The National Council of Provinces is at the centre of a parliamentary battle over the independence of the Independent Communications Authority of South Africa (Icasa)
The battle, revolving around amendments to the Icasa Act, comes against the background of turmoil inside the regulator. Its CEO, Jackie Manche, has been suspended, and new allegations of conflict of interest have been levelled at a council member (see accompanying article). Longstanding internal disputes between the council and Icasa management are adding heat to the political debate.
The Electronic Communications Bill (previously the Convergence Bill) and amendments to the Icasa Act, currently making their way through the committee process, would strengthen Icasa as a regulator and give it more resources.
But the National Council of Provinces (NCOP) has proposed changes to the Icasa Amendment Bill, which the council is anxious to see scrapped.
Currently, Parliament’s communications committee interviews would-be councillors and makes recommendations to the president. Councillors can only be fired after a National Assembly resolution.
Initial versions of the Bill, championed by the Department of Communications, handed those powers to the communications minister. But the portfolio committee decided, after representations from Icasa that this would undermine its independence, to retain the current system.
After intense lobbying, the NCOP has reverted to a version closely resembling the original draft, putting hiring and firing powers in the minister’s hands.
The Bill also aims to apportion responsibilities within Icasa more clearly and to resolve governance problems. Deep internal divisions that see management and the council contesting basic governance issues, and the suspension of CEO Jackie Manche, complicate this battle.
One factor is the dual executive and oversight responsibilities of the council and a history of mistrust between it and managers perceived as weak or inexperienced.
The result has apparently been to draw some senior managers into a closer political alignment with the communications ministry as it looks for more control over council, both through the power to hire and fire and a performance management system.
Former CEO Nkateko Nyoka asked in his exit report two years ago whether council had “sufficient experience and expertise to make sound managerial decisions”. He warned that council could be violating the Public Finance Management Act (PFMA) if it ignored managers’ sound advice.
He suggested there was a failure of leadership “as a collective exercise” and cited an absence of “collegiality, good governance, depth in experience and appreciation of the regulatory craft”.
The theme is echoed in reports by corporate governance adviser Nigel Payne, commissioned by Manche. The Icasa Act, Payne reported in April 2005, envisages the CEO as an administrative assistant to the council, while the PFMA vests the post with significantly greater responsibilities.
Payne identifies numerous governance weaknesses, including concerns that the council exercises its executive responsibility not just over policy, but on administrative issues that could be delegated to the CEO.
The council’s performance has never been formally evaluated, he says, and there are no non-executive members of council to ensure independent oversight of or challenge to councillors’ work.
The Bill addresses much of this, which is why managers such as Manche want it enacted, and the council may challenge it in the Constitutional Court.
Manche has not yet received detailed charges, but her suspension appears to turn on the alleged disappearance of cash from a safe and a dispute over vehicle purchases. Both underscore confusion over lines of responsibility.
Manche commissioned forensic accountants Sizwe Ntsaluba to look into what had happened to the cash, which was raised from the sale of old computers to staff by an Icasa supplier. The council, say Manche sympathisers, rejected the Ntsaluba findings because they did not adequately address the CEO’s responsibility for the cash. The implication was that, having been commissioned by Manche, investigators were reluctant to probe her role fully, and that she did not inform the council quickly enough.
A similar dispute over responsibility concerns the purchase of vehicles worth R2,6million. Manche’s backers insist the council discussed and “signed off” the acquisitions.
Manche was reluctant to discuss suspension, but said serious governance and capacity challenges faced Icasa. “The relationship between council and management is strained”, she said.
“It goes back to the merger of the troubled Independent Broadcasting Authority and the South African Tele-communications Regulatory Authority. For the first year or two, council ran things and management capacity was lacking. Council was rightly concerned that things might fall apart.”
Changes at the authority, she suggests, mean that concern is no longer justified. “When I got there, the organisation had little capacity to implement its mandate. Charged with regulating a fast-growing sector, it had had no economists,” she said. Basic management controls were absent, cheque books were used for banking, there were very few supplier contracts and risk control was inadequate.
To meet the challenge of the Electronic Communications Bill and the Icasa amendments, she said, “we realised we needed a bigger transformation, which started in October. I haven’t been able to see that through, because of my suspension.
“You can’t change the situation only by changing the law, you must also change the culture.”