Annual Report of the Portfolio Committee on Communications for 2004:

Portfolio Committee on Communications

Mr MK Lekgoro, MP, was duly elected as Chairperson of the Committee.

The Committee worked well together as a team despite political differences. There was a great deal of transparency, efficiency and co-operation throughout.

The Committee undertook oversight trips to KwaZulu/Natal, the Eastern Cape and North West

The Chairperson wishes to extend a word of appreciation to members of the Committee who participated in all the committee activities despite many other commitments. A word of appreciation also goes to the Department and GCIS for their co-operation and willingness to appear before the Committee.

Ensure that communications services are available to all South Africans and that they have access to both traditional and electronic media and communications and information technology

Deal with bills and other matters falling within its portfolio, as referred to it by the NA, or in terms of legislation

Maintain oversight over the Ministry and the Department of Communications and the Government Communication Information System

Where necessary, make recommendations concerning any organ of state, constitutional institution or other body or institution

Work towards the goal of a better life for all

Approve fiscal transfers to the Department of Communication, Government Communication and Information System and portfolio organisations

To promote the development and implementation of policy for telecommunications, postal and broadcasting services

To control fiscal transfers to the portfolio organisations such as the SA Post Office, the SABC, the Independent Communications Authority of SA, the National Electronic Media Institute of South Africa, and the Universal Service Agency

The Department of Communications

The Government Communications Information System (GCIS)

Independent Communications Authority of SA

Media Development and Diversity Agency

National Electronic Media Institute of South Africa

South African Broadcasting Corporation

Sentech

South African Post Office

Telkom

Universal Service Agency

No legislation was referred to the Committee.

The Final Acts and Decisions of the 1999 Beijing Congress: Universal Postal Union was ratified on 24 August 2004. The Report on the Ratification was published in the ATC on 24 August 2004 and it was considered in the Chamber on 26 August 2004.

The Committee interacted with the department on three different occasions. Firstly on 4 June 2004 to scrutinise its budget vote and draft strategic plans. This was followed on 24 August 2004 by a briefing on the road that they have covered in the past ten years and on their future plans. In the last quarter of the year they presented their annual report to the Committee.

The Department was unable to present a formal copy of its Strategic Plan to Parliament. The Committee registered its objections and indicated that regulations deriving from the Public Finance Management Act directed that the Department had to table its strategic plans.

The Committee was able to interact with Nemisa only once during the budget debate session on 4 June 2004. On the occasion of their annual report they could not honour the meeting due to the absence of their CEO, who was out of the country. We believe there was some miscommunication, and the CEO apologised to the committee in writing.

The Committee met SAPO once during its budget briefing on 4 June 2004.

Sapo’s retirement medical benefit obligation, a defined benefit plan, was discussed in detail. This benefit plan is Sapo’s largest liability, and its actuarial value towards active members and retirees, including HIV/AIDS sufferers, stands at R2 251 million compared with R2 373,8 m for 2003. An amount of R1 229,5 million had been provided in the balance sheet as compared to R996,9 m for 2003. Sapo has recognised an expense of R321 million for 2004 (R359 million for 2003) in the income statement. Management had put in place various actions, including, amongst other things, the exclusion of this benefit to new employees, the exclusion of the benefit to any employee accepting a promotion within the company, or an employee taking a retirement benefit or an early retirement.

Sapo has a fully funded pension fund, hence it does not appear under post retirement benefit liability.

The Committee did not have an opportunity to meet Sapo to scrutinise its annual report as it was not tabled in Parliament on time .The Minister of Communications explained the delay in tabling the annual report in a letter addressed to the Speaker, which was published in the ATC of 10 November 2004.

Committee members were of the view that the Committee should examine the possibility of obliging Post Offices to provide certain basic electronic means of communications to enable citizens living in the far flung areas to access such means. Post Offices could be obliged to offer at least photocopying and faxing facilities, and provide for the sending and receiving of email. This will be an ongoing discussion.

The Committee interacted with Icasa on three occasions. Firstly, the Committee heard them on their budget allocation and requirements on 8 June 2004. This was followed by a workshop on 8 October 2004 when members were taken through the technical aspects of their operations, and, lastly, we interacted with them on their annual report.

After having conducted a public process of nominating candidates for appointment on Icasa, the Committee interviewed those candidates who were elected by the Committee, and reported its recommendations to the National Assembly on the appointment of three new councillors. The National Assembly in turn recommended the names to the President, as the appointing body, and they were duly appointed.

There is consensus in the committee that our country needs a well resourced regulatory authority, both in terms of personnel and funds. If need be, we hope to address this through an Act of Parliament during the course of 2005.

The Committee interacted with the SABC on two occasions, namely during the budget briefings on 8 June 2004 and, secondly, on the presentation of the annual report.

The new board has settled in. Issues of the funding model for the public broadcaster will continue to be debated, both in the Committee and in public. The Committee will also follow the actual setting up of the two regional channels.

The Committee met the USA on 8 June 2004 when it considered their budgetary allocation. The Department could not table the USA’s annual report in Parliament before adjournment for end of the year recess, and the Committee is awaiting an explanation from the Department and the USA when meeting them early in 2005.

We interacted with Telkom on three counts. Firstly, during a presentation on their budget on 11 June 2004, secondly upon the presentation of its annual report on 9 November 2004, and thirdly, during a workshop when members were guided through the technical part of Telkom’s work.

Telkom became a point of attention on a number of occasions during the time under review. They made excellent profits, which were interpreted differently from different elements of society. Members of the Committee took strong exception to the rising tariffs that are forever putting a burden on the consumer. Due to retrenchments, they were experiencing a negative reaction from the trade unions, and the Freedom Front (FF) called for a debate in the National Assembly on the issue of retrenchments.

Upon the Minister’s announcements on further liberalisation of the Telecoms sector and the coming into being of the Second National Operator (SNO) we can only wait to see how the markets will react and what shape this sector will take.

Sentech appeared before the Committee twice during the past year, namely on 22 June 2004 when we discussed its budgetary allocations and needs, and again on 2 November 2004 when they presented their annual report.

The Committee met the GCIS on three occasions namely on 15 June 2004 during hearings on its budget, It reported on progress made in the Advertising and Marketing Industry on 19 October 2004, followed by the annual re [port briefing on 22 October 2004.

The International Marketing Council is a programme under the overall operations of the GCIS. Its main brief is to market South Africa in the world. The IMC is functional and able to report to the Committee on their work and did so when the Committee heard the GCIS on its budget on 15 June 2004. The IMC also reported to the Committee on its area of work when GCIS reported on its annual report on 22 October 2004.

Whereas the Media Development and Diversity Agency is an independent body, established under an Act of Parliament, it was nonetheless conceived under the GCIS. While still in its early days, the structure has started to function. The Committee interacted with them during budget hearings on 15 June 2004 and again on 22 October when they presented their annual report.

The Committee split up in three groups visiting KwaZulu Natal, the Eastern Cape and North West from 13 to 15 October 2004. The delegations are as follows:

Eastern Cape: ANC: Ms N Mokoto, Nkosi M Nonkonyana, Ms L Yengeni, Mr KM Khumalo

IFP: Ms S Vos

Staff: Ms S Pauw (CS) Ms C Paulse (CA)

North West: ANC: Mr Mohlaloga, Mr G Oliphant, Mr R Pieterse

FF+: Dr PWA Mulder

Staff: Mr M Philander (Control CS) Ms N Stemele (CA)

KwaZulu Natal ANC: Mr SE Kholwane, Ms MN Magazi, Mrs N Nkuna

DA: Mr S Haassbroek

ACDP: Rev MS Khumalo

Staff: Ms R Schaafsma (CS) Ms N Pasensie (Secretary to Chair)

The groups visited various parts of the three Provinces and sought to oversee in the main Post Offices, Multi Purpose Community Centres (MPCC’s), USA initiatives and Community radio stations.

These visits were quite a revelation to members and enabled them to realise and understand the effect of what they are doing and how it manifests itself at local community level. Most of them expressed the need that more time should be allocated for these visits and that they should take place more often. Members were also impressed with the way in which people made them feel welcome and they noted that people were looking forward to such visits.

On 7 October 2004 the Committee went on an oversight visit to Telkom’s Centre for Learning in Milnerton and to the submarine cable in Melbosstrand, Cape Town.

7.1.1 Members of the Committee underwent a three day training course, conducted by the Link Centre, University of the Witwatersrand, in preparation of the forthcoming Convergence Bill .

7.1.2 The term of office of three Icasa councillors expired in June 2004. The matter was referred to the Committee, and a process was set in motion of inviting the public to nominate candidates for filling these vacancies. The Committee agreed to a shortlist of candidates to be interviewed. This was followed by interviewing and selecting candidates. A report, containing the names of the preferred candidates, was tabled in the National Assembly, as provided for in the Independent Communications Authority of South Africa Act. The National Assembly adopted the report , the President, as the appointing body, was informed accordingly and he appointed the recommended candidates.

7.1.3 The Committee was briefed by the Department of Communications on 10 August 2004 on the steps they took to give effect to the recommendations contained in the Report of the Parliamentary Task Group on Sexual Abuse of Children, the effectiveness of strategies to monitor media broadcasting as done by the Film and Publications Board and the enforcement of the Code of Conduct of the SA Broadcasting Complaints Commission.

7.1.4 The Print Media briefed the Committee on 17 August 2004 on its profile, functions and future plans. It was agreed that further interaction will take place at a later date.

7.1.5 The Committee considered the Report on the Ratification of the final Acts and Decisions of the 1999 Beijing Congress on the Universal Postal Union on 27 August 2004, and recommended the ratification of the protocol by the National Assembly. The National Assembly adopted the recommendations in the Committee report.

7.1.6 On 19 October 2004 the Advertising and Marketing Industry reported to the Committee on the progress that had been made in the transformation of the industry. The Committee tabled a report containing its recommendations in the National Assembly. Further interaction will take place with the industry, as is recommended in the Committee report.

7.1.7 On 5 November 2005 the Department of Communications reported to the Committee on the National Task Team on the Broadcast Content and Languages National Summit. During deliberations on the report the issue of a funding model for the Public Broadcaster emerged as a matter that needs consideration. In general we agreed that public discourse is needed on this issue.

The following matters stand over for the next session:

Annual report briefing: South African Post Office (SAPO)

Annual report briefing: Universal Service Agency (USA)

Annual report briefing: National Electronic Media Institute of SA (Nemisa)

A total budget of R351 421 was allocated to the Committee for the financial year ending 31 March 2005.

Expenditure incurred are indicated below:

Catering: R59 460.00

Provincial Visits: R150 000,00

Vehicle hire R1 000,00

10. Conclusion

The Committee covered a lot of ground in the past year, and great efforts were made to accommodate both experienced and new members in providing various training courses so as to empower them to deal with the magnitude of tasks that they have to fulfil in terms of the portfolio requirements.

11. Adoption of Report

The Committee recommends that the Annual Report be adopted.

Annual Report of the Portfolio Committee on Communications had been put to the Committee, and was adopted on Tuesday, 15 February 2005

Signed: R Schaafsma

………………………………………………………………………………….

Signed: M Philander……………………………………………………………………………….

Signed: MK Lekgoro, MP………………………………………………………………………………….

Control Committee Secretary: Mr M Philander

Period: January 2004-December 2004

Committee Secretary: Ms R Schaafsma

Period: January 2004-December 2004

Committee Assistant: Ms C Paulse

Period: January 2004-December 2004

Ms N Stemele

March 2004-December 2004

Secretary to Chairperson: Ms N Pasensie

Period: January 2004-December 2004

Research Unit

Researcher Mr K Pasensie

Period: January 2004-December 2004

Researcher: Mr N van Zyl

Period January 2004-December 2004

1 September 2004 Report and Financial Statements of the Independent Communications Authority of SA (Icasa) for 2003-2004 [RP 106-2004]

1 September 2004 Report and Financial Statements of Sentech for 2003-2004, including the Report of the Independent Auditors on the Financial Statements for 2003-2004

1 September 2004 Report and Financial Statements of Vote 7 – Government Communication and Information System for 2003-2004 [RP 148-2004]

14 September 2004 Report and Financial Statements of the South African Broadcasting Corporation Limited (SABC) for 2003-2004, including the Report of the Independent Auditors on the Financial Statements for 2003-2004

14 September 2004 Report and Financial Statements of Telkom SA Limited for 2003-2004, including the Report of the Independent Auditors on the Financial Statements for 2003-2004

14 September 2004 Report and Financial Statements of the National Electronic Media Institute of South Africa (Nemisa) for 2003-2004, including the Report of the Independent Auditors on the Financial Statements for 2003-2004

13 October 2004 Report and Financial Statements for Vote 27 – Department of Communications for 2003-2004, including the Report of the Auditor-General on the Financial Statements of Vote 27 for 2003-2004

15 October 2004 Report and Financial Statements of the International Marketing Council for 2003-2004, including the Report of the Auditor-General on the Financial Statements for 2003-2004 [RP 174-2004]