Government Printing Works & Film and Publication Board 2013/14 strategic plans & budgets

Meeting report

Government Printing Works 2013/14 Strategic Plan and Budget
Professor Anthony Mbewu, Chief Executive Officer, Government Printing Works, outlined the vision and mission of the Government Printing Works (GPW), which was the State’s mandated security printer. He noted that in this role, it intended to provide cost effective, reliable and timeous services to all spheres of government in printing, to provide the public with equitable information and to disseminate government information through technology, innovation and service excellence. The values that the organisation aspired to were listed as reliability, integrity, accuracy and stakeholder satisfaction.

GPW outlined what it saw as its contribution to the priorities of government (see attached presentation), and stressed that it would also make a contribution to decent employment by having a skilled and capable workforce that was to support an inclusive growth path.

He outlined that the Ministers of Finance, Home Affairs, and Public Service and Administration had approved the business case, and that GPW was established as a Government Component on 9 October 2009. As a Government Component, the GPW delivered security printing services to government, but had to operate on business principles, and had to defray expenditure from the revenue generated by services rendered. It would no longer get a budget from the National Treasury, save in respect of previous years where National Treasury had provided transfers to recapitalise revenue, and from 2014 onwards all expenditure would be defrayed from revenue generated by services rendered.

The strategic outcome-orientated goals for the following five years were mainly concerned with developing the government component, so that it could perform as a sustainable ring-fenced business entity, with flexibility yet within regulated parameters. Prof Mbewu was pleased to say that GPW had never yet requested any financial bail-outs.

He noted that GPW aimed also to increase its operational effectiveness and offer improved customer services. He noted the renovation of the former government garages in Visagie Street over two to three years, but said that the entire operation would subsequently be moved from Bosman Street. The new passport factory was situated in Visagie Street. From July 2013, production of the new national identity smart cards was to occur at Visagie Street, and he noted that these production facilities were considered amongst the most advanced in the world. 38 million smart-cards were to be produced to replace the current ID books. Pavilion 2 housed the security printing. Pavilions 3, 4 and 5 still required renovation, but he noted difficulties and delays with the Department of Public Works (DPW) in this regard.

GPW had undertaken a process of optimising internal business processes through the implementation of an enterprise resource planning system, as well as externally, through diversified services which had included online publishing, by means of the website which was launched in the previous year. An electronic version of the Government Gazette was to be found on that site.

GPW further aimed to develop the workforce, with a special remuneration dispensation for the Government component. The principal constraint in this development was that the Public Service Regulations governed the salary that could be offered by the Component, but a task team was preparing a report to the Minister with the rationale and structure for the special remuneration dispensation. The Portfolio Committee had also advocated for such salary dispensation.

He then outlined the budget for the 2013/2014 financial year. Remuneration was estimated at R225.572  million, after taking into account the introduction of the new GPW human resources establishment which was necessary for the running of a modern print media company, and the remuneration would increase in line with increased implementation of the framework. The capital expenditure was needed to replace dilapidated facilities and aged machinery within the course of two to three years, and amounts of  R180 million and R85.2 million had respectively been allowed. This kind of operation also necessitated  spending on IT equipment and furniture, amounting to R20 million. The funds were available, and there was no need for funding from the national fiscus.

Prof Mbewu explained that GPW comprised four branches. Operations and Production had the strategic objective of ensuring functional and secure production facilities. It must acquire modern production equipment to satisfy state security printing requirements. The state required continuous improvement and innovation of security documents, which necessitated the most advanced equipment and technology. The passport document introduced in 2009 was illustrative of this, as it had not yet been successfully forged. However, the ID document was subject to rampant fraud. In July 2013, the Minister would be launching the ID-smart cards which would assist in eliminating identity theft and fraud. The smart card would contain a microchip that would ensure access to government services, such as electronic health records and e-voting, in addition to verification of identity. The card would have 20 security features. Through the tender process, citizens would be required to pay the same price for this as for an ID book – namely R140, which was remarkably low in comparison to international best practice. The mandate from the Minister was that the entire production process was to be in-house, and international tenders for polycarbonate producing machinery were thus released.  The offices of the Department of Home Affairs (DHA) were meanwhile introducing a paperless system of obtaining an ID smart card, with a turnaround time of 48 hours to five days.

The third strategic objective was producing security printed material according to customer requirements, and local or international standards, in the most cost effective manner and within agreed upon timeframes. An instance was the new unabridged birth certificate, which was launched by the Minister in March 2013. Another strategic objective of this particular branch was the development and maintenance of all operational and control processes, to safeguard the integrity of security material. 

The Strategic Management branch attended to coordination and distribution of government information to the public. It must provide for high availability of ICT services. The implementation of the ERP software systems had commenced in October 2012 and it would contribute to the business continuity of the GPW through integrated internal management information flow between finances and production services. The provision of a secure ICT environment was significant, as it enabled the GPW to discharge its mandate. Other objectives included a continuous printing process improvement, optimisation of ICT support services, which were linked to the ERP service. This branch also had to raise and increase awareness of GPW and its production capacity and capabilities. As a security printer, there were restrictions on the way in which awareness could be raised, but GPW was still marketing its services to current government customers, the general public and potential customers in Africa. He also outlined the objective to diversify the product mix within security printing, which would include printing on various materials, including polycarbonate, and the product mix would be determined in conjunction with the marketing. The marketing strategy was aimed at retaining and growing the market. Other objectives for this branch were outlined as developing and implementing a security risk management system, and to provide independent and objective assurance and advise management on the adequacy assessment and effectiveness of internal controls and governance processes,  through internal audits and in compliance with the Public Finance Management Act (PFMA) requirements.

The financial services branch of GPW aimed to provide quality financial and supply chain management services and contribute to financial sustainability. GPW had received an unqualified audit opinion for the last three years.

The human resources (HR) branch aimed to ensure an adequately trained workforce to support the organisation toward growth and sustainability. HR policies had been drafted and training of workers undertaken. The remuneration benchmarking had been completed and cascaded to various role players and decision makers, aimed also at skills retention. This branch further aimed to develop and implement labour relations and employee wellness management policies, processes and programmes.

Mr Rassie Barnard, General Manager of Financial Services, GWP, expounded on the understanding that all stated strategic objectives had to operate in tandem, which had implications on the budget. For instance, machinery could not be procured before the completion of the facilities in Visagie Street.

The income side noted that part of the requirement was that the Government Component was to receive certain funding from the fiscus. He noted that in 2008, the GPW had estimated that it needed between R900 million and RI billion for factories and facilities, and a further R500 million for equipment. Over R400 million had been paid to date. An agreement with National Treasury was reached that this funding would now cease, as GPW would fund the additional R900 million intended for facilities.

The projected revenue was set to increase due to the rollout of the ID smart card. When the budget was prepared, a conservative approach was taken on the rollout rate, as there was no prior experience for the smart card. It was projected that the same numbers of smart cards would be requested as ID books – namely about 2.4 million per year. The ID smart card rollout was to be funded without input from the fiscus.

On the expenditure side, one of the key issues facing the GPW was the remuneration of staff, as mentioned earlier, and over the Medium Term Expenditure Framework (MTEF), the employee benefits were set to increase substantially. Mr Barnard emphasised that the skills that GPW required could not be attracted at the current salaries. The new technology based equipment required specialised skills, and it was necessary to bring GPW’s remuneration offerings in line with the market rate. The current workforce had had considerable money spent on it, in training in computer literacy and the ERP system.

Finally, he noted that the depreciations were estimated to increase, particularly with the implementation of the new equipment.

Discussion
The Chairperson commended GPW on the report. She wanted clarification on the point that the GPW would not be receiving any transfers from National Treasury (NT) from 2014. Her understanding was that GPW was to receive its transfers from the Department of Home Affairs (DHA).
 
Mr Barnard explained that GPW had received transfers from National Treasury, through DHA, as the organisation was linked as a Government Component to DHA. However, the outer year of the MTEF would be the last in which GPW received funding from the national fiscus, and after that, GPW would fund itself. Its good performance in previous years ensured that there would be adequate funding.

The Chairperson asked how far the process had gone for replacement of the equipment, and whether GPW was now operating from two locations.

Mr Joe Engelbrecht, General Manager: Operations, GPW, clarified that the main plant was currently situated in Bosman Street and asserted that this plant was fully fledged in all disciplines or components involved in the printing process. Only the passport factory  and security printing facility were situated at the Visagie Street site, and the new ID smart card process was to be placed on that site as well. GPW was not in a position to move the remainder of the equipment or procure new equipment until the Visagie Street site was completed.

The Chairperson wondered if GPW was now able to be competitive, in order to retain skilled labour. She wondered if, as a government component, it could engage with the private sector in regard to skills.

Mr Jan Rossouw, Acting General Manager: Human Resources, GPW, stated that GPW was only just retaining its skilled work force. He commended the loyalty of the workforce and stated that only two artisans had been lost. Eight out of 33 posts were filled. Nine posts had been advertised and a further five posts were to be advertised in April. The appointment of the Strategic Management General Manager had been delayed, yet was now again on track, and the nominee had been submitted to Cabinet for approval. The vacancy rate at the lower level was 22% but GPW was making progress with regard to the filling of those posts.

Prof Mbewu conveyed that the GPW salaries currently were not in line with those offered in the private sector as competitors were able to offer salaries exceeding the Public Service Administration regulations.

Mr A Gaum (ANC) enquired as to where the excess revenue was directed. He noted, and enquired about the 70% growth in the other objectives programme was noted.

Ms N Mnisi (ANC) requested elucidation on the intent of the GPW, whether it sought to be self sustaining or a profit generating entity.

Mr Barnard referred to the previous years’ results and confirmed that the operation was sustainable and profitable. He noted that in regard to the profit generated, the GPW had to apply annually to the National Treasury to retain those profits in order to for the business to be recapitalised.

Mr Gaum asked why there was a baseline target of an “unqualified audit” as opposed to a “clean audit”.

Mr Barnard explained that GPW operations were not simplistic, in that it was competing with the private sector and hence faced equivalent challenges with that sector, whilst also having to comply with government mandated standards. For this reason, it was considered that an “unqualified” audit was perhaps more realistic.

Mr Gaum also questioned the remuneration figures, saying that although the special remuneration dispensation had not been approved as yet, there was still provision for a growth of 13% above inflation of average pay to levels 1 to 6 employees. He also wanted more details on the filling of posts, saying that the Committee had asked GPW specific questions on this in the past.

Mr M Mnqasela (DA) pointed to the 13% above inflation growth of average income projected expenditure and asked whether the GPW had an alternative means of funding in the event that the special remunerations dispensation is not granted. He also wanted to know the time frame, whether this would be immediate or deferred, and said that if the intention was that there would be immediate implementation after the agreement was adopted, he wanted to know the plans for the interim.

Ms P Petersen-Maduna (ANC) Ms Petersen-Maduna enquired what was expected to lead to the significant expected growth in expenditure over the 2013/2014 period. She also asked to what extent the filling of vacancies included the disabled, and wanted to know how the workforce would be developed.

Mr Rossouw asserted that GPW ratio for disabled staff was at 1:8. A few appointments of people living with disabilities had been made that year, and the positions that were suitable for such individuals were being earmarked for filling with disabled employees.

Mr Rossouw expounded on the development of the workforce. He noted that, with implementation of the ERP system and new equipment, a different skills set was required, and thus the workforce was developed to meet the demands of the GPW for future operations. Hundreds of days had been given over to new training.

Prof Mbewu added that if the special remuneration dispensation was not granted, the other option lay in GPW becoming a State Owned Enterprise, as this would afford it greater flexibility in terms of remuneration that it could offer. It had been hoped that the task team comprising GPW and the Department of Public Service and Administration would have delivered the report to the Minister of Public Service and Administration in December 2013, but this had been delayed and it was hoped the report would be delivered soon. The budget figures assumed that the special dispensation would be granted, failing which the option of becoming a state owned enterprise would be explored.

Mr Mnqasela said that the GPW had indicated that it was establishing security risk management system, but he hoped that this system was already in operation, not still being established.

Prof Mbewu elucidated that there was a security risk management programme in place, yet it was in the process of being updated, and would require subsequent ratification.

Mr Mnqasela enquired as to the cost of the polycarbonate plant was enquired. He also wanted more comment on the interim costs between the July rollout of ID smart cards and the completion of suitable facilities. He asked if the figure outlined for the expenditure on passports over 2015/2016 was inclusive of the polycarbonate plant costs.

Mr Engelbrecht explained that the tender process had been completed for the production of the ID smart cards. The amount of R51 million was the estimated amount for the procurement of the equipment. However, a substantial cost that had not been factored into that R51 million figure involved the costs of the facility, which would probably be in the region of another R50 million. The tender had included a skills transfer agreement, with the transfer of skills to GPW at a rate which it could accommodate them.

Mr M De Freitas (DA) asked how the GPW had managed to become self sustaining, whereas other government entities had not.

Mr Barnard answered that previous years’ success was due to correct financial administration yet there was room for improvement.

Mr De Freitas asked whether the GPW was going to market itself in competition to the private sector, in addition to marketing within the public sector. If so, he wondered if it would be able to meet private sector production timeframes and deadlines.

Prof Mbewu answered that a marketing specialist post had been advertised. This individual would be instrumental in the marketing of services to government and would also go out on road shows in the rest of Africa to market GPW services to that potential market. The GPW did not aspire to compete with the private sector as such, yet increasingly, government departments had asked the organisation to complete tasks that had hitherto been awarded to private companies. The GPW had found that situational constraints such as the completion of facilities and equipment that was yet to be procured meant that at the moment much of its work was sub-contracted out to the private sector. 

Mr M De Freitas asked if the special remuneration dispensation was intended to make salaries competitive to those in the private sector. He also enquired if staff development entailed sending staff through formal courses at recognised institutions, and if there was any presumption that there was a form of payback with regard to training.

Prof Mbewu said it was hoped that the special remuneration dispensation would assist in retention of skilled staff. It had been found, during a benchmarking exercise, that the GPW would train employees in the past, only to find that they migrated to the private sector.

Mr Rossouw outlined that GPW offered in house training services, as well as the training of learners and apprentices. Instances where staff were sent to Japan and Germany for training on passport production were also detailed.

Mr De Freitas asked for more elucidation on the new building and the processes for the move, and asked what would happen to the old facilities thereafter.

Mr Engelbrecht explained that the existing building belonged to the Department of Public Works. There was therefore no lease, and the building would simply revert under control of the DPW when the GPW moved to the new premises. The new premises at Visagie Street comprised the former government garage that also belonged to the Department of Public Works. It was assumed that, because of the development costs paid by the GPW toward that facility, ownership would be transferred to the GPW, so once again no lease was applicable.

Mr De Freitas asked over what period the projected number of ID smartcards would happen, and what the consequences would be if this was not met.  

Mr Engelbrecht said that the equipment to be procured was believed to be capable of producing 6 million ID cards in an 8-hour shift. The determining factors for the speed were, however, how quickly the requisite data was sent to GPW by the Department of Home Affairs.

Mr De Freitas asked for more details of the online resource in regard to the e-Gazette.

Mr Barnard answered that there were two websites. The government domain website was a static flash page which also linked to the govonline.za domain page, and this allowed for business processes to be carried out where the “.gov.za” domain had limited functionalities. The intention of the e-Gazette was not to duplicate the function of the Department of Communications. It comprised three months rolling stock and access to archives. The objective was that the online platform be both input and output orientated. This was in the process of being finalised.

Ms G Bothman (ANC) was concerned about the perception that the field of printing was stereotypically white and male dominated. She asked if there were processes to address transformation.

Prof Mbewu expounded on the transformation issue by stating that the organisation composition had changed remarkably, from its former position of being 100% white and 95% male.

Mr Rossouw expanded on this and detailed that 91% of appointments were black. Management now also included black females, and there were more black than white artisans. Previously disadvantaged individuals were specifically targeted in terms of employment opportunities, and the organisation was meeting those targets in that regard. However, the fact that commercial printers were also used on sub-contracts did skew the transformation picture. GPW was on target on broad-based black economic empowerment.

Ms Bothman asked if Members could be apprised of the security features of the ID smart cards, and if they were allowed to disclose such information for public consumption.

Mr Engelbrecht explained that the ID smart cards comprised three categories of security features. The first could be disclosed to the public, and could be identified and verified under natural light. The second level of security features contained information that could be verified at the Department of Home Affairs, whereas the third level was forensic and known by only a few. The last level was used for legal determinations and could only be verified in a laboratory environment. DHA would determine which features would be publicised.

Ms Bothman commented that in previous years an outcomes-based strategic plan was agreed upon, yet she could not isolate the tangible outcomes from this presentation.

Prof Mbewu relayed that there had been an attempt to make the strategic objectives outcomes-based in that six tangible products were identified. He posited that many of the GPW operations were in line with the National Development Plan (NDP). He said that these endeavours would be explicitly stated in the next presentation.

Ms Bothman then requested the addition of an addendum to the strategic plan that incorporated these issues.

The Chairperson requested more details on the assertion that the Department of Public Works had caused some delay in the completion of the move to Visagie Street premises.

Mr Engelbrecht answered that the premises in Visagie Street, along with open land opposite Minaar Street, had been earmarked for GPW development. The Department of Public Works was requested to procure the open land from its owners, the City of Tswane, on behalf of GPW. In the meantime, owing to the urgency of the DHA deadline on the production of passports four years ago, the Visagie Street Pavilions 1 and 2 were developed to serve that purpose. However, it was undesirable to continue with this piecemeal kind of development. The DPW, despite numerous requests, had simply not been forthcoming on the remainder of the development.

Film and Publication Board Annual Performance Plan, Strategic Plan and Budget for 2013/14
Ms Thoko Mpumlwana, Chairperson, Film and Publication Board, introduced her team and explained the circumstances that surrounded the delayed tabling of this plan to the Committee. The Film and Publication Board (FPB or the Board) had had a legal debacle with South African National Editors Forum (SANEF) concerning the pre-submission classification of magazines, and the Board had redefined its rule on this matter, and then wanted to verify the legality of the strategic plan in this regard. The strategic plan was subsequently resubmitted, and she emphasised that there was no change in the substantive aspects.

Mr Mpumlwana said that the visibility and publicity of the FPB had grown and the Board was recognised internationally, especially in referring to websites that held unacceptable content. The turnaround strategy had been finalised, and the outreach programme had grown. The classification rate had succeeded and there had been the addition of new classifiers. Its major challenges included shortage of finance, and the constantly changing media space, which required that the Board monitor continuously. The Board needed to reach out to the approximately 52 million people in South Africa, and this would also include the need to reach out to those in the SADC region, where the shared border relations on regulation of material were to be strengthened. Under-collection of revenue had challenges the Board as well, in the last year, due to the effects of the economic downturn on the industry. The Board sought to engage in more financially motivated partnerships and had signed more Memorandums of Understanding (MOUs) in this regard.

The Board was also mindful of its mandate of child protection, in addition to regulation, and had transcended ministry lines, which resulted in inter-departmental partnerships. International partnerships had also been enhanced and the Board had been invited to present at the European Union Parliament conference.

She noted that the strategic plan to be presented now detailed the manner in which the Board planned to engage the new media space, and one of the focus areas was increased research. In regard to the legislative overview, the Board had informed the DHA of some areas where stricter measures were required. Work had been done in collaboration with the Security Cluster, as this highlighted the role of the work done by the Board, as a means to protect children and the community at large.

Ms Yoliswa Makhasi, Chief Executive Officer, FPB, tabled the mandate, which involved the provision of consumer advice and protection of children from harmful content, because exposure of children to pornography was punishable by law. The values of the Board continued to be transparency, accountability, professionalism, integrity and fairness.

She noted that the Board exercised a regulatory function and would classify content in line with guidelines that were updated by the Board every two years. Consumer education programmes were embarked upon, along with compliance monitoring and child protection initiatives, in discharging the mandate of the Board.

The vision had been sharpened, so that the Board now provided relevant information to both children and adults. The principles central to the regulatory function of the FPB included the protection of children from adult content, and use of children in the production of pornography. The public was still to be advised on content, which enabled the public to make informed choices. The FPB provided designated areas for the distribution of adult material.

Top TV had applied for the approval of three designated adult content channels. FPB believed that this would test the current legislation in relation to the interaction between Independent Communications Authority of South Africa (ICASA) and the Board. FPB had submitted its representations, which centred around the concerns of protection of children, and the final decision was still to be made by ICASA. It was the understanding of the Board that if Top TV were to obtain approval, that entity must register with the FPB as a distributor and an agreement would be reached on the dissemination of such content.

The information on the entertainment and media analysis served to highlight the challenges to effective regulation, because of increased technology presence in the industry, and the convergence of content across platforms. Local analysis had revealed that the use and capabilities of the internet had grown. Broadcasting was also documented as having grown. Adult content had increasingly encroached into the media space. Out-of-home advertising was set to grow. The new media forms included, for instance, video games, for which the FPB had established a system of online self classification or co-regulation by the distributors, following which the Board would verify the classification. The print media was also subject to adult content, and consequently required sustained monitoring and regulation. Where the newspaper fell under the authority of the press ombudsman, the FPB could only monitor, but had no regulatory function.

The Board recognised that in light of new developments, global partnerships had to be formed. At the global level, one of the regulatory mechanisms worked on was the Applications (Apps) Rating System, so that whenever a computer or cellphone was purchased, the Apps rating of the country of purchase would be pre-loaded. Apple had not joined the coalition of distributors involved, but it was believed that it was under pressure to do so. This system would prevent Apps from bypassing the Board when they entered the country. The Board noted that it was regrettably not possible to regulate internet content, and there were high volumes of distribution of pornography on the internet. The industry was highly litigious, and large sums were spent in legal fees.

Other implications to the Board included the need to promote industry and consumer awareness, improved governance and partnerships within the organisation, the need for automated internal processes, an improved profile and a repositioned FPB, and cyber space safety education. The performance management component required the continued maintenance of accurate statistics and reports as well as the fact that FPB must develop a monitoring and evaluation system.

Ms Makhasi stated that in previous years, the FPB had presented three strategic outcomes, but had now added another five. The strategic outcomes were named as effective and visible monitoring of films, games and certain publications throughout the value chain. The objectives linked to this were the continued classification of content, initiatives such as electronic labelling, review of guidelines, and research around society norms.

The review of legislation had been mentioned, and of significance was the review of internal audits, which was significant given the co-regulatory mechanism envisioned by the Board, where distributors were allocated responsibilities, so that suitable mechanisms had to be found to ensure compliance.

Ms Makhasi noted that the Committee had instructed the Board to engage with Apple in terms of ipads and the distribution of films and games. The Board had subsequently undertaken such engagement, and it was found that Apple had registered as a distributor for films, and had launched Itunes films for South Africa in December 2012. The films had already been classified by the FPB. The gaming aspect was under negotiation and the Board was scheduled to meet Apple in April 2013. She noted that Apple had its own classification system, and the Board was in the process of testing this for compatibility with FPB requirements. 

Cyber safety initiatives had comprised of school visits, but pressure on the resources of the FPB meant that this was limited. The integration of cyber safety teaching into the Life Orientation curriculum was being explored.

Mr Tebogo Matabane, Head of Finance and Acting Chief Financial Officer, FPB, tabled the MTEF allocations. He noted that the grant from the Department of Home Affairs amounted to R82.68 million. The internal revenue generated consisted of classification fees, registration fees and the annual renewal of registration certificates. In addition to those streams, the FPB had invested two months’ grant in an investment account, which generated an estimated R300 000 and was set to yield increasing dividends in the years that followed. The total projected revenue was thus R93.63 million.

He set out the projected expenditure, broken down by strategic outcomes, and said that R28. 4 million was budgeted for industry regulation and monitoring, that R10.1 million was allocated to strategic objective 2 for public awareness and consumer education. R27.6 million was to be spent on support services under strategic objective 3. The additional grant from National Treasury, of R8.5 million, was intended for expenditure on strategic objective 4, relating to the regulation of distribution of content online. R5.6 million was allocated for partnerships, as expressed in strategic objective 5. R9.5 million was allocated to operating expenditure. The capital expenditure was forecasted at R3.6 million. All of these added up to the figure of R93.63 million, matching with the total revenue expected.

Discussion
Mr A Gaum (ANC) commended the Board on its progress with regard to the registration of Apple as a distributor. However, he was concerned because the new platform comprised films already classified by the FPB, and questioned what implications there were around access to films.

Mr Gaum wondered when the considerations around games would be resolved. He asked if the FPB’s decisions would have implications on the right of South African users to access the US Apple iStore.

Ms Makhasi relayed that Apple had suggested the use of FPB classified material .There need not be concern around access to films, as major screenplays were screened in South Africa and were thus subjected to classification standards. The issue of access to US iStore was to be communicated to the Apple representatives, yet it was conceded that different countries were governed by different regulations.

Mr Gaum said that the indication on Top TV was that the FPB had made representations, but there was no indication that it had protested. He asked if the Board was opposed to Top TV’s proposal, as it was concerned with the child protection consideration. 

Mr de Freitas asked about the nature of the MOUs signed by the FPB, and for more detail on where the FPB was located within the Top TV debate.

Ms Mpumlwana stated that the Top TV channel had exercised its right as a broadcaster, but simultaneously, the Board had the mandate to regulate such content. The paramount consideration for FPB was that the rights of the child were not infringed, and the FPB took an uncompromising stance on that aspect. However, it was fact that the FPB itself did not have the authority to deny Top TV broadcasting rights, and this had to be decided upon by the Broadcasting Complaints Commission and ICASA.

Ms Makhasi added that FPB wanted to conclude the critical MOU with ICASA, because of the inter-related nature of the respective operating fields. The MOU with the Department of Communication had proved complex to finalise.

Mr Gaum asked for the source of the information on assertions and predictions for the media and the Industry.

Ms Makhasi indicated that the information used was compiled from the PriceWaterhouseCooper industry analysis, which was believed to be a credible source. It looked into the entertainment and industry focus over a five-year period.

Mr Gaum noted the broad scope of regulation to be undertaken by the FPB, and asked at what point the strategic objectives might be reached and why two figures were mentioned, one of 100% classification, and the other of 75% classification.

Ms Mpumlwana explained that the Board operated on the system that materials submitted for classification by distributors had to be paid for in advance, as the FPB offered no credit option. Where payment and other requirements had been met, FPB aimed for classification of 100% of the material. There was no backlog on this. The 75% figure spoke to the  “shadow markets” that were not formally registered and thus could not be captured and monitored in the same way. The Board was working on reaching all these markets, aiming for 75% this year, and had employed the services of research consultants to assist on this.

Mr M De Freitas (DA) enquired about the pre classification of magazines

Ms Mpumlwana said that the Constitutional Court judgment in relation to magazine pre-classification was to the effect that the FPB had no regulatory authority over publications under the press ombudsman. The remainder, which did not fall under the ombudsman, particularly in the area of adult content, were subject to FPB regulation. The FPB considered the rights and freedoms of patrons, but also in respect of ensuring that children were protected, and legislation required that children not be exposed to adult content. It had been suggested that the legislation was outdated and required amendment. The necessary recommendations by the FPB had been submitted to the Minister, but it was up to Parliament to have the legislation amended.

Mr De Freitas enquired why the Chief Financial Officer was not present at the meeting.

Ms Mpumlwana explained that the CFO had a family engagement that had detained him.

Mr de Freitas noted the comment that FPB was recognised internationally, and asked whether this had taken place against certain criteria; if so, he wanted more details.

Ms Makhasi said that the international recognition was measured at the level of acknowledgement, in the form of invitations from overseas bodies such as the EU Parliamentary Conference. The second aspect of recognition was the FPB’s participation in international structures such as the International Apps Council, as detailed in the presentation.

Mr De Freitas asked if any legislation compelled distributors to have obtained content classification logos and how the Board enforced this. If it was not yet in existence, he asked if there were plans for the introduction of such legislature.

Ms Makhasi explained that content labelling was a requirement of the legislation, and compliance monitors routinely conducted spot checks for that. The challenge remained that there was no consequence, bar a notice to comply within three months. In instances of child pornography, South African Police Service (SAPS) was, however, mandated to intervene, as that was a priority crime.

Mr M Mnqasela (DA) required elucidation on how the FPB monitored the convergence or progression of values and societal norms in an environment where there were no agreed upon set of values. He also pointed out that the result of FPB’s intervention could be limited access for adults who chose to engage in such entertainment.

Ms Mpumlwana said that the concept of societal norms and values was based on the objectives and purport of the legislation, and values enshrined in the Constitution. It was acknowledged that these values may clash. Thus the Board utilised focus groups in diverse areas that formed the research component. Within the focus groups, there was an enquiry done as to whether the manner of classification by the FPB reflected opinions and norms of society, and these enquiries yielded affirmative responses for the most part. Classification was thus extrapolated from the median of the responses.

Mr Mnqasela asked how the Board would monitor local content, and what was the extent of the FPB’s involvement in film production.

Ms Makhasi answered the question of sponsorship, and clarified the fact that it spoke to partnerships with creatives rather than sponsorships.

Mr Mnqasela asked what constituted the 22% increase in the support services expenditure .

Mr Matabane indicated the structure of the support staff, which comprised the Chief Financial Officer, the Internal Audit unit, and explained the office space allocations budget and legal services, risk management as well as governance structures. The budget allocations also applied to employee costs.

Mr Rowan Nicholls, Council Member, FPB, further expounded on the figures pertaining to management expenditure and said that they were to be further revised as they related more to performance indicators. There was to be continued revision of the administration costs, toward the targeted 10%.

The meeting was adjourned.