Independent Communications Authority of South Africa
Review of State Institutions Supporting Constitutional Democracy
20 February 2007
Meeting Summary
A summary of this committee meeting is not yet available.
Meeting report
AD HOC COMMITTEE ON THE REVIEW OF
STATE INSTITUTIONS SUPPORTING CONSTITUTIONAL DEMOCRACY
2O February 2007
INDEPENDENT COMMUNICATIONS AUTHORITY OF SOUTH AFRICA
Chairperson: Prof K Asmal (ANC)
Documents handed out:
ICASA response document Part 1 & Part 2
Annexures Part 1
& Part 2
Relevant documents:
Terms of
Reference
ICASA Amendment
Act (2006)
Electronic
Communications Act (2005)
Audio Recording of the meeting: Part1 and Part2
SUMMARY
The Independent Communications Authority of South Africa was the sixth body
to appear before the Committee. As with other bodies the Committee’s
interaction was guided by the terms of reference as well as ICASA’s responses
to the questionnaire. The major points of discussion related to ICASA’s
institutional organisation, its role in its budget process, its internal
processes as well as the quality of its interaction with Parliament through the
Communications Portfolio Committee. The appropriateness of the addition of
postal services to its mandate and the circumstances surrounding the
resignation of the chief operating officer were also raised. ICASA noted that
although it met with the Department of Communications and National Treasury, it
could hardly influence its budget allocation. The Committee would deliberate on
the Chapter 9’s budgetary process and Prof Asmal raised the possibility of
Parliament playing a greater role in this. ICASA also clarified that it did
have a disclosure process for both administrative staff and councillors and
that the register was public and available on request.
Prof Asmal’s opening remarks
Prof Asmal welcomed the Independent Communications Authority of South Africa
(ICASA) delegation which comprised Mr Paris Mashile (Chairperson) and his
advisor Mr M Baloyi, Mr Stan Mamaregane (Acting CFO), as well as the
councillors Mr J van Rooyen, Mr M Zokwe, Ms B Ntombela, Ms T Cohen, Mr Masiza,
Ms M Mohlala and Mr Nkuna. He noted that various Members of Parliament,
especially from the Communications Portfolio Committee were present. He pointed
out that as far as process was concerned, all bodies appearing before the
Committee were treated identically. Questioning was not done in a partisan,
party political fashion. The Committee’ questioning was informed by its terms
of reference and the 25 point questionnaire it had sent out towards the end of
2006. When reporting to Parliament the Committee would make general
observations, followed by a systematic look at each one of the eleven bodies.
The Committee had also studied their annual reports, response submission and
other documentation.
Discussion
Prof Asmal said that all Members considered the constitutional
provisions to be enormously important. Some of ICASA’s work was profoundly
technical and it now had jurisdiction over electronic communications, broadcast
communications and the post office. He thus asked the Mr Mashile to take a few
minutes to explain exactly what ICASA did.
Mr Mashile explained that ICASA was a regulator in the broadcasting industry
and as such created a playing field for operators in the telecommunications,
broadcasting and postal industries. They provided licences and developed
regulations and policies that contributed to a competitive environment in which
service operators could operate.
A competitive environment provided a myriad services at competitive prices and
ICASA created ex-ante regulation that created such a competitive playing field.
It also issued frequencies, which as a scarce resource had to be managed and
equitably allocated. This was one of the biggest challenges facing ICASA.
It also had to ensure that universal access and services were provided,
especially to the marginalised sectors of the community. ICASA as the regulator
had to become the hub in the Information and Communication Technology (ICT)
sector. The Minister of Communications set the policies, Parliament set the law
and ICASA as the regulator operated within the confines of the legislation.
The ICASA Amendment Act (No 3 of 2006) empowered them to do what they had to do
and the Electronic Communications Act (No 36 of 2005) defined the kind of
services ICASA had to regulate.
Due to advances in technology there was much convergence of networks and
services: one no longer spoke of vertically integrated licences. Separate
network and services licences were now necessary. The Electronic Communications
Act (ECA) allowed for the necessary competition in networks and services.
ICASA, in its competitive safeguards, had to make sure that there was no
anti-competitive behaviour and had to determine who the significant market
players were in order to impose certain obligations or create pro competitive
avenues. This enabled ICASA to contribute to the socio economic enhancement of
the country. The objects of the ECA stated that there were a myriad of social
issues that ICASA had to have as an outcome in their regulation. These included
job creation, empowering the historically disadvantaged and encouraging foreign
direct investment. The ICT sector had been calculated as contributing about 6%
of the gross domestic product (GDP). ICASA collected about R1,5 billion
annually in revenue from licensing and frequency. This money was submitted
directly to National Treasury.
Prof Asmal summarised that ICASA was thus a regulatory body with fixed minimum
terms, had the socio-economic function of delivering to the previously
marginalised, allocated frequencies, and gave advice to the Minister when
asked. Had Mr Mashile left anything out?
Mr Mashile said that ICASA also assured that the playing field was even.
Prof Asmal pointed out that Mr Mashile had forgotten to list that ICASA
supervised the control of their licensees to see whether they carried out their
mandate.
Mr Mashile added that ICASA also tried to ensure that in issuing licences, it
created a plurality and diversity so that even the marginalised communities
were included.
Prof Asmal pointed out that ICASA had an agreement with the Competition
Commission to prevent the accumulation of too many radio stations in one area.
Ms D Smuts (DA) wondered whether the delegation would agree that the basic
reason ICASA existed as a licensing and rule-making body, was in the interest
of free speech. Newspapers were not licensed or regulated but due to the
scarcity of frequency it was important to do this in the case of broadcasting.
Up until recently, frequency had been a finite public resource. Those who got
frequency licences could be required to observe licence conditions which rested
on two principles contained in the Constitution: fairness and diversity of
opinion in broadcasting. If one had only a few broadcasters, one had to ensure
plurality of opinion.
She said that due to technological developments and convergence it was
necessary to regulate telecommunications solely within ICASA’s jurisdiction.
Voice-, video- and data- broadcasting and telecommunications had become
indistinguishable and it followed that telecommunications had to be treated the
same. Technological developments had, in her opinion, brought to life the right
to impact and receive information because every citizen now could receive as
much information as he or she wanted.
Prof Asmal pointed out that ICASA had three major statutes that established
what had just been said. It also had additional functions and could have
agreements with the Minister of Finance to raise money in different ways. This
was a very important fact and would be returned to later. He pointed out that
Mr Mashila had not mentioned the South African Post Office (SAPO) as yet.
Mr Mashile responded that SAPO was incorporated in ICASA who now also had
postal services under its jurisdiction. SAPO was a monopoly and provided
certain services. ICASA issued service licences and determined tariffs.
Prof Asmal asked what kind of licences ICASA issued to SAPO.
Mr Mashile replied that ICASA offered licences for courier and other postal
services. DHL and others were also being regulated. They also determined
tariffs such as postage and imposed universal service obligations.
Prof Asmal wondered who had regulated and licensed postal services before 2006.
Mr Mashile replied that it was under ambit of the Department of Communications
(DOC).
Ms Smuts said that the Committee was tasked with looking at the suitability and
appropriateness of ICASA and similar institutions in present day South Africa.
This question was, in many ways, answered by the fact that Parliament had
“recently legislated both the ECA and the ICASA Amendment Act.” She asked if
the addition of postal regulation to ICASA’s function was because it was argued
that the post office would increasingly use electronic services and was it
appropriate to regulate the postal services.
Mr Mashile replied that the ICASA was “a creature of statute”. ICASA acted
within the confines of the law.
Prof Asmal wondered whether the postal service mandate was funded.
Mr Mashile responded that after receiving the added responsibility, there had
been requests for an increase in funding. To date there had been no additional
allocation.
Prof Asmal noted that ICASA had an advisory body that dealt with stamps.
Ms Ntombela confirmed that there was the Stamp Advisory Body. The Minister
appointed the officials serving on it.
Mr J van der Merwe (IFP) said that it appeared as though there was overlap of
functions as the DOC was supposed to manage the postal services.
Mr Mashile replied that ICASA’s role was clearly defined in the legislation -
ICASA regulated licences and tariffs and saw to it that the licensee met
service obligations.
Prof Asmal clarified that a Post Office Board had been appointed to run SAPO
while ICASA regulated the tariffs.
Ms Smuts pointed out that the Minister had just taken back the powers that
governed the reserve and other postal services. She wondered what ICASA had
been left with.
Mr Mashile explained that ICASA set the tariffs for postage. It issued licences
and made sure that licensees adhered to the regulations. ICASA determined and
approved tariffs on the basis of the post office’s proposals.
Prof Asmal said that there was an advisory body that established what stamps
would appear, but was not involved in the minutiae of the design.
Ms Smuts did not think that the Committee needed to spend time on the postage
stamps. She was merely using it as an example to show that ICASA had its hands
full and she was not sure that they should have received the additional
functions.
Prof Asmal asked if it was correct to say that in terms of the regulation of
broadcasting and realising national policy objectives, ICASA had by and large
been successful. However, as far as telecommunications regulation, they had
been far less successful.
Mr Mashile thought that the promulgation of the ECA would result in greater
success in the area of telecommunications. There would no longer be a monopoly
of the industry. The ECA allowed for competition in networks as well as
services.
Prof Asmal pointed out that a commentator had noted that ICASA’s success in
broadcasting was largely due to the autonomy it enjoyed under Chapter 9 of the
Constitution. Telecommunications was characterised by a range of unintended
policy outcomes, job losses in the sector, super profits of its incumbents,
increasingly less foreign direct investment and ICASA’s own institutional
incapacity to anticipate, regulate, monitor and mitigate these developments. He
wondered whether this was a fair comment.
Mr Mashile agreed that it was indeed fair comment.
Ms Smuts elaborated that the Independent Broadcasting Authority (IBA) had been
fully in charge of the governance of broadcasting under Section 198. Because it
was fully in charge, it had autonomy in opening up the airwaves, which it did.
Telecommunications was very different due to the ministerial co-regulation.
Prof Asmal pointed out that the Committee was not meant to provide comment on
ICASA ‘s comment but was supposed to allow ICASA to make comments.
Ms Smuts continued saying that Nadia Bulbulia, a former ICASA councillor, had
said that the power of co-regulation had had a delaying effect. As a result
there had been huge backlogs in what ICASA had wanted to do for liberalising
telecommunications. Under the new regime they were in charge of
telecommunications and still had a relationship with the Minister in as far as
she could set national policy and give them policy directives. ICASA had to
consider directives but were not bound by them.
Mr Mashile responded that the role of the Minister vis a vis the regulator was
that the former could come up with policy and also consult with ICASA. ICASA
could also identify certain areas that could be improved and then advise the
minister accordingly. It was clear that when it came to regulation and
licensing, the Minister played no role.
Prof Asmal recalled that previously the Minister could veto licences. It was
important to note that the executive had thus withdrawn its veto power.
Ms Smuts said that the Minister was, on behalf of the State, the shareholder
and manager of nearly 38% of Telkom, the major incumbent, 100% of the major
broadcaster and of Sentech. This presented a conflict of interest. The person
who held the shares on behalf of the State could not conceivably regulate for
the rest of the sector as well, especially not when those were the big players
who influenced the fate of the new entrants in telecommunications.
Mr Mashile replied that that was no longer the case. ICASA issued licences,
determined the tariffs while the Minister played no role in that. Regulation
was referred to the Minister.
Mr S Dithebe (ANC) asked whether ICASA saw their role primarily as that of ensuring
that prices were as low as possible and that services were made accessible.
Ms Cohen responded that from ICASA’s mandate, it was
clear that it had to do both. Telkom’s monopoly and the duopoly in mobile
services made it clear too that access and affordability went hand in hand. The
ECA now required a systematic approach to managing the lack of affordability,
which was the flipside of accessibility. It was important to note that before
the ECA could open the door to increased competition, a number of procedural
requirements had to be met: markets had to be defined and a determination of
domination in market power had to be given. Only then could one regulate
pricing. Prices were not just lowered automatically.
Prof Asmal said that he would not ask why the President had on three occasions
mentioned that Telkom’s landline cost was very high because he would then be
micro managing ICASA. He took it that the Minister did not interfere with the
socio economic application.
Ms Cohen confirmed that that was the case.
Mr van der Merwe disagreed that asking about Telkom’s high rates amounted to
micromanagement. He felt that this was of extreme importance to the entire
country.
Mr Mashile responded that the high prices were indeed a serious problem and
agreed with Ms Cohen that they could not just be lowered. The market was not
yet liberal enough to allow competition. ICASA could only take action against
those who “misbehaved”. He added that since it was an emerging market,
regulation was imperative. Even with regulation itself, it was not easy to
succeed in bringing down pricing. ICASA still had to act within the confines of
the law and believed that the best way of regulating was through competition.
The ECA would assist in achieving this. If there were alternatives, people
would have choices as far as services were concerned, and there would be
greater pressure on service providers to competitively price.
Mr van der Merwe sought clarity on whether ICASA had to adhere to the policy or
not.
Mr Mashile replied that the objects of the Act determined what the policy
objectives were. There were certain outcomes that they hoped to achieve through
licensing and regulation. This was what he understood as the policy objectives
of the country for telecommunications and broadcasting. The government of the
day was tasked with creating a better life for all and had to try and do so via
communication too. ICASA could only facilitate and ensure that there was a
competitive playing field. It was difficult when outcomes were not as expected.
Prof Asmal noted that while the new Act removed the Minister’s veto powers, she
still retained significant other powers. These included the co jurisdiction
over licensing, spectrum planning, the performance management of councillors,
fees, charges in the postal sector and the approval and appointment of
consultants. These powers restricted the autonomy of the regulator. He asked if
the delegation agreed that there was in fact a conflict of interest.
Mr Mashile responded that while ICASA appointed their local consultants
themselves, the Minister appointed foreign consultants. The performance
management system was aimed at holding councillors accountable for their
actions. Even though ICASA was independent, councillors still had to be accountable
to someone.
Prof Asmal pointed out that ICASA was accountable to Parliament and not to the
Minster. The Committee had found that very few of the bodies under review were
able to handle their internal differences. Some might be beginning to do that
now. One understood why the provision had been put in the legislation, but one
wanted to know whether it was consistent with the autonomy of ICASA.
Mr Mamaregane responded that there was recognition that the constitutional
mandate was limited only to broadcasting issues. The question was whether it
would be extended to the other activities that were not of a broadcasting
nature.
Prof Asmal pointed out that the Constitution did provide that ICASA was
independent and should perform their mandate without fear or favour. The
Constitutional Review Committee had proposed that the Constitution be amended
to embrace ICASA.
Mr Mamaregane noted that the law stated that the Minister would, in certain
cases, play a certain role.
Mr Mashile added that the Minster was only responsible for spectrum that
related to security services and that the rest fell under ICASA’s ambit.
Ms Smuts wondered whether the co jurisdiction as far as licences were concerned
referred to the invitation to apply for big licences. ICASA could not invite
people to build national or provincial networks or supply the big
communications services until the Minister had issued an invitation to apply.
This was a very big issue and had economic implications.
Prof Asmal said that one could not have a body that was not accountable to the
electorate. Moving to institutional capacity, he noted that the new legislation
had changed the method of appointment. He wondered whether this was a breech of
the ECA. He asked the delegation whether ICASA owed its existence to Parliament
or the Minister.
Ms Mohlala responded that according to the legal mandate, ICASA regulated in
the public interest. ICASA believed that Parliament was the repository of the
public interest because it was elected by the people and represented the view
of the majority. ICASA thus believed that they were accountable to Parliament.
Moving to internal arrangements, Prof Asmal asked how it was possible that the
CEO could have been suspended in January, had charges brought against her for
ten months and then was allowed to resign. The Committee was also interested in
how the councillors viewed their mandate. He wondered whether ICASA would like
the Committee to recommend that there should be some reference to some criteria
for the appointment of councillors.
Mr Mashile felt that that there were already criteria for the appointment of
any councillor.
Prof Asmal recalled that a councillor with technical background had chosen not
to take up his place. This could be an indication that there was something
wrong in the appointment procedure. He wondered whether the process was not a
bit informal.
Ms Smuts felt that it would be fairer for a member of parliament to answer that
question, since councillors did not play a role in the appointment process.
Mr Mashile responded that the appointment of that particular councillor had
been made, but the incumbent had not been satisfied with the remuneration that
was offered.
Prof Asmal thought that the fact that the remuneration in a technical area had
not been shared with the nominees, was important information to take into
account.
Prof Asmal asked the delegation to give an account of ICASA’s interaction with
the Communications Portfolio Committee in Parliament. He wondered how many
times ICASA had appeared before the Committee and what the nature of those
appearances were.
Mr Mashile replied that ICASA appeared before Portfolio Committee about twice a
year. He added that since the Portfolio Committee was that week in Gauteng, it
would visit ICASA.
Prof Asmal wondered how structured these interactions with Parliament were. A
number of commissions felt that Parliament treated them in a “frivolous” way
Mr Mashile replied that the two occasions he had referred to earlier, were
formal structured meetings. From time to time they made presentations on how
they were progressing in certain specific areas of interest.
Prof Asmal noted that ICASA had made representations on the Electronic
Communications Bill. He wondered how receptive the Portfolio Committee to the
ICASA submission.
Mr Mashile felt that the Portfolio Committee had considered ICASA’s submission
and had fused some of the issues into the Bill.
Prof Asmal questioned why there had only been two meetings for the whole year.
Mr Mashile responded that a number of stakeholders, including ICASA, had made
submissions on the Electronic Communications Bill.
Prof Asmal said that ICASA submission was not that of a non-governmental
organisation (NGO). It was the principal regulatory body who through that
legislative process would have acquired enormous power. He asked if the
Portfolio Committee has treated them differently from any of the other people
who had made submissions.
Ms Cohen responded that there were formal meetings that were set down in the
parliamentary calendar every year. ICASA was required to attend these at the
Portfolio Committee’s request. These meetings were very formal and very public.
The legislation process was a public process in which ICASA as a stakeholder
made a submission. A number of its proposals were accepted, and a number were
not. ICASA had for example made very detailed proposals around funding
mechanisms for the organisation and those had not found their way into the
legislation. ICASA was not a lawmaker and could only make proposals and then
implement the Act they were given. She felt that ICASA had been heard, and that
matters had been extensively debated on many occasions. She added that when the
Portfolio Committee was in the province, they often requested meetings with
ICASA to discuss specific issues.
Ms Smuts wondered whether ICASA would welcome the idea of a super committee (in
addition to Portfolio Committee perhaps) that would take care of the Chapter 9
institutions.
Mr van Rooyen agreed that independence was important. Section 192 of the
Constitution guaranteed this independence. It was a historical fact that
telecommunications usually lay with the Minister and he thought it a step in
the right direction to hand it over to an independent body. He believed that
the ECA and the ICASA Amendment Act also represented positive steps. The
ministerial check on councillors could not go much further than checking
whether they went to the office.
Prof Asmal repeated Ms Smuts question on whether ICASA was satisfied with the
degree of parliamentary supervision it received or whether it would prefer an
additional body.
Mr Nkuna responded that there was a dynamic interaction with the Portfolio
Committee. The only aspect that was absent was the performance appraisal of
councillors. Historically councillors were counted as a collective and
presented what ICASA had done as a collective. Now each councillor would have
its own performance agreement and the Portfolio Committee would play an
important role. The ECA and the ICASA Amendment Act had shuttled in a new
dispensation where each and every councillor would be given a set of objectives
that they had to achieve. The Portfolio Committee and the Minister would play a
role in making sure that individuals were evaluated.
Prof Asmal said that Mr Nkuna was talking of a report card for councillors,
while Prof van Rooyen referred to checking up on whether they were at work or
not. These were two different matters.
Mr Nkuna said that ICASA was moving into a new dispensation now. They had
assessed councillors’ competencies and these would determine what they would be
responsible for doing. Parliament should play an important role in the
appraisal. At the end of the year it should be possible for Parliament to
assess whether objectives had been achieved.
Prof Asmal wondered whether it was ICASA’s collective view that someone would
draw up the appraisal form and that Parliament would then publicly go through
these forms.
Mr Mashile replied that the Commission shared this view. ICASA had developed a
proposal on this and they were yet to submit it. They had analysed the
legislation and found that it was necessary for the body to reconsider their
strategies. Councillors would now have specific roles. He also pointed out that
that if one agreed to a performance management system, there had to be a
corresponding allocation of resources, so that one’s delivery could be judged
on the resources that had been made available.
Prof Asmal said that the Commission was collectively responsible and
collectively accountable. The Committee would require a document indicating how
ICASA envisaged this appraisal and reflecting that it was a collective
decision. The Committee wanted to know who would draft the appraisal, and
whether ICASA was serious about doing it. The Committee would want to put this
to other commissions too.
He mentioned that the Towards Ten Years of Freedom Review of 2003 referred to a
strong lack of capacity and leadership within the sector. The Committee was
interested in what ICASA had since done to develop leadership in this sector.
Ms Cohen said that if one was true to history, ICASA had during the ICASA
Amendment Bill process asked for a collective appraisal process and not for an
individual one. It was difficult to justify the wisdom of Parliament to have it
take a different form. ICASA had proposed a model along the lines of the Civil
Aviation Authority which at the time was their benchmark.
Prof Asmal commended the existing document from National Treasury that assisted
portfolio committees on how oversight should take place. He realised that it
was embarrassing for a body to comment on whether oversight was satisfactory or
not. He asked if ICASA had systems in place for dealing with differences of
opinion or “real cleavages” between councillors and staff. He also wondered
whether the CEO was a member of the commission.
Mr Mashile responded that in terms of the ICASA Act the CEO, who was not a
member of the Commission, was appointed by it to assist in carrying out its
mandate.
Prof Asmal said that the fact that the CEO was not a member explained some of
the difficulties ICASA had historically experienced.
Mr Mashile responded that the CEO was the sole custodian of the Public Finance
Management Act (PFMA). The legislation however indicated that he or she would
perform administrative tasks under the Commission’s control and supervision.
The Commission had to have oversight.
Prod Asmal wondered how the situation could be addressed.
Mr Mashile felt that the legislation would have to be reviewed.
Prof Asmal pointed out that the PFMA applied to government departments and that
the director general who was the accounting officer, could receive directions
and instructions from the minister. There was no need for the PFMA to be
amended to have a proper, rational arrangement, and if that was what ICASA
expected they would wait a long time. He added that accountability could work
both ways. Although the CEO was accountable to the Commission, the Commission
should realise that the CEO was responsible for the day-to-day administration.
Prof Asmal asked if the delegation did not think that having only full time
commissioners, meant that those who would like to serve on it on a part-time
basis and perhaps had the technical capacity needed, could not do so. He realised
that it was a tough question. This related to the efficiency of the body.
Mr Masiza responded that in their submissions to the ECA they had advocated for
a reduced number of councillors. They had used the Financial and Fiscal
Commission and some Malaysian models as benchmarks.
Prof Asmal said that it had been suggested that there had been a blurring of
the distinction between the work of the councillors and that of the staff.
Councillors had been accused of interfering in the day-to-day operation of the
institution and undermining the CEO. The staff on the other hand might not have
had the qualifications, thus necessitating the councillors’ intervention. He
wondered whether ICASA would agree that the Commission had in a sense been
running the institution.
Mr Mashile responded that the ICASA Act said that councillors had the
responsibility of running the organisation. Councillors had to appoint the CEO
to assist them in running the administrative side. The Commission was solely
responsible for licensing and regulation. In the final analysis if anything
went wrong by way of finances for instance, the Commissioners would be
accountable even though the CEO handled administration.
Prof Asmal reminded the Commission that it had to look at the efficiency and
efficacy of ICASA. It appeared as though ICASA had not worked out a day-to-day
system governing the relationship between the commissioners and the full time
staff. He again asked how it had been possible to suspend the CEO for ten
months, not bring any charges against her and then allow her to resign with
some kind of benefit. He wondered what kind of system allowed that to happen.
Mr Mashile explained that they had become aware of certain infractions and
wanted to conduct an investigation as soon as possible. The matter was
investigated and charges solidified. New matters were uncovered during her
suspension. ICASA brought those forth as well. The respective legal
representatives could not agree on suitable dates for resolving the matter. By
June they had already formulated six charges. As much as he wanted to have the
case resolved there were certain difficulties around availability. The CEO
finally decided to terminate her contract and serve her three months notice so
that she could get on with her life. The Commission decided that they would
allow her to resign and in lieu of her serving her three months' notice, they
would simply pay her for those three months. He added that she had originally
expected ICASA to pay her legal costs. They had refused.
Prof Asmal pointed out that in very many countries, if serious charges were
laid, the official in question was suspended without pay. In cases where the
charges were less serious, officials were suspended with pay, but were absent
from the office. For a layperson, for someone to be suspended for ten months
with no charges being brought was beyond the realm of understanding. The
Committee was concerned about an institution of such importance operating
without a CEO for ten months. If charges were there, they should be charged,
and not look for new charges.
Mr Mashile said that initially they investigated two charges and in that
process other charges were discovered. He had thought it better to lay the
charges together.
Prof Asmal wondered whether the board rather than the Chairperson alone should
have taken this decision.
Mr Mashile said that they had records indicating that it had indeed been a
board decision.
Ms Smuts felt that the matter had not been exhausted. She said that the absence
of the CEO had been a material factor in ICASA’s poor financial performance.
The Auditor General's Report showed that the deficit of R43 million was
ascribable to the absence of the CEO and CFO. Some of the procurement
irregularities, and the fact that staff performance was not measured were also
ascribable to that. In addition she had read that the CEO was now suing ICASA
for defamation and the CEO's lawyer argued that it was ICASA’s lawyer who was
frequently not ready to resolve the matter. Had ICASA defended the action at
the Council for Conciliation, Mediation and Arbitration (CCMA) when Ms Jackie
Manche disputed that there was a basis for her suspension. She was reinstated
after that action. According to her lawyer the agreement made in the end was
that there was no substance in the charges made against her and that there
would be a joint media statement.
Prof Asmal intervened and said that this was not a trial. The Committee only
wanted to establish why the matter had not been resolved and to then draw a
conclusion around whether that was an efficient way of running an organisation.
Mr Dithebe noted that ICASA had mentioned that with the ECA coming into
operation, there would more multi disciplinary competencies that ICASA would
have to deal with. Did ICASA had sufficient self-financing mechanisms to ensure
that staff could be retained?
Mr Mashile responded that ICASA was under-resourced financially and was
incapable of attracting the right human resource capabilities. This challenge
would remain as long as the institution was under-resourced. They had come up
with a game plan for addressing the matter. The allocations ICASA obtained was
far less than what it needed to fulfil its mandate. The coming into operation
of the ECA, which required nine rather than six councillors, as well as the
taking on board of postal services would further challenge it as far as paying
market related salaries. He added that about 80% of ICASA’s staff had joined
the operators. ICASA appeared to serve as a training ground.
Mr Dithebe wondered how the haemorrhage could be ended.
Ms Mashile replied that that would only be done if ICASA had enough resources
to retain staff, offer market related salaries, and create an environment that
would make people want to work for ICASA. He added that ICASA was beholden to
the people who resourced it.
Prof Asmal noted that a licensing officer who should be paid a considerable
amount so as to ensure that they did not fall victim to corruption, was paid
only R264 000, while a part-time advisor was paid R380 000. Whose permission
had to be sought to increase the salaries of licensing officers.
Mr Mamaregane responded that with the ECA coming into effect that had to
re-look at their operations. One of the projects currently underway was
reviewing people’s job description and benchmarking the different posts within
ICASA to gain an understanding of what market related salaries would be. This
would form part of the retention strategy. He added that advisors were employed
on a full time not part-time basis.
Prof Asmal said that the presidential review in 2003 had found that ICASA had
difficulty retaining staff, did not have a mentoring programme to keep staff
and instil how important their work was. There were people who were willing to
work in an environment that was good even if the remuneration was not that
good.
Mr Mamaregane said that the institution was embarking on the process to address
some of the shortcomings.
Ms C Johnson (ANC) said that in the submission the Committee had received from
the Communications Portfolio Committee there was mention of internal
instability due to the high staff turnover. It went on to say that councillor
salaries were a major source of concern and that the relevant ministries had
since attended to them.
Mr Mamaregane explained that the current process was aimed at cascading those
improvements to the level of the staff.
Ms Cohen added that it was important to note that ICASA had last year come to
Parliament “cap in hand” to make a submission to National Treasury (through Parliament)
that an additional R68 million would be required to implement the ECA. There
were no less than 200 regulations and a number of policy papers that needed to
be re-gazetted, yet there was no publication budget. Laws were passed without
any additional budgetary allocation. Some allocations had been made for
addition of postal services and two extra councillors.
She added that although councillor salaries had been increased they were still
way below the salaries of other regulators within their own sector. There were
also no benefits attached to these salaries. That notwithstanding, ICASA had
begun the process but how that would be funded was still to be seen. Additional
allocations would have to be made otherwise the ability to fulfil the mandate
would be somewhat compromised.
Ms S Rajbally (MF) asked if ICASA had done a survey to see if, in some areas of
their institution, there was over employment and overpayment. Was there any job
sharing within the institution.
Ms Mamaregane responded that as part of the institution revising its work plan,
it had looked at the resources that were available. They were now at the stage
of looked at the work people did and the value attached to that work. That
would inform the remuneration strategy.
Mr Dithebe asked if over-reliance on international consultancies had impacted
on ICASA’s resources.
Mr Mashile responded that ICASA operated within a very dynamic sector where
knowledge had to be constantly updated. One needed to be up to date with the
latest technological developments. From time to time they needed to call on
experts with international experience. ICASA then customised that information
to the South African environment. If an international consultant came to help
them, then skilling of their officials had to form part of the agreement. He
assured the Committee that from time to time they did use consultants from
South Africa.
Ms Smuts agreed that ICASA ought to have access to absolutely all the
consultancies they needed and that the Minister ought to have nothing to do
with it. She also agreed that councillors’ salaries had to be very high.
Section 219 of the Constitution required that councillors and judges and
commissioners of other bodies had to be dealt with separately. She was also in
favour of a huge budget, as well as cost recovery for the institution. However,
she did not think that it was only poaching by the sector that had resulted in
ICASA losing its entire general management and other senior staff. The CFO was
under police investigation. The loss of all these people was a serious
reflection. The institution had to express to the Committee what it was that
made it so difficult for them to run ICASA. People had been required to write
exit reports, which the council had given to an independent consultant.
Prof Asmal also wondered what had caused the effective breakdown.
Mr Mashile replied that all the general managers had left for greener pastures.
He could supply information to that effect. The Committee had to bear in mind
that they were operating in an environment where companies had to fulfil Black
Economic Empowerment (BEE) requirements and the few black professionals were in
demand. Most of them “serve sufficient time” to gain knowledge and experience
to then move on to better companies with better remuneration. Some started
their own companies, while many went to operators.
Prof Asmal pointed out that the exit affected the credibility of the
organisation. If in 2003 they had discovered that their professional staff were
being poached, they could have decided to work with a smaller group of
professionals who would then be much better paid. What public pressure had been
generated to ensure having a streamlined base of better paid, more competent
professionals who would stay with the institution, like the South African
Revenue Service that did not lose staff.
Mr Mashile responded that ICASA grew from the coming together of the South
African Telecommunications Regulatory Authority (SATRA) and the IBA and thus
had a particular legacy. It was not easy to retrench people who had been
employed within those two bodies. Given the high unemployment rate, trimming
and streamlining had to be done cautiously.
Prof Asmal interrupted to say that ICASA had enormous influence in the area of
anti-competitive behaviour and regulation. He mentioned that the liquidator of
a well known company had just had to retrench 200 staff. ICASA had enormous
political and public service power. It was not a social security outfit but a
regulatory body.
Ms Smuts noted that each councillor had an advisor and a personal assistant.
This stemmed from the old IBA organisational structure. Did the delegation not
think that that presented difficulties? ICASA had highly skilled general
managers who worked on certain recommendations and sent that to the councillors
who sometimes worked with the advisors. Did the presence of advisors not
contribute to the institution’s structural difficulties?
Mr Mashile responded that ICASA did take a look at this historical structure.
During the IBA days there had not been sufficiently resourced people to help
with the activities of licensing etc. The Commission now realised that the
general managers were actually advisors because they brought recommendations to
councillors. The redeployment of the advisors had thus been considered.
Prof Asmal wondered whether advisors were appointed permanently or on contract.
Mr Mashile explained that they were on contracts that were attached to those of
the councillor.
Prof Asmal sought clarity on ICASA’s relationships with other bodies.
Mr van Rooyen replied that all the Chapter 9 bodies had the Bill of Rights as a
basis. ICASA was unique in that it had a range of functions that other bodies
did not share: legislative, judicial, administrative, policy making, licensing
and regulatory functions. He thought that contact between Chapter 9
institutions would be useful. Councillors did often make speeches at human
rights occasions - Councillor Masiza was very active in this regard. ICASA had
spent some money as far as the World Summit on Children was concerned.
Prof Asmal pointed out that broadcasting complaints were sent to the
Broadcasting Complaints Commission (BCC). ICASA thus did have a relationship
with at least one other body.
Mr van Rooyen replied that in accordance with the ruling by the IBA in 1995,
the National Association of Broadcasters had set up its own disciplinary body.
This operated in a similar way to Advertising South Africa (ASA) and the Press
ombudsman. The scope of the Communications Complaints Commission (CCC), which
would come into operation on 1 March was much wider than it was before.
In reply to Prof Asmal asking how the CCC would function, Mr van Rooyen
explained that the CCC would act on complaints referred to it by the council.
It could even give legal advice. The council could refer matters to the CCC for
resolution. A complaint would go to the CCC who would decide on its merits. It
would then advise council as to the sanction and council would take the final
decision.
Prof Asmal pointed out that ICASA was the most litigated commission because
there was so much money involved. Telkom brought most complaints and cases. He
asked whether it was not possible to work out a process of arbitration rather
than going to court for such long periods. This would contribute to their
efficacy of their work.
Mr van Rooyen said that the CCC would not have an enquiring function, which
would interfere with its judicial function. It would be independent with an
independent chairperson who was an experienced lawyer.
Prof Asmal wondered why there was so much litigation against ICASA.
Mr van Rooyen responded that there was big money at stake. Radio Pretoria had
lost all its cases against ICASA over the last five years.
Prof Asmal pointed out that in arbitration things were decided very quickly.
Legal recourse would be taken when it was necessary. A huge amount of public
money and resources as well as opportunities were lost through litigation.
Mr van Rooyen replied that if arbitration could be worked into the Act, the
situation might change. Since arbitration was not provided for in the Act they
took the ordinary course and took ICASA on review.
Prof Asmal said that this should be indicated in the next Annual Report to
Parliament.
Ms Mohlala responded that the concern Prof Asmal raised had been noted and that
the Portfolio Committee had taken cognisance of it. The ECA now provided that a
decision of the regulator would be valid and binding until set aside by a court
of law. This would prevent operators from taking the regulator to court for
long periods of time so that decision could not be of any force and effect.
Ms Cohen said that the nature of the interest determined how a matter could be
resolved. A visit to the Financial and Fiscal Commission in 2006 confirmed that
almost none of their substantive decisions had gone unchallenged. As far as
ICASA’s relationship with other Chapter 9 institutions, there was no overlap
outside of shared values. ICASA did have a relationship with the Competition
Commission which was governed by a memorandum of understanding. Broadcasting
cases were content related and linked to licence conditions, while the
telecommunications litigation was invariably around pricing, price caps, etc.
Steering the discussion to ICASA’s financing, Prof Asmal noted that the
regulator recommended that it should have authority to keep some of the fees
for funding. Obviously that could not be done autonomously because they had to
be accountable to someone. He wondered how seriously ICASA had pursued the
idea. He said it was clear that Parliament would have to play a central role in
the bodies’ budgets. He asked the delegation to explain its budget process.
Mr Mamaregane explained that different business units considered their
respective medium term expenditure framework (MTEF) priorities, once those were
developed, they were sent to Council for approval.
Mr Masiza explained that once ICASA had finalised their budget, it was taken to
the Department of Communications who in turn took it to National Treasury.
Prof Asmal wondered whether the DOC discussed the budget with ICASA prior to
taking it to National Treasury.
Mr Mamaregane explained that ICASA interacted with the Director General and the
CFO. The DOC was ICASA’s link with National Treasury.
Ms Johnson asked if the DOC was merely ICASA’s “post box” or whether the DOC
appeared before National Treasury on its behalf.
Mr Mamaregane replied that DOC was part of the discussions with National
Treasury.
Prof Asmal noted that ICASA worked out their budgetary arrangements, which were
sent to the DOC who arranged a meeting with National Treasury, to which ICASA
was invited.
Mr Mamaregane explained that at the meeting with National Treasury and the DOC,
ICASA presented its budgetary needs and business plan. There would be some
debate.
Mr Masiza said that at the one meeting they had attended with the CEO, they
were told how much funds were available across the departments. There was no
way that ICASA could then argue for the amount they needed. National Treasury
told them what amount was available and said that they needed to operated
within those limits. They had so far met with the National Treasury only once.
Prof Asmal said that if Parliament dealt with National Treasury on the bodies’
behalf, it might well be told that there was a certain amount available and it
would then decide how to allocate it amongst the bodies.
Mr Dithebe wondered whether it would thus be safe to assume that the meeting
with National Treasury and the DOC was merely a formality and that whatever
allocation they were to receive was a fait accompli.
Mr Mamaregane replied that it was not always a fait accompli. In some
instances they could convince National Treasury to increase the allocation.
Prof Asmal wondered what the institutional memory of the Council was.
The delegation’s institutional memory ranged from two months to seven years.
Mr Mamaregane said that it was mostly the CFO and the CEO that met with
National Treasury and the DOC. A council member was usually delegated to
accompany them.
Prof Asmal wondered whether their ideas had been suggested to the other role
players.
Mr Mamaregane replied that the suggestions had been made but had not found
their way into the ICASA Amendment Act. It was an ongoing process.
Ms Mohlala said that ICASA had made submissions in the ICASA Amendment process,
to the Department as well as to the Ministry. The submission had often been
repeated but had unfortunately not been taken on board. She thought that that
was largely due to concerns about the accounting mechanism that had to be put
in place.
Prof Asmal wondered whether ICASA had considered what would happen if for one
year their income from licensing was very meagre. The Committee was interested
in whether they had considered the proposal adequately. He requested them to
supply the Committee with a document that explained how they would practically
go about realising the idea.
Ms Smuts thought it necessary that some comparative work also be included. She
suggested the United Kingdom’s Communications Act. This was an old issue that
had been dealt with in Parliament. It was precisely because of this issue that
the ICASA Amendment Act now included saying that the Minister of Communications
together with the Minister of Finance could also channel other moneys.
Prof Asmal asked to whom councillors made their disclosures of outside
interests. He wondered where these disclosures were vested, who gave consent
and how often these disclosures were updated. He found it curious that ICASA
had a public as well as a confidential register.
Ms Mohlala responded that ICASA had a code of conduct, which specified the way
in which each councillor had to disclose interests. It also indicated what
needed to be disclosed. Directorships within the telecommunications,
broadcasting and postal sector were prohibited. Initially ICASA had not had a
process for staff members to disclose their interests, but the code of conduct
had now been extended to them. Specific procedures governed their disclosures.
The register was kept by the CEO. One was expected to update the declarations
annually or when ever it became necessary. She denied that there was a private
register.
Dr J Delport (DA) wondered whether only directorships or all interests were
covered.
Ms Mohlala replied that all interests and gifts received from the sector had to
be disclosed.
Prof Asmal said that Parliament’s disclosures were in the public domain. The
Institute for Democracy in South Africa (IDASA) used to publish them once year
but had now lost interest in doing so. He wondered who had access to the
register if the CEO kept it.
Mr Mamaregane replied that it was available on request. ICASA might have to
consider making it public.
Prof Asmal said that the Committee would consider whether disclosure of
interests should be published in annual reports.
Ms Smuts pointed out that councillors should not develop any interests.
Prof Asmal said that that one should try to keep this area, which to his
knowledge had so far been mercifully free of corruption, to remain so.
Mr Dithebe wondered how ICASA dealt with complaints from the public about the
cost of telephony. Was ICASA certain that the public knew that it could lodge
complaints about that?
Mr Masiza replied that due to financial constraints ICASA had not been able to
make available an 0800 number to give the public easy access to them. It had
also not been able to establish provincial offices that would bring them closer
to the public. ICASA was trying to address this matter. Those lucky enough to be
able to lodge a complaint, could expect a resolution within three to fourteen
days. ICASA wanted to reduce the number of days.
Prof Asmal said that the Committee had found that bodies “loved regional
offices” but often did not consider the cost and supervision these offices
required. He suggested that ICASA rather be well-publicised and made leaflets
available such as in every social security office.
Mr Dithebe said that almost every community would like to have its own
community radio station. He wondered what ICASA had done to make sure that
people had the necessary information to make an application for a radio
station.
Mr Masiza responded that ICASA had outreach programmes. They tried to visit a
province each month to address broadcasting and telecommunications issues. They
normally took the electricity regulator along, since there was no point in
advertising their services if people did not have access to electricity.
Ms Smuts said that the ICASA Amendment Act made provision that five technical
experts could be invited sit with the relevant portfolio committee when they
interviewed councillors. That was based on the Independent Electoral Commission
(IEC) model where a "pre legislated body" did all the public
invitation interviewing and then submitted a shortlist to Parliament. The
majority of the members on the Committee simply declined to exercise the option
of inviting these technical experts. She wondered whether the delegation
thought an outside panel, would be a good idea.
Prof Asmal felt that the question related to policy matters for Parliament and
could not be answered by the councillors.
Mr van Rooyen wondered of he could address a matter related to the defamation
case against ICASA that was raised earlier. He felt that that this was necessary
since there was a media presence at the meeting. He said that the case had been
warded off. There was also never any indication from ICASA that the charges
brought against Ms Manche had been unfounded.
Prof Asmal ruled Mr van Rooyen was out of order. The Committee was exercising
an oversight role and was not sitting in judgement. The matter of principle in
that case was the long time it took to resolve the matter. What happened in a
court of law was ICASA’s own business.
He dissuaded members of the Committee from raising matters that bore no
relevance to what they were tasked with doing. He added that irrespective of
whether something was a true reflection or not, the press would report whatever
it wanted too.
He summarised that the major areas the Committee was interested in was the
institutional design of the agency, whether it was adequately resourced,
whether there was skill development as well as the efficiency and legitimacy of
the regulator. The Committee would also consider the political will to create
an accountable, independent regulator, which the sector could respect, as well
as whether ICASA was performing its function within the requirements of a
developmental state.
Prof Asmal thanked ICASA for its participation and said that the Committee
might have to recall them, perhaps for a closed session.
The meeting was adjourned.
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