The Minister can't tell the SABC what to do
Note to Editors: Please find attached a soundbite in English by DA Shadow Minister of Communications, Phumzile Van Damme MP.
The Democratic Alliance (DA) is in possession of a letter to the SABC board Chairperson, Bongumusa Makhathini, by the new Communications Minister, Stella Ndabeni-Abrahams, and its contents are cause for serious concern.
At first instance, while the Communications Minister does indeed have an oversight role over the SABC, she does not, however, have the power to give instructions to the board. The fact that she has decided to “desist from all engagements with the SABC board” because it refused to take her instruction to halt retrenchments is puerile and in violation of the SABC’s independence.
Minister Ndabeni-Abrahams must continue discharge of her oversight role as shareholder and cannot decide not to do so because the board will not take her instructions and “…is no longer acting in the interests of the company, shareholder, and Parliament…” as stated in her letter. If she is not up to the task, she is welcome to resign.
The current SABC board has done well to enforce its independence and stand up to political interference by former communications ministers and it is evident it is doing the same with the current one.
That being said, the SABC board reports to and is accountable to Parliament and has not covered itself in glory regarding its proposed plan to retrench 2200 staff.
The DA has consistently said that the board must conduct an independent skills and salary audit before considering retrenchments, a view that was shared by the rest of the Communications Portfolio Committee when the board appeared before it last week. The committee also requested that the board present a clear strategic plan that will see the board self-sustain by cutting costs and exploring new revenue streams and funding models. The board has thus far done neither.
The SABC has until January to present both the results of an independent skills and salary audit, as well as a clear strategic plan to Parliament or face the risk of being axed. In terms of Section 15A of the Broadcasting Act, Parliament can dissolve the SABC board for the inability to perform its duties “efficiently.”
The DA is not blind to the politics at play. The SABC board has been adamant about enforcing its independence and this is not a situation Luthuli House would be happy with going into an election.
It has in the past had the SABC under its control and made sure that the public broadcaster was its mouthpiece and portrayed the ANC in a positive light to the electorate. The dissolving of the current board would allow for Parliament to appoint an interim board which could quite likely be filled with ANC-friendly individuals who would be at Luthuli House’s beck and call.
The ball is ultimately in the SABC board’s court. It must in January not give the Communications Committee reason to dissolve it, by presenting the results of an independent skills and salary audit and a clear strategic plan.
The DA is serious about rebuilding the SABC, protecting its independence after years of financial mismanagement, corruption and political interference by the ANC. We are also serious about protecting SABC staff against unjust retrenchment, we will not allow SABC staff to lose their jobs without just cause. We wait for the SABC board and management to redeem itself, and we hope it will do so.
Text of letter from Minister Stella Ndabeni-Abrahams to the SABC board, 30 November 2018:
Mr B Makhathini
The Board Chairperson SABC
Radio Park Henley Road
AUCKLAND PARK 2094
Dear Mr Makhathini
SUBJECT: SOUTH AFRICAN BROADCASTING CORPORATION'S (SABC) REQUEST FOR MINISTER'S INTERVENTION WITH REGARD TO GOVERNMENT GUARANTEE APPLICATION
1. The meeting between the Ministry of Communications and the Board of SABC on the 29 November 2018 has reference.
2. We have taken note that the SABC applied for R3 billion government guarantee during the Interim Board period and the Minister responsible was Minister Ayanda Dlodlo. The application was submitted to National Treasury during 2017 financial year. The second revised submission was done during the term of office of Minister Mmamoloko Kubayi - Ngubane by the current board. The Department received a response from Minister of Finance Nhlahla Nene around March 2018 wherein he indicated that the submission is receiving attention. The former Minister Nomvula Mokonyane requested that the technical teams for both departments, DoC and NT and SABC must, througha Task-Team, work together to ensure that the application meet Treasury requirements before the meeting of both ministers.
3. Based on former Minister's concerns on the financial crisis of the SABC, the ADG requested that the GTAC be requested to assist in the development and monitoring of the Turnaround Strategy. GTAC agreed and did a project charter outlining what needed to be done to ensure a financially viable and sustainable SABC. The Task Team between the Department, NT and SABC was established to ensure that the Turnaround Strategy met the requirements for all stakeholders.
4. While discussing the GTAC project, SABC management submitted to the Department that they had developed Strategic Roadmap 2023 for SABC which had been approved by the Board. Despite the concerns raised by Minister Mokonyane with the Board on the 4th of September in Cape Town, the Board went ahead to start with section 189 process, whose end result was to retrench employees.
5. We have also taken note that the SABC submitted a letter to Minister Mokonyane requesting her concurrence for the application of the R1.2 billion loan facility. The Department processed the request and the letter of concurrence was submitted to Minister of Finance to ensure compliance with PFMA, which requires that public entities must receive approval from National Treasury before any borrowings could be done. The Minister of Finance responded that they had consulted their legal advisors and had given an opinion that SABC did not require Minister's approval for this kind of borrowing. It is safe to say SABC was to utilise its debtor's facility as a security. The Department gave feedback to the SABC.
6. As observed in the meeting on 29 November 2018, it is clear that this new development puts on hold the government guarantee application as SABC thought financial institutions would come to their rescue. That is why at the meeting it was clear that the Government Guarantee application was never updated after the development of the Turnaround Strategy by the new Executive management and the approval of the borrowing limit. It is clear now that the discussion with financial institutions is not going according to the envisaged plan, and SABC liquidity challenges are increasing day by day, hence pressure on government bailout and looming section 189 process.
7. The SABC is engaged on section 189 of the LRA, and indicated that they will be retrenching 981 permanent employees and 1200 freelancers. We are also aware that the SABC presented to the Portfolio Committee on Communications and SCOPA on this section 189 process and all these committees have not approved the SABC approach on this matter and have requested the SABC to explore all the alternatives before ultimately resorting to retrenchments . The former Minister was also vocal on this matter. SCOPA went further to urge the SABC to recover R5 billion in irregular, fruitless and wasteful expenditure as well as applying cost reduction methods before they could commence with retrenchments. They were also not happy about the salary packages that are being offered to the top executives of the SABC amid the financial position. SCOPA has requested SABC to submit monthly reports on how are they going to clear the AGSA findings in preparation for 2018/19 financial year AFS.
8. The SABC presented to PCC again on Tuesday the 27 November 2018 about their continued intentions of retrenchments but the committee again requested them to find other alternatives and to come back to the committee with all the supporting documents. Until these documents are submitted, the Committee made it clear that no retrenchments should take place.
9. It was against this background that a meeting with the employees, the unions, management and the board on this matter was convened yesterday. As a shareholder, and further taking into account the discussions at Parliament, both at SCOPA and PCC, we pleaded with the Board to suspend the section 189 notice so as to allow us an opportunity to familiarize with the Turnaround Strategy, the Bailout application, and furthermore in consideration of the impending meeting between myself and Minister of Finance to discuss the SABC's financial position. The Board flatly declined this request, resolving instead not to " agree to the directive (by the Minister). The Board proposes that the status quo on section 189 continue while the Minister approaches the Presidency and National Treasury for immediate cash injection. The Board will review the pace and quantum of the impact of the section 189 should funding be found".
10. The Board further made it clear at the meeting that irrespective of the success of Government guarantee or bailout, they will still proceed with retrenchments. As the shareholder representative, we were left with no option but to desist from all engagements with the SABC Board, including National Treasury, and Turnaround Task-team as we realized that the Board was no longer acting in the interests of the Company, the shareholder, and Parliament as the representative of South African public to which the SABC Board is accountable to.
We will report this impasse to the President, Parliament and all relevant stakeholders on the outcome of this meeting, because the SABC is a public institution with clear lines of accountability.
MINISTER STELLA NDABENI-ABRAHAMS MP
Cc: The President
Chairperson of the Portfolio Committee on Communications
Chairperson of Standing Committee on Public Accounts
Minister of Finance
Statement issued by Phumzile Van Damme MP, DA Shadow Minister of Communications, 2 December 2018