Friday, 27 November 2009

Open letter - Request for granting more time


Director General - Mamodupi Mohlala
Department of Communications
iParioli Park
399 Duncan Street

Fax: (012) 427-8026

Dear Madam,

We are a specialist trade union organised in the Broadcasting and Media Sector. We represent more than a thousand members in these sectors, particularly at the SABC.

This serves as a request for a shift of the deadlines to submit input in respect of the proposed Broadcasting Bill. Apart from the fact that the Bill, in its current form, cannot work in practice, the process being followed is flawed and unconstitutional.

As a trade union we are particularly concerned about the huge job losses that will occur if this proposed Bill is passed in its current form.

We estimate that between 1200 and 1500 people will lose their jobs. This goes directly against the stated intent, in the pre-amble of the Bill, of its aim of fighting unemployment.

Furthermore, we are of the view that the current tax proposal will not be enough to fund the SABC sufficiently to fulfill its public mandate.

According to the last budget review figure of the SABC R5.1b (Operational and CAPEX) is required for the next financial year. This excludes the current loan repayment of R1m and the repayment of the new loan in process (installment unknown). According to SARS Financial Statements, Financial Year 2008/9, they collected R 196b in Personal Income Tax for the year. This figure will be substantially lower for the current financial year due to approximately 1 million jobs being lost in the first nine months of 2009. SARS reported an expected shortfall of R 70b in Personal Income Tax. At a maximum rate of 1% the proposed Fund would only receive R1.9b from tax this year.

If the SABC only receives 60% (other broadcaster will also benefit from the Fund) they would have received R1.14b. Add to that the current income of approximately R 1.7b from advertising and sponsors the total is R 2.84b. There appears to be a serious shortfall. When commercial advertising is capped, as suggested by the Bill, the shortfall may even be more.

Having said this, it is clear that due and thorough debate and brain storming needs to be done before any new legislation is passed.

We propose that a process be started where all stakeholders are involved, including treasury, to looking at the new funding model, which may simply include a government grant for the PBS part of the SABC and that TV licenses be retained as part of that funding.

As part of this exercise we need to relook the SABC’s very heavy and expensive top structure and the exorbitant salaries Executives are paid.
We also need to look at cutting costs in respect of all the pleasure trips (Beijing, Jazz Festival, Dakar, etc) by the Executive Management of the SABC and there needs to be proper, transparent and thorough accounting and accountability by those individuals.

We need a qualified and competent CEO with a proven track record of successful business operations, not another (incompetent) political appointment. We need a lean and competent top structure which should be effective and understand the business. The SABC cannot afford to pay top management exorbitant packages when they cannot do their jobs properly and they then hire consultants at a cost of Millions of Rands to do their job. If we cannot find competent people, only then should the SABC appoint consultants. We cannot afford to pay both.

A few years ago the SABC had what was known as the Top 100 management team. Then the SABC made a surplus of several millions. It has now become the Top 250, if not more, and the financial situation is dreadful.

Some of our other concerns (extracted from a SOS Coalition document of which we are a member of) are:

We believe that the Bill introduces a number of fundamental policy shifts that require significant discussion and debate. Briefly, we wish to reiterate some of these shifts:
  • The Bill includes two new Charters – one for the SABC and one for community broadcasting.
  • The Bill aligns broadcasting to the “Developmental goals of the Republic” and the developmental state. Previously broadcasting was aligned to the Constitution. It is not always clear what the developmental goals are.
  • The Bill introduces fundamental shifts to the broadcasting funding environment. It calls for the scrapping of TV license fees and for amendments to the Income Tax Act, 1962 to ensure that up to 1% of personal income tax is set aside for broadcasting.
  • Also, in terms of funding, it introduces a new Public Service Broadcasting Fund, to be administered by the Media Development and Diversity Agency, requiring that the MDDA Act be amended. The Fund is mandated to fund a wide-ranging set of issues including the public service division of the SABC, regional television and international broadcasting services, content development, community broadcasting services and signal distribution.
  • The Bill introduces far-reaching and draconian new powers for the Minister of Communications. The Minister can now issue directives to the SABC and community media on “any matter connected to public service broadcasting”. If the entity is unable to “perform its functions as prescribed in this Act”.
  • Previously the SABC was split into two divisions – public and public-commercial.
  • The SABC is now to be divided into three separate divisions – public, commercial and international.
  • Sentech has been designated as ‘the common signal distribution carrier’ requiring amendments to the Electronic Communications Act, 2005.
  • Finally, and very importantly, community media’s role has now been re-conceptualised. A new Charter has been introduced for the community media sector specifying the ways in which the community media sector needs to be organised. Further, the Bill requires that community media forge partnerships with their local municipalities.

Given these major policy shifts, we believe that a period for debate of just over a month is not sufficient. Further, we wish to place on record that we are not sure why a Bill of this magnitude and reach needs to be passed in such haste. We believe strongly that the present financial crisis at the SABC is primarily a management crisis and can be dealt with under present legislation.
We believe that the Interim Board has done an excellent job in beginning to stabilise the SABC. We have faith that the new, Permanent Board, will continue this process. The drafting of new legislation should be a separate and parallel process. We believe that rushing this new legislation may very well create new crises for the SABC, which may include industrial action, should employees be retrenched.

A second area of general concern about the Proposed Bill is that it is not clear what exactly the Proposed Bill is and what its full ambit is. The Notice describes the Proposed Bill as a “Bill”. However a “Bill” must be introduced in Parliament. To the best of the Coalition’s knowledge the Proposed Bill has not been introduced in Parliament and therefore it ought, more correctly, to have been called a Draft Bill.

Further, it is customary for Draft Bills to be discussed in Cabinet before being published for public notice and comment in the Government Gazette and yet the Proposed Bill is silent on whether or not the National Executive, acting through the Cabinet, has endorsed this Proposed Bill as indeed reflecting national policy.
Given the number of apparent significant breaks with existing broadcasting and national fiscal policy, the Coalition would have expected that Cabinet approval to have preceded the publication of the Proposed Bill.
The Coalition respectfully requests the DOC to clarify exactly what the nature of the Proposed Bill is if and when it publishes a future iteration thereof.    

The Proposed Bill also clearly envisages significant changes to the entire broadcasting sector: public, commercial and community broadcasters as well as, in respect of signal distribution, the role of the regulator etc.
However the Bill makes no proposals for necessary consequential amendments to be made to, inter alia¸ the Independent Broadcasting Authority of South Africa Act, 2000 (“the ICASA Act”) and the Sentech Act, 1996 (“the Sentech Act”). Without these necessary consequential amendments it is likely that there will be inconsistent and clashing provisions in the various pieces of legislation that regulate broadcasting – clearly an undesirable outcome.


Another third area of critical concern is that it appears from sections in, inter alia, Chapters 4 and 5 of, and the Schedule (what ought to be Schedule 1) to the Proposed Bill, that the Proposed Bill is in fact a “Money Bill” as defined in section 77(1) of the Constitution of the Republic of South Africa, 2006 (“the Constitution”) that is, “a Bill that appropriates money or imposes taxes, levies or duties”.
If this is indeed the case then the Proposed Bill is, on its face, unconstitutional.

The grounds of unconstitutionality include the following:

Section 73(2) of the Constitution provides that only the Minister responsible for national financial matters may introduce a money Bill in the National Assembly. However, it appears that the Proposed Bill is intended to be introduced by the Minister of Communications (“the Minister”) and not the Minister of Finance.
This does not accord with the requirements of the Constitution on the National Legislative Process set out in Chapter 4 of the Constitution.

Section 77(1) of the Constitution specifically provides that a Money Bill “may not deal with any other matter except a subordinate matter incidental to the appropriation of money or the imposition of taxes, levies or duties”. Clearly the Proposed Bill deals with a number of other non-tax related issues and this does not accord with the requirements of the Constitution on the National Legislative Process set out in Chapter 4 of the Constitution.

We wish to place on record our overwhelming support for the concept of public funding of public broadcasting that is, of funding being made available for the public broadcaster out of the National Revenue Fund. This is essential, if the SABC is to deliver on a public mandate. However this must be done in accordance with the Constitution and current Government fiscal policy.


The SABC’s Freedom of Expression Rights:

The Proposed Bill contains what appear to be a number of Schedules to the proposed Bill. One of these is headed “the Charter of the Corporation” (“the Proposed Charter”). As such it forms part of the Proposed Bill and, should the Proposed Bill be passed into law, would constitute legislative provisions. One of the provisions appearing in the Proposed Charter is section 1.5 which is headed “The Independence of the Corporation”. This section provides, inter alia, that the SABC enjoys “freedom to express [sic] and journalistic, creative and programming independence as enshrined in the Constitution”.
The SABC, like all other persons (both natural and juristic) enjoys the right to freedom of expression as enshrined in section 16(1) of the Constitution and does not require section 1.5 of the Proposed Charter in order to enjoy such right.
However, notwithstanding the provisions of section 1.5 of the Proposed Charter, the Proposed Bill contains a number of provisions which directly, and in our view, unconstitutionally limits the SABC’s right to freedom of expression, by subjecting the SABC to National Executive control in a number of important respects, these include but are not limited to:
  • Section 15(2)(a) of the Proposed Bill which specifies that the International Services to be provided by the SABC must be subject to the “Republic’s foreign policy”;
  • Section 15(4) which specifies that the SABC may only establish any international broadcasting service channel with the approval of the Minister after consultation with the Minister of International Relations and Cooperation; and
  • Section 3.11.1 (8) of the proposed Charter of the Corporation which appears to suggest (although the section is confusing and contradictory in this regard) that the Minister must approve various revised editorial policies of the SABC.

We submit that it would be entirely unconstitutional for any of the SABC’s programming or services to be subject to National Executive policy and for its editorial policies, which directly influence its broadcasting content, to be approved by anyone, save for the Constitutionally-mandated regulator of broadcasting services, namely ICASA.

A more detailed submission has been made by the SOS Coalition.
Kindly read same into this document.

This was put together in a very short space of time. It is clear that there is still much to be done in the way of thinking and research.


Hannes du Buisson
BEMAWU (Broadcasting, Electronic, Media & Allied Workers Union)

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