Department of Communications, ICASA, SABC 2011 strategic plans: continuation of discussion with Deputy Minister

Meeting report

The Chairperson welcomed Mr Obed Bapela, Deputy Minister of Communications to the proceedings.

Subsequent to the briefings to the Committee during April 2011, the Committee met with the Department of Communications, the South African Broadcasting Corporation and the Independent Communications Authority on Friday, 20 May 2011 in Johannesburg to continue discussions on the strategic plans of the entities [This meeting was not monitored by the Parliamentary Monitoring Group].

Discussion on the Strategic Plan of the Department of Communication (DOC)
Ms W Newhoudt-Druchen (ANC) wanted to know how the proposed E-Skills Institute would be funded. She asked if funding for the Institute of Space and Software Application (ISSA) would be provided by the DOC or by the Department of Science and Technology. Clarity on the funding required was necessary as the relevant Department’s budget had to be approved in the near future. Members had observed young persons undergoing training during recent site visits and she wondered where the trainees would be deployed once their training was completed.

Dr Harold Wesso, Acting Director-General, DOC explained that the intention was to develop the E-Skills Institutes into centres of higher education. Currently, the program was incubated and funded by the DOC and provision was made in the Department’s budget. The DOC was developing academic networks involving local and international universities, colleges and Further Education and Training (FET) institutions. ISSA was the responsibility of a DOC directorate and involved both space technology and the development of software applications. The idea was to develop an ex-factory institution.

Ms Newhoudt-Druchen asked for an explanation of the budgetary link to e-skills training.

Dr Wesso explained that the DOC collaborated with universities to develop knowledge and production hubs, which would in future become fully-fledged faculties. The Department had found that a greater impact could be achieved if efforts were focused at the local or provincial rather than at the national level.

Mr N van den Berg (DA) observed that the organisational chart of the DOC indicated that a number of sections were involved in the development of communications infrastructure. He was aware that a great deal of research and development was taking place in the private sector. He asked if the Department made use of the research and development output of the communications sector.

Dr Wesso confirmed that there was a significant degree of engagement between the DOC and universities. The Minister had initiated round-table discussions with academic institutions. The DOC did not replicate the training provided by universities but participated in the development of the training programmes. The Department required additional capacity and policy directives to implement its mandate and the detailed strategic plans that were developed. Research and development projects were undertaken by universities instead of being outsourced. The universities received funding from Government and had the necessary expertise. The research and development conducted by the private sector were available as well. The DOC envisaged a more collaborative scenario in future.

Mr Bapela agreed that the strategy developed by the DOC served to guide the Ministry in the development of the communications policy. The Ministry was able to determine what was happening on the ground and could identify specific areas for development to the benefit of all. Collaboration required coordination and leadership by the DOC. For example, provinces were investing in infrastructure for broadband, radio frequency and digital terrestrial television (DTT) and it was important to know how the investment would be utilised in future. The DOC required the necessary high technology capacity to function at international level.

Mr Van den Berg asked if the Department was satisfied that the universities were willing and ready to contribute to South Africa’s success in the communications field.

Mr C Kekana (ANC) noted that the DOC complained of a shortage of skills in the country yet a black engineering organisation had reported that there was an over-supply of black engineers. Although foreign-owned companies invest in South Africa and brought in skills, it was imperative that the South African knowledge base was expanded. He noted that there was only one spectrum engineer in the country, who was trained overseas.

Ms F Muthambi (ANC) asked what progress had been made to transfer the list contracts referred to in the earlier briefings. She noted that the strategic plans included personnel numbers and the number of new appointments required but no deadline was provided.

Ms N Magazi (ANC) observed that the position of Director-General of the DOC was vacant. She wanted to know when the new Director-General would be appointed. She was of the opinion that the Director-General was responsible for determining the organisational structure of the Department.

Dr Wesso replied that the universities were very willing to engage with the Department and to contribute to Government programmes. The opportunity to implement ideas in addition to doing academic work was welcomed. South Africa was a participant in the global information, communication and technology (ICT) revolution but suffered from a lack of high-end skills in this field. Companies operating in the private sector reported that qualified students generally required additional training to bring their skill level up to the desired standard. Internationally, it remained a challenge to provide the skills required by the new kinds of jobs in the sector and to ensure that qualifications remained relevant. The E-Skills Institutes were developed to address the disparity where students obtained university qualifications but required further training before they could be employed.

Dr Wesso said that the DOC had found that competitors in the ICT industry collaborated and shared knowledge but the competitive advantage was in the application of knowledge. Spectrum engineering was a relatively new field and it was necessary to provide training in order to increase capacity. Spectrum specialists were available but there were no spectrum managers. With regard to ISSA, the DOC had to maintain the space testing equipment for as long as necessary. A verbal agreement with Denel was reached but rescinded by a subsequent Director-General. Discussions had been resumed. The DOC was developing an applications laboratory. It was necessary to align the Department to new industry demands and to streamline the organisation in accordance with the strategic plan. The organisational chart was amended accordingly. The process of designing the new organisation had been lengthy and intense and he trusted that the result would be acceptable to the incoming Director-General. The Department had commenced the process of staffing the revised organisation.

Ms Magazi was aware that the DOC was under-capacitated. She understood that a Director-General would be appointed by mid-May 2011. The person concerned would be held accountable for the organisation of the entity and she was critical that another person had performed the function.

Mr Bapela explained that the process of revising the Department’s organogram had involved the Minister, Deputy Minister and external consultants. The revised organisational chart was presented to the Committee but must still be presented to the Department of Public Service and Administration (DPSA) and the National Treasury as additional funding would be required. The process had not yet been finalised and would be presented to the Committee for final approval by the incoming Director-General. Final interviews were held on Friday, 20 May 2011 and the list of recommended candidates would be submitted to the Cabinet. The Minister of Communications would announce the appointment in due course.

Dr Wesso advised that the new Director-General would finalise the amended organisational chart but the process of transferring personnel to new positions had already commenced.

Ms Magazi asked for clarity n the relationship between the E-Skills Institutes and the Department of Higher Education (DHE). The DHE had already taken over the responsibility for the Sector Training and Education Authorities (SETA’s) from the Department of Labour and was responsible for integrating the universities, FET’s and other higher education institutions. She asked if the DHE would be responsible for the E-Skills Institutes in future and pointed out that that Department was currently formulating its strategic plans as well.

Dr Wesso replied that meetings had been held with the Minister and the Director-General of the DHE as both Departments collaborated on the development of the curricula and training programmes. The E-Skills Institutes occupied a dedicated space in the ICT sector and were focused on improving the level of e-skills in the country. Discussions on the establishment of a new SETA were under way and the intention was to eventually bring all aspects of ICT training under a single umbrella. The DOC dealt with the ICT industry and had to ensure that the necessary training and the required skills and jobs were delivered.

The Chairperson observed that further discussion on the E-Skills Institutes and ISSA would be necessary.

Ms T Ndabeni (ANC) expressed appreciation that the DOC had incorporated the concerns of the Committee in the strategic plans for the Department. The briefings had not been too technical and the oversight responsibility of the Committee was acknowledged. The strategic plan could be utilised by Members to assure the people that they would get the desired ICT services. The Department had to ensure that its internal structures were properly staffed and that personnel were engaged with in order to meet the mandate. Clear, effective leadership was necessary to address the poor coordination between the DOC and its parastatals. A robust programme of research and development was necessary to ensure that Government policy was effectively implemented.

The Chairperson thanked Dr Wesso for his contribution during his term of office as the Acting Director-General of the DOC.

Dr Wesso replied that he had enjoyed the interaction with the Committee and thanked his team for their support.

Discussion on Strategic Plan of Independent Communications Authority of South Africa (ICASA)
Ms Muthambi noted that ICASA currently paid a high rental for its premises in Sandton, Johannesburg. She asked for an explanation of the opportunity cost amounting to R18 million referred to in the presentation documents.

Ms S Tsebe (ANC) noted that ICASA had placed a moratorium on the filling of vacant posts and wanted to know how operations were affected by this decision.

Mr Themba Dlamini, Chief Executive Officer, ICASA recalled that the Committee had remarked on the high rental paid for the head office premises. The Committee had pointed out that an inordinate 60% of budget was spent on administrative expenditure and requested that the budget split was reviewed. ICASA had insufficient funds available to relocate its head office before the expiry of the current lease in October 2011. The Authority had agreed with the current landlord to remain in the premises until sufficient relocation funding was available. The amount of R18 million opportunity cost was determined by the Department of Public Works (DPW) for premises in the Sandton area. The matter was currently under discussion with the DPW. The moratorium on the filling of vacant positions did not apply to critical posts and the operations of the entity were therefore not affected.

The Chairperson requested that consideration was given to providing accessibility to the public at the new head office premises.

Ms Ndabeni said that ICASA needed to assert its authority in order to be effective as the regulatory authority.

Discussion on Strategic Plan of South African Broadcasting Corporation (SABC)
Mr Justice Ndaba, Human Resources and Strategy Executive, SABC introduced the delegates from the SABC. He advised that the Board and management of the SABC had stabilised and reaffirmed the Corporation’s commitment to meet its mandate. The SABC had been lauded for its coverage of the recent local government elections had had been voted the second most trusted source of information. The Committee’s remarks concerning gender and race composition were taken into consideration in the filling of four vacant executive positions. Audience numbers were improving and the results of reviews would be published in due course. The SABC had set tight deadlines for the completion of projects. The Committee had raised the issue of linking performance management to employment contracts.

Where applicable, footnotes had been added to the presentation document submitted to the Committee. An illustration of the organisational structure had been included in the updated document. Details were provided of the key performance indicators under each of the seven strategic pillars. Where appropriate, performance indicators were aligned to external requirements, for example the ICASA license conditions for radio and television broadcasts. External sources provided the television and radio audience ratings utilised to measure performance.

The organisational structure was based on the SABC operating model. A comparison was made between the new and previous operating models. Previously, the organisational structure was disjointed and inefficient, top-heavy and over-resourced. The new structure reduced the management headcount from 97 to 59.

The SABC had identified television and radio broadcasting and digital media as the three core businesses. Peripheral and support functions were identified, roles were clarified and operational policies were defined. The exercise had indicated where there were areas of conflict or overlap. A review of the executive structure was undertaken. Once the operational requirements were clear, the necessary resources were identified. The Corporation was now in a position to reconsider the renewal of employment contracts coming up for renewal and to negotiate retrenchments in the context of organisational requirements.

The SABC’s budget for the Medium Term Expenditure Framework (MTEF) period would be presented to the Committee on 9 June 2011. A saving of R121 million in staff expenditure was anticipated.

The Chairperson understood that the SABC Board had not yet approved the revised organisational structure. He wished to avoid undue speculation by SABC personnel.

Mr van den Berg observed that a new Chief Executive Officer (CEO) for the SABC had not yet been appointed. He asked if the Committee could regard the information provided as accurate as the new CEO might make changes.

Ms Magazi queried the relative position of editorial policy and marketing intelligence on the organisational chart. She noted that the number of personnel would be reduced, which was in conflict with the President’s objectives to create more jobs.

Mr Kekana wanted to know how the SABC contributed to the national priorities, for example if programmes that raised awareness of the national priorities were broadcast.

Ms Newhoudt-Druchen asked for further details of the target to increase the audience number to 16%. She added her congratulations on the local government election coverage provided, in particular the degree of access provided for persons with disability. The issue of making adequate provision for providing access to disabled persons had been ongoing since 1999. She asked if the promise to provide full access with Digital Terrestrial Television (DTT) merely raised the expectations of the disabled community.

Ms Muthambi asked for further information on how the SABC dealt with fixed term employment contracts. She noted that the target date for Board approval of the new organisational structure was the end of June 2011 and wanted to know when the matter would be dealt with. She asked why the review of policies required an entire year and why a breakdown of the policies up for review was not provided. She requested details of the provision for ad-hoc rewards to staff. Quarterly targets were not set for the collection of license fees and for sports programming.

Ms N Michael (DA) observed that the challenges of providing access for disabled persons were acknowledged but the only target set was the provision of DTT services. She objected to the reference to ‘constraints’, which was insulting to persons with disabilities. She requested a copy of the SABC’s editorial policy. Sentech required additional funding for the provision of universal access but no contingency plans were in place if the funding was not forthcoming. The resource strategy was based on increasing audience and advertising market share, which were not guaranteed. She asked if the SABC would require further bail-outs from the State if the desired increase did not materialise.

Ms Magazi remarked that the review of policy by the SABC and the DOC was a recurring theme. She asked if the SABC Board or the executive authority was responsible for the development and review of policy. She was of the opinion that the issue of transformation was addressed at policy level and should be driven by politicians. The SABC and DOC should merely implement policy.

Ms Tsebe said that the Members of the Committee found the template that was used for the key performance indicators difficult to understand. The indicators were under discussion for the third time and she requested that only the changes that had been made since earlier briefings were highlighted. Quarterly targets were not set for the skills audits.

Mr Ndaba replied that the Board was accountable for the organisation of the SABC. The CEO was required to comply with the Board’s decision, else submit alternative proposals for Board approval. The schematic illustration of the operational model did not indicate the level of the different functions and did not imply that one function was at a higher level than another. The briefing document included a list of the program offerings designed to support the State’s developmental objectives. Several programs promoted the job creation objective. The SABC formed partnerships with entities such as NEMISA that focused on job creation, participated in incubation programmes and provided assistance to the sector.

Mr Ndaba reiterated the SABC’s commitment to no forced retrenchments of staff. Instead, early retirement, up-skilling and re-skilling alternatives were considered. External audience rating sources indicated that the SABC’s current audience market share was 13%. The main competitor had an audience market share of 21%. The objective was to increase market share by 3% per annum. The SABC took the issue of providing access to the disabled community very seriously. Disabled access services were often funded from own resources. Services in addition to sign-language and services for the blind were included in programming. DTT included options for access by disabled persons. Meetings with DeafSA were held and the SABC was considering the input provided.

Mr Ndaba explained that personnel were employed on a permanent basis prior to 2005. The fixed term employment contracts expired at different times, for example new contracts with executive management personnel were for a period of five years. The Board was scheduled to consider the new organisational structure on 6 June 2011. The policies referred to in the presentation were organisational policy. An example was the policy on human resources, which had not been reviewed for four years and which impacted on the negotiations with unions on employee benefits. The SABC had decided to review all the operational policies in the light of the new operational model. He agreed to include quarterly targets for skills audits. The quarterly target for the collection of television license fees was 25% of the total fees due. He agreed to make the editorial policy available to the Committee.

Mr Ndaba advised that the SABC currently provided the funding required for universal access. The Corporation attempted to access additional funding for this programme. The installation of 100 new transmitters per annum was planned and budgeted for. The SABC had no intention of requesting another bail-out from the State. A bail-out would only be necessary if the SABC failed to implement its turnaround strategy, in which case the shortfall would amount to R1.5 billion. The Corporation’s financial position had improved to the extent that the loan repayment of R111 million to Nedbank would be made before the December 2011 due date. Executives participated in the formulation of operational policy but the policy was approved by the SABC Board.

Mr Bapela added that the SABC formulated its own operational policies but the Ministry was responsible for developing overall broadcasting policy. The White Paper on communication was twelve years old and had become outdated. Reviews of the White Paper and the SABC mandate were planned. The SABC had found that a number of jobs were duplicated but DTT offered a number of opportunities for employment. The multi-channel strategy required additional content, which provided further job opportunities. The provision of universal access also provided opportunities. The matter concerning the provision of funding to provide access for disabled persons was noted and he undertook to ensure that the necessary funding was made available. The accolades on the SABC’s election coverage and the Corporation’s performance during the election period had shown that a 24 hour news channel could be provided.

Ms Ndabeni asked who would be responsible for implementing the new organisational structure. She suggested that the Committee insisted on the attendance of SABC Board members at future appearances before the Committee. The presentation documents were in the public domain and it was necessary to ensure that the documents were clear and correct. Administrative matters must be addressed to avoid causing any delay to the Committee process. The SABC must ensure that all personnel were familiarised with the content of the documents.

Mr Kekana requested that the design of the presentation and the template were improved. He would prefer that more attention was paid to broadcast serious documentaries instead of lifestyle programs.

Ms Muthambi asked for the assurance that all legal requirements and the provisions of the Labour Relations Act had been met before the new organisational structure was approved by the Board. She asked if staff had been consulted during the process.

Mr Ndaba confirmed that staff had been consulted and had contributed to the process. The unions had been engaged and a framework agreement was signed. If necessary, a notice would be served in accordance with the Labour Relations Act. As the head of Strategy and of Human Resources, he was responsible for implementation.

Mr Hlaudi Motsoemela, Chief Operating Officer, SABC was responsible for stakeholder management, which included Parliament. He gave the assurance that the SABC could be trusted to implement the strategic plans presented to the Committee. Good progress was being made and a stable Board was in position. The function of the SABC was to educate and to inform and it was a fallacy that ‘good news stories didn’t sell’. The public was consulted on matters of editorial policy.

Mr Bapela acknowledged the critique of Members on the preparation of the briefing documents. The template used in producing the documents conformed to the requirements of the Money Bills and the Monitoring and Evaluation Department in the Office of the Presidency. He thanked the Members of the Committee and the presenters for their participation.

Ms Ndabeni thanked the SABC delegates and the Board for the input provided to improve the organisation.

The Chairperson advised that the Committee accepted the presentation submitted by the SABC. He suggested that the presentation documents were streamlined. He requested that the DOC and the entities the Department were responsible for compiled an over-all strategic plan, which would assist with identifying any areas of duplication.

The meeting was adjourned.