This is the fifth in a series of reports compiled by the Freedom of Expression Institute’s (FXI)researcher, Ike Hloka. It covers the period 11 to 22 August, 1997. It was compiled by Ike Hloka with financial assistance from the European Union Foundation for Human Rights in South Africa. The views expressed herein do not necessarily represent the official view of the European Union Foundation for Human Rights in South Africa.
The report looks at the decision
by the department of Trade and Industry to withhold the names of the parties
who supplied input and submissions to the draft working paper on which
liquor policy was to be based. The Cape Wine and Spirits Institute(CWSI)
argued that they needed this information because they believed the
draft working paper released by the department of Trade and Industry did
not represent most of the views expressed by members of the liquor
industry. The report also looks at the IBA’s decision to amend pay television
M-Net’s licence conditions and the response from the South African Broadcasting
Corporation(SABC) and the Independent Producers Organisation(IPO).
The wine industry threatened to contest in court a decision by the department of Trade and Industry to withhold the names of the parties who supplied input and submissions on which the draft liquor Green Paper was to be based. The draft working paper was released earlier this month following a two year process of consultation.
A representative of the Cape Wine and Spirits Institute(CWSI), Andre Steyn, said the wine industry required access to all submissions made to the department on the draft working paper to allow it to prepare a "considered response" to the process and "engage in a proper discussion with the department on the draft".The CWSI represents eight wholesalers and producers in the wine and spirits industry in the Western Cape province. According to Steyn, the liquor industry is the biggest contributor to the economy in the Western Cape in the form of labour, tourism, and exports. The CWSI gave the department of Trade and Industry until Friday, August 8, to respond to their request for access to this information.
The department responded on Monday, August 18, in a meeting with the Liquor Initiative Forum(LIF), a body representing South African Liquor Stores Association, the South African Taverners Association, and the South African Liquor Traders. The department said the names of parties who made inputs and submissions were confidential. However, the forum claims its proposals were ignored in the draft document. Steyn said ideas contained in the draft document had never been discussed in any forum or with trade unions in the industry. The department argued that the proposals were part of a discussion document which was still going to be debated before it became a policy. According to sources in the department, the question of access to information was not the issue, it was an issue of logistics. Therefore the CWSI was advised by the department to contact parties who made submissions and ask them to give them copies of their inputs and submissions.
The forum will prepare its response
and present it to the Department of Trade and Industry on September 4.
According to Steyn, the reason the Institute wants to see the submissions
is because they are radically different from the general understanding
of the issues, such as the licensing structure of liquor traders,
by the industry insiders. The CWSI says it will only take the matter to
court as a last resort. The department is obliged to provide this information.
It is not clear yet whether a government department can claim inability
to provide information on the basis of logistical problems,
as there is no legal precedent on this issue.
Amendment of M-Net’s licence
The Independent Broadcasting Authority(IBA) has made a final decision on the amendment to pay television M-Net’s licence following a second round of hearings despite serious criticisms of the process. The final decision upholds an interim decision handed down two months ago, which allowed M-Net to retain its 2 hour open time slot of unencoded broadcasts and its second channel Community Service Network(CSN). The IBA’s decision to amend M-Net’s licence was severely criticised by the SABC. The corporation proposed that the IBA’s decision should not be implemented until the Ministry of Posts, Telecommunications and Posts had come up with a policy on broadcasting on which all broadcasting regulation would be based. The process for arriving at this policy was unveiled earlier this month. The IBA argued that it sought to amend M-Net’s licence in a bid to create a fair and competitive private television environment before the licensing of a new free-to-air private television early next year. M-Net’s licence was granted long before the IBA and the IBA Act came into operation. However, the IBA Act recognised the existing rights and obligations contained in the channel’s previous licence. It was this licence the IBA set out to amend. The SABC, probably the most important stakeholder, apart from M-Net itself, participated in the first round of hearings earlier in June but chose to boycott the second round, and instead made their submission to the Parliamentary Portfolio Committee on Communications.
In arguing for the delay in implementing changes to M-Net’s licence, the SABC said then that the current state of uncertainty and problems confronting the SABC were a direct result of "piecemeal" regulating. Currently broadcasting is regulated by the Public Broadcasting and the IBA Act. The Minister of Posts, Telecommunications and Broadcasting, Mr Jay Naidoo, launched a policy process earlier this month which was expected to culminate in legislation on broadcasting that would provide a national framework for the whole industry.
However, the SABC’s main argument against the IBA’s move was that the authority did not have jurisdiction to amend M-Net’s licence conditions. Ironically, this argument was initially used by M-Net during the first round of IBA hearing in a bid to stall any attempt to interfere in its operations. However, the pay TV apparently dropped the argument in the second round. The SABC’s position was echoed by the prospective bidder from the new free-to-air TV channel, who participated in the second round of hearings. The SABC argued that the IBA Act did not empower the regulatory body to amend M-Net’s licence conditions as it could only do so to ensure "fair competition" between licensees. Since M-Net was the only private broadcaster, the SABC argued that there could be no fair competition if its licence conditions were amended, especially in view of the fact that a free-to-air television station would be licensed very soon. Section 52 of the IBA Act, which deals with amendments of broadcasting licence conditions, does not expressly prevent the IBA from amending M-Net’s licence conditions.
The Independent Producers Organisation(IPO), representing about 167 local producers, was not opposed to the IBA seeking to amend M-Net ‘s licence. However, it was opposed to the IBA’s interim decision and argued that M-Net should be forced to sell off its second channel, the CSN, because the Act proclaims: "one station, one licence"(Mail&Guardian, 08 August 1997, p10). It is not clear whether it is legally possible to force the M-Net to sell off its second channel. The IPO argued the decision to allow M-Net to keep its CSN service did not serve the viewing public and the local production industry. They argued that the decision merely served the interests of a small group of shareholders. Among the IPO’s concerns was that extending M-Net’s license conditions would marginalise small independent producers since M-Net predominantly broadcast externally produced material. According to Harold Bopalamo, Director of Regulatory Affairs at M-Net, M-Net broadcast about 15% locally produced material during open time and only 4% during encoded time.
The changes in M-Net’s licence condition did come without new conditions. The IBA imposed a weekly average of 20% local content obligation on the open window slot. Advertising during this time would be limited to an average of eight minutes an hour. M-Net was also required to broadcast an average of 6% local content during encoded time, with an average of six minutes of advertising an hour. With regard to its CSN service, the channel would have to broadcast a minimum of 50% community services programming, including minor and developmental sports. A further 9% local content was imposed on CSN and limit of an average of six minutes of advertising per hour allowed. M-Net would also be required to pay an annual licence fee of 2% of its turnover. The reason being , according to Bronwyn Keene-Young, IBA’s acting chief executive officer "M-Net uses scarce terrestrial frequencies which are a national resource."
M-Net’s chief executive officer Lazarus Zim expressed concern at the extent of the financial implications of the latest IBA decision. He argued that "The licence fee, increased local content, curtailed advertising and community service obligations will carry heavy cost penalties." He further argued that "the fee alone equals more than half the dividend paid to 18 000 shareholders. It will increase our taxes by between R15 and R20 million" a year(Saturday Star, 23/08/1997).
The SABC’s spokesperson, Mr Enoch
Sithole, said the SABC had taken the IBA’s decision to the lawyers to seek
advice on further steps which could be taken to challenge the decision.
The IBA’s decision will come into effect in April 1, 1999, when the
new free-to-air television channel is expected to go on air.