MDDA investigation: discussion; Department Quarter 3 performance: consideration; with Minister

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Communications and Digital Technologies

24 April 2018
Chairperson: Mr H Maxegwana (ANC)
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Meeting Summary

The Chairperson briefed the Committee on the processes concerning the removal of Mr Rubben Mohlaloga as Chairperson and Councillor of the Independent Communications Authority of South Africa (ICASA). The Office of the Speaker of Parliament received a letter from Mr Mohlaloga’s lawyers outlining Mr Mohlaloga has not been sentenced and expressed the sentence would be appealed. The matter should therefore not be on the agenda of Parliament until the criminal court proceedings are finalised. Some Members recommended the item be withdrawn from the agenda of the National Assembly until criminal proceedings are finalised to mitigate eminent legal risk. The opposition Members present stressed her opinion to proceed with the removal as the Committee previously decided and is in line with legal opinion received by the Committee. It was then suggested that the

National Assembly meeting should be held in abeyance to avoid any potential legal costs. Depending on the outcome of the meeting between the Committee and the Office of the Speaker the matter could then be put back on the agenda, if necessary, for the next National Assembly meeting. If the matter was rushed it would have legal implications for Parliament. Mr Mohlaloga should be given the opportunity to exercise his full democratic and constitutional rights to exhaust all available remedies.

The Chairperson read Section 8 (3) of the ICASA Act and emphasised that the Minister may suspend the Councillor from office at any time after the start of the process in the National Assembly and not after the start of the process of the Portfolio Committee on Communications. Mr Mohlaloga has not been suspended.

The Committee was then briefed by the Department of Communications (DoC), with the Minister of Communication, on the performance in Quarter Three of the 2017/18 financial year. The presentation covered targets planned for the quarter, achievements and non-achievements per programme of the Department. Challenges were also outlined progress made in key areas, financial information and expenditure.

The Committee asked if SENTEC had switched-on the signals for the community radio stations whose signals were switched-off, expenditure of Programme Four, planning for Digital Terrestrial Television, accountability instruments and transformation of the communications sector. Members were concerned about the performance of Programme Two and community radio broadcasters.

The research unit then presented to Members the terms of reference of the Committee’s investigation into the MDDA. Members were provided with the background to the investigation, issues identified in the audit findings of the entity by the Auditor-General of SA for the 2017/18 financial year and terms of reference of the investigation. Members would be able to provide input on these terms of reference to the Committee secretariat.

The Committee then decided to take its Draft Report on its Strategic Planning Workshop (April 2017) as read. Members could make inputs on the Draft Report to consider and adopt at the next meeting of the Committee.

Meeting report

The Chairperson welcomed the Minister of Communications, Ms Nomvula Mokonyane. Apologies were received from Mr J Selfe (DA, Alt) and Mr W Madisha (COPE). 

The Committee’s plan to visit the Media Development and Diversity Agency (MDDA) and Film and Publication Board (FPB) in Gauteng next week is confirmed.

Removal of ICASA Chairperson
The Chairperson briefed the Committee on processes leading to removal of Mr Rubben Mohlaloga as Chairperson and Councillor of the Independent Communications Authority of South Africa (ICASA). Over the past weeks, the Committee has deliberated on the issue of removing Mr Mohlaloga because of a case of fraud and money laundering he faced. Sentencing was scheduled for April 2018 but postponed to May 2018. The Office of the Speaker of Parliament received a letter from Mr Mohlaloga’s lawyers explaining Mr Mohlaloga has not been sentenced and expressed the sentence would be appealed so matter should not be on the agenda of Parliament until the criminal court proceedings are finalised.

The Chairperson and Deputy Speaker of Parliament, Mr L Tsenoli, subsequently, had a short discussion and are of the view that if the Office of the Speaker of Parliament does not respond to the letter within reasonable time, before the matter is on the National Assembly agenda, it is likely a court interdict will be sought by Mr Mohlaloga and his lawyers. The legal processes should be finalised, first, before a decision is made by Parliament on the issues raised by Mr Mohlaloga’s lawyers. The Committee needed to reflect on the matter to avoid any potential legal action. Members were being informed of the matter, from the onset, to prevent hearing about it first when the National Assembly deliberates on whether to remove the item from the agenda or not. In accordance with the processes of Parliament, when a motion is moved in the National Assembly it is reverted to the Committee for consideration.
 
Discussion
Mr M Kalako (ANC), considering recent correspondence from Mr Mohlaloga and his lawyers to appeal the criminal case, recommended the Committee proposes to the Office of the Speaker for the item to be withdrawn from the National Assembly agenda. The grounds for appeal could be on both the sentence and the conviction so until the criminal proceedings are finalised the matter should be removed to mitigate eminent legal risk. He requested copies of the letters be circulated to Members.

The Chairperson confirmed that the Committee Secretary will send the letter from Mr Mohlaloga’s lawyers including the prior letter from the Office of the Speaker to Mr Mohlaloga’s lawyers sent in February 2018.

Ms P Van Damme (DA) recalled that the Committee received legal opinion that advised if Mr Mohlaloga is found guilty he must be removed as Chairperson and Councillor of ICASA. Mr Mohlaloga’s intention to appeal, or not, should not be relevant. The Committee should continue to follow processes stipulated in the ICASA Act. The decision to remove Mr Mohlaloga should not be reconsidered because of the letter from his lawyers. If Mr Mohlaloga does not agree with Parliament’s decision to have him removed, he can appeal the decision accordingly. She strongly stressed her firm opinion to proceed with the removal, as previously decided upon by the Committee, based on strong legal opinion. 

The Chairperson read out to Members the letter from the Deputy Speaker, dated 8 February 2018, to Mr Mohlaloga and his lawyers. Responding to the letter received from Mr Mohlaloga, on 1 February 2018, it communicated that his letter had been referred to the Committee for its consideration. It further stipulated no decisions on removal of Mr Mohlaloga as Chairperson and Councillor of ICASA would be undertaken by Parliament before outcome of the appeal.  Subsequently, section 8 (3) (b) of the ICASA Act, which provides that the Minister must remove a Councillor from office upon adoption by the National Assembly of the resolution calling for that Councillor’s removal, does not arise. In closing, a request was made for Mr Mohlaloga to give confirmation when the case is placed or taken on appeal.

The Chairperson also read out the letter from Mr Mohlaloga and his lawyers. It confirmed contents of the letter from the Deputy Speaker which stated that Mr Mohlaloga will not be removed as Councillor and Chairperson of ICASA until the appeal process pertaining to the criminal matter was finalised. Notwithstanding, the letter from the Deputy Speaker,  Mr Mohlaloga’s has learnt , through the media, that the Committee recommended the National Assembly remove Mr Mohlaloga’s as Councillor and Chairperson of ICASA. An item on the National Assembly agenda, for 24 April 2018, was also discovered, on the parliamentary website, relating to consideration of the report by the Committee relating to the removal of Mr Mohlaloga as ICASA Chairperson and as a Councillor. The parliamentary agenda was also attached to the letter. Mr Mohlaloga’s lawyers requested an undertaking declaring all parliamentary processes relating to the removal of Mr Mohlaloga as ICASA Chairperson and Councillor be suspended until finalisation of the appeal. Failure to give such an undertaking will result in issuance of an urgent application for an interdict to remove the matter from the National Assembly agenda scheduled for 24 April 2018.   

Ms Van Damme asked for clarity on why the Deputy Speaker of Parliament was involved in the matter and why he communicated on behalf of the Committee. She pointed out that the Committee was not consulted on the decision taken and subsequently communicated to Mr Mohlaloga by the Office of the Speaker of Parliament, that he will not be removed. This new information changed her previous position and she proposed instead that a meeting be held with the Committee and the Office of the Speaker to clarify the matter. The Deputy Speaker’s letter compromised the position previously taken by the Committee to remove Mr Mohlaloga. The National Assembly meeting should be held in abeyance to avoid any potential legal costs. Depending on the outcome of the meeting between the Committee and the Office of the Speaker, the matter could then be put back on the agenda, if necessary, for the next National Assembly meeting. She also asked whether the Minister of Communications has suspended Mr Mohlaloga as undertaken by the Deputy Minister that it would be done within five days.

Adv B Bongo (ANC) aligned himself to Mr Kalako and Ms Van Damme’s recommendations. The meeting must be put in abeyance because of complexities of the legal issues. Proper consideration and certainty was required to uphold the law. If the matter was rushed it would have legal implications for Parliament. Mr Mohlaloga should be given opportunity to exercise his full democratic and constitutional rights to exhaust all available remedies.

Mr M Tseli (ANC) affirmed the decision that the meeting be kept in abeyance. The Committee took the correct decision when it agreed to have Mr Mohlaloga removed but considering new developments the item must be removed from the National Assembly agenda. Going forward consultations need to be held with all relevant persons to be able to make informed decisions.

Mr Kalako expressed his views that the suspension of Mr Mohlaloga is unlikely to be actioned given the letter from the Deputy Speaker. The Minister of Communications was also bound from acting on the Committee’s recommendation.

Mr N Xaba (ANC) suggested that the Office of the Speaker of Parliament to project a road map of the consultation processes so the Committee is updated on all matters. 

Ms Van Damme said that if there is going to be any consultations, Members of the Committee or the Chairperson needed to be present because the matter was originally addressed to the Committee.  As a representative of the Committee, the Chairperson must be included in the consultations.

Mr Tseli called for the complete removal of the matter from the National Assembly meeting agenda as it might complicate matters and expose Parliament to greater legal risk.

Ms Van Damme emphasised the position previously taken by the Committee to remove Mr Mohlaloga because of his fraud and money laundering convictions. The decision was based solely on legal advice that he should be removed upon a guilty conviction and not upon the outcome of any pending appeals. Mr Mohlaloga should not continue to serve as a Chairperson and Councillor of ICASA if found guilty in a criminal court. Consultations can be held to only discuss legal issues but Mr Mohlaloga should not be allowed to continue to lead the ICASA Council. She strongly disagrees with and cannot support a decision for Mr Mohlaloga to remain at ICASA.

Mr Tseli shared the belief that the ICASA Act is very clear. The Committee cannot force the Minister to suspend Mr Mohlaloga prematurely. He cautioned against any actions that would lead to legal litigation.

The Chairperson confirmed that the Committee had agreed the matter should be put in abeyance and to allow the consultation process between the Office of the Speaker and political party leaders to take course.  He gave assurance that going forward the Committee will be consulted. He clarified the matter can only be removed from the National Assembly agenda by a motion and then referred to the Committee.

The Chairperson read Section 8 (3) of the ICASA Act and emphasised that the Minister may suspend the Councillor from office at any time after the start of the process in the National Assembly and not after the start of the process of the Committee. Mr Mohlaloga has not been suspended.

The Chairperson concluded that the Committee resolved that the matter be removed from the National Assembly agenda for 24 April 2018 pending consultation processes between the Office of the Speaker and political party leaders.

Department of Communication Presentation on the 2017/18 Performance Report (Q3)
Minister’s overview

Minister Mokonyane submitted an apology for the absence of the Deputy Minister of Communications, Ms Pinky Kekana, who was on an official international trip as Secretary-General of the Pan-African Woman Organisation. The third quarter report consisted of commitments made since October 2017 to December 2017. There were 18 targets planned for the quarter – 14 were achieved while four were not achieved. Programme One contained seven out of the 14 achieved targets while Programme Two reflected challenges on achievements because of the prolonged process of legislation. Programmes Three and Four reflected achievement of all targets.

The Department of Communications had complied with the processes of the Auditor-General of SA (AGSA) in the same period.  

The challenges of community radio stations that defaulted to pay for signals had received attention from the Ministry of Communications, the Minister of Telecommunications and Postal Services (DTPS) as well as community broadcasting entities including the forum for community broadcasting. The matter was further investigated to assess capacity required to avoid these challenges as it reflects a weak capacity on the side of the Department for oversight of entities. There is a need to strengthen oversight capacity. An important turnaround strategy of the Department is not to re-invent the wheel but to prioritise areas of entity oversight, regulation and policy developments that were continuous challenges.

Minister Mokonyane also reported on progress made on the Audio-Visual and Digital Content Bill and on Media Transformation and Diversity. The Audio-Visual and Digital Content Bill was re-submitted to the economic cluster of Cabinet to respond to issues raised because of the Bill’s potential to contribute to inclusive growth and sustainable economic development. There were consultations on the discussion paper on Media Transformation and Diversity. Inputs received from consultations, so far, include transformation and inclusion of new participants into the sector and access to resources and capacity. The MDDA, FPB, and South African Broadcasting Corporation (SABC) are still to make inputs before its finalisation.

Broadcasting digital migration remains a key responsibility of the DoC. Progress made should be appreciated however things can be done differently. Initiatives from the private sector should also be appreciated and embraced. Interactions with the private sector are necessary to see where interventions from the sector are more affordable, accessible and easier to assist targeted communities. The Department achieved 78 percent of its target - the remaining 22 percent will not be rolled out in the same way as previously done. Relationships should be forged with the private sector to be able to do things in a smart, efficient and effective way and adapt to new technologies to make sure there is functionality moving forward.

Minister Mokonyane concluded that the Department remains committed to overarching communication policies and country-branding to improve and reposition South Africa as competitors and equal to others on the same level.

Ms Kedibone Phetla, DoC Director: Planning, Monitoring and Evaluation, went through the presentation on Quarter Three performance of the Department. In relation to matters arising from the Quarter Two presentation to the Committee, all requested documents by the Committee were submitted on 19 March 2018. The DoC set itself three strategic goals, namely, effective and efficient strategic leadership, governance and administration, a responsive communications policy regulatory environment and improved country branding and to ensure transformation in the communications sector.   

The Department had 18 targets for the Third Quarter. 14 targets were achieved while four targets were not achieved. The only programme that did not achieve any of its deliverables was Programme Two, Communications Policy, Research and Development. This put the DoC at 78% achievement overall for the Third Quarter.

Programme 1: Administration
The legislative requirement to submit the Human Resource Plan to the Department of Public Service and Administration (DPSA) and the 2016/17 annual training report to Public Service Sector Education and Training Authority (PSETA) was complied with along with the 2017/18 quarterly training reports to PSETA. A risk mitigation progress report for Quarter Two was complied highlighting the progress on mitigating identified departmental risks. A progress report on financial, compliance and performance audits against the annual operation plan was also compiled and approved by the Audit and Risk Committee.

Programme 2: Communications Policy, Research and Development
Engagements with the Department of Economic Development and DTPS on the White Paper on Audi-Visual and Digital Content was necessary to ensure awareness of the Bill and impact it is going to bring to the sector. It was important to have consultations with Cabinet and the Committee before opening it to public comment. Various stakeholders were consulted on the discussion document for Media Transformation and Diversity before commencement of the Charter process.

Programme 3: Industry and Capacity Development
16 Digital Migration awareness campaigns were carried out in the Free State, Eastern Cape and Gauteng. A report showing consumer access to digital broadcasting was compiled, outlining 151 944 house registrations and 84 186 set-up boxes (STB) distributed and installed. The DoC participated in the National Planning Work Group (NPWG) meeting in preparation for the World Radio Conference 2019 (WRC-19). It also participated in the Inter-Departmental Workshop on Intellectual Property Policy facilitated by the Department of Trade and Industry. During the period under review, the DoC tabled two position papers at the WIPO Broadcasting treaty and WRC-19.

Programme 4: Entity Oversight
In ensuring viability and sustainability of the Entities and improving their capacity to deliver, the Department processed three funding requests and funds were transferred. The Minister wrote to the Councillors of ICASA and provided a deadline for the submission of performance agreements. ICASA did not adhere to timeframes and the matter was escalated to the Committee. Accountability instruments from the other entities (MDDA, FPB, SABC, and BrandSA) were drafted but not signed during the period under review. Four forums were held with the DoC DG and entity CEO’s to discuss challenges identified by Company Secretary’s.  

Ms Dikeledi Thindisa, DoC Chief Financial Officer, took the Committee through the financial performance of the Department for the Third Quarter.  

The budget for Programme Three increased by the R10 million rollover approved by Cabinet. Programme Three stood at 60 percent expenditure and Programme Two at 32 percent because provincial consultation on the Audio-Visual and Digital Content Bill was not done due to delayed regulation processes. Programme Four stood at 47 percent expenditure but this should not be concerning because entities would be paid before the end of the financial year. the Administration Programme stood at 48 percent expenditure at the end of the Third Quarter.  

Compensation of employees’ expenditure stood at 41 percent because of delayed filling of vacant posts. Expenditure on Goods and Services was challenging at 70 percent – the DoC must ensure there is no over expenditure by year end. Two cars were bought for the Deputy Minister so the capital expenditure was at 98 percent. As per the Committee’s request at the last meeting, expenditure per economic classification per programme was also provided in the report. Members can now see budget details per programme.

As of quarter four, 47 percent of the budget had been spent.  The Department would make sure it adheres to the budget.

Discussion
Mr Xaba welcomed the presentation and sought some clarity on the expenditure of Programme Four - is the budget listed per areas of strength to improve entities as per allocation?

Ms Van Damme was concerned about the 0% performance on Programme Two. The Department’s core mandate is to develop communication policies. It was a big problem that policy drafting was not achieved. There is a lot of development in technology that needs to be legislated. More time needs to be spent on looking at innovative ways that the DoC can keep up with fast developments in the sector. One Audio-Visual policy is not enough.

Ms V Van Dyk (DA) asked if the discussion paper on Media Diversity and Transformation will be presented to the Committee along with the evaluation report on digital migration effectiveness. What is the outcome of communication with SENTEC about switching on the signal for defaulting community broadcasters? She requested further insight on planning around content for Digital Terrestrial Television (DTT). Will the Department be taking into consideration the cost effectiveness of community radio stations for the door-to-door campaign expenses?

Mr Tseli found the report unclear on the status of the signing of performance agreements by ICASA Councillors. When will the White Paper on Audio-Visual Content be submitted to Cabinet? When are the reports on public consultations for the Audio-Visual and Digital Content and Media Transformation and Diversity going to be submitted? When will the reports be presented to the Committee?

Mr Xaba wanted to know when a response can be expected on inputs submitted from stakeholders on Programme One, Administration. On Programme Four, had the Department considered including labour forums in meetings with the DG and CEOs of various entities?

Mr Tseli was concerned about accountability of instruments - the Committee cannot provide oversight without knowing the performance agreement with the entities. If an entity does not achieve targets what happens? When is the DTT deadline?

Adv Bongo complimented the presentation. His concern was on transformation of the communications sector - how would the industry be transformed to respond to social cohesion and address financial problems? What is the plan to radically transform the sector to respond to social cohesion and ills happening where there are five community radio stations broadcasting in one location?

The Chairperson sought more clarity on the issue of community radio broadcasters. How would it be ensured that there were not too many community radio stations in one place? How much did the Department owe SENTEC? How licenses are issued to community radio stations needs to be audited to take cognizance of specific locations. There is an allegation that some applications are sidelined, particularly those that applied a long time ago are not granted licenses but licenses are given to those that have recently applied. Licenses should be issued equally. Community broadcasters are very important to South African’s because they reach people in remote areas in their own home languages.

Responses
Minister Mokonyane responded that policies are not developed on a quarterly basis – there is overlap between the quarters and development is continuous. The work is ongoing so there is no target as to when a policy will be developed. The same applies to research work. Further policy and legislation are done per the Annual Performance Plan approved by Parliament and not as an immediate response to technological advancements.

Community radio stations whose signals were switched off were switched on again. The DoC, together with the forum on community broadcaster, was working on developing the sector and making it more financially viable and sustainable. The role of SENTEC is also important. ICASA and the MDDA were consulted on how to consolidate and improve functioning of community radio stations. The Committee would also be invited to participate in those consultations. It would be important, at some point, to present the status of community broadcasting in SA to track achievements and challenges. Processes towards switching on a new radio station is open to abuse and misuse and has potential to promote an informed citizenry. There are rules that are supposed to be complied with about the issuing of licences per location. Some areas have six community radio stations which creates problems with signals and broadcasting quality. This needs to be considered including the conditions of issuing licences to ensure they are viable and sustainable. Government support is always necessary. Print media to advertise posts is not the only option particularly when advertising local vacancies.

Digital migration will not meet the June 2019 deadline. Unless something drastic happened between today and 30 June 2018, this needs to be accepted. The DoC should build relationships with key players in the sector and allow an opportunity to create an enabling environment for others to participate.

The issue raised on consulting with labour forums is misplaced. The programme specifically involves entity oversight through meetings with the DG and heads of the entities and not broad consultations on everything and with everyone.

Mr T Thiti, acting DG of the DoC, responded to the issue of utilising community broadcasters for digital migration door-to-door campaigns - the undertaking that the communications strategy be more inclusive of community broadcasters is been highly considered. On the ICASA Councillor’s performance agreement, the matter will be presented to Parliament in the first quarter of the current financial year as per the ICASA Act. All Bills were targeted for the first quarter of the current financial year as well.  Many of the accountability instruments in Quarter Three were not yet in place however the Minister had signed and finalised all accountability instruments in the Fourth Quarter.  

Ms Thindisa responded to financial questions - allocations to entities were in accordance with the National Treasury framework. The reason expenditure was at 47 percent for entity oversight was because of monitoring mechanisms for entities to provide reports monthly before payment is transferred. Due to delays in submitting the reports there were delays in payment.

Investigation on the Media Development and Diversity Agency (MDDA)
Mr L Dibetso, Research Unit, presented the terms of reference for investigation into the MDDA. He provided background to the investigation that was due to a myriad of challenges the MDDA faced over the years. To date the entity does not have a permanent CEO and CFO. This resulted in weak governance and instability. Furthermore, there were other vacancies at the Agency which needed filling. The high vacancy rate impacted on the ability of the Agency to perform efficiently.

The AGSA identified the following issues, which formed part of its audit findings in the 2017/18 financial year:
-Performance information
-Procurement and contract management
-Management of irregular expenditure
-Misstatements on annual financial statements
-Senior management and Accounting Authority did not exercise adequate controls and oversight on performance information and financial information submitted to the AGSA

The Committee also raised concern over the former chairperson of the Board executing a managerial position role in the Agency. This was confirmed after the former board chairperson denied doing such at the Committee’s Strategic Planning Session in March 2017.

The terms of reference of the investigation are in line with Chapter 12, Rule 167 of the Rules of the National Assembly. The Committee resolved to institute an investigation into long-standing matters relating to governance, procurement and human resources at the MDDA. The Committee’s terms of reference were limited to considering the following:
-Financial status and sustainability of projects funded
-Governance and stability challenges
-Human resource-related matters
-Agency acting outside its delegation
-Implementation of investigation report, which contained findings against the former chairperson of the Board
-Nature of all irregular contracts awarded
-Management of irregular expenditure
-The former chairperson of the Board acting as CEO of the Agency
-Adherence to the MDDA Act and other governing prescripts
-Appointments of executives and suspension of management and executives
-Decision-making processes of the Board
-Alternative funding streams for the Agency

The Chairperson confirmed circulation of the document so that Members can go back and make further inputs on it. When visiting the MDDA the document with inputs will be considered and deliberated. The document with all inputs will be circulated amongst Members.   

Consideration and Adoption of the Draft Committee Strategic Planning Workshop Report
Mr M Maleka, Committee Content Advisor, presented the Draft Report on the Committee’s strategic planning workshop in April 2017.

Mr Tseli suggested that, given that the Report was received a long time ago, it be taken as read. Members with inputs to make must send them the secretariat to then be discussed at the next meeting of the Committee.

The Chairperson confirmed the position to take the document as read and that only a summary would be presented.  

Mr Maleka focused on the last part of Draft Report which spoke to the Committee’s strategic goals imperatives. The workshop enabled the Committee to engage with broader challenges faced by it. The Committee has four strategic outcomes oriented goals that are also aligned to Parliament’s strategic outcomes oriented goals. The Committee also has 12 indicators to support the strategic objectives. These are not all cast in stone and Members are still expected to make inputs.

The Chairperson concluded that the Committee will reflect on the Draft Report when it next meets.  

The meeting was adjourned.

 

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