Save Our SABC: Reclaiming Our Public Broadcaster

Save our SABC: Reclaiming our Public Broadcaster

Civil Society Policy Discussion Paper on the SABC (Second Draft)

April 2009 Contents

Acronyms

1. Introduction 2. The SABC’s digital future 3. The SABC’s public mandate – programming 4. The SABC’s public mandate – the Charter 5. The SABC’s legal structure 6. The SABC – national versus regional structures 7. The SABC - key governance roleplayers 8. The SABC’s funding model – options for the future

Annexure A – SOS membership list

2 Acronyms

CIB – Campaign for independent broadcasting DTT – digital terrestrial television DOC – Department of Communications ECA – Electronic Communications Act ICASA – Independent Communications Authority of South Africa IPO – Independent Producers Organisation Pansalb – Pan South African Language Board PFMA – Public Finance Management Act SABC – South African Broadcasting Corporation SABS – South African Bureau of Standards STBs – set top boxes SASFED – South African Screenwriters Federation

3 1. Introduction

The “Save our SABC: Reclaiming our Public Broadcaster” Coalition was set up in June 2008 to deal with the multiple crises unfolding at the SABC.

The Coalition includes a large grouping of non-governmental and civil society organisations, trade unions, independent producer organizations, academics and freedom of expression activists. (Please see Annexure A for list of members.)

To date the Coalition has done significant work as regards the Broadcasting Amendment Bill. Although the Coalition supported the passage of the Bill it argued that the crises at the SABC could not be fully addressed by piecemeal amendments to the legislative framework – what was required was a holistic review of the challenges facing public broadcasting in South Africa. The Coalition called for:

- An assessment of the root causes plaguing the SABC; - A comprehensive review of the White Paper on Broadcasting (developed more than 10 years ago) in order to, amongst other things, assess the effectiveness of policies and evaluate its relevance given the changes to the broadcasting environment due to convergence, digital migration and so on; and - Flowing from the policy review, the promulgation of a comprehensive new SABC Act to replace the current Broadcasting Act, 1999.

As a contribution to the policy review process and to the drafting of the new SABC Act, the SOS Coalition organized a civil society “Discussion Paper” workshop in Johannesburg on the 28th and 29th January 2009. The purpose of the workshop was

- To draft a civil society Discussion paper to be used as an important lobbying document for new SABC policy and legislation - To look at the best strategies for lobbying for a new SABC Act - To chart a way forward for the SOS Coalition

This document presented here is a second draft of SOS’s civil society Discussion Paper. The document raises a number of questions and puts forward some initial thoughts, models and tentative solutions. The purpose of the paper is to get civil society talking about this most critical of institutions – the South African Broadcasting Corporation – and to make meaningful contributions to the proposed government policy and legislative review process.

The SOS Coalition would like to thank the participants, presenters, respondents and chairs who attended the workshop for their very valuable contributions. Also, SOS would like to thank all the people who, since the workshop, have helped to further deepen the discussion document. Finally, we would like to thank the Open Society Foundation for their ongoing generous intellectual, financial and administrative support.

4 2. The SABC’s digital future

2.1 Background issues

The International Telecommunications Union ruled that analogue television frequencies will no longer be protected from interference post 2015. Television needs to be delivered digitally.1 There are both opportunities and challenges. Opportunities include:

- It will allow for more channels and therefore give viewers more choice - The digital signal allows for Improved picture and sound quality - Digital transmission offers more flexibility and enhanced services – e.g. different sound tracks can play simultaneously catering for different language preferences) - There are possibilities for interactive applications enabling viewers to interact more effectively with services – and with government should e government services be made available

However, there are also a number of challenges – critically the expense of digital migration for government, television channels and viewers.

Funding

In terms of government funding what is worrying is that it appears that some of the basic costs are not being covered. So for instance there are major shortfalls in the conversion of analogue transmitters to digital. Sentech, South Africa’s signal distributor, says it needs R950m for conversion and a further R917m for the dual illumination period. However, government has only awarded Sentech R600m. Also, in terms of the set top boxes, government has estimated that STBs will cost R700 per unit. It has then calculated that 5 million people will not be able to afford this so a subsidy “Scheme for Ownership Support” (SOS) has been proposed to pay 70% of the cost for those on government grants – a cost of R2.45billion. But there is no clarity as to who will manage this fund and where these funds will come from although National Treasury has stated that monies may be accessed from the Universal Service and Access Fund of South Africa.

Government policy also talks about the need to develop “Digital Content Generation Hubs”. However, again there is no clarity as regards when these will be established, by whom, and if they will offer any financial support.

2.1.2 Government policy

So what does government policy say? The policy is very broad. It talks about the fact that the digital signal will be switched on 1 November 2008 and the analogue signal will be switched off on 1 November 2011. This is known as the “dual illumination” period. By 2010 it states that 80% of the population will have access to a digital signal and by “switch off” everyone will have a digital signal. It states that all existing terrestrial TV channels will be accommodated during this period including the SABC, e.TV and M-Net

1 Analogue signals take up a significant portion of the frequency spectrum. This needs to be freed up for other applications especially mobile.

5 and that no new players will be licensed.2 However government policy does not state how many channels each will get. This is detailed in the regulations.

2.1.3 Draft Digital Migration Regulations

ICASA has to develop a new regulatory regime for digital broadcasting. ICASA’s draft regulations propose that two “multiplexes” be reserved for existing broadcasters – the first multiplex for public and community television and the second for commercial. Each multiplex is to carry 8 channels. On multiplex one it is proposed that the SABC be allocated:

- Two public commercial channels (SABC 3 and another) - Five public channels (SABC 1 and 2, the still to be launched regional stations SABC 4 and 5 and a further channel). - One community channel.

The proposal for the second multiplex is that e.TV be given two channels and M-Net four.

A further proposal in the regulations is that authorization of channels for public broadcasting be subjected to a “public value test” and possibly a public process. The “public value test” will look at the following issues:

- The level of educational programming - The distribution of different languages with an emphasis on the marginalised languages - The promotion of cultural diversity - Programming aimed at persons with disabilities, children, youth and women - The social development of persons in the Republic including programmes providing entertainment and information - Multi-genre programming

2.1.4 SOS’s comments on ICASA’s draft regulations

The SOS Coalition has commented on the regulations. Briefly, the Coalition has pointed to a few problematic areas.

- First, the Coalition believes the regulations entrench the SABC’s flawed funding model. The SABC is divided into public and public commercial channels with the public commercial channels supposedly cross-subsidising the commercial channels. The public commercial channels however don’t appear to be making a profit and no cross-subsidisation appears to be happening. This calls the model as a whole into question. The ICASA proposals entrench this flawed model by allocating yet another public commercial channel to the SABC. (See section 8 for further discussions on the SABC’s funding model) - Second, although SOS welcomes in principle the idea of a “public value test” the idea needs to be substantiated. The Coalition believes the test needs to reflect

2 This is a costly time for broadcasters. They have to pay for transmission of their broadcasts in both analogue and digital formats. Further they have to pay for extra programming. Government has agreed that they should not have to face new competition.

6 “public value” at three levels - value for money, value to the individual citizen and value to society. In terms of “value for money” the SABC needs to cost its offerings as regards each of its proposed channels and demonstrate how it will be able to sustainably provide these. In terms of “value to the individual citizen” the SABC needs to outline its proposed offerings and how each channel will enhance diversity of content and language across its bouquet of public channels but also how its bouquet of proposed channels will ensure greater diversity of content within the broadcasting environment as a whole. Further, the SABC needs to demonstrate that audiences will actually be interested in watching the programmes it proposes. In this regard the SABC needs to provide audience research. Finally, in terms of “value to society” the SABC needs to demonstrate that its offerings, across its bouquet of channels, will contribute to the deepening of democracy in South Africa and the fulfilment of its goals in its Charter. Finally, SOS has insisted that a public process is followed in terms of the assessment of the “public value test” – this can not be optional.

2.1 Issues for further debate:

- The SABC’s funding model needs to be debated in depth given the increased costs associated with digitalisation. We need to review the laws that separate the SABC into public and public commercial wings to determine their effectiveness and ongoing relevance in the digital age. Also we need to review funding for public broadcasting as a whole. In the digital environment there are increased costs and it is predicted that there will not be new income. - Also on the issue of funding, civil society needs to assess what is happening in terms of funding shortfalls for signal distribution. What are the implications and what can be done about it? Further, it appears that the broadcasters are expected to fund the dual illumination costs. Again, what are the implications of this? - In terms of set top boxes a number of issues need to be discussed including the issue of how they will be rolled out, and with what kind of mass awareness and education campaigns. - Finally, what will government’s proposed “digital content generation hubs” do? When will they be set up? By who? And will there be any government financial support?

7 3. The SABC’s public mandate – programming

The Broadcasting Act, 1999, and the SABC’s editorial policies require the SABC to encourage the development of South African expression by providing, in all official languages, a wide range of programming that:

- Reflects South African attitudes, opinions, ideas, values and artistic creativity; - Displays South African talent in educational and entertaining programming; - Offers a plurality of views and a variety of news, information and analysis from a South African point of view; and - Advances the national and public interest.

The Electronic Communications Act, 2005 (Section 61) calls for ICASA to set local content regulations for both radio and television (public, commercial and community as well as free-to-air and subscription). It does this from time to time. Further, ICASA sets licence conditions for all broadcasters, which may include additional local content and/or language requirements.

Current SABC licence conditions go some way to ensuring the SABC meets this mandate. The SABC has separate licences for each television channel and each radio station (whether public or public commercial). These licence conditions deal not only with language requirements but also local content requirements including (particularly in respect of public stations) particular requirements in respect of programming genres e.g. news, current affairs, informal knowledge building, documentary, drama, children’s programming and education.

By and large the SABC fulfils these requirements but we have to take this on trust as the SABC provides the reports to ICASA and there are no clear checking mechanisms in place. Further, there are some additional issues that remain problematic. These include:

- There are continuous accusations of political bias at the SABC. This reached crisis levels in 2006 with the so-called “Blacklisting” saga. Accusations were made that the broadcaster had “blacklisted” a number of political commentators critical of government. The Sisulu Commission of Enquiry was established to investigate the issues. The Commission findings were suppressed by the SABC but leaked to the media. To date the SABC is denying such a blacklist exists (or ever existed). - A culture of fear pervades the SABC. This impacts on a number of areas of programming – not just news and current affairs, thus there is a lack of cutting edge drama touching on political controversies. - Further, the SABC’s funding model seems to work against the encouraging of creativity, diversity and public service principles. The independent production industry has been forced to produce more and more programming on less and less funding and ultimately this has made the industry unsustainable in its current form.

2.2 Issues for further debate

8 - The new digital environment will have a major impact on content. It will impact for instance on general interest channels. Will they continue to exist - or will all programming be split into specialist channels such as news, sport, education, drama? What does this mean for public broadcasting? What does this mean for the nation-building project? - A key issue here is what is “public service” programming and how can this be distinguished from “community” and “commercial” broadcasting. One of the principles here is that we need diversity. Here we mean diversity in terms of genres (types of programmes), voices (the representation of different people) and the reflection of different political opinions. Another principle would be the provision of programming to under-served/ neglected audiences in terms of language issues, geographical location, life-style choices etc. A further principle would be that it should be compelling. This is in the sense that it needs to be quality programming that pushes the boundaries. So potentially you could have a games show but it would need to be an innovative games show! Are these the principles that we should be promoting? Are there others? How practically can we ensure these principles are entrenched? - As discussed above “quality programming” is critical. However, “quality programming” requires money. This is where subsidies and other support measures for the independent production industry become critical. We need to debate what these support measures might be. The Independent Producers Organisation (IPO), the South African Screen Federation (SASFED) and the SABC have jointly commissioned research with recommendations for reform of the current broadcaster/ independent production sector relationship. The proposals for reform made in the research report must be considered. - Another critical area is monitoring and evaluation. The monitoring of the SABC’s performance is critical. We need to consider the following: - The definition of genres. These need to be more carefully defined – so for instance the SABC considers Oprah to be “informal knowledge building”. The question is should her show be considered as such? - The SABC’s progress over time in terms of its provision of programming in all official languages, percentage of local content etc. SABC annual reports need to present this information more clearly so it is easier to check progress. - We need to ensure greater civil society participation in evaluating the SABC’s compliance with its mandate. We need to consider the most appropriate mechanisms in this regard. - Finally, the SABC’s programming needs to be seen to be independent and fair. One way to demonstrate this would be to appoint a Public Editor, a move undertaken by many newspapers around the world. Public editors generally have two roles: to receive and adjudicate on complaints from the public; and to actively work to improve relationships and interaction with the audience. The main purpose, however, is to ensure that complaints can be dealt with quickly and fairly and not by the subject of the complaint. The Public Editor also potentially could serve as a compliance officer in respect of the broadcaster’s editorial code. Further, journalists could turn to this person to get advice in difficult situations. There are two options in terms of the powers and independence of this person: first the person could merely comment and recommend responses to the editor; or second, the person could have the power to order corrections, retractions, apologies or disciplinary action. The latter would probably be most appropriate for the SABC. This person could be appointed by the Board and could operate

9 separately from the current editorial structures. All complaints could be directed to his / her office and he / she could run a website dealing with complaints, discussions of contentious issues and recommendations of how to deal with them. Although there is potential for this person to come into conflict with the editor, a wise editor would see that this could strengthen his or her position, provide safeguard against errors, and remove the responsibility of making difficult rulings on contentious cases involving particular staff and colleagues. A clear delineation of responsibilities and powers however would be important. This proposal needs to be part of a package of new measures to ensure independence and fairness. We need to debate what the other principles might be.

10 4. The SABC’s public mandate – the Charter

The SABC’s Charter is essentially made up of a number of sections scattered throughout the Broadcasting Act, 1999. It is hard to distinguish where the Charter starts and ends. The section that is in fact headed “Charter” (Chapter IV, part 1) does not refer to Charter-like principles but rather to specific tasks that the broadcaster needs to fulfil such as establishing and maintaining libraries and archives. The SABC’s vision is in fact better captured in sections such as the SABC’s policies, “code of practice” for the Board, and objectives of the corporation.

However, if these various sections are pulled together and distilled into one set of principles the following key elements become important:

- Nation building - A commitment to excellent, up-to-date, informative programming - A commitment to programming that contributes to the development of South Africa’s culture, languages and local cultural industries - A commitment to providing broadcasting services of the highest technical standards

- The first question is - do we need a Charter? The consensus is that we do. It is important to have a document that sets out the vision and mission for the Corporation. The second question is what should this Charter say - what should the SABC’s vision and mission be? It is interesting to look at the principles distilled here in terms of the Broadcasting Act, 1999. We need to debate whether these principles outlined above are appropriate and what further principles should be included? - Another issue raised was should the Charter be a renewable document. Again, consensus was that it should be. This strengthens our commitment to participatory democracy. Also, there is an international precedent - the BBC’s Charter is renewed once every seven years. The question that then arises is should the SABC’s Charter be included in legislation – or in a separate policy document? The Charter has greater legal weight if it is included in the legislation i.e. drafted by Parliament but this would mean that new SABC legislation would need to be amended every time the Charter was renewed. An alternative might be to empower ICASA to draft the SABC Charter by way of regulation. This needs to be debated further. - Issues were also raised about linking the Charter to long term funding. This would be an excellent way of ensuring the SABC fulfils Charter goals and objectives.

11 5. The SABC – Legal structure

The Broadcasting Act, 1999 provides for the conversion of the SABC into a “public company incorporated in terms of the Company Act, to be known as the South African Broadcasting Corporation Limited”3. The SABC was converted into a public company in 2004.

The law emphasizes that the state is the sole shareholder of the SABC – but unfortunately does not stipulate that this is on behalf of the public. In line with this understanding the Minister of Communications determines the SABC’s memorandum and articles of association, without public involvement. Further, the Minister signs an annual Shareholder’s Compact with the SABC. This too is not part of a public process. These documents give the Minister significant powers in terms of appointments of executive directors to the board, input in terms of corporate plans etc. This ultimately compromises the SABC’s independence. (See section 7 on governance role players.)

Further, it is important to note that the SABC’s corporate model is linked to the division of the SABC into public and public commercial divisions. According to the Broadcasting White Paper, 1998, this division was aimed at ensuring financial viability, as the commercial wing would supposedly be able to maximize profits, which would then be used to cross-subsidise the public wing. However, as discussed earlier it appears the model has not worked, for example, the public channel SABC 1 generates more money than the public commercial channel SABC 3.4 It appears that no cross-subsidisation is actually happening.5 The influence of advertising on all SABC channels therefore remains significant.

Overall it appears there is insufficient protection of the SABC’s independence both from commercial and government pressures.

- One way to protect the SABC’s independence is for the SABC to be transformed into a Chapter 9 institution. Chapter 9 of the Constitution provides for a number of state institutions that support Constitutional democracy. These institutions include the Public Protector, the South African Human Rights Commission, the Auditor General, ICASA and so on. These institutions are given Constitutional protection for their functioning, funding and so forth. It can be argued that the SABC’s role in providing the majority of citizens with news and information is a critical role in terms of the smooth functioning of our democracy and it should therefore logically be a Constitutional structure. However, this would need a Constitutional amendment. If parties are unwilling to raise the issue in Parliament, Constitutional amendments can be campaigned for every five years by civil society. As civil society we have an opportunity to raise this issue in 2009.

3 Section 8A(1) Broadcasting Act, 1999 4 The Sunday Times, 8 March 2009, “SABC fat cat coins it”, refers to the under-performance of SABC 3, which saw a drop in revenue of at least R300m. 5 See SABC Annual Reports 2004/2005; 2005/2006, 2006/2007, 2007/2008.

12 - However, it is important to point out that Chapter 9 institutions have not always operated effectively. To remedy this, the Coalition should take on board the suggestions made by Kader Asmal in his report to Parliament on Chapter 9 institutions. - The issue of a Chapter 9 institution however does not deal directly with the SABC’s corporate structure – the SABC could potentially remain a corporation and still be a Chapter 9 institution. The advantages put forward include the fact that corporate governance principles are often clearer in law than governance for government/ statutory bodies and that it is easier to have transparency and access to corporate information under company law e.g. in terms of accounting reports, annual reports, directors’ minutes etc. However, a counter argument is that there have been numerous corporate scandals due to lack of transparency and bad corporate governance. - It was suggested that a thorough legal analysis was necessary to determine if company law in South Africa was appropriate for the SABC. This should include an assessment of current government reviews of the applicability of company law to all public institutions. Further a thorough legal analysis needed to be conducted to ascertain what would be required as regards the transformation of the SABC into a Chapter 9 institution e.g. changes to the Articles of Association etc.

13 6. SABC - National versus regional structures

At present the SABC has a national structure – there is one corporate entity governed by the Broadcasting Act and its Memorandum and Articles of Association. However, an argument was put forward that we need to consider creating a number of SABCs – not national or regional but both. The reasons for doing this included:

- We need to dilute the power of political forces seeking to control the SABC. - We need to redistribute power across several centres. - At present the SABC’s governance is one of external contestation, rather than having different interests represented structurally within the governance of the broadcaster itself.

Drawing upon the German model of public broadcasting, it was suggested that the SABC should be unbundled into a number of separately governed bodies to thwart party political quests for hegemony. It would make for more autonomous and locally accountable institutions of public service broadcasting. In terms of this scenario you could therefore have 12 SABCs including:

- SABC National (consisting of SAFM, Metro, Radio 5, RSG, TV1, 2 and 3 and their websites) - Nine provincially-orientated radio stations (consisting of African language radio stations, and web sites) - One provincial SABC for TV 4 and 5 (and web) - SABC International (TV, radio and web)

For each of these SABCs, it was suggested that there should be separate boards of governance and as regards the involvement of political bodies, different state structures should be involved. Thus the boards of SABC National and SABC International would include representatives appointed via Parliament, the Presidency and the Ministry of Communications. There would also be non-state representatives such as trade unions, churches, university vice-chancellors and representatives of SABC staff etc. (See section 7 on governance roleplayers for further details.)

Each of the nine provincially-oriented stations would then have boards appointed via provincial parliaments, governments and the Presidency. Joint provincial appointments (perhaps via the National Council of Provinces) would bring in the relevant representatives for TV4 and TV5. Each provincial board would also include non-political stakeholder group representatives.

In total this would give 12 SABCs, each with its own boards – with flexibility to network in the US-affiliate mode. But instead of the single super-board that we have at the moment, power would be distributed to a dozen structures – each one representing diverse stakeholders (including diverse political forces) and their interests within it.

International precedents for this include the fact that:

14 - NGOs and unions are represented on public broadcaster boards in Albania, Bosnia, Croatia, Czech Republic, Lithuania, and Slovenia. - A portion of board members are elected representatives of the broadcaster’s staff in countries like France, Macedonia, Romania and Slovenia. - While political nominees make up a third of the two public broadcaster boards in Hungary, only half this quota may come from the ruling party. The rest have to come from minority parties.

- A number of objections to the above proposal were put forward. These included the fact that: - It goes against economies of scale - It makes the provincial SABCs more vulnerable to competition from commercial rivals, threatening public service - It might require more funds from the national fiscus - It provides possibilities for provincial capture as there may well be a lack of understanding of the role of a public broadcaster at a provincial as opposed to national level - It could play into ethnic tensions reflected in the provinces. - It could accentuate regional inequalities and income gaps - It was agreed that we needed further debate on this issue – but particularly in terms of the fact that the SABC does not reflect the needs of its provincial audiences – despite the legislative imperative to do so. One suggestion would be to ensure that ICASA provides for provincial quotas as part of either its local content regulations or as part of its imposed SABC licence conditions for particular services.

15 7. The SABC - Key governance roleplayers

There are a number of important governance roleplayers including the Minister and the Department of Communications, ICASA, Parliament, the SABC Board, SABC management and the public. There appears to be a strong need to clarify their respective roles.

7.1 The role of the Minister and Department of Communications

A particular area of concern is the role of the Minister. Allegations have been made that she has played an interventionist role that has undermined the independence of the SABC. It appears that the SABC’s legal structure creates certain problems in this regard. As discussed earlier the SABC is a public company – the state represented by the Minister is the sole shareholder of the SABC and the Companies Act designates certain rights to her on this basis.

The role of the Minister is outlined in three important documents:

- The Broadcasting Act, 1999 - The SABC’s Articles and Memorandum of Association - SABC’s Shareholders compact

It is important to outline what these documents say:

The Broadcasting Act, 1999 ascribes certain roles to the Minister. These include

- Determining the Memorandum and Articles of Association for submission to the Registrar of Companies (Sec 8A(2)) - Setting the television licence fees by regulation (Sec 40) - Approving the SABC’s financial regulations after consultation with the Minister of Finance (Sec 18) - Approving investments of any surplus of the SABC (Sec 18(5)) - Approving the extent of the subsidy of the public division by the commercial wing, on the recommendation of the Board (Sec 11 (d))

The Memorandum and Articles of Association, in line with company law, set out the relationship between the SABC and its shareholder (the Minister of Communications on behalf of the government). As discussed earlier the Minister of Communications determines the Memorandum and Articles of Association with no public involvement.

The Articles of Association include the following clauses:

- Clause 11 gives the Minister the right to determine the appointments of the three executive members of the Board (the Group Chief Executive Officer, Chief Financial Officer and Chief Operating Officer)).6 - Clause 19 requires that the Minister approve the GCEO’s employment contract and the remuneration of all three executive members of the Board. Note that the designation of the GCEO is Editor-in-Chief – resulting in the Minister being effectively responsible for appointing the editor of the SABC.

6 It is interesting to note that the Minister has specifically denied this under oath.

16 - Clauses 14 and 32 deals with the development of a three year strategic plan (corporate plan) and submission of the annual report and financial statements to the Minister with no mention of the oversight role of the legislature. The clauses on the corporate/ business plan state that the SABC must “consider” any comments on the plans made by the Minister/State. - Clause 26 calls for the SABC to send the Minister monthly management accounts while Treasury regulations issued in terms of the PFMA only require quarterly reporting by public entities.

Finally, the SABC is supposed to sign annual “shareholder’s compacts” with the Minister. These compacts insist that the SABC submit its corporate plans to the Minister and that the Board takes on his/ her recommendations in this regard.7

The Freedom of Expression Institute has sought legal advice on the legality of the Memorandum and Articles of Association. Initial opinions point to the fact that the Articles are almost certainly unlawful. This would also be true of the Shareholder Compact.

Issues for further debate

- What should the Minister’s role be ideally? Suggestions were made that the Minister should play an important national policy role (distinct from regulatory policy). For instance s/he should be driving the Green/ White Paper policy process leading to the promulgation of a new SABC Act. Further, s/he should be monitoring the SABC to ensure that broadcasting policy and legislation is in fact being implemented. Finally, s/he should ensure that the SABC gets the secure, ongoing, stable funding that it requires to function effectively. The legal structure of the SABC would need to be taken into account when defining her role legislatively. - Major discussions were held as regards the Articles of Association and Shareholder Compact. Many coalition members felt that SOS should support a legal case declaring the Articles of Association illegal and unconstitutional.

7.2 The role of ICASA

As the SABC’s crises have unfolded, the SOS Campaign has complained about ICASA’s “deafening silence” on a number of issues, including:

- The appointments debacle - The Blacklisting saga - The financial crisis

Currently the role of ICASA includes to set licence conditions and ensure compliance with these licences as well as to make regulations and ensure compliance with such regulations and with governing legislation. Part of this would require ensuring that the SABC adheres to its Charter. Unfortunately, the regulator plays a very hands-off role, for example, it sets licence conditions but does not monitor them effectively. Also, it does not hold the SABC to account in terms of its Charter. The role of ICASA needs to be

7 To date many of these shareholder’s compacts have remained unsigned.

17 debated in greater depth and consideration must be given to ensuring the regulator has the resources (both human and financial) to fulfil its obligations in this regard.

7.3 The role of Parliament

Currently Parliament plays an important role in terms of the SABC. The Communications Portfolio Committee (PPC) is tasked with:

- Appointments of the non-executive members of the Board; - Oversight of the SABC as a whole including content, board and management functioning and finances; - Also oversight of other key stakeholders such as the Ministry and Department of Communications and ICASA that directly impact on the functioning of the SABC; and - The passage of broadcasting and SABC-related legislation.

Unfortunately the PPC has not fulfilled these functions as effectively as it should have. It illegally allowed the ruling party to dictate specific individuals for recommendation to the present Board. MPs have not played as rigorous an oversight role of the SABC (and the Ministry and ICASA) as they should have. Further, MPs have been motivated more by political considerations than the need to pass effective broadcasting legislation e.g. during the Broadcasting Amendment Act process the PPC refused to close clear loopholes in the Broadcasting Act which have contributed significantly to the current crisis, including, the lack of clarity on the appointment/ removal of executive Board members and improving the criteria for board members, whether for a final or an interim board.

Issues for further debate:

- One position put forward was that there should be no role for Parliament - not as regards oversight nor in terms of appointments. In terms of oversight, the argument put forward was that the SABC should be answerable to the public not the state i.e. not Parliament. (E.TV does not report to Parliament, it reports to its shareholders, so do the private radio stations.) The real shareholders are the people who pay their TV licences. The SABC needs to account to these people. In terms of this view there are two possible destinations for the SABC’s annual report – one is to a properly constituted, independent ICASA. The other is to a body which could be established by licence payers for instance called the “Friends of the Public Broadcaster”. - There was significant opposition to this view because a number of Coalition members felt that the Communications Parliamentary Portfolio Committee was the appropriate oversight institution in principle, even if it wasn’t functioning as effectively as it should. Parliament represents all political parties including the ruling and opposition parties. Parliament is a representative body. - There was a major discussion about board appointments. There was serious concern about political interference in appointment processes. One view put forward was that the Campaign for Independent Broadcasting (CIB) appointment process should be followed. In 1993, before the democratic elections, CIB called for a panel of eminent persons with no connections to party politics to nominate the board. The panel then called for nominations, it selected board members

18 through a public process, and as a formality they were appointed by the President to give them the necessary legal standing. - The difficulty however with this model is who appoints the panel. One suggestion made was that South Africa should set up, as they have done in Britain, an Office of the Commissioner of Public Appointments that appoints board members to public institutions. This body could then select the panel which in turn would call for nominations of board members. They would then select the latter through a public process. - An opposing view put forward was that Parliament should not be abandoned. Further, it was argued, that independent panels were no less dangerous than Parliament itself in terms of issues of political interference. What is good about Parliament is that transparency, public participation and minority party participation is built into its structures and processes - and this can be further strengthened. A suggestion was then made that a select committee of Parliament be set up specifically to play the appointment role. This committee could be chaired by an opposition party member or include a particular percentage of opposition candidates to ensure greater debate and discussion within the committee. Further this committee could take on the broader role of appointments/ oversight for all Chapter 9 institutions as recommended in the Kader Asmal report. This assumes of course that the SABC is transformed into a Chapter 9 institution but even if it is not, a special committee of Parliament would still stand as a viable option for appointments. - Further, the SOS Campaign has made a number of suggestions around the strengthening of board appointments to ensure greater public participation and greater transparency. These include: - the names of nominators and nominees need to be made public - the detailed CVs of all nominees shortlisted for interviews need to be made publicly available - MPs need to give reasons as to why they have selected a particular shortlist of candidates i.e. reasons on each individual considered. - Further to these suggestions, a suggestion was made that the final interview processes should be carried on primetime SABC TV and radio. - Another view put forward - also to try and mitigate against destructive political interference - was for the SABC to be split into a number of regional institutions with a number of boards. It proposes that different interests should be represented structurally within the SABC Board or Boards. (See section 6 – national versus regional structures) The model proposes that each nominating institution should have power to propose and remove its representative e.g. Parliament would be empowered to dismiss its representatives, but not those of other stakeholders. It was proposed that the following representatives should sit on the national SABC Board (with similar arrangements for the regions): presidential appointment (1), ministerial appointment (1), House of Provinces ruling party appointment (1), National Assembly reps from ruling party (4), National Assembly reps from opposition parties (3), trade unions (1), churches (1), business (1), university vice-chancellor’s representative (1), Pan South African Language Board (1), and SABC staff (1). - However, it was also felt that there was a need to ensure criteria based on hard broadcasting and corporate governance-related skills, including journalism, programming, finance etc.

7.4 The role of the SABC Board

19 Currently the Board is made up of 12 non-executive members selected by Parliament and appointed by the President and 3 executive members including the Group Chief Executive Officer, Chief Financial Officer and Chief Operating Officer. The appointment of the three executive members to the Board remains a vexed issue as it is a lacuna in the Broadcasting Act, 1999. In the Articles of Association, it appears that such appointments are ultimately decided by the Minister.

According to the Broadcasting Act, 1999 the Board “controls the affairs of the Corporation”. Potentially this is a powerful role. The Board is entrusted with the following:

- Compliance with the Charter - Ensuring legislative compliance - Appointments and oversight of executive members to the Board and senior management - Strategy development and oversight of the latter’s implementation

Although the mandate is theoretically powerful, the Board does face a number of structural and practical problems. These include:

- It is not clear what is exactly included in the Charter so it is difficult to ensure compliance. - The legislation, Articles of Association and Shareholder’s Compact contradict one another. As discussed the Articles and Shareholder’s Compact in fact give “interventionist” powers to the Minister and restrict the power of the Board. - As discussed above appointments of executive members to the Board remains a vexed issue. - Finally, in terms of the SABC’s legal structure, the Board is the “accounting authority”. This gives them particular financial responsibilities and makes them accountable for mismanagement. This potentially creates confusion re: management / board responsibilities and actively encourages the Board to play a more “hands-on” role.

- To deal with the issue of executive appointments - In line with international best practice the non-executive members of the Board should appoint (without any involvement from the Minister) the executive directors and senior management. This will assist in protecting the SABC’s independence and further should harmonise the relationships between the non-executive and executive members of the Board. It should also assist with increased accountability of management. This principle should be captured in new legislation. - Ideally the Board’s role should include the following: appointment and oversight of executive members to the Board, developing monitorable strategies to meet the SABC’s public mandate and ensuring these are implemented, and finally ensuring the long term sustainability of the SABC. - The Act should clearly determine the different roles between management and board - One of the suggestions made was that the CEO should be the accounting officer as is the case in Chapter 9 Constitutional bodies. This makes management

20 responsible for finances and allows the Board to more effectively play the oversight role. - More discussion needs to be held about the role of executive members on the Board. A number of questions remain: - should all three top management positions be represented on the Board? - is it appropriate for executive members of the Board to attend all board sessions including those that deal with their own performance?

7.5 Role of SABC Management

Currently the Broadcasting Act, 1999 provides for an Executive Committee which is accountable to the Board and responsible for administration. This is made up of the three executive members of the Board and up to 11 others. Under present management it appears that the Executive Committee has been expanded to 21 members. There are allegations of management becoming top heavy. Further management has become involved in ruling party factional politics leading at times to open warfare with the Board (equally accused of being involved in opposing factional politics). Finally, there have been allegations that management lacks in-depth broadcasting experience.

- Do we need such a top heavy management structure? Is this not a drain on Corporation resources? - How do we ensure that management remains professionally non-party aligned? - How do we ensure that management as a collective has significant broadcasting experience – rather than simply management experience? - What should the ideal role of senior management be? Suggestions were made that they should assist the Board to shape the SABC’s strategic plan and then should be held to account in terms of implementation. As discussed above the GCEO should be the accounting officer and should play a key role in terms of ensuring the long term financial sustainability of the SABC. Further, senior management should ensure that the SABC fulfils its public mandate.

7.6 Role of the public

Currently, the SABC is accountable to the public through presentation of its annual report to Parliament. ICASA also monitors compliance by the SABC with its Charter and licence conditions. Members of the public can submit complaints about non-compliance with licence conditions or Charter to ICASA for further investigation.

Further, the SABC has to draft its editorial policies through public consultation, and ICASA procedures encourage and facilitate public involvement in the finalization of licence conditions.

Whilst these mechanisms do provide for public participation and (to some degree) oversight by the public of the SABC, the legislation does not detail mandatory mechanisms to ensure the latter consults listeners and viewers or is directly accountable to them.

International best practice

21 Internationally, there are several possible mechanisms to ensure more transparency and accountability to the public. The BBC’s 2006 Royal Charter has for example put in place some measures:

- First, the Royal Charter specifically states that its governance structure (the Trust) is accountable to licence fee payers. - Second, the Charter states that a protocol for public engagement must be developed through a consultative process which must detail how the Trust will actively seek the views of licence fee payers. The Charter sets out six Public Purpose Remits and the Trust is required annually to publicly outline what measures it proposes taking to meet these Remits and how it will measure and assess performance. - Third, before any major changes are made to any of the BBC’s services (or a new service is introduced) a “Public Value Test” must be conducted. This includes an assessment of the public value of the change and a market impact study – and the results must be published. - Fourth, the Trust has to establish four audience councils in the four major geographical regions in the UK to engage with licence fee payers. The Trust must consult with these. - Finally, the BBC has been bound by certain reporting formats to detail the costs of each genre of programming, what it spends per region in terms of programming and so forth.

- As mentioned above, one proposal made was that the SABC should not be accountable to Parliament but directly to licence fee payers. The SABC’s annual report should in fact be presented to this grouping of people. A licence fee payer organization could be set up called for instance “Friends of the Public Broadcaster”. - The Freedom of Expression Institute (FXI) in 2006, in a memorandum to SABC management, demanded that the SABC consult directly with communities and that it should establish forums for regular consultation to enable it to fulfill its objective of total citizenship empowerment.8 These structures should be further explored. - At the time of the launch of the 2007/2008 SABC Annual Report, the SOS campaign specifically campaigned for greater transparency and access to information. For instance it lobbied for the SABC Annual Report to include details of its language coverage and local content figures over time. Further discussion needs to be had in terms of what specifically the SABC needs to report on to ensure maximum transparency and accountability to the general public.

8 Freedom of Expression Institute, “Memorandum for SABC Management”, 16 November 2006.

22 8. The SABC’s funding model – options for the future

In the last few years the SABC’s financial situation has been steadily deteriorating. In 2005/6 the corporation posted an after-tax profit of R383 million. By 2008 the SABC’s profits had dropped to R111.3 million by 2009 the Sunday Independent alleged that the SABC was surviving on a R780 million overdraft and struggling to pay its debts.9 It appears there are a number of reasons for this downward spiral including the fact that advertising spending is declining and simultaneously SABC’s expenditure is rising.

8.1.1 The SABC’s present financial model

The SABC has a commercial funding model. SABC funding is derived from the following main sources: 78% from advertising, 17% from licence fees and 2% from government10. In terms of SABC policy, cross-subsidisation from the Corporation’s public commercial channels to the public channels is supposed to be an important additional funding source for the public channels. However, as discussed, this does not appear to be happening.

It is important to analyse each key funding source.

- Pros and cons of commercial funding – In terms of advantages advertising forces the SABC to ensure that audiences watch its programmes. Further, given the sheer size and powerful reach of the SABC it is a reasonably easy source of funding for the corporation to access. In terms of disadvantages advertising is dependent on boom times; it does not allow for long term planning; it encourages the SABC to choose programming that is attractive to advertisers not audiences; it emphasizes cheap programming (thus maximizing profit); it interferes with editorial independence; and affects the actual time for programming – news is 22 minutes not 30. Further, some people argue that the SABC has a major negative impact on the rest of the broadcasting industry. It is the largest broadcaster and has the greatest reach allowing the corporation to dominate – the Corporation gets approximately 75% of all TV adspend. Ultimately this is not sustainable for other broadcasters, particularly in an economic downturn raising concerns about unfair competition for advertising. - Pros and cons of licence fee funding – In terms of advantages licence fees protect the public broadcaster from either direct government or commercial interests. It is thus an excellent source of “public” funding. In terms of disadvantages however licence fees are difficult to collect in South Africa even though new regulations have improved this. South Africa has a culture of non- payment. Collection of fees is costly and the economic downturn will further hamper compliance. Also, there have been problems with ensuring the licence fees keep abreast with inflation. There has been no increase in the fee since 2004 and there is no specific mechanism to facilitate inflation linked increases. Finally, it’s a regressive tax i.e. as it is a flat rate it impacts on the poor more adversely than the rich. Finally, the current licence fee revenue is small - it makes up only 17% of the SABC’s funding.

9 Sunday Independent, 25 January 09 10 The SABC’s 2007/8 Annual Report

23 - Pros and cons of direct government funding – one of the advantages is that it can be used for non-commercial programming purposes. Further, if it is an assured grant, it can allow for predictability and thus long-term planning. In terms of disadvantages there are serious possibilities of direct government influence. In South Africa government funding is very small (2%) and in fact has been shrinking. In 2007/08 it actually declined by 10% and this despite the fact the ANC has made repeated calls for more state funding. At the 52nd Polokwane ANC conference a call was made for government to contribute 60% of the SABC’s budget. However, this has been ignored in the latest Department of Communications budget vote. What is interesting however, is that government does fund the SABC but through the “backdoor” - it is a major advertiser and various government departments sponsor specific programming. There are no clear statistics about how much money this actually involves. - Pros and cons of the SABC’s “cross-subsidisation” model – The SABC’s funding model divides the broadcaster into public and public commercial channels with the latter supposedly cross-subsidising the former. According to the Broadcasting White Paper, 1998 the purpose of the model is to offer a further funding stream to the public broadcasting channels so as to protect them from undue commercial / advertising pressures. There is however little concrete evidence that this model is working in practice.

One final point is important, in line with its corporatization, the SABC was broken up into a series of business units supposedly to ensure greater efficiency but this does not seem to have had the desired effect. It seems to have increased the bureaucracy and layers of management at the SABC. It is interesting to note that administration costs have increased. In 2003 programme costs were 42.5% of the SABC’s budget and administration costs were 40.8% by 2006/7 programme costs were 38.3% and administration costs had increased to 46.6%.11

International trends

The United Kingdom

The United Kingdom’s regulator OFCOM is holding an enquiry into public broadcasting. It is looking into the best model to meet audience needs. It is beginning to ask the following questions – is funding for the BBC the only way to meet these? What about fragmentation of audiences across different platforms? Will this create growing resistance to payment of the licence fee? Should other broadcasters with public broadcasting mandates also be able to share in the licence fee revenue?

France

France has announced that it will be phasing out advertising on its public broadcaster by 2011. This lost revenue will be replaced by taxes on the internet, mobile phones and commercial broadcasting companies.

Areas of agreement

11 SABC Annual Reports.

24 - It was agreed that the SABC needs long-term, assured funding not subject to the vagaries of the market or government. Further, it was agreed that new laws must emphasise transparent accounting. The SABC must report on the percentages it spends of its budget on different genres of programming, the percentages of its budget is spends on programming from different regions, the percentages of its budget it spends on different languages.

Issues for further debate

- We need to rethink the SABC’s corporate structure. Ironically, the restructuring of the SABC into business centres seems to have created major inefficiencies and a proliferation of layers of management. - There needs to be a re-think as regards the SABC’s cross-subsidisation model. There is no evidence this model is actually working. - We need to think about how funding could be linked to the Charter and the Charter renewal process to ensure the SABC’s accountability. - We also need to look at what would be the best mechanism for determining ideal public funding levels. Who should decide this? Should it be Parliament, the Ministry, National Treasury, an independent body, the Regulator? What capacity should this body have? - Special provisions should be put in place to ensure support for independent producers e.g. independent producers should retain copyright on the material they produce, there should be subsidies from the Department of Trade Industry, further the SABC should assist with digital equipment hire etc. - In terms of government advertising and sponsorships - these should be pooled to avoid the direct influence of individual government departments on editorial content. - One suggestion was the idea of a public programming fund available to all broadcasters. However some were concerned that this could ultimately lead to the undermining of public broadcasting institutions. The problem is that someone needs to pay for the institutional costs of running a public broadcasting institution.

Possible funding models

- Model one – SABC is a public broadcaster with public funds – This model argues that the SABC’s present hybrid commercial/ public funding model is unworkable. Commercial radio and television stations should be sold off. Even the new digital channels allocated to the SABC should be sold off leaving the SABC with a single TV station and its public radio stations. The remaining stations should be dedicated to excellent public interest content i.e. South African-related news, information, current affairs, and educational content aimed at South African citizen empowerment. There should be no adverts. Because of restricted hours on television the SABC’s language requirements should be tailored to the languages most commonly spoken by South Africans e.g. IsiZulu, IsiXhosa, Sesotho, English and Afrikaans. The funding generated from the sales of the commercial radio stations and television stations should be retained by the SABC. This should be substantial. A further source of funding would be taxes on the commercial broadcasters. Hopefully they would be happy to pay this since advertising funding would have been freed up. Commercial stations should continue to be given some public service obligations. Further, a suggestion was made that the SABC could receive a levy on profits of the stations it sold off.

25 - Debate re: model one - People argued that the SABC would need as a minimum two TV channels (and probably more) to deal with the Corporation’s language requirements even if these were pared down. Further, people argued that one of the major purposes of the public broadcaster is to cover under-served audiences that commercial broadcasters avoid - the language mandate should therefore not be tailored. In fact the more marginalised languages should be particularly prioritized. Further concerns were raised about the marginalisation of public broadcasting in this model since in the new digital era there will be a proliferation of channels. - Model two – the SABC is a public broadcaster with a mix of public and commercial funds – This model argues that the problem is not commercial funding per se but the potential influence of commercial funding on editorial content. The model suggests that there are ways to manage this influence. It suggests that the SABC retain its present and new digital television channels. Channels however should no longer be divided into commercial and public commercial wings – all stations should be public. Stations should concentrate particularly on the following kinds of content: compelling education, news and current affairs, and cultural programming. Also, the SABC should be obliged to broadcast public service announcements on elections, HIV/Aids, cholera etc. However, it should retain certain reduced quantities of purely entertainment focused (but high quality) programming. The reason the SABC’s stations should not be sold off is two fold - first, the SABC needs to retain these to ensure it fulfils its public service and constitutional mandate and second, the SABC’s dominance and reach in the market gives it muscle with advertisers. However, to ensure that advertising does not impact on editorial independence it should be restricted to certain kinds of programming (not news and current affairs) and certain time slots. These funds should then be supplemented by a direct, long term, assured grant from National Treasury. This funding should be utilized for operational costs (salaries), infrastructure (particularly new digital infrastructure) and particular kinds of programming i.e. programming promoting civil rights (news and current affairs), programming promoting socio-economic rights (development focused programming) and programming promoting cultural rights (particularly African language programming). The SABC should account for this money through Parliament’s public accounts committee. - Debate re: model two – one of the most important questions is how to ensure that government doesn’t influence content in terms of this model. More debate is needed in this regard.

26 Annexure A – SOS membership list

 Alternative Information Development Centre (AIDC)  BEMAWU (The Broadcast, Electronic Media and Allied Workers Union)  COSATU (Congress of South African Trade Unions)  Documentary Filmmakers Association  Ecumenical Services for Social and Economic Transformation (ESSET)  IDASA, an African Democracy Institute  The FXI (Freedom of Expression Institute)  The FXN (Freedom of Expression Network)  The IPO (Independent Producers Organisation)  The IAJ (Institute for the Advancement of Journalism)  The MMA (Media Monitoring Africa)  The South African Screen Federation (SASFED)  MISA South Africa (The South African National Chapter of the Media Institute of Southern Africa)  The NCRF (National Community Radio Forum)  The National Consumer Forum  SANGONET (The South African Non-Governmental Organisation Network)  SAHA (The South African History Archives)  The TAC (Treatment Action Campaign)  Workers World Media Productions  Prof. Anton Harber – Caxton Professor of Journalism, University of the Witwatersrand (in his private capacity)  Prof. Devan Pillay – Head of Sociology Department, University of the Witwatersrand  Prof. Tawana Kupe – Associate Professor of Media Studies and Dean of the Faculty of Humanities, University of the Witwatersrand (in his private capacity)  Ms. Justine Limpitlaw – broadcasting lawyer and academic at the University of Pretoria (in her private capacity)  Ms. Jeanette Minnie of Zambezi FoX – international Freedom of Expression and Media Consultant