Amendments to Independent Communications Authority of South Africa Amendment Bill [B32F-2005]: voting

COMMUNICATIONS PORTFOLIO COMMITTEE
23 May 2006
AMENDMENTS TO ICASA AMENDMENT BILL: VOTING

Acting Chairperson: Mr G Oliphant (ANC)

Documents handed out:
Reprinted version [B32D-2005] of the Bill, incorporating all options and amendments suggested on 17 May 2006
ANC proposed amendments issued during the meeting
Proposed amendments as of 22 May 2006: Part1 & Part2
Independent Communications Authority of South Africa Amendment Bill [B32F-2005]

SUMMARY
The Committee considered various amendments to the Independent Communications Authority of South Africa (ICASA) Amendment Bill. The main contention centered on whether the President or the Minister of Communications should have discretionary responsibility for appointing ICASA councillors. The ANC tabled proposals they believed would satisfy concerns the President had previously expressed regarding the perceived independence of ICASA. The DA and ID however believed the proposals of the ANC would constitute a clear conflict of interests for the appointing Ministry. The Committee adopted the ANC proposals, with the DA, IFP and ID abstaining.   

MINUTES

The Chair welcomed Members and hoped the meeting would represent a conclusion to the Bill. He commented that the ANC wanted to settle the matter and he hoped there would be co-operation from other parties to enable the Committee to put this matter behind them. The Independent Communications Authority of South Africa (ICASA) Amendment Bill in its current form represented a lot of hard work. The previous time the Committee had met, they had made a lot of progress and he hoped to Committee would read from the same page on how to move forward on this matter.

The Chair asked Members if they had any general comments in terms of how to proceed before the Committee would review the details and technicalities of the Bill.

Mr M Mohlalonga (ANC) requested permission for the ANC to make a submission.  

Mr Mohlalonga believed that in politics a day was a long period of time. In politics every hour and minute counted. This also counted for the ANC position, especially in relationship to the Councilor selection process. As a matter of principle and consistency the ANC wanted this process to remain the purview of the National Assembly (NA). They were in agreement with the views of the President and shared the concerns that he had expressed in his letter to the Speaker. They had decided that taking into account the discussions of the past weak, the ANC would like to revert back to the original position, adopted in 2000 when the ICASA Act had originally been passed. This therefore meant that the provisions of the principal Act be reverted to, specifically in relation to the employment process. He explained however that the ANC supported a few amendments, which he highlighted as follows.

The number of councilors would be nine. One of these would be the Chairperson appointed by the Minister upon the approval of the NA.

The second proposal was that the NA must be clear in terms of the employment of councilors. The NA must submit to the Minister a list of suitable candidates at least one and a half times the number of councilors that needed to be appointed.

The NA may invite technical experts to assist in the selection, evaluation and appointment process of councilors. Such experts would have to follow particular criteria. These would be the criteria that had been included in the amendment bill that determined that people with experience in the industry, people with academic backgrounds in the electronic communications sector and a representative from the legal sector and consumer interest groups be included.

Mr Mohlalonga explained that the NA would recommend one and a half times the number that was required. The Minister would recommend to the NA from this list the names of the people he or she wanted to appoint. If the NA was not satisfied with this list, for example if the gender balance had not been addressed, it had the ability to express disapproval of these persons.
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Ms D Smuts (DA) commented that she had listened with interest to Mr Mohlalonga introduce the ANC position. He had described it a reversion to the 2000 Act. It was however quite clear that it was not that. What had been presented was something quite different. The distinction was that the principal Act had stipulated that the President would appoint on the recommendation of the National Assembly. This was not the model put forward by the ANC and it was misleading to suggest so.

She believed there was not in itself a great problem with the Minister appointing the councillors, which was an executive function. She however noted that contrary to the progress that she felt the Committee had made last week, the ANC intended that the NA would still be submitting a candidate list to the Minister, even if it was one and a half times the number of vacancies.

The Minister was being reintroduced into the equation, quite contrary to the discussions that had taken place, although it was true that a final position had not been reached.

She noted with interest the idea that Parliament would simply invite technical experts and that there would be no need to formally constitute a panel. She felt it was very necessary to seek the guidance of outside experts. Members would remember that her second favorite position was a heavyweight pre-legislature panel which did all of the interviewing and then sent the NA one and a half times the number of required of candidates.

She felt the proposals really amounted to a reversion to aspects of the compromise that had originally been reached between all parties. Under the ANC’s new proposal the NA would now send one and a half times the number of councillor vacancies to the Minister, who would now exercise the discretion.

She explained that Section 3 dealt not only with full representation it deals also with freedom and fairness and the required qualifications and level of expertise. She would hate to for example see a list full of women only for the sake of seeing women when what was really needed was an economist.

Ms Smuts expressed disappointment at now seeing the Minister reintroduced into the equation, because the Ministry had a very clear conflict of interest in being the shareholder. It was truly problematic that the Government had such large shareholdings in the major operators. Such a Government ought to stay right out of appointment and removal proceedings.

Mr P Swart (DA) noted that the previous week he had believed that it was more or less agreed that the NA would submit the final list to the Minister.  The major problem was that Mr Mohlalonga had talked about ICASA as an independent body, which should have meant there would be no discretionary powers held by the Minister. He had understood that last week this had been the consensus, but clearly something had happened since the Committee had last met.

The problem was really two issues of independence, the first was factual independence and the second was perceived independence. He explained that the previous week he had been reasonably satisfied that there could be no outside perceived problems with independence. The new ANC proposal however now subscribed to Ministerial discretionary powers. He felt this highlighted a clear factual lack of independence for ICASA, which he could never support. There had clearly been no attention given to the expressed concerns of the President in terms of both the perceived and factual independence of ICASA. He believed this illustrated a complete u-turn in ANC policy.

Mr R Pieterse (ANC) explained that there had been no u-turn in policy. Members needed to understand that the ANC were proposing to give control of the selection process to the NA. The NA would submit a list with one and a half times the number of councilor vacancies to the Minister, who would then indicate the preferred nine. However even if the NA were not happy at this stage, it had the right to reject the list as often as it liked, until they arrived at the preferred nine. The Committee had previously voted on its preferred nine candidates, or seven as it was at the time. The President was expected to sign, but had no input into the process. The crucial thing about the ANC’s proposal was that the NA maintained the right to send back the candidate list. He could not see any problem with this approach.

Mr Mohlalonga wanted to emphasise the fact that the Minister or the President would appoint from a list that would be processed by the NA. The question of perceived or actual independence therefore would not arise. The list would be composed by the NA, the Minister would have no power to add any names to the list. He therefore believed there was perceived and actual independence in the sense that the Minister had a limited role in the process, being constrained by the NA.

Ms S Vos (IFP) expressed disappointment at the reversal of what was meant to be for the good of ICASA back to a process in which essentially the Minister held control. The Minister would under this proposal be able to put precisely who she or he wanted on the council. Councilor appointments would become a political process and majority driven with scant attention to the required for expertise.

Mr S Kholwane (ANC) sought clarity on the precise nature of the opposition parties’ problem with the ANC’s proposed amendment. Was it a concern about a lack of capacity of Members of Parliament? He had understood that Members would be able to select a list with one and a half times the amount of candidates needed to fill the vacancies. He was sure that the NA was quite capable of selecting the appropriate candidates.

The Chair believed a lot of progress had been made.  He explained that on his way to the meeting he had wondered what the Members from the ANC, DA and other parties would complain about today. He believed there was now a situation where all parties were in agreement that the NA should be the driving force behind the appointment process.

He felt that under the ANC proposal Members would be involved in the appointment and selection of the new councillors.  He explained for example that if there were five vacancies Members would provide the Minister with the best eight candidates. The Minister would then select five. This was however not the end of Members’ involvement, as the Minister would at this point return the list to the NA to make further suggestions.

The Chair believed that the difference of opinion was that the DA did not want the Minister to be involved in the process at all. He however believed this to also be problematic as the Minister or the President would become just a rubber stamp of the NA in the process. He believed the Minister would in fact act as a safety net being in a better position than the NA to closely scrutinise candidates. He believed the suggestion was credible. The NA if they felt necessary could invite experts to assist in the selection process.

He was confident the ANC proposal catered for the centrality of the NA in the selection and final appointment of councilors. He suggested there could be no major issues with this proposal.     

Ms Smuts wanted to bring this down to a concrete proposal. She conceded that the NA did still guide most of the process under the ANC proposal. However if the ANC insisted on sending a candidate list one and a half times the number of vacancies to the executive for filtering, she urged the Committee to consider sending such a list to the President who would not have the direct conflict of interest that the Minister had in respect of ICASA.

The communications ministry had been characterised by conflict after conflict. Under the current regulatory regime, the ministry had time and time again thrown out ICASA’s regulations and decisions. She believed that in many cases such actions had clearly been influenced by the shareholding management role that the Minister played in respect of certain operators. The President was however symbolically vastly different, and her suggestion would therefore address the issue of the perceived independence; it was far healthier. She however insisted that the NA would choose the final list, but if they had to submit a list to the executive, she believed the President would be responsible for selecting the final candidates.

The Chair asked if this was actual or symbolic independence.

Ms Smuts believed it would affect actual and perceived independence.

The Chair explained that even if the responsibility rested with the President, the President might in fact devolve line function responsibility by delegating line functions to the ministry. Why should he not?

Mr V Gore (ID) wanted guidance as to what the roles and responsibilities of a Minister were. He had understood that this Minister had a responsibility to maximise the benefits for the shareholder, in this case the Government. He was aware that there was a legal obligation on the Minister to maximise the benefits for the government. This was the perceived conflict and perhaps it was a question of finding a way around this conflict.

Mr Mohlalonga responded that by Mr Gore’s logic, a conflict of interest would arise even if the President made the selections as he was the Head of Government. The argument of shareholder interest therefore did not hold for him.

He felt that because the NA would drive the appointment process, the process would therefore be an independent process from the ministry providing actual and factual independence for the authority.

Mr Swart believed that if one looked at the issues outside party influence, it was very clear that there were a number of arguments against Ministerial involvement in the appointment process. There were however no arguments against the President’s involvement. He expressed difficulty in comprehending why the ANC would continue to insist on giving the Minister a discretionary role in the process and why they would not hand this role to the President. This would cater for the perceived independence of ICASA. Was it purely the fact the Minister wanted to be involved in the process?
 
The Chair requested clarity on what Members doubted about the NA’s own capability in the selection process. He again demonstrated that if three councilor positions were vacant and the NA gave the Minister a list of five candidates to choose from, what could be doubted about this selection process that Members had made themselves?

Mr Kholwane believed the center of the debate had been about the role of the NA. Now with the ANC’s proposals no one could dispute that the NA were thoroughly involved in the process. He noted that only now there seemed to be a problem with the Minister being involved. The NA would be the driver in the selection process.

Ms M Morutoa (ANC) believed that the purpose of the ANC’s proposed amendments had already been thoroughly explained by her colleagues. She in turn questioned why an opposition party would doubt the Minister. It was important for Members to comprehend that they were creating laws that would be in operation for decades to come. Was the objection to the Minister’s involvement on a personal basis? The Minister would be guided by the decisions of the NA and she did not believe this was significantly different from the original ICASA Act.

Mr Pieterse agreed that concerns about the Minister being involved in any way were personal. He wanted to correct a particular perception that the current Minister insisted that she wanted to be involved in this process; this had not been the case. If the current Minister were to become the President of the country, would the DA’s concerns be the same?

He had never been happy with supplying the President, or Minister for that matter, with the exact amount of names. You could not expect the Minister to just sign the appointments and have no input. He said Members needed to be honest. Very often such concerns were about who holds a particular position. However the country did not have an ANC Cabinet and tomorrow the IFP or DA could be back in Cabinet. Indeed, Ms Smuts could be the Minister.

He insisted the Minister could not go wrong if the NA were to compose the list. The shortcoming would be to do with Parliament. He believed there would be a better ICASA than previously.

The Chair asked the Director General of the Communications Department, Ms Lyndall Shope-Mafole to explain international precedent on the appointment of councilors to similar regulatory bodies. He knew she had explained this to the Committee previously but felt it might be worth drawing Members’ attention to this again.

Ms Shope-Mafole explained that as she had indicated to the Committee previously, in all other jurisdictions where the regulators were said to be independent for example all the mature democracies, the US, Canada, Australia, and France there was involvement of the executive function in appointments. In the USA the President directly appointed Councillors, there was no panel. In Canada, the Cabinet made the appointments. In the other countries mentioned it was the Minister directly who made the appointments. There was no doubt that these were independent regulators.

She wanted to very briefly respond to the question of the Minister being a shareholder and needing to maximise profits. This was in fact not the case. What was required regarding the state owned enterprises and companies in which government had a shareholding was the public interest and the ability of those enterprises to ensure development goals were reached. The Minister also had a responsibility to minimie improper use of resources. There was no legal responsibility to maximise profit.

The Chair explained that he had asked that question deliberately with the intention of dispelling sensationalism by the media. He feared a situation where the headlines would have grasped onto the misleading catch phrase “conflict of interest” without stating the facts.

Mr Vos commented that there were many elements to this debate, but the Committee was essentially engaged in a highly political debate that centered on the fears of majority rule and the consequences of that. The reason the Committee were debating this was precisely because the President had sent back the product of this kind of “take it or leave, this is what we want attitude”. The ANC had rammed down every bodies neck, something the President in his wisdom, thought might not stand up to constitutional scrutiny. The Committee was dealing with a highly political situation, but they were also faced with the reality of ICASA’s strategic importance and its role in nation building.

There was a situation where there was a body that was meant to regulate a strategic sector of the economy. There was a Minister and no doubt Ministers to come who would be loyal and disciplined Members of a political party, in this case the ANC. They must therefore be loyal to the dictators of that party. She commented that she had experience attempted political manipulation of ICASA councilors. She felt that the bottom line was that this proposal would be reverting to a situation, which clearly allowed the Government direct control over appointments to ICASA. The ANC had now decided that because they had not won the first round, they would skirt as close to the edge as they could to put their political hand right over appointments to ICASA.

Ms Smuts commented that she felt suggestions that she and her colleagues doubted the Minister personally, were a slur on their professionalism. She would not waste her breath dealing with this matter further.

She stressed that Members were sitting on the Committee as legislators and were there to design a systems that would best work to achieve the independence of a body such as ICASA.
 
She substantiated Mr Gore’s assertion that the Minister had a conflict of interest. It was her duty to maximise state assets which were in her management portfolio. That in itself was enough to say that the Minister should not also have a role of appointing the independent regulator. However if Members needed factual examples, they existed. Over the years over and over again there had been cases where the maximization of state assets had quite clearly overruled the public interest. She gave an example where ICASA in 2000-01 posted tariffs for telecommunications under the price cap regime. This would have helped consumers as ICASA filled tariffs that would have started bringing phone tariffs down. But they were not implemented because the Minister with the current regulatory powers refused to implement them. This was the Minister with the shareholding management function and she went against the advice of the independent regulator. The result had been that phone tariffs did not drop for consumers.

This demonstrated why this particular ministry had a structural conflict of interest with appointment of councilors and therefore it was not a good idea for the ministry to have a role in selecting councilors. A solution to the problem would have been to do what is done in Canada where the whole Cabinet makes the appointments. The important thing there was that it was a collective appointment.

Ms Smuts echoed Mr Swart’s remarks that there were a number of problems with the Minister exercising discretion over the appointment of Councilors. There were no problems with the President doing so, why not give such a list to the President? There was a problem with the Ministry, but it had nothing to do with personal considerations.
 
Rev M Khumalo (ANC) believed his ANC colleagues were wrong because they had made an assumption that they could convince the opposition parties to agree with the ANC proposals. It was not worth investing so much effort trying to convince the opposition parties to agree with the ANC. He believed the only way to solve this dispute was to go straight to the vote. Members who were unhappy could take this matter to the Constitutional Court or any other platform as was permitted in a democratic country.

The Chair believed the debate should be closed.

Voting

Amendment Clause 7 (A) (1), (A), (B) and (C) of Section 5 of Act 13 of 2000
 
The Chair explained that this was in effect a vote between the ANC proposed amendment to allow the Minister to appoint councilors from a list chosen by the NA. The DA, ID and IFP however maintained that the President should appoint councillors.

Ms Smuts and Mr Swart raised a technical matter relating to poor grammar, particularly relating to the use of words such as “upon” and “approval”. 

The State Law Adviser Ms Juan believed however that the worlds were in line with the language used in the rest of the Act.

Mr Swart suggested a punctuation change to resolve this matter.

The Chair found consensus on this matter and the punctuation was therefore amended.  

Members voted along party lines with the ANC majority holding sway.

Amendment Clause 7 (B) of Section 5 of Act 13 of 2000. Proposed insertion of Clause 1A (A)

The Chair summarised that the ANC proposal here amended the original Act so as for the NA themselves to submit a list of councillors which was at least one and a half times the number of vacancies on the board. The DA, ID and IFP wished to maintain an independent and impartial selection panel for appointment purposes.

The ANC held the majority and their proposed text was inserted

Amendment Clause 7 (B) of Section 5 of Act 13 of 2000. Proposed insertion of Clause 1A (B)

The Chair explained that the ANC proposal would cater for inviting technical experts to assist in the selection, evaluation, and appointment process of councilors.

The DA, ID and IFP approved of this measure as it allowed for experts such as an economist to be involved in the process.

The Committee unanimously adopted this Clause.

Amendment Clause 7 (B) of Section 5 of Act 13 of 2000. Proposed insertion of Clause 1B (A)

The Chairperson explained that the ANC proposal would allow the NA and the Minister input into the appointing process; the opposition parties however believed the Minister should be excluded from the process altogether. Members voted along party lines.

The proposed ANC text was inserted.

Amendment Clause 7 (B) of Section 5 of Act 13 of 2000, Proposed insertion of Clause 1B (B)

The Committee unanimously adopted this amendment, which compelled the Minister to review his or her recommendations if requested to do by the NA.
  
Amendment Clause 7 (B) of Section 5 of Act 13 of 2000, Proposed insertion of Clause 1B (C)

This Clause which dealt with the announcement of a councillor’s appointment was unanimously adopted with non-substantive grammatical amendments.

Amendment Clause 7 (C) of Section 5 of Act 13 of 2000

The Committee unanimously approved this Clause which dealt with the appointment of the Chair of the ICASA council.

Amendment Clause 7 (B) of Section 5 of Act 13 of 2000

The Committee unanimously adopted this clause which catered for councillors to elect from their number a acting Chairperson in the absence of the Chair.

Amendment Clause 9 6A of Section 6A of Act 13 of 2000

The Chair summarised that the ANC proposed to amend this Section to prescribe that the Minister should establish a performance management system in consultation with the National Assembly.

The text would be amended to “ the Minister must, in consultation with the NA establish a performance management system to monitor and evaluate the performance of the Chairperson and other councillors.

The ANC voted in favor of this amendment, but the opposition parties voted against. The amendment was carried.

Amendment Clause 9 6A (3) of Section 6A of Act 13 of 2000

The ANC proposed changing the text to read, “as soon as is practicable after the appointment of the chairperson or other councilors a performance management system must be concluded between the chairperson or other councilor and the Minister”

This amendment placed the emphasis on the Minister rather than the NA in establishing a councilor performance management system. 

The DA, ID and IFP voted against this amendment, but the ANC majority carried the text.    

Amendment Clause 9 6A (3) of Section 6A of Act 13 of 2000
 
The ANC proposed amending the text to read “the evaluation of the performance of the chairperson or other councilor must be conducted by a panel constituted by the Minister for that purpose”.

This amendment placed the emphasis on the Minister rather the NA in the appointment of the Chairperson.

The DA and ID voted against this amendment, but the text was carried.    

Amendment Clause 11 (D) 3 of Section 8 of Act 13 of 2000

The ANC proposed that the word “President” be replaced by the word “Minister”.

The DA, ID and IFP voted against this measure as this would effectively give the Minister control of dismissals.

Amendment Clause 11 (D) 3 A, B, C of Section 8 of Act 13 of 2000

Mr Swart suggested the removal of (A) which he believed contradicted (C).

The ANC voted against the deletion of (A).  The DA, ID and IFP however supported Mr Swart’s assertion.

The Chair put the whole Bill as amended to the Committee. The ANC voted in favour, while the DA, ID and IFP abstained.

Meeting adjourned.