Communications minister Solly Malatsi has reiterated that the draft policy directive gazetted last week isn’t meant to “deviate” from broad-based black economic empowerment (B-BBEE).
Malatsi also described the timing of gazetting the directive, which coincided with the South African delegation's visit to the US, as “purely” coincidental.
This, as he faced a grilling from members of Parliament of the Portfolio Committee on Communications and Digital Technologies on Tuesday.
The Parliamentary committee is the legislative’s oversight body for the Department of Communications and Digital Technologies (DCDT), which is headed by Malatsi.
On Friday, the minister proposed the Independent Communications Authority of South Africa (ICASA) review the role of equity equivalent investment programmes (EEIPs) in the ICT sector as a mechanism to accelerate broadband access.
Currently, telecoms and media licensees in SA must apply one set of rules to measure ownership by historically-disadvantaged groups (HDGs) under ICASA’s rules, and a different approach when they get their B-BBEE certificates to measure ownership by black people under the B-BBEE codes, according to Webber Wentzel.
The move has been met with diverse reactions, with many viewing it as South Africa bending its transformation rules to enable the licensing of Elon Musk’s Starlink satellite internet service. Musk has publicly slammed SA’s transformation obligations and policies, saying they stand in the way of Starlink operating locally.
Recognising EEIPs in ICT
Portfolio committee chairperson Khusela Sangoni-Diko said among the reasons for the meeting was for the minister to brief the members, particularly given there’s never been a need to issue policy directives that would seem to favour a specific company.
During his opening remarks, Malatsi said the gazetted directive stems from efforts by the DCDT in regard to recognising EEIPs in the ICT sector, which is also reflected in the medium-term development plan of the seventh administration of the Government of National Unity.
“It’s not about introducing a dispensation for any individual, nor any company, or introducing preference. The policy direction…we started working on it around September, we released communications to ICASA on the 4th of October in the form of a letter, expressing an intention to issue a policy directive to provide policy clarity on the full EEIPs in the sector.
“The policy direction refers to the ICT codes published under the prescripts of the B-BBEE Act. The intention is to ensure consistent applications of the B-BBEE Act and the ICT sector codes.
“This mechanism around EEIPs and how they can be utilised in the sector is not a new invention, it’s not an invention by myself. It is an attempt to say ‘in the formulation of any regulations in our sector, it has to be read consistently with the ICT sector codes that emerge from B-BBEE’.
“While the ECA, which guides policy-making in the sector and the ICASA Act, do allow for ICASA to make the regulations, it also allows ICASA to give effect to whole parts of the ICT sector codes. My duty is to ensure there is alignment between the codes and regulations in fulfilment of all national laws.”
Non-negotiable transformation
Malatsi stated he believes the process by his department, in terms of the policy directive and subsequent gazetting, followed the necessary steps.
“I’m clear that transformation is sacrosanct in our country; that it’s a non-negotiable in order for the country to achieve its aspirations, but most importantly, to live to the provisions of the B-BBEE Act as it was articulated.
“So, we are not attempting to open a special dispensation for Starlink or any other company or individual. We are saying that the regulations in our sector must consistently make provision for the two choices that exist in any other sector and other aspects of the ICT sector when it comes to the role of multinationals, whether small or big, and that the provisions around the option of a 30% local ownership, or the pathway of equity equivalent must be consistently available. Or, at least, for the authority to consider the consistency of that option.
“The ultimate intention is to ensure the regulation is aligned with the national empowerment regulations for licensing and potential new entrants.
“There is no conspiracy on our part with regards to this policy direction. There is no underhanded effort in darkness to railroad this into the South African public.”
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