Electronic Communications & Transactions Bill: formal deliberations

Meeting report

COMMUNICATIONS PORTFOLIO COMMITTEE
31 May 2002
ELECTRONIC COMMUNICATIONS AND TRANSACTIONS BILL: FORMAL DELIBERATIONS
 

Electronic Communications and Transactions Bill [B8-2002]
Summary of Submissions
Proposed amendments to ECT Bill [B8A-02]
Proposed redraft Chapter 10 of the ECT Bill [prepared by Namespace, Uniforum and ISPA]
ANC redraft of Clause 63 (awaited; but see Appendix for version of Clause 63 as prepared for voting on 3 June)

SUMMARY
Chapter Ten was dealt with during this session. The following main concerns were raised:
- The Committee was in a unique position in that the previous owners of the .za domain name space were not only administering it without government intervention, but were doing so successfully.
- What the Bill did was to expropriate the .za Domain Name Authority.
- Namespace should be specifically included in the panel that would elect the Board of Directors for the Domain Name Authority.
- The Bill considered issues that would more appropriately have been decided by the Domain Name Authority (DNA) in the articles of association. Specifically a badly drafted Bill would result in the necessity of amending the Bill, while if left with the articles of association this would be unnecessary.
- The minister should not have the degree of power that he currently had over the DNA.
- The concept of "Bad Faith" should be clarified.

The following points were clarified:
- a Section 21 Company does not have shareholders, merely members since there is no profit in which to share.
- June was placed as the budget year-end for no definite reason.

It was agreed that:
- Clause 63 would be revisited by the Committee once it had been redrafted and included into the Bill.
- All the amendments would be circulated amongst the members.
- In general the ANC submission regarding Clause 63 would be accepted.
- Clause 60, 61(deletions), 62, 64, 65, 66(amendments), 67, 68, 69, 70, 71, 72 were accepted.
- Clause 73 would be dealt with on Monday.

MINUTES
Chapter 10
An ANC submission in respect of Clause 63 had been circulated and considered by the Committee.

The Chair asked for comments on the ANC submission.

Ms. Vos (IFP) began by stating the unique position that the Committee is in, where there is already an existing company that currently dealt with the domain space. She also mentioned that a representative of Namespace should be consulted in each phase of the project.

Mr Lekgoro (ANC) then spoke about the ANC proposition that the panel should not represent particular individuals or represent institutions. However they should be consulted in the process. Clause 63(2)(a) is what is the ANC submission. It was said that there was no intention to sideline people in the Namespace area.

Ms Smuts (DP) suggested that the minister in consultation with the registrar of Namespace should decide on the members of the panel (who in turn decide on the Board of Directors).

The Chair pointed out that there must be consultation when deciding on any issue.

Mr. Maziya (ANC) agreed that the panel must have credibility, and pointed out that Namespace is the first to be consulted when this process is embarked upon. According to him Namespace should not be specifically placed as part of the panel.

Mr. Pieterse (ANC) suggested the clause should read "the minister, after consultation with the registrar" so as to place the responsibility on the minister.

Ms Smuts disagreed by saying that the minister must decide with the registrar. She pointed out that the idea is that the government is expropriating the Namespace domain authority. She pointed out that something that was a private institution and working faultlessly is now being taken over by the government. She said that the registrar should have the biggest say in the question.

The Chair pointed out that the .za Domain Name Authority was not present. He said that the law must be crafted in such a way to identify the people. The law must be specific. When do we expect the minister to get the registrar?

Ms. Vos indicated that she was concerned about the fact that the .za Domain Name Authority was not included in consultations about the Bill. The very people that we are expropriating this from were not consulted. Ms Vos further asked why this committee could not appoint the panel?

An ANC member pointed out that an interview is not done by a committee. Therefore the Committee should not decide on the specific people who should compose the panel. She also indicated that the debate should be done on points.

Mr. Magashula was worried about the dilution of the powers of the minister, and stated that if there is a difference in point of view then that must happen.

The Chair wanted it to be emphasised that there are options to Chapter Ten. The Chair indicated that this issue is not important enough to become an issue of the National Assembly. The reason why Clause 61 (2-3) has been deleted is because it is recognised that the government cannot be a shareholder, and so deal with this problem on a day to day basis.

Ms Smuts proposed the words "the minister in consultation with the registrar's and/or their successors" in 63(a).

This proposal was supported by the IFP and not supported by the ANC.

The Chair turned to 63(b) after "republic" put "online news services".

Clause 63 (c) of the ANC submission this was accepted.

Clause 63 (d) of the ANC submission this was accepted.

Regarding Clause 63 (e) of the ANC submission Mr Brown from UNIFORUM indicated that it was not clear who they were inviting comments through?

Mr. Kellner indicated that there were a whole lot of things that needed to be inserted to make Clause 63 clearer.

Clause 63 (3) was considered and a proposal of, "The panel must, when recommending names to the minister take broad representivity of the population of the country into consideration" was put forward by Ms Smuts.

Mr. Magashula said that he did not see anything wrong with that.

Mr Kellner pointed out that some provision should be made for the appointment of the chairperson in Clause 63.

Mr. Maziya stated that the clause should remain the same. He was worried about the motivation of Ms Smuts.

Ms Vos said that while she appreciated the need for culture, but she wished to know what "culture" meant in the context of the Bill? Ms Vos was referring to 63 (3)(b) of the ANC submission.

Referring to 63(3)(b) of the ANC submission Ms Smuts suggested that the clause was acceptable, with the inclusion of "iii"- a legal person. This would result in eight people. Ms Smuts suggested that there should be one person from each sector of the industry.

Miss Magazi (ANC) didn't agree with the inclusion of the "internet community" and "legal community". She asked why the Committee needed a person from each sector of the community?

The Chair asked what the Internet Community would be?

Ms Smuts suggested that there should be nomination from the Internet Community.

Mr Pieterse said that to make special provisions for the "Internet community" seems to fly in the face of the intention of the amendment.

Mr Dowry (NNP) said that we must leave the constitution of the s21 company to its members.

Ms Smuts said that the Internet community are a recognisable community.

Namespace said that "internet user community" would be exactly that.

Mr. Magashula moved 63(1-3) is then moved "legal" to be added to 63(3) (b).

Ms Smuts asked why the Internet user community is excluded?

The Chair pointed out that there should be eight (academic includes "legal") sectors.

Clause 63 (4) was accepted.

Mr. Maziya pointed out that the term of office is not dealt with.

Mr. Kellner (State Law Advisor) pointed out that section 63 (6) dealt with the term of office of the chairperson.

The Chair indicated that 63 (1) (2) (3) (4) (5) are deleted and replaced with the ANC submission.

Ms Smuts indicated that this is not a government body (Domain Name Authority - DNA) and that they should elect a person from their own ranks.

Mr. Maziya indicated that while the minister drives the whole program the board elects the chairman. He moved that the minister should elect the chairman.

The Chair indicated that it was not acceptable to vote for yourself, and having eight members would be impractical as per Ms Smuts suggestion.

Mr Kellner said that he was worried about the stakeholders in Clause 63(3) (b).

Mr. Maziya indicated that it was not necessary to be prescriptive to the panel, and said that those are the constituencies/industries that should be represented. He pointed out that they are giving the panel an independent mind.

The Chair indicated that the Committee will return to this issue.

Ms Smuts wanted to know whether the provision comes into force - when does it happen? Is there a new s21 company?

Mr Kellner urged to continue using the existing Clause 60. That will define the date when the s21 company will begin.

The Chair turned to 63 (6) and asked for clarity.

Ms Smuts moved that "The articles of the Domain Name Association shall determine the tenure etc (see 63 (6) (a) (i-iii)" and suggested that this should be contained in the articles of the company and not in the Bill.

The Chair wanted to look at Clause 60 and see if the Bill still makes sense.

Mr. Magashula pointed out that there is no contradiction with 62 (2). 61(1) and 62 (2) talk about the same thing.

Mr Brown from UNIFORUM indicated that if the articles determined the tenure then they can be amended easily. If legislation does it then the legislation must be amended each time that it needs to be changed.

The Chair agreed that this was a point.

61 (a) was accepted.

The Chair indicated that we would now deal with the Namespace submissions. The Chair asked for submissions regarding Clause 65 from Namespace.

Mr Browne (Uniforum) indicated that 62 (4) and 62 (5) need to be linked. The proposal was that there would be changes to add a 62 (5) which would deal with the formation of a .co.za or .com.za for example.

65"e" of the Namespace document should be place in Clause 66.

65 "f and g" of the Namespace document are dealt with under Clause 63.

Ms Smuts suggested the inclusion of "which consent shall not be unreasonably withheld" to 62 (2). (Must correspond with Clause 66 of the Namespace document).

Mr Kellner indicated that a s21 company does not have shareholders since there is no profit, simply members. You must divorce the membership from the board of directors.

The Chair indicated that the articles of association could sort out the membership.

Namespace indicated that their submission suggested that membership should be restricted to people who were interested in the problem.

Mr Gore (DP) asked why directors needed to be permanent citizens of the Republic of South Africa?

Mr. Magashula said that if you were not a member you could not become a director.

Mr Kellner said that if the memorandum of articles of association and this Chapter takes precedence over the Companies Act then members need not be directors. In other words the Committee could make any law it chose.

Alan Barrett said that he was elected to the board of Namespace. Referring to Clause 67 he said that the .za domain name is there for the people of South Africa. It was the idea that the members should play a large role to elect the board. It is important that the board serves the interests of the members and not the minister.

The Chair indicated the Bill should not try to provide the full working of the domain name s21 company. The aim is clear - the Internet must belong to all and not to the few. The Chair indicated that the Committee has tried their best to accommodate industry perspectives.

Mr Kellner pointed out that in terms of Clause 60 that the responsibility of the .za domain space will be up to the minister and the DNA.

The Chair moved to the ANC submission which was approved.

Ms Smuts indicated that the nominations of "stakeholders" (in Clause 63 (3)(b)) are the members of the s21 company.

Regarding s64 (disqualification of directors) the Chair asked whether there is anything that ought to be amended?

Ms Smuts suggested that this would be covered by the articles of association.

Clause 64 was accepted with the abstaining of the DP.

The Chair moved to Clause 65 where he indicated that the intention is to have a Domain Name Authority that will serve the public and to be proactive to the public. In short the Domain Name Authority (DNA) will have to bring .za names to the people. The Chair emphasised that it did not want a body that is not accountable.

Mr Gore indicated that the Domain Name Authority could not provide universal access. The problem is of a different nature. Specifically it is a hardware problem, and not a problem stemming from difficulty in obtaining a domain name.

In spite of these submissions Clause 65 was passed.

Turning to 65 (e) of the Namespace document that should amendment should be included in s66 of the Bill as a Clause 66(b) i.e. an addition. Clause 66 was passed with the amendment.

Clause 67 was addressed by Ms Smuts who indicated that this question should be, once again, decided by the members of the company.

Clause 68 was addressed and, once again, Ms Smuts suggested that the deletion of 65-68. This was not carried.

Clause 69 was accepted with the DP opposition.

Clause 70 was accepted with the DP opposition.

Mr. Maziya asked for technical clarity as to the year end for the authority. He was concerned that this authority would not be able to be considered during the budget months.

The Chair indicated that the idea is that the s21 will be self-sustaining and so will not need a budget.

Mr. Maziya indicated that the Post Office was also supposed to be self-sustaining and it clearly was not. It was questioned why the financial year ended in June?

A representative of the Department of Communications indicated that June as a year end was an arbitrary point. He indicated that any other month would be acceptable. June was accepted by the Committee.

The Namespace people said that Clause 70 of the Namespace recommendation is meant to deal with replacing Clauses 72 and 68 of the Bill.

Mr. Maziya asked why there must be research and investigations into domain name policy?

The Chair indicated that there would be a vote on Chapter 10 once the amendments have been made.

Ms Smuts indicated that Clause 72 is unnecessary and would be inappropriate in a s21 company.

Mr. Kellner said that it is possible to make regulations, and it does not affect the validity of the clauses.

Namespace stated that the idea was not that the s21 body will be dictated to by the minister. They also indicated in addition that the DDG of Communications did not want to administer the .za domain name.

Turning to Clause 73 the Chair then turned to the concept of "bad faith" in the Namespace document. Namespace indicated that the concept of "bad faith" was indicated to consider the question of trademark disputes. The idea is that "bad faith" cyber-squatting must be proved for the domain name dispute to resolved by means of Alternative Dispute Resolution (ADR) (otherwise it would be determined by the courts).

The Chair asked for comparisons with the dispute resolution procedures of other countries so that clarity could be reached.

The Chair indicated that the only chapter that is outstanding is the definitions. The amendments will be distributed, and the amended document will be considered at the next meeting.

It was agreed that the Committee will meet on Monday 3 June 2002.

Appendix
As voted on: Clause 63 Board of Directors of Authority

63. (1) The Authority is managed and controlled by a Board of Directors consisting of eight ordinary members, and the chairperson.
(2) The process of appointment is the following:

(a) The Minister must appoint an independent selection panel consisting of five persons, who command public respect for their fair-mindedness, wisdom and understanding of issues concerning the Internet, culture, language, academia and business, the names of whom must be placed in a notice in the Gazette;

(b) the Minister must invite nominations for members of the Board from the public through newspapers which have general circulation throughout the Republic, on line news services, radio and by notice in the Gazette;

(c) nominations must be made to the panel established in terms of paragraph (a);

(d) the panel must recommend to the Minister names of persons to be appointed to the Board taking into account the sectors of stakeholders listed in subsection (3)(b);

(e) the Minister must appoint the members of the Board, and publish the names of those appointed in the Gazette;

(f) the Minister must appoint the Chairperson of the Board from among the names recommended by the panel.

(3) (a) The Board, when viewed collectively, must be broadly representative of the demographics of the country including, with regard to gender and disability.

(b) Sectors of stakeholders contemplated in subsection (2)(d) are-
(i) The existing Domain Name community;
(ii) Academic and legal sectors;
(iii) Technology and engineering sectors;
(iv) Labour;
(v) Business and the private sector;
(vi) Culture and language;
(vii) Public sector;
(viii) Internet user community.

(4) Directors must be persons who are committed to fairness, openness and accountability and to the objects of this Act.

(5) All directors serve in a part-time and non-executive capacity.

(6) Any vacancy on the Board must be filled in accordance with subsections (2) and (3).

[PMG Note: One change was the inclusion of this sub clause:
If the minister is not satisfied with the recommendation of the panel under sub (3), she may request the panel to make a new recommendation.]