Nepad Protocol: discussion with Director General & Approval

Meeting report

COMMUNICATIONS PORTFOLIO COMMITTEE
19 June 2007
NEPAD PROTOCOL: DISCUSSION WITH DIRECTOR GENERAL & APPROVAL

Chairperson: Mr G Oliphant (ANC)

Documents handed out:
Protocol on the NEPAD ICT Broadband Infrastructure Network: Department briefing
Protocol on the NEPAD ICT Broadband Infrastructure Network

Relevant documents:
NEPAD e-Africa Commission presentation on NEPAD ICT Broadband programme
Legal opinion
Draft committee programme (available once adopted)

Audio Recording of the Meeting

SUMMARY
The Committee met to discuss the Protocol that set out the policy and regulatory framework for the NEPAD Information and Communication Technologies (ICT) Broadband Infrastructure Network for Eastern and Southern Africa. The Director General was present to respond to concerns that Members had.

Particular attention was paid to the NEPAD ICT Protocol. Members had high expectations for the Protocol but were concerned about the number of ratification and implementation issues. The legal report requested at the previous Department briefing was criticised for not providing sufficient information. Members expressed concern regarding infrastructural issues in Southern and Eastern African states and the role Telkom would have in Protocol’s objective of achieving low-cost communication. Despite Member’s feelings that the ratification process was rushed, the Protocol was ratified by the Committee.

MINUTES
The Chairperson commented on the emergence of the Protocol. He noted that the legal opinion concerned the landing rights of the cable and the impact it would have on the Electronic Communications Act (no. 36 of 2005). He concluded that there would be no harm in ratifying the Protocol.

Ms D Smuts (DA) requested clarification on the power that members of the Inter-Governmental Assembly (IGA) had to change the Protocol with a two-thirds majority. She commented that it would be problematic if power was concentrated with IGA members.

She criticised the legal opinion for not providing enough information. She asked what the status of the Protocol was under the African Union (AU).

Ms Lyndall Shope-Mafole, Director General, Department of Communications, responded that the Government needed assurance from state law advisers and the Ministry before ratification could take place.

She noted that Protocol was a NEPAD process and therefore fell under the AU economic body. The Protocol was associated with a regional body and not the whole continent and therefore needed ratification.  She noted that the power IGA members had with a two-thirds majority, was only on major issues. Normal voting would be based on consensus or a majority vote. In the case of the two-thirds majority vote, the decision would still be brought back to Parliament for ratification on the amendments.

She noted that the Department preferred the use of one cable in the network; however signatory status would prioritise the NEPAD cable. Government’s majority holding in Telkom could affect the cable South Africa would use.

Ms S Vos (IFP) asked whether a risk analysis had been done and inquired about the process after ratification of the Protocol. She requested clarification on the risk analysis process and the impact it would have on investors. She asked what impact the Protocol would have in 2010 and whether public hearings could take place on the Protocol. 

The Director General responded that the relationship between the government and investors was not strained. The construction of the network would follow ratification. The establishment of the policy framework was needed before other procedures could take place. She was optimistic that the network would be running by 2010.

There was no risk analysis on the East African Submarine Cable System (EASSy). There was an opportunity to reduce costs through government’s holdings in Telkom.

Mr Pieterse (ANC) asked whether government was using its authority to reduce telecommunication costs. He noted that the Department’s capacity to meet all its objectives was strained. It was not ideal that ratification of the Protocol was so close to the deadline.

He wanted to know whether market power was located within South Africa and whether foreign investors would dominate to the detriment of South African companies. He noted that the ratification process should be done correctly.

The Director-General said that it was the Department’s intention to have a good relationship with the companies. The Department would try to honour its agreement to ratify the Protocol by end of June so that the cable could be operational by 2009. Seven countries were needed to ratify in order for the Protocol to be accepted.

Mr V Core (ID) asked whether a risk assessment had been done to prevent market failure. He asked whether the IGA was an over-arching regulator and whether there had been consultation with ICASA.

Mr K Khumalo (ANC) asked whether the ratification process might affect the landing rights of private companies. He questioned the effect the ratification would have on the Electronic Communications Act through the clauses that would change.

The Director General responded that a risk assessment of the market had been done. It was unlikely that there would be a market failure as alternatives for communication in Africa were few. She said that the cable was commercially viable.

The IGA was not an over-arching regulator as veto powers would be instructed before the cable was operational. The Protocol would not nullify any other processes as sovereign rights would be observed for all countries. A foundation would be laid for fairer competition through supporting countries that promoted development and competition. Each country would make a contribution based on their individual experience. Reports had been compiled and regulatory bodies had made their contribution.

Mr S Nxumalo (ANC) asked whether there would be financial implications for South Africa. He asked what benefits would poor South Africans enjoy from the NEPAD network.

The Director General responded that there would be no new implications for South Africa except for the companies within the framework. The network would benefit the poor as a basic structure would be established upon which services would be provided at an affordable cost. Communication would be more accessible and faster.

Ms D Smuts (DA) noted that the legal opinion was not comprehensive enough. She queried whether policy changes would have an effect on the Electronic Communications Act. She asked whether operation entities would become wholesale entities that would sell to retailers.

The Director General responded that expropriation had not taken place. The Protocol aimed to set up a core communication network for countries that had very weak networks. She noted that a country can decide to lease a network to Special Purpose Vehicles (SPV) that would enable countries to build an infrastructure.

She noted that the IGA had one representative from the whole grouping and not from individual countries. 

Ms S Vos (IFP) noted that there was a duality of the process regarding 2010. She wanted to know what would happen if the NEPAD network failed. She asked what would be the impact if Telkom had been disabled. She noted that Telkom and other companies had different business-plans to the Protocol.

The Director-General responded that the government had not focussed on which companies had signed but rather on the NEPAD cable. She noted that the network could go on without Telkom if government’s shares were reduced but Telkom played a useful role in advising on under-sea cable construction.

She noted that the Minister was committed to the 2010 operational date for the NEPAD cable.  

Mr M Kholwane (ANC) noted that follow-up meetings with the Department were necessary. He stated that the NEPAD network had been a progressive Protocol and should therefore be ratified.

The Director-General noted that more time was needed to discuss the Protocol. The NEPAD network was a historic movement for ICT on the African continent and would be instrumental in bringing down the high costs of telecommunications.

The Committee agreed to ratify the Protocol with a majority vote.

Committee Reports on Department Budget 2007/08 and Oversight Visit to Gauteng
The Chairperson adopted these two reports with amendments and corrections. It also adopted the minutes of meetings with Telkom, SABC, National Electronic Media Institute of South Africa (NEMISA) and Sentech.

Committee Programme
A draft program for the first three weeks of the third session was discussed. It was noted that interviews for board member positions at the SABC and ICASA would take priority. The Chairperson requested that an interval be placed in the schedule so that matters such as the Limpopo Committee Report could be discussed.

Ms S Vos (IFP) requested clarification on the 2010 FIFA World Cup broadcasting process. She wanted to know whether discussions would take place in September and October.

The Chairperson responded that a finalised date must still be arranged with the SABC for a meeting.

Mr M Kholwane (ANC) was concerned about the interviews. He requested that Friday meetings be re-scheduled to avoid logistical problems. He noted that standards and norms should be created for the interviews with a standard set of questions for all candidates. He asked whether the SABC could arrange a briefing with the Committee.

Mr R Pieterse (ANC) suggested that the position at ICASA should take priority over the SABC positions. He requested that enough time be granted to the Committee during the interview process.

The Chairperson noted that the position at ICASA had not been advertised yet.

Ms M Morutoa (ANC) stated that questions for the interviews should not be standardised as it would be restrictive to Members.

The meeting was adjourned.