accounting system had been implemented that would better facilitate all expenditure.

Ms Mkonza added that the content acquisition process had operated outside of procurement policy and that major acquisitions had been made and closely scrutinised. She said that at the moment all nine regional offices had their own procurement systems, which could open the door to problems such as fraud and corruption and non-financial compliance. This also delayed decision-making and had prompted the SABC to draft new policy frameworks that would align content acquisition.

Dr Mulder said that since the Board had been appointed nothing had come of the threats by the ANC to have it dissolved. He said that the SABC had to be a credible institution, as the role of a public broadcaster was just as important as the Constitution. He noted that the test would be to see whether the current Board would be able to “dodge the bullets” and ensure that its objectivity had not been compromised.

Dr Mulder said that real change would come to the SABC if the ANC lost power, as its internal conflicts spilled over into public institutions, as it seemed as if there was a fight for the soul of the SABC. It was further noted that the Board had to safeguard itself against this. He cited as an example the credible, objective and fair reporting by the British Broadcasting Corporation (BBC), despite successive governments.

Dr Mulder said that the coming months would be daunting for the SABC as it would be tested on its principles of fairness, objectivity and credibility. There had been signs that shuttle censorship of news was taking place. He expressed the hope that election coverage would be objective.

Dr Mulder added that many SABC staff had alluded to the problems at the SABC Sea Point Branch, and asked for an investigation into the allegations of misconduct and mismanagement against the Branch Manager, Jeffrey Twala, who seemed to have been responsible for four successive resignations in the past four months. He said that Mr Twala had abused his power and seriously compromised the objectivity of political coverage in the Western Cape, where opposition parties had virtually been ignored.

He said the public had also learned that senior SABC staff had gone to the Beijing Olympic Games on taxpayer’s money. He asked in terms who had gone, and what the reason for this trip had been. He also asked how far the internal investigation into the fraud and corruption allegations at the Sea Point Branch had proceeded.

Ms Vos raised the issue of financial losses at the SABC and asked how many staff members that had been suspended over fraud and corruption allegations were still in the employ of the SABC.

She too alluded to the problems at the Sea Point Branch, and said that she had several documents and affidavits that spoke of corruption and fraud as well as the manipulation of systems for overtime payments.

Ms Vos added that the Branch Manager, Jeffrey Twala, had instructed the newsroom not to afford opposition parties any coverage after the “forced’’ resignation by then Western Cape Premier Ebrahim Rasool. Apparently he had become enraged and forbade the newsroom to send these feeds to Auckland Park.

Ms Fadiela Lagardien, Human Resource Manager, SABC, replied to the questions asked by Ms Vos and Dr Mulder. She said that an internal investigation into the Sea Point Branch had concluded that there had been no substance to the allegations made, and that it had been difficult to verify the claims as no affidavits in fact had been presented.

In relation to the Beijing issue, Ms Lagardien noted that the trip had not been undertaken on taxpayers’ money, as the Chinese State-run broadcaster had invited the Premier and representatives of the SABC to travel to Beijing at the former’s expense. The SABC did not pay for the trip. 

Ms Vos commented that it was a poor decision by the SABC to accept the findings, as many people had complained about this. She said that the broadcasting unions had been in possession of sworn statements to that effect and that the SABC had to make the Deloitte Report into allegations of mismanagement and financial misconduct at the Sea Point branch available to the Committee, after repeated requests.

Ms Yengeni asked whether any threats of physical harm had been made against any Board members and whether a security company had assessed this.

Ms Yengeni asked how many Board members worked full time for the SABC and how regularly they met.

Ms Christine Qunta, Deputy Chairperson, SABC Board,  replied that the SABC offices had been deemed to be national key points and thus had all the relevant security measures in place. She could not give an answer on whether threats had been made in public.

Ms Yengeni said it would in the Board’s best interests to disclose this relevant information, as the ANC did not want a situation where Board members had to have bodyguards and armed convoys.

Mr Pietersen asked whether radio broadcasting had also been included in the digital terrestrial television plans, to cut down on costs.

Mr Mampone replied that Radio broadcasting had also been targeted by the initial pilot project and the SABC hoped that a spectrum would soon be launched to have it on a digital platform.

Independent Communications Authority of South Africa (ICASA): Annual Report 2007/08
Mr Paris Mashile, Chairperson of ICASA Council, briefed the Committee on the ICASA Annual Report. He said that ICASA’s strategic intent had been underpinned by the regulation of the communications sector in the public interest, so as to position the communication sector as a sector of choice for local and international investors and to promote the affordability of services to consumers.

ICASA’s strategic objectives had been to increase the availability and quality of electronic communication services to domestic business users and to encourage and maintain a pro-competitive market through effective competition and transparent regulation.

ICASA had issued five subscription-broadcasting licenses, issued 23-community sound broadcasting licenses and registered 64 courier companies. The SABC License Agreement had also been amended to allow for the expansion of SABC 1, 2 and 3 to under-serviced areas in nodal points.

ICASA had also commenced on the revision of regulations that pertained to the finalisation of the subscription broadcasting services, had finalised the Universal Access Regulations and conducted research on the Sport rights regulations, including the topic of dispute resolution. ICASA had also compiled 60 compliance assessment reports and had undertaken 81 visits to assist licensees in complying with license terms and conditions.

ICASA had also appointed the Consumer Advisory Panel that would conduct public education and awareness workshops across the country and as well as extensive consumer awareness through radio and print media.

Discussion
Mr Pietersen asked at which level the Consumer Advisory Panel would interact.

Ms Brenda Ntombela, ICASA Councillor, (Consumer Affairs) replied that the consumer advisory panel would interact on a senior as well as a consumer division level and the panel would report to the CEO who would present the findings to the ICASA Council. She said that as the Councillor tasked with Consumer Affairs she was one of the panelists.

Mr Mashile added the that panel would be constituted provincially, where it was hoped that regular town meetings would be held with ordinary South Africans to ascertain whether they had any problems with signals, frequencies and other related problems.

Mr Pietersen asked whether ICASA had delivered on its promise to conclude performance agreements with its councilors.

Mr Mashile said that according to the Electronic Communications Act (ECA) there had been an obligation on the part of ICASA to comply with the implementation of performance agreements, but that the Minister of Communication’s failure to draw up these agreements had delayed the process. He noted that the Minister had decided to seek expert advice before she drafted the agreements.

Mr Pietersen said that it was unacceptable that the performance agreements had not yet been signed. He called on the Committee Chairperson to draft a letter to the Minister of Communications stating the Committee’s irritation at the delay of this process.

Ms Smuts said that she was glad that ICASA did not join the Minister of Communication’s appeal against the Altech judgment. She also asked how ICASA intended to finance the implementation of the Internet Connectivity for 2201 schools, and whether the specifications of the set-top boxes required for digital broadcasting had been changed by the South African Bureau of Standards (SABS).

Mr Mashile replied that certain regulations had been drafted pertaining to the liberalisation issue, but that the Minister of Communications had refused to sign these for implementation. He said that this refusal had led to relevant legislation being left open to interpretation, which ultimately resulted in the litigation by Altech against the Department of Communications (DoC). He said that ICASA was never in contention with Altech and that this had formed the basis of the Council’s decision not to join in the action between the parties.

He added that Cabinet had taken a decision that schools would be exempted from paying the 50% contribution to the Schools Internet Connectivity Programme, but that no indication had been given on who would finance this plan.

Mr Mashile noted that ICASA had to outsource the testing of broadcasting equipment to the SABS, as it had it own laboratory where these tests could be conducted. He said that SABS’s opinion would then inform the decision that ICASA would take

Mr Mthobeli Zokwe, ICASA Councillor (Engineering and Technology) added ICASA had a Standards Liaison Committee that thoroughly checked that all products met the technical, health and safety standards, and added that unsafe and faulty equipment would never be allowed to be sold on the market.

Mr Robert Nkuna, ICASA Councillor (Markets and Competitions) noted that ICASA had proposed to draft the standards relating to set top boxes, but that SABS had refused this and stated that it would decide on these standards.

Ms Vos asked when ICASA would announce its Elections Strategy as well as the rules and regulations that would govern it.

She also asked whether the ICASA and or the DoC had started to work on policy framework that would prevent the dumping of analogue television sets on the South African markets.

Mr Mashile replied that it would difficult to ban the sale of analogue TV sets as many people could not yet afford the set top boxes. The pilot project first had to draw to a conclusion. It might take quite some time before DTT became a reality for all South Africans.

Adv P Swart (DA) asked why ICASA made use of so many consultants, and how much it paid these consultants.

Adv Swart also asked ICASA to put the collection rate of license fees and applications of 82% into context.

Mr Mashile replied that all of the relevant information could be found on page 124 of the ICASA AR.

Dr Mulder thanked ICASA for allowing him to attend the recent ICASA workshop on its Elections guidelines. He said that despite the fact that political parties had attended this workshop, they had never received feedback from ICASA on how it would affect political parties.

Mr Khumalo commented that ICASA must manage its finances much better as it had become known as a ‘’bank teller’ due to the extent of the financial mismanagement. He said that ICASA continued ask for more funds. He questioned whether ICASA had the will to stop the DoC from interfering in its affairs. He cited the issue of set top box standardisation that had been taken over by the DoC and said that ICASA had to emphasise that it was an independent authority that was not answerable to the Director-General of Communications or the Minister of Communications.

Mr Khumalo also commented on the Altech issue. He said that the liberalisation of the communication industry had always been under discussion and that it had appeared as if the ANC had opposed this. He said that liberalisation of the industry would only be allowed on certain conditions that would have to be approved by Parliament

Mr Mashile noted that ICASA had always emphasised its independence from the DoC and that its refusal to join the DoC’s appeal against Altech served as an example.

The meeting was adjourned.