SABC Board recommendations: adoption; SA Postbank Ltd Amendment Bill: proposed amendments

Meeting report

The Chairperson referred to the letter from the SOS Coalition so that the Members have a look at it. He asked the Committee to turn to the report of the Sub-Committee on filling the 12 vacancies of the South African Broadcasting Corporation (SABC) Board.

The Committee secretary took the Committee through the Sub-Committee report.

The Chairperson asked the Sub-Committee if the report is a reflection of the recommendations it made.

Mr L Molala (ANC) stated that the report is a reflective of the Sub-Committee’s process.

Ms D Kohler Barnard (DA) stated that a small correction needs to be made to the report but it is nonetheless reflective of the process the Sub-Committee underwent.

The Chairperson said that the Sub-Committee report must first be submitted to the Committee. He checked with the Committee members who do not sit on the Sub-Committee if they have comments on the report.

Mr T Gumbu (ANC) stated that he does not have an issue to raise.

The Chairperson asked if any Committee members object to this report.

Ms Kohler Barnard stated that she does have a problem with adopting the report – but that the Committee should consider the SOS Coalition letter that shows reservation about two candidates. She requested if this letter can be considered or did this letter come too late in the Committee process.

Ms T Bodlani (DA) supported Ms Kohler Barnard’s request. The letter must be done justice and be entertained properly for the sake of fairness and thoroughness.

Mr Molala stated that he has no problem entertaining the letter. However, his problem is that the matter is supposed to be completed today and the letter comes in before the Committee can adopt the names. The letter anticipates that the names are the final names. It is possible that someone can raise issues with certain names in today’s meeting. What happens then? The report and names should be adopted so that when the SOS Coalition letter is entertained it can be on the basis of names that have already been adopted and the process is not delayed.

Dr M Basopu (ANC) said that this is not the first time there are objections in this process. The Committee did receive a legal opinion on the matter at some point. He agrees with Mr Molala. He does not believe that the approach that the Committee adopted when dealing with the names should change now. A legal opinion was sought from Parliament’s Legal Services and the Committee should adopt the same approach that it adopted.

Ms A Mthembu (ANC) supported Mr Molala’s statement. She does not have a problem with the letter. The Committee should finish with the names then deal with the letter thereafter

Ms Kohler Barnard said that the Committee had received a legal opinion on the possible conflict of interest of Ms Batyi. Did the opinion state that there is no conflict of interest? Or is she remembering incorrectly?

The Chairperson said that it is important to help the meeting. The report properly captures the journey the Committee has been on. The Committee has gone through the letter. It is just a matter of having it publicly on record that there are still matters raised on those candidates.

The Chairperson said that the Committee did receive a legal opinion clarifying what conflict of interest is and that there is no conflict of interest. The Committee was convinced that this was correct. The Committee should not appear as though they are starting a new public comments process. However, the Committee should not stop members of the public from making comments as information becomes available. The Committee should be able to say if it has applied its mind in considering everything that came before it. This is not the only committee where matters have been raised and the committee got that response. This is being raised so that the Committee does not have an open ended process as it will not get its work done. The Committee is making recommendations for the SABC Board and is not the appointing authority. The appointing authority will also consider other information. It is important that the Committee does not hide that comments were received and the formal request that those comments be circulated to Committee members. The Committee has not hidden that.

The Chairperson asked if there are any objections to the adoption of the report.

Ms Kohler Barnard replied that Mr Mohuba is in a court process where he was found guilty but his case is on appeal. What will happen should his appeal be unsuccessful? Will his appointment have to be reviewed? What will the status of the Committee be should his appeal fail?

Mr Molala said that he is under the impression that the Committee is concluding this process. The Committee should conclude the process and then engage with other comment thereafter. It is the Committee’s duty to provide a report to the National Assembly and the President and indicate all these complaints and how it dealt with them all; otherwise the report will be returned. The work of the Committee should be finalised. He is okay with complaints from the public and welcomes the Committee engaging with these matters as much as possible but for now, the Committee should finish its process. Ms Kohler Barnard has a right to raise her concerns but she can do so after the Committee has finished its process.

The Chairperson asked if there are any objections to the report.

Ms S Xego (ANC) said that she agrees with Mr Molala that the Committee should continue with its process and not focus on rejections from the public for now. The Committee can entertain the public concerns after concluding the adoption of the report.

The Committee adopted the report.

The Committee turned to the SOS Coalition letter urging the Committee to consider public opinion on the SABC board recommendations.

Ms Kohler Barnard accepted that the report is adopted and requested advice on Mr Mohuba’s court matter that is on appeal. What will the Committee do should his appeal fail? Will the Committee have to do another process for recommending a name?

Ms Bodlani appreciated the process. On the question asked by a Committee member on why the letter should be considered now, the list was made public because the Sub-Committee deliberations were in the public domain. The SOS Coalition is writing in that sense. It is important to allow civil society to partner with the Committee in its oversight work. The Committee should go through the letter thoroughly. If the Chairperson and Ms Barnard are comfortable with the legal opinion on the women who are recommended, then the Committee does not have to entertain that matter any further. However, the issue about Mr Mohuba should perhaps be entertained as the Committee should not give the impression that it does not care about public interest and public views. The Committee should entertain the letter to be thorough.

Mr V Pambo (EFF) said that the issues and question surrounding Mr Mohuba have been raised before and have been entertained before. The Committee recommended Mr Mohuba with the knowledge of his court case. Entertaining these issues again looks like the Committee is re-interviewing Mr Mohuba. Ms Kohler Barnard’s question is not even a legal question. There is a judgment that states that there are prospects of Mr Mohuba winning his appeal. Asking these questions is unfair to the candidate and sets the Committee back. The Committee cannot revisit these issues under the guise of protecting public interests. Even after the questions have been entertained, here is the outcome. The letter assumes that it is only gender parity that was looked at when selecting candidates. The letter makes it appear that the DA is the only party that considered expertise. This is not true as half of the Committee members spoke about expertise throughout. This letter is disingenuous, rather suspect, and gives the DA a moral high ground that it was the only party that considered the expertise of candidates. The letter seems very suspicious and cooked to derail this process and target the people that it mentioned. The Committee should not allow this letter to derail it. The issues in the letter were responded to before this letter appeared before the Committee. The letter seems politically motivated and lacks merit. The letter would raise all the other positive things raised by other parties if it was a genuine letter. This is one Committee that stops its process to consider public opinion; however, this particular letter is rather suspect.

Mr Molala said that he is partially covered by Mr Pambo. He said that it must be on record that these issues have been raised and have been responded to on record. These issues must be attended to by the Committee. It is a two-way process. The issues have been entertained. They are being entertained now because the Committee does not want to appear as though it is ignoring the letter. Therefore, the Committee agrees that the same process that applied to other people whose names have been raised will apply to Ms Batyi and Mr Mohuba. The Committee unconsciously left three names at the bottom as reserves. If anything that affects the board appointments happens in the process, the Committee would have names on reserve and would not have to start the process from scratch. The Committee should proceed. The Committee should write back to the SOS coalition stating that their second letter has been considered but the response still remains as the first response. This is a matter of due diligence.

Dr Basopu proposed progress on this matter as the discussion of the letter has been exhausted. The Committee all understands that they are not making the appointments but are just making recommendations to the appointing authority. Ms Kohler Barnard is just asking what the situation will be should one of the recommended candidates not be available to be appointed into office. He requested clarity on this.

The Chairperson chose not to venture into the legal side of things. His understanding is that this question relates to when a person has already been appointed to the board. This matter can be entertained at that point. If does get to that point, it will create a vacancy. The vacancy will be dealt with and filled like other vacancies are dealt with. The Committee appreciates that the letter is a reaction to a Sub-Committee process. The Committee is not reopening the public participation process. It has listened to the concerns of the letter and given it justice. The report has been adopted and will be sent to the National Assembly as a report of the Committee. The Chairperson concluded this agenda item.

South African Postbank Limited Amendment Bill [B 22-2022]: Deliberations/finalisation
The Chairperson said that this item emanates from the Portfolio Committee that dealt with the clause-by-clause amendments and that there were amendments suggested during the public participation process. He mentioned that the State law advisors needed to work on those in creating the Portfolio Committee's proposed amendments (A list), which they will be taking the Committee through to move forward.

Alternative A list amendments: non-consequential
Ms Thiloshini Gangen, Parliamentary Legal Advisor, Constitutional and Legal Services Office, said that the Committee went through the written submissions at the last deliberations. The Department responded to those submissions. However, there was a submission the Department had agreed to on clause 4 but the proposal was omitted in the Committee deliberations. However, it was still prudent that the Committee was made aware of what these changes entailed. Most of the changes mainly included quotation marks, commas, semi-colons etc. She noted that many of the changes on the A list are technical or consequential amendments. Having gone through this proposal that was omitted during the deliberations – she was of the view that the following suggestion was rather problematic.

There was a suggestion to rephrase section 9(1)(i) in clause 4. However, the proposed amendment was broad and problematic. It refers to the Code of Banking Practice which is developed by a non-governmental organisation. It is so broad and covers so much that to add a clause like this would be opening a Pandora’s box. The Conduct of Financial Institutions (COFI) Bill is not yet included as legislation. We can only add legislation that is in our statute book. Parliament's Legal Services team feels that this proposed amendment that the Department agreed to, should not be included in the A list.

Portfolio Committee's proposed amendments (A list)
Ms Thiloshini Gangen took the Committee through the document.
Clause 1
Inserts the definition of ‘bank services’ which was not defined before even though the term is used in the Act. Definition: “banking services” means the services rendered in the course of the business of the bank as contemplated in the Banks Act”.
On page 2, in line 23, at the end of paragraph (d), to remove the word “and”.

Includes the definition of ‘financial services’ as it appears in the Financial Sector Regulation Act, 2017.
The word ‘services’ is in inserted in line 17 on page three.

There was also a technical amendment.

Clause 3
On page 3, from line 36, to omit paragraph (d) to substitute with the following
Inserts “and the Financial Sector Regulation Act, 2017. No. 9 of 2017” to last line of paragraph.

Clause 5
Omits paragraph (b) on page four and substitutes with a new sentence.
These are the amendments to the A list Chairperson thank you very much.

Discussion
Mr Molala said that he is comfortable with the proposed amendments. He requested clarity on the clause that Legal Services removed. What are the implications of said problematic clause? He proposed the Committee should adopt the amendments.

Ms Kohler Barnard said that clause 2 provides for the transfer of ownership but it looks like it pays lip service to the banking requirement. This is a move because the South African Post Office is crippled. Yet the Postbank also received a disclaimer from the Auditor-General. Who is going to fund this? The state does not have any money. This looks like a project with no substance.

On clause 3, since it has been established that the government has no money in place to ensure a viable bank, she fears that this is going to be disastrous to the fiscus. For the Committee to pass a bill with no proposed budget and going with the caveat that the bank already exists so it will not need anything – yet say that the bank is brand new in the same breath without proper costing. This is committing a cardinal sin in terms of legislation.

On clause five, the proposed automatic right of acceptance could and will lead to manipulation or collusion because appointments can be made through the back door. Any fiscus-related financial decisions should have the express consent of the Minister of Finance. She is relieved that decisions should be run concurrently with him but the decisions should be the Finance Minister's decisions. In an earlier meeting it was stated that once a bank is legislated, the legislation can be changed to hand the bank oversight over to the Standing Committee on Finance. However, legislation takes long to pass and the Committee will end up doing oversight on the Postbank.

On clause six, when it comes to dealing with board appointments and fiscus related matters, a Portfolio Committee must do oversight and affirm persons in board positions. Yet there is no oversight at all into those appointments. The Committee is looking at the possibility of another Zondo Commission. The Committee should protect itself and the country from this. Ministers should not have unilateral powers to make submissions. The board should have the exclusive right to appoint the Chief Executive Officer to avoid the situation where a Minister has full control over an entity.

Where is the oversight over remuneration packages? The lax way in which this is laid out is a financial catastrophe waiting to happen. Her questions about offices, staff, training still remain unanswered. The difference between the Postbank and a full bank are massive. This Committee is being instructed to go into this blindly. This is not the job the Committee is paid to do.

Legal team response
The Parliament Legal Advisor explained that clause 4 still exists in the Bill as introduced. There was nothing removed. This was a proposal that came from a submission which the Department had agreed to in its response to public comments. It was never agreed to by the Committee and it was not in the Bill. The submission proposal is to rephrase the section. The proposal wants to include things like ‘code of banking practice’ and ‘code of financial institutions’. The code of banking practice is a voluntary code. It is not legislation. It is broad and there is a plethora of banking codes. It would be difficult and silly to put in something like this because there are so many banking codes. Which code would we be talking about? It is a disaster to add it.

On the second reference to 'code of financial institutions’, she said that COFI is still a Bill and is not yet legislation. To include the COFI in legislation here is problematic. She does not think that the people that proposed the redrafting of the clause fully thought about the ramifications of having such a broad clause inserted. She repeated that the clause was never removed. Parliament Legal Services is saying that they do not agree with the proposal for these stated reasons.

Further discussion
Mr Molala said that Ms Kohler Barnard is correct in stating that she has raised before the issues she raised, but those were clarified in all instances. They were clarified in the Committee’s own meeting and again in the meeting with the Standing Committee on Finance. Mr Omega Shelembe from the Department clarified the issues raised by Ms Kohler Barnard. Is Ms Kohler Barnard deliberately delaying the Committee? The issues that she raises have been dealt with. It is only fair that the Committee allows the process to move forward. If Ms Barnard is not happy and feels her concerns have not been addressed, she can raise these in the National Assembly during the final process or write to the President when he is turning the Bill into an Act. He is appealing that new issues not be raised. The amendments have been done in the Committee’s presence. A few smaller issues were not raised before the Committee. The Committee has exhausted this Bill and needs to move towards the adoption of the Bill. This is not to say that Ms Kohler Barnard must be ignored but the issues she raised have been raised before and have been addressed.

The Chairperson said that the points that Ms Kohler Barnard has raised will be noted and some of them have been clarified. The Bill is before the Committee and it should move forward on the basis that the Committee confirms the proposed amendments as they were raised. The next step should be from Legal Services if any matter is pending as the Committee agrees to these amendments.

A legal team member explained that if the Committee adopts the A list, the next step is the Committee will receive the B Bill. Once the B Bill is with the Committee, Legal Services will go through it together with the Committee with a fine tooth comb. The B version will be adopted if the Committee is happy with it. The Content Advisor and Committee Secretary are aware of the process.

Ms Kohler Barnard requested that the Chairperson note the Democratic Alliance's absolute objection to proceeding with this Bill. She foresees this as a train coming down the track right at the Committee.

The Chairperson noted Ms Kohler Barnard’s objection and said that the next step is legal advice. He adjourned the meeting.