COSATU Parliamentary Submission on the Broadcasting Bill [B94-98 ] Presented to the Portfolio Committee on Communications, 11 September 1998

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Contents

Introduction

COSATU's Approach to the Bill

Public Broadcasting Service

Restructuring of the SABC

The Charter of the Corporation

Corporate governance

Community Broadcasting

The Regulatory Framework

The Minister and the Regulator

The Minister's power and privatisation

The merger of the IBA and SATRA

Signal distribution and multi-channel distribution

Commercial Broadcasting

Skills Development

Other Issues

Cross-media ownership

Limits on foreign ownership

Local content

Elections

Conclusion

Annexure: Technical Amendments

Relating to Separation of Policy-Making and Regulatory Authority

Relating to the Commitment to Programming in all Languages

Retaining the Legal Status of the South African Broadcasting Corporation as an Independent Statutory Entity

Relating to the Board of the South African Broadcasting Corporation

Relating to the Funding and Financial Affairs of the South African Broadcasting Corporation

Relating to the Staffing of the South African Broadcasting Corporation

Relating to Community Broadcasting

Relating to Privatisation

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Introduction

The White Paper on Broadcasting Policy (the "White Paper") and the Broadcasting Bill (the "Bill") are important landmarks in the transformation of the broadcasting system. Until recently, the South African Broadcasting system functioned as one of the most politicised broadcasting systems in the world. The SABC was created to serve the interests of perpetuating apartheid oppression; and its services were devised along ethnic and racial, class, language, and geographic lines. Although new entrants came into the market in the 1980s, this did not result in transformation of the system. As noted in the White Paper, the hallmarks of this broadcasting system were political censorship and the dissemination of propaganda on all services. The broadcasting system also operates in the highly concentrated media industry, which makes it difficult for new entrants to establish themselves.

The enactment of the Independent Broadcasting Authority Act signaled a shift in broadcasting policy in South Africa. The IBA has played an important role in opening the airwaves, significantly to community radio stations. Further, the IBA recently issued a license for the first privately owned free-to-air television service. Although these reforms have changed the broadcasting landscape, there continue to be many inequalities in the broadcasting system. The most glaring inequality is the uneven penetration of television in urban areas, and between urban and rural areas. Ownership of television sets and VCRs is skewed in racial and regional terms. Some of the inequalities include:

• Inequality in access;
• Inequality in resource allocation;
• Inequality in language, cultural and educational programming;
• Lack of diversity and choice, in services and in programmes; and
• Lack of empowerment for historically disadvantaged communities (White Paper, p.12).

The terrain in which South African broadcasting is transformed has dramatically changed since the institutional frameworks were created on South Africa. Globalisation has shifted economic frameworks that govern activities of many countries. Countries are being forced to de-regulate and liberalise their economies ostensibly to facilitate ‘free trade’. In this context there is massive pressure on the state to withdraw from the economy and to slash the size of public institutions. Many sectors which were defined in the past as national services, characterised by state monopoly such as broadcasting are either being privatised or subjected to increasing competition. The government’s macro-economic strategy is imbued with these developments. The fiscal austerity stance adopted in GEAR has far reaching ramifications for broadcasting, especially the public broadcaster.

Against this background, COSATU regard the Bill and the White Paper in some areas as a watershed in the transformation of the broadcasting system, and we have serious concerns in others. We thank the portfolio committee for affording us the opportunity to participate in the public hearings. This presents an opportune moment to realign the broadcasting system in line with our new democratic dispensation. This submission will outline COSATU's broad approach to the Bill, the public broadcasting service, community broadcasting, commercial broadcasting service, signal distribution and multi-channel distribution, skill development, the role of the Minister and the Regulator, and other issues related to broadcasting. Proposed technical amendments are attached to the submission.





COSATU's Approach to the Bill

COSATU is supportive of the broad intentions of the Bill and the White Paper to reform the broadcasting system in order to allow for more participation by other stakeholders. In opening up the airwaves we need to be sensitive to the need to ensure that the public broadcaster is not undermined, as this will have undesirable effects. If the public broadcaster is not able to fulfil its public service mandate, broadcasting services will only be available to those who can afford to either pay subscriptions or currently enjoy access. In our view the broadcasting system should be guided by the following important principles:

• Universal access;
• Redress of past imbalances;
• Human resource development;
• Promotion of local production and content;
• Job creation;
• Promoting ownership and control by South Africans;

The objects outlined in section 2 of the IBA Act (Act 53 of 1993) still remain relevant and should continue to guide the broadcasting system. Further, we support the objects outlined in section 2 of the Bill, as they are consistent with the IBA Act and will ensure a democratic broadcasting system. The Constitution guarantees a number of fundamental rights, which should be taken into account in determining broadcasting policy and its regulation. In addition to the rights identified in the White Paper (p.14), we would add the right to access information. The broadcasting system is part of the information infrastructure, which serves to impart information to the society. It is therefore positioned to play a significant role in ensuring the right to access information and securing peoples basic communication right.

COSATU believes that the White Paper places an important emphasis on diversity of broadcasting services, which would result in more participation by a variety of stakeholders. We therefore, welcome and support the three tiers of broadcasting, namely public service, commercial and community broadcasting services. Both public service and community broadcasting operate on a non-commercial basis, in response to the need for universal access to broadcasting services. If they were driven solely by the profit motive, a large section of the community would be excluded from broadcasting services.

In addition, we recognise that these tiers of broadcasting service have different social and economic roles to play and if regulated carefully, should complement one another and cover the totality of broadcasting needs in society. As pointed out by the FXI in its submission "policy needs to ensure that it appreciates the different roles of these tiers: if it does not, the interest of some constituencies may override others." We therefore support the classification of broadcasting services (section 5 of the Bill) and the requirement for all broadcasting service to hold a license (section 4 of the Bill).

COSATU has a number of concerns with the process of developing the Bill. The fact that the Bill is prematurely tabled while the White Paper is being discussed, is cause for concern. Whilst we recognise the need for legislation, we however, do not believe this should be rushed. As a result we are forced to comment on both the White Paper and the Bill. In some respect the Bill fail to systematically implement directives contained in the White Paper as shall be outlined in the course of the submission.

Secondly, there was no consultation with COSATU. Neither COSATU nor CWU were invited to participate in the Stakeholder Committee. We view this exclusion as a matter of serious concern, as we have an interest in the future of broadcasting in South Africa.

Some of our concerns revolve around the proposed restructuring of the SABC, the merger of the IBA and SATRA, and the community broadcasting services. Specifically, the NFA process has been marginalised in the restructuring of the SABC. These will be raised in the relevant section in this submission. Secondly, were it not for the intervention of the portfolio committee, the incorporatisation of the SABC would have proceeded outside of the scope of the proposed legislation and policy. These concerns raise important principles regarding public participation and should be noted by the portfolio committee.





Public Broadcasting Service

Restructuring of the SABC

COSATU believes a strong public broadcasting service is central to fulfillment of the public mandate. The public service broadcaster should in our view be primarily responsible for rolling out services to previously disadvantaged communities. The infrastructure of the public broadcaster should be used to guarantee universal access – the availability of broadcasting services to all citizens, and to expand access to marginalised communities. This should be the strategic objective of the public broadcaster, as we cannot rely on the commercial broadcasters to achieve universal access. More importantly it is only possible to ensure that public mandate is contained in the programme content of public broadcaster compared to the content of the commercial broadcasting.

In order for the public broadcaster to be able to fulfil its public mandate there should be greater commitment from government to allocate resources. The fiscus should be the main source of funding for the public broadcaster. In this vein, we support the IBA’s recommendation for triennial funding for the SABC to allow it to fulfil it public service obligations. This will create certainty and secure public service broadcasting against the private sector.

The commercialisation model proposed for the SABC is based on the notion that the corporation should become self-sufficient whilst funding from the fiscus is gradually decreased. This however, is not backed up by a detailed study on what the impact of dividing the SABC into commercial and public services arms will be. It is not clear what will be the extent of cross-subsidisation, what the impact of restricting advertising on the PBS service will be and how potential duplication of corporate services will be avoided.

There is no guarantee that the SABC will be self-sufficient without appropriate support from the state. This is compounded by the fact that advertising revenue would decline as more services would compete for such revenue. This would render subsidization from the commercial arm to the public service arm ineffective. The withdrawal or gradual erosion of state funding for the public broadcaster may lead to ‘cherry-picking’, resulting in the broadcaster focusing on commercially viable activities rather than implementing its public service mandate. This will further place the broadcasting services further away from the reach of those who currently lack them.

There is no clarity which four radio stations and the television channel will form part of the commercial arm of the SABC. In addition, no process is outlined to identify such service. Government needs to spell out which television and radio station will fall under the commercial arm of the SABC.

COSATU does not support the incorporation of the SABC in terms of the Companies Act as proposed in section 7 of the Bill. This proposal incrementally introduces commercial principles and activities such as a corporate shareholding management structure and an increasingly private sector reliant programming policy. Whilst the Bill purport to opt for corporatisation in the legal form of the Companies Act, there are contradictory elements in the proposed legislation, for example the SABC needs Ministerial approval to acquire land and borrow money.

Rather than legislating in this contradictory fashion, it would be more preferable for an inquiry into the most appropriate legal form for the SABC informed by the vision of a transformed public broadcasting service, serving the needs of all South Africans. It is not clear to us what is wrong with the current legal form of the entity. Further, the split of the SABC into a public broadcasting and a commercial broadcasting service does not require the legal form of the Companies Act.

In order to ensure that the commercial arm does not have unfair competitive advantage in relation to other commercial broadcasters, it must operate in a self-sufficient manner without public support. The Regulator should then check that it does not receive a subsidy from the state. This however, does not mean that the commercial arm cannot subsidize the public broadcasting arm. While the inquiry is taking place, the current status of the SABC should be retained. The proposed inquiry should be investigate the following:

1. the funding base for the public broadcast service,
2. the mechanism for cross-subsidization from the commercial to the public service arm of the SABC, and
3. the impact of restricting advertising on the public broadcaster. (1)

The results of the inquiry should be used to determine the appropriate legal form for the SABC. SABC restructuring should also be in line with the NFA process.

Preferably, the cross-subsidization model should be internal rather than left to the Minister to determine. The Bill requires the corporation to pay dividends to the shareholder, and the Minister has the discretion to allocate to the SABC on the basis of recommendations of the SABC Board. The surplus will be paid to the National Revenue Fund. In terms of section 11(d) the Minister should approve subsidisation from the commercial to the public broadcasting service on the recommendation of the SABC Board. This model creates instability, as there is no guarantee that money received from the corporation will be ploughed back into the SABC. There is a possibility that such moneys can be used to pay the national debt (for instance, as it happened with the proceeds of the sale of the other radio stations), rather than being reinvested in the corporation.

Having said this, we note with concern the statement in the White Paper (p.20) that "separation will a be a precursor to a later, more complete restructuring of the SABC operational activities, which will review the scope and size of SABC commercial activities and investigate the possible privatisation of, or the introduction of private equity to, the SABC’s commercial services." The privatisation of commercial services will make cross-subsidization a distant reality, and in the light of government withdrawal in funding the SABC, create momentum for privatisation of the public broadcasting service.

The Charter of the Corporation

COSATU welcomes and supports the inclusion of the charter for the corporation in the Bill. The Charter will play a significant role by clarifying the mandate and duty of the SABC, and allow for monitoring to evaluate whether the corporation fulfill its mandate. Further, we welcome and support the objectives of the corporation outlined in section 8 of the Bill and the responsibilities outlined for the public broadcasting service as outlined in section 10 of the Bill.

Although the commercial arm will be regulated in terms of the framework for commercial broadcasting, we believe that it should be brought under the purview of the Charter. As such, the commercial arm needs to be guided by the overall vision of the public broadcasting service. Section 11(b) is important in this regard. (2)

As noted above, the SABC’s financial independence is curtailed in the Bill, particularly by section 20. In terms of this section the corporation may not borrow money without prior written approval of the Minister and the Minister of Finance. In addition, the SABC need the approval of the Minister in terms of section 21 to acquire land in respect of transmission and reception facilities. This restriction appears to us to be too stringent, as a public corporation the SABC should have to account like all other public corporations. We believe that these provisions need to be relaxed. First, the SABC should be able to acquire land in pursuant of its objectives. However, it must seek Ministerial approval in cases of land expropriation as provided for in section 15 of the Broadcasting Act (Act No.73 of 1976, as amended. Secondly, a borrowing ceiling can be set, beyond which ministerial approval can be required.

Corporate governance

COSATU welcomes the fact that the Bill contains appointment procedures of the SABC Board. However, the current procedure is too broad and subject to varying interpretations. For instance, the provision such as ‘participation by the public in the nomination process’ is too broad and open to varying interpretations. The appointment procedure should be spelt out in more detail including the grounds for disqualifying candidates.

Further, we welcome the criteria outlined in section 13(1)(a) as it will result in a representative board (3). This is an important victory to COSATU as we have campaigned for a representative board for the SABC. There should be worker rerpresentation on the Board. Such a representative will represent the interest of SABC employees and it is consistent with the principle of worker participation in the governance of the organisation. This is distinct from the person who has expertise and knowledge of labour issues as provided for in the Bill.

There is a need for clarity as to when the new board will be appointed. Section 13(6) state that members of the Board appointed immediately before vacating the transfer date will retain their appointments with all existing benefits. This can be interpreted to mean that the new board will be appointed as and when the incumbent’s period of service has expired. Alternatively, it may mean that parliament will only fill vacancies in the current board to ensure that it is in line with the new Act. The Board as constituted in terms of the Broadcasting Act of 1976 should comprise 12 to 16 members. Section 13 (6) would therefore create supernumeraries in the Board by conflating the two legislative frameworks. Our preference is for the Board to be reconstituted and current members can be re-nominated if they so desire.

We wish to raise two issues relating to the Executive Members of the board. First, we believe that the non-executive members of the Board should appoint them. Secondly, their term of office needs to be clarified. Since the Chief Executive Office, the Chief Operations Officer and the Financial Director are executive members of the board, it would seem that their term of office is equivalent to the term of the board. This creates unnecessary confusion and we propose that policy indicate whether they are appointed on fixed term contract or appointed on a permanent basis.

The Bill does not outline the functions of the Board. This should be corrected and the Bill should outline the Board’s functions. This should include protecting the independence of the SABC. COSATU believes that the independence (including editorial independence) of the SABC should be explicitly guaranteed in the charter. We must avoid diluting the independence of the SABC, and the credibility of the institution should be secured in legislation.





Community Broadcasting

Our starting point is that the frequency is a limited public resource, which must be distributed equitably between urban and rural areas and ensure coverage of a broad range of community interests. Secondly, it is imperative to ensure that commercial broadcasters do not operate under the guise of community broadcasting. As argued in the White Paper the community sector offers considerable prospects for community empowerment and nation building. The community sector can further complement the public broadcasting service and reach out to areas where broadcasting services are non-existent. Further, we support the White Paper when it argues that community broadcasting must represent all the people in the community in ownership, control and decision making.

Having said this, we note the proposal to move towards geographically founded community broadcasting. However, we believe that an inquiry should be held to investigate the future of community of interest licenses. Otherwise, we run the risk of curtailing media diversity by prematurely shifting towards geographically founded licenses without ascertaining the implications for community of interest licenses. This should not be construed to mean that COSATU believes that there is a concerted campaign to get rid of community of interest licenses as argued by other groups.

An alternative route could be to retain this category of license and develop a national frequency plan with targets for both geographically founded and community of interest licenses. Within the national plan, targets could be set for both forms of licenses and the authority can prioritise according to available frequencies. This plan should be reviewed from time to time. The terms of the inquiry contemplated in section 29(9) should be amended to allow for an investigation into the future of community of interest licenses rather than a transition towards geographically founded licenses.

COSATU supports the call for the establishment of the statutory Media Development Agency (MDA). This structure would contribute significantly to promoting media diversity especially through its support for community broadcasting. Most importantly, the MDA will serve as a conduit for capital injections to community broadcasters, who are currently facing severe cost constraints. It will also provide training to this tier of broadcasting and thus secure their viability and sustainability. Whereas the White Paper envisaged an equivalent institution called the Community Development Trust, the Bill is silent on this issue. This should be corrected by accordingly amending the Bill to establish the MDA. (4)

The Bill in terms of section 29(7), limits community broadcaster access to national advertising, a concept which itself is unclear. This provision is unnecessarily prohibitive and should be changed. Whilst we understand the need to protect the identity of community broadcasting, restricting access to national advertising may have the undesirable effect of denying this tier an important revenue source.

The restriction placed on the community sector to free-to-air in terms of section 29(1) should also be relaxed. We believe that the sector should be able to explore various distribution technologies including satellite distribution networks. Finally, COSATU supports the enquiry into community television as contemplated in section 29(10) of the Bill.





The Regulatory Framework

The Minister and the Regulator

The White Paper set out to clarify the roles of the Minister, the Regulator and Parliament. This is in response to the argument that the IBA Act merged policy formulation and regulation into a single structure. COSATU agrees that the Minster should bear responsibility for policy formulation as set out in section 3(2) of the Bill, which states that the Minister is ultimately responsible to develop policy that is required from time to time. However, both the White Paper and the Bill have further confused and fudged the role of the IBA and Minister.

There is confusion in both the Bill and the White Paper on where policy stops and regulation starts. For instance, the IBA is given the mandate to inquire of policy matters such as local content, cross media ownership and foreign ownership. On the other hand the Minister is given the power to issue regulations in respect of any matter required to be prescribed by the Minister to achieve the objectives this Bill (in terms of section 37(1). Against this background recommend deleting section 37 and amending section 3(2) to give the Minister the power to issue broad policy directives consistent with the section 2 of the Bill.

The Minister’s power and privatisation

The Bill provides that the Minister will be granted power to determine all matters relating to privatisation of government broadcasting enterprises in terms of clause 13A(a), which amend the IBA Act. The intention is to shift the responsibility from the Regulator to the Minister. COSATU support the amendment to give the Minister the powers to deal with state asset restructuring rather than leaving it to the IBA.

However, we have a problem with the amendment as it currently stands. The amendment suggests that state asset-restructuring take the form of privatisation. While restructuring of state asset may take place, privatisation is not the only option. The Bill is totally silent on the National Framework Agreement and the role of parliament in state asset restructuring. While the Minister is given powers around state asset restructuring, we would argue that state asset restructuring should not be left to regulation but should be in the form of legislation. Secondly, it should be subject to public scrutiny. State broadcasting enterprises are public assets and forms part of the national heritage.

Section 195 of the Constitution, which applies to all governmental bodies, direct them to operate in an accountable and transparent manner. Therefore any state asset restructuring should be subject to public scrutiny and within nationally agreed frameworks.

The merger of the IBA and SATRA

In principle we agree with the logic informing the formation of a single regulatory authority. However, we have concerns with the way this is being implemented and that this needs to be carefully managed. The White Paper (p.45) promised that legislation will be tabled in the course of the 1998 parliamentary session and the new regulatory body will commence operations in the 1999 / 2000 financial year. We are disappointed that such legislation has not been tabled to date. The speculation around the process fueled by this omission is compounded by the fact that the merger of the operational aspects of the two bodies is already taking place outside of a clearly stipulated framework.

The timeframes set by the Minister to complete this exercise are short, and secondly there has not been proper consultation with the IBA about this process. The issue of convergence is quite a complex phenomenon and to rush the process through without weighing the impact of digitisation on job security is a matter of concern. More broadly, no detailed study has yet been carried out to investigate the savings that will accrue from the merger.

The complex question is the fact that the IBA and SATRA are two qualitatively distinct bodies created through different founding legislation. While the logic of integration is accepted, there is a need for a legislative framework, which is sensitive to the dynamics of the two components that will form a merged authority. Further, there is a need for a study to evaluate the implication of merger and how authority will look like after merger. Part of the study needs to look at the job losses that may result from the merger process.





Signal distribution and multi-channel distribution

COSATU supports the broad vision for signal distribution outlined in the White Paper and sections 30 - 31 of the Bill. Increasing signal distribution network to cover 80% of the population compared to the current 60% is beneficial to the public. Since this will have cost implications for the public broadcaster, there is a need for fiscal support to facilitate implementation of this objective

Further, government need not be a neutral shareholder but should support the common carrier in whatever way possible. Therefore, the government should clarify the type of financial assistance, or infrastructural development plans it will provide to ensure universal access/service. The opening of the market to competition should not result in the state owned enterprise losing as a result. This will require innovation on the part of the enterprise as well as appropriate support from the state.

There should be proper consultation and discussion on the restructuring of Sentech. The White Paper (p.30) identifies three options for restructuring Sentech, namely retention of the status quo, partnerships and privatisation.

We note the proposals in both the White Paper and the Bill in relation to multi-channel distributors. We concur with the White Paper that there is a need for regulatory framework to be further developed on digital convergence and multi-media. We therefore support the public inquiry to be undertaken by the Authority.

Digital convergence and multi-media technology would have a dramatic impact on job security. Secondly we need to ensure that that this form of technology does not erode universal access. Thirdly, the impact on television broadcasters needs to be taken into account. Digitisation removes the organisational barrier between broadcasting, communication and information, and would require repositioning these services.





Commercial Broadcasting

COSATU accepts the necessity of the category of commercial broadcasting services, provided that proper support should be provided to the public broadcaster. This opens the broadcasting sector by allowing for participation of a range of service providers. It is important as the Bill does to bring the private sector under the ambit of the regulatory framework. This will help prevent the proliferation of fly-by-night commercial broadcasters. The mandate given the IBA to investigate the feasibility of introducing a second subscription service as well as regional television is important in this regard.





Skills Development

Notwithstanding the provisions of section 36 of the Bill, we believe that compliance with the Skills Bill should be expedited. This includes setting up a Sector Education Authority (SETA) and contributing 1% of payroll to fund skills development. The SETA is important, as it will cover both the public and private sector. We concur with the White Paper that human resource development strategy for the broadcasting sector must be viewed holistically in terms of qualification standards, skills development, teaching, interrelationship with complementary sectors and the funding of the training system.

The second aspect of education and training relates to provision of education and training programmes by all broadcasters. COSATU supports the White Paper’s conceptual framework regarding education programmes including the role of different broadcasters, the objectives of human resource development, the investigation of a dedicated channel for education and a regulatory framework for regulation of educational broadcasting.





Other issues

Cross-media ownership

COSATU in principle supports the White Paper (p.40) that cross-media ownership should be limited to ensure that there is an equitable share of voice across all print and electronic media in South Africa. Further, we concur with the argument that the principle of deemed control should apply. According to the White Paper, a person shall be regarded as being in control of, or being in a position to exercise control over a company if he holds shares exceeding 15% or has other financial interests therein equal to at least 15% of its net assets. The IBA should expedite the process of developing formal regulations on cross-media ownership. Further public discussion is needed to determine what constitute the proper ceiling.

Limits on foreign ownership

We note that the IBA is to undertake an investigation on this and to report on what the appropriate level of foreign ownership should be. Government’s stated intention is to raise the current ceiling of 20% in order to facilitate investment. The White Paper fails to provide timeframes for this to happen. It is urgent that this matter is investigated and resolved as it will have an impact on new entrants in the market. We support the general principle that South Africans should be in control of broadcasting, and that investment in the sector should be encouraged.

Local content

We welcome the establishment of the South African Broadcast Production Advisory Body in terms of section 35 of the Bill and the White Paper. We believe that this body will play a significant role in promoting local content production. The White Paper envisaged that the body would have representation from all broadcasting stakeholders. The Bill should expressly state the manner in which the body will be composed. Section 35(2) requires that the Minister consult with the body on amongst its composition. How can the Minister consult with a non-existing body? This omission should be corrected by stipulating the composition of the advisory body.

Further, we welcome the directive to the IBA to draw a plan for local content carriage by broadcasters – for all South African broadcasters to reach a predominant local content in all genres within a target period of 10 years. The IBA should be required to draft a proposal on the level of local content requirement to be imposed on broadcaster and submit this to a public process for discussion. The result of this discussion should then be used to develop the plan.

Elections

The forthcoming elections require an independent body to monitor the media along the lines of the Independent Media Commission established prior to the 1994 elections. The IBA should be required to carry this function as it falls within its scope of activity.





Conclusion

While we support the objective of the Bill and the White Paper to transform the broadcasting system, we have underlined certain areas that need to be improved and in some cases changed. This should not obscure many areas in which we are in agreement with the Bill and the White Paper. The proposals contained in this submission seek to enhance the policy and legislative framework for broadcasting and hope that they will be taken on board. We are available to discuss with the committee any issue raised in our submission. We are proposing amendment to the Bill in the following areas:

• Separation of policy-making and regulation;
• Commitment to programming in all languages;
• Legal status of the SABC as an independent statutory entity;
• The board of the SABC, including appointment procedure,
• Funding and financial affairs of the SABC;
• Staffing of the SABC;
• Community Broadcasting; and
• Minister’s power with regard to privatisation.

Again, we thank the portfolio committee for giving us the opportunity to participate in the public hearings. We commend the Minister and the Department for developing the Bill and the White Paper.




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Annexure: Technical Amendments





COSATU’S PROPOSED AMENDMENTS TO THE BROADCASTING BILL

Relating to Separation of Policy-Making and Regulatory Authority

Item	Section	Suggested Amendment	Comment
1.	3	Replace subsection (2) with – (2) Subject to the policy and objectives announced in this Act, the Independent Broadcasting Authority Act, the Minister is responsible to develop broad national policy for the South African broadcasting system.	Subsection (2) of the tabled bill appears to allow the Minister to make day-to-day policy decisions. The Minister should make broad policy decisions and leave it to the IBA to implement that policy as necessary from time-to-time.
2.	37	Delete Section 37	Nothing in the act is expressly required to be prescribed by the Minister. Therefore, it is not clear why the Minister needs to be granted regulatory powers. Rather, policy should be made by the Minister and regulations should be made by the IBA.

Relating to the Commitment to Programming in all Languages

Item	Section	Suggested Amendment	Comment
1.	3	Omit the words "as circumstances permit" in subsection (6), so that the subsection reads – (6) A range of programming in the Republic’s official languages must be extended to all South Africans.	This section establishes the requirements for the broadcasting system as a whole—including the public noncommercial, public commercial, private commercial, and community broadcasting services. The tabled bill provides an option to neglect programming in some languages; that option is removed by the amendment.
2.	10	Omit the words "as circumstances permit" in subsection (1)(a), so that the subsection provides that the SABC must – (a) strive to make services available to South Africans in all the official languages.	This section assigns responsibilities to the SABC. The obligation to seek to make services available in all languages should not be diluted; the amendment corrects this.

Retaining the Legal Status of the South African Broadcasting Corporation as an Independent Statutory Entity

Item	Section	Suggested Amendment	Comment
1.	6	Omit subsections 6(2) and 6(3), renumber 6(1) as 6(2), and insert new language so that the section reads as follows – (1) The South African Broadcasting Corporation established in terms of the Broadcasting Act of 1936 (Act No. 22 of 1936) and continued in terms of the Broadcasting Act of 1976 (Act No. 73 of 1976) shall, notwithstanding the repeal of those Acts, continue to exist and to be a juristic person. (2) The Corporation is governed by the Charter. (3) The Corporation shall function independently and separately from any organ of government or its administration or any other person directly or indirectly representing the interests of such entity. (4) The provisions of subsection (3) shall not be construed as preventing – the enactment of the Charter in this Act; the provision of financial support to the Corporation including the regulation of any matter relating to the liability of listeners, viewers and subscribers to be licensed and to pay licence fees and subscriptions; the determination by or under the authority of Parliament of the remuneration of board members of the Corporation and, subject to the provisions of this Act, of other terms and conditions of service of board members; the reservation of the right of Parliament to authorise or prohibit the acquisition or establishment of any studio or broadcasting apparatus outside the Republic or the broadcasting by the Corporation of programmes intended for reception outside the Republic; the control of the borrowing or investment of funds by the Corporation and auditing of its books of account; the requirement of the Corporation to furnish reports on its activities to Parliament, the Minister, or the Authority; or the control of the exercise by the Corporation of a statutory power to expropriate immovable property.	The omitted subsections of the printed bill are redundant or should be dealt with by amendment to the Independent Broadcasting Authority Act in Schedule 1. New subsection 1 continues the SABC as a statutory entity. New subsections (3) and (4) address a glaring omission in the tabled bill by stating that the SABC must be independent and free of government interference, yet subject to regulation by the IBA.
2.	7	Omit the entire section.	The omitted section converts the SABC from a statutory entity into a limited liability company in terms of the Companies Act.
3.	16	Omit entire section.	This is a consequential amendment: If the legal form of the SABC is not changed, this section is unnecessary.
4.	19	Omit entire section	This is a consequential amendment: If the legal form of the SABC is not changed, this section is unnecessary.
5.	23	Omit from subsection (1) the words "In addition to the annual financial statements to be prepared in terms of the Companies Act,"	This is a consequential amendment: If the legal form of the SABC is not changed, this section is unnecessary.
6.	1 – Definitions	Omit subsection (vi) and replace it with the following – (vi) "Corporation" means the South African Broadcasting Corporation mentioned in section 6.	This is a consequential amendment: If the legal form of the SABC is not changed, this section is unnecessary.
7.	Schedule 1 – Amendment No. 4 to the IBA Act	Insert a new subsection 13(1)(o), authorising the IBA – (o) to monitor compliance by the South African Broadcasting Corporation with the charter enacted in the Broadcasting Act, 1998.	This is a consequential amendment: It moves this provision from the main text of this bill and places it in a more appropriate location in the IBA Act.

Relating to the Board of the South African Broadcasting Corporation

Item	Section	Suggested Amendment	Comment
1.	12	In subsection (1), after "Corporation," insert "and protects its independence" In subsection (2), omit everything after "appointed by the President" and insert new language, so that the section will read – (2) The Board consists of eleven members, eight of whom are non-executive members appointed by the President taking into account the objects and principles enunciated in section 2 of this Act and following the procedures set out in subsection ___. In subsection (3), insert a new provision so that the entire subsection will read – (a) The Chief Executive Officer, the Chief Operations Officer and the Financial Director are the executive members of the Board. (b) The executive members of the Board are appointed by the members of the Board who are appointed by the President. Delete subsection (4) and replace it with the following – (4) The President must designate one of the members of the Board referred to in subsection (2) as a chairperson and another such member as a vice -chairperson, both of whom must be non-executive directors. Insert new subsections (5), (6), and (7) as follows – (a) The President shall appoint members of the Board from a list of nominees developed as contemplated in subsection (c) by a panel of not less than three persons chosen as contemplated in subsection (b). (b) (i) The Minister shall cause a notice to be published in the Gazette inviting interested persons to submit within a specified period, which shall not be shorter than one month after such publication, nominations for appointment to a panel contemplated in subsection (a). The Minister may publish the notice or otherwise make known its contents in any other manner that the Minister deems necessary or desirable. The notice shall require the nominee to submit a statement of qualifications and a declaration of any possible conflict of interest he or she might have. The appropriate portfolio committee of Parliament shall, after the expiry of the specified period, publish a list of nominees (or, should the number of nominees exceed three times the number of vacancies, a short list of selected nominees and shall, not less than 14 days after publication hold a public hearing at which every person nominated or shortlisted, as the case may be, shall appear and at which public comment shall be received, and shall, thereafter, appoint the members of the panel from among those nominees. (c) (i) The Minister shall, with the concurrence of the panel, cause a notice to be published in the Gazette, inviting interested persons to submit within a specified period, which shall not be shorter than one month after such publication, nominations for appointment as Board members. The panel may publish the notice or otherwise make known its contents in any other manner that the panel deems necessary or desirable. The notice shall require the nominee to submit a statement of qualifications and a declaration of any possible conflict of interest he or she might have. The panel shall, after the expiry of the specified period, publish a list of nominees (or, should the number of nominees exceed three times the number of vacancies, a short list of selected nominees) and shall, not less than 14 days after publication hold a public hearing at which every person nominated or shortlisted, as the case may be, shall appear and at which public comment shall be received. The panel shall thereafter make to the President, its recommendation of nominees for appointment of Board Members. The President shall appoint Board members from the list except that, the President may decline to appoint to some or all vacancies from the list with a statement of reasons therefor. In the event that all vacancies are not appointed from the list, the panel shall submit further recommendations and may, for that purpose, through the Minister, invite further nominations in accordance with this section. Notwithstanding the provisions of subsection (a), where a vacancy occurs and the unexpired term of office is less than half the full period of that term, the vacancy may be filled by the appointment of another board member in such other manner as the President may deem appropriate. (a) Persons appointed to the Board must be suited to serve on the Board by virtue of their – qualifications, expertise and experience in the fields of broadcasting policy and technology, media law, frequency planning, business practice and finance, marketing, journalism, entertainment, education or social and labour issues; and commitment to fairness, freedom of expression, the right of the public to be informed, and openness and accountability on the part of those holding public office. (b) Notwithstanding subsection (a) – One member of the Board must be appointed to represent employees of the Corporation; The member appointed to represent employees shall be selected by the employees of the Corporation. (c) The Board, taken as a whole, must be representative of the broader population of South Africa. (a) A person shall not be appointed or remain a board member if such person – is not a citizen of the Republic; is a member of Parliament, a provincial legislature, or a local authority; has a direct or indirect financial interest in the telecommunications, broadcasting or printed media industry, whether personally or through a spouse, partner or associate; or his or her spouse, partner or associate holds an office in or is employed by any company, organisation or other body, whether corporate or incorporate, which has a direct or indirect financial interest of the nature contemplated in subsection (iii); is an unrehabilitated insolvent; is subject to an order of a competent court declaring such person to be mentally ill or disordered; is convicted, after the promulgation of this Act, whether in the Republic or elsewhere, of any offence for which such person has been sentenced to imprisonment without the option of a fine; at any time prior to the date of commencement of Act was convicted, or at any time after such commencement is convicted – in the Republic, of theft, fraud, forgery and uttering a forged document, perjury or an offence in terms of the Corruption Act, 1992 (Act No. 94 of 1992); or whether in the Republic or elsewhere, of any other offence involving dishonesty. (b) Notwithstanding the provisions of subsections (iii) and (iv) of subsection (a), a person shall be eligible for appointment to the Council if such person divests himself or herself of the relevant financial interest in a manner that satisfies the President.	The amendments to this section revise section 12 of the tabled bill so that the section Deals only with the function and composition of the board Requires the SABC board to protect the independence of the SABC Explains how the executive members of the Board will be selected (and, because of they are key operational officers of the SABC, assigns responsibility for their selection to the eight members appointed by the President) Prescribes the procedure for appointment of SABC board members which allows for public and parliamentary participation Establishes criteria for selection as a board member Provides that one member of the Board shall be appointed to represent the workers of the SABC
2.	13	Section 13 should be deleted and replaced with the following – (1) The members of the Board appointed by the President shall serve terms of five years, unless the member is appointed to fill an unexpired term or terminated in terms of section 15 of this Act. The executive members of the Board shall serve terms of ___________________. A member of the Board appointed in terms of section 12(5)(c)(ix), shall hold office for the unexpired portion of the period for which the vacating member was appointed. Executive members of the Board who were serving immediately before the transfer date will retain their appointments with all existing benefits. Every appointment of a member must be published in the Gazette. Six members of the Board, which must include the chairperson or vice-chairperson, will constitute a quorum at any meeting of the board. When the chairperson is absent or unable to perform his or her duties, the vice-chairperson must act in his or her stead and, when so acting, exercise or perform any function of the chairperson.	This amendment revises section 13 so that it deals exclusively with operations of the board. The only substantive changes from the bill are that the amendments – Prescribe the manner of filling mid-term vacancies whereas the tabled bill does not Requires all existing Board members, except the CEO, Financial Officer, and Chief Operating Officer, to stand for reappointment in terms of this bill Seeks clarity regarding the term of service of the CEO, FO, and COO.
3.	14	Delete subsections (1) and (2), insert a new section (1), and renumber so that the Section will read – The Board may form an executive committee, which must include the Chief Executive Officer, the Chief Operations Officer, and the Financial Director. The executive committee will perform such functions as determined by the Board.	The tabled bill gives the Board responsibility to control the affairs of the SABC in section 12(1), but it gives an Executive Committee authority to administer the affairs of the SABC in section 14(1). The distinction in authority is not clear. This is a more conventional formulation in which the Board is empowered to create an Executive Committee and to assign to it such responsibilities as it sees fit.

Relating to the Funding and Financial Affairs of the South African Broadcasting Corporation

Item	Section	Suggested Amendment	Comment
1.	10	Delete from subsection (2), "and may receive grants from the state" and insert new language so that the subsection reads - (a) The state shall have primary responsibility for funding the public broadcasting service provided by the Corporation. (b) The Corporation may also draw revenues from advertising and sponsorships, grants and donations, as well as licence fees levied in respect of the licensing of persons in relation to television sets.	The proposed amendment requires the state to take responsibility for funding the service with all other funding to be ancillary. It deletes the provision for grants from the state because state funding for the public broadcasting service should not be tied to particular programmes.
2.	New section in Chapter 4, Part 6 Financial Matters	Insert a new section which will read – ___. Any surplus realised by the Corporation shall be reinvested for purposes consistent with the objectives set out in section 8 of this Act.	Money realised by the SABC should be retained in the corporation in order to build the broadcasting services.
3.	20	Omit "The Corporation must not borrow money without prior written approval of the Minister and the Minister of Finance" and replace it with the following – 20. The Corporation may borrow money for purposes consistent with the objectives set out in section 8 of this Act to the total amount which the Minister shall prescribe for the purposes of protecting the financial soundness of the Corporation.	This section of the table bill is inconsistent with the independence of the broadcaster. The amendment will enable the Minister to exert control over the level of debt incurred by the Corporation relative to its assets, funding, and budget without unnecessarily interfering in its day-to-day operations.
4.	21	Insert the words "by expropriation" in the caption and in section (1) so that it reads – Acquisition of land by expropriation (1) Despite anything to the contrary in any other law, the Corporation may, with the approval of the Minister and subject to such conditions as he or she may deem fit, by expropriation –	This section would prevent the SABC from acquiring land or rights in land without consent of the Minister. This is inconsistent with the policy of giving the SABC greater independence. It appears to be a drafting error. The amendment will conform the bill to current law.

Relating to the Staffing of the South African Broadcasting Corporation

Item	Section	Suggested Amendment	Comment
1.	24	Insert new language so that subsection (1) will read – (1)(a) The Corporation may engage such officers and other employees as it may deem necessary for the attainment of its objects, and may determine their duties and salaries, wages, allowances or other remuneration and their other conditions of service in general. (b) Any departure by the Corporation from the conditions of employment, including levels of remuneration applicable to the public service must be explained in the annual report furnished to the Minister in terms of section 25 of this Act.	Although the SABC must be permitted to compete with commercial and community broadcasters for employees and therefore should not be required to conform to the wage levels applicable in the Public Service, government has made an important commitment to narrowing transformation, including narrowing the wage gap between the lowest and highest paid workers in public service. The SABC’s human resource policies should be established in light of that commitment and deviations, whether upward or downward, from public service compensation standards should be explained.

Relating to Community Broadcasting

Item	Section	Suggested Amendment	Comment
1.	29(1)	Insert a new subsection (1)(c) as follows – (c) Such other category of free-to-air broadcast distribution technology as the Authority may, by regulation, create.	The tabled bill limits community broadcasters to two forms of broadcast distribution. The amendment will enable community broadcasting to develop along with the available technologies.
2.	29(2-4)	Delete subsections (3) and (4). In subsection (2), after "licensee," insert "which is a non-profit entity and is controlled and managed by people representative of the geographical community or community of interest that it serves in accordance with any regulations prescribed by the Authority."	The proposed amendment omits the very specific governance requirements of the tabled bill and substitutes a more general description of the requirement of democratic control, leaving it to the Authority to refine this by regulation. In that way, it addresses two problems in the bill as drafted: The bill presumes that all community broadcasters should be organised to serve a geographic community whilst the IBA Act, in a provision not amended by the bill, recognises that community broadcasters may serve either geographic or interest-based communities. The bill duplicates and, to some extent, is inconsistent with the IBA’s requirements of licensees. The IBA requires a community broadcaster be a non-profit entity. It may be that the law governing non-profit entities requires that boards be elected by members who subscribe to the purposes for which the entity is organised rather to members of a geographically defined community. The mesh of this law with that governing non-profit entities requires further study.
3.	29(7)	Revise subsection (7) to read – (7) Community broadcasters will have no limits on the revenues to be drawn from advertising, but will be subject to any restrictions imposed by the Authority on the amount of airtime devoted to advertising.	The White Paper says that national advertising time should be limited by the Authority; it does not say that national advertising revenue should be limited. The tabled bill unduly limits revenue available to community broadcasting from national advertising.
4.	29(9)	Revise subsection (9) to read – (9) The Authority must conduct a public inquiry into— (i) the appropriate balance between geographically founded community broadcasting services and interest-based community broadcasting services; (ii) means for encouraging the development of geographically founded community broadcasting services; (iii) appropriate methods, including regulations, for achieving the desired balance.	Subsection (9) of the tabled bill is not clear. On the one hand, it seems to call for gradual elimination of community broadcasters that serve communities defined by commonality of interest, rather than geography. On the other hand, it seems to call for a study of priorities for community broadcasting. The amendment recognises that there will always be a place for interest-based community broadcasting and more clearly defines the required inquiry.

Relating to Privatisation

Item	Section	Suggested Amendment	Comment
1.	Schedule 1 – Amendment No. 5 to the IBA Act	In subsection (a) of new Section 13A, omit "privatisation" and insert "restructuring" and add additional language so that it will read – (a) The Minister shall determine all matters relation to restructuring of government broadcasting enterprises, consistent with nationally agreed frameworks.	The tabled bill seems to assume that privatisation is inevitable and that privatisation is the only form of restructuring of the SABC that may occur. In fact, the bill contemplates non-privatisation restructuring of the SABC by dividing it into two services. The proposed amendment broadens the exclusive authority of the Minister and requires that the Minister exercise his authority within agreed upon frameworks.

Footnotes

1. The FXI argues that the starting point for the debate should not be which legal form is best suited to the SABC, but what its ideal funding base should be.

2. Section 11 states that the commercial broadcasting service provided by the Corporation must-
   (b) comply with the values of the public broadcasting service in the provision of programmes and services.

3. Section 13(1)(a) provides that members of the Board must be persons who are suited to serve on the Board by virtue of their qualifications, expertise and experience in the fields of broadcasting policy and technology, media law, frequency planning, business practice and finance, marketing, journalism, entertainment and education, social and labour issues.

4. The MDA should be involved in the following areas:

   • Human resource development, to facilitate, if not co-ordinate training for the sector;

   • Grant funder;

   • Infrastructure- equipment, studios, and networks for multi-purpose agencies, radio stations, news agencies and production houses;

   • Audience research specifically for the community media sector

   It would derive its source of funding from government grants, levies on commercial broadcasters and advertisers, grants from corporates, foreign funders and local foundations and subsidies in the form of tax exemptions, tariff reductions or exemptions, or in the areas of post, telecommunications and electricity (FXI, 1998:20-1).

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