NATIONAL PORTS AUTHORITY BILL, 2003
- Telkom SA Limited ("Telkom") thanks the Parliamentary Portfolio on Transport for giving it the opportunity to comment on the National Ports Authority Bill, 2003 ("the Bill"). The Bill was published in Government Gazette 24261 on 17 January 2003.
- The main purpose of the Bill is to constitute the National Ports Authority, which is currently a division of Transnet, as a public company with the South African government as the sole shareholder. (For ease of reference, we will refer to the newly constituted company as "the Authority" and to Transnet’s National Ports Authority Division as "the NPA Division" or "the Division"). The main function of the Authority is to manage, control and administer ports on behalf of the state. The Bill also establishes a regulatory body in the form of the Ports Regulator ("the Regulator").
- Telkom has a number of concerns with the Bill that we wish to raise before the Bill is enacted into law.
- In brief, Telkom’s concerns are as follows:
- Firstly, a number of the definitions in the Bill are defined to include telecommunication services and facilities. The effect of this inclusion is to subject telecommunication services and facilities at ports to a dual regulatory framework – under both the National Ports Authority Bill and the Telecommunications Act 103 of 1996 ("the Telecommunications Act").
- Secondly, the Bill provides for the transfer of the assets and liabilities of the NPA Division from Transnet to the Authority. Transtel, which is the telecommunication division of Transnet, is not specifically excluded from these provisions of the Bill. This may have the unintended effect of requiring telecommunication facilities belonging to the Transtel PTN (private telecommunication network) located at ports to be transferred to the Authority. If this error is not corrected, then the Bill could have the effect of inadvertently undermining the SNO (second national operator) licensing process, as the Transtel PTN is supposed to be transferred to the SNO once it becomes operational.
- Telkom believes that these problems were probably an oversight on the part of the drafters of the legislation. Nevertheless, we are of the view that these issues should be addressed in the Bill so as not to undermine the telecommunications regulatory framework.
- We will now comment on specific provisions within the Bill as set out below. We have compiled a comprehensive audit of all the provisions of the Bill which impact upon Telkom and the SNO in tabular form which we have attached as an annexure to this submission.
Inadvertent inclusion of telecommunication facilities within the ports regulatory framework
- At the root of the problem is that many of the definitions in s1 of the Bill relating to the various types of port facilities and services are defined widely to include telecommunications, either explicitly or by implication. The effect of this is to subject port telecommunication systems to double regulation – by the Authority and the Regulator under the National Ports Authority Bill on the one hand, and by ICASA (the Independent Communications Authority of South Africa) under the Telecommunications Act.
- In this section of the submission we will examine the implications of including telecommunications within the ambit of the ports regulatory framework. We will then examine the specific definitions in the Bill that Telkom considers to be problematic. Lastly we will suggest amendments to the Bill that will rectify this problem.
The effect of including telecommunications within the ports regulatory framework
- The Telecommunications Act grants ICASA very wide powers to regulate telecommunications. ICASA’s powers extend to the regulation of the radiofrequency spectrum, the licensing of telecommunication services and the regulation of access to telecommunication facilities, amongst other things.
- The Bill inadvertently creates a number of overlaps between the Authority, the Regulator and ICASA where port telecommunication services are concerned. Three of the most problematic overlaps that Telkom has identified relate to the granting of licences, the provisioning of port telecommunication facilities and the prescription of tariffs. Although there are others, we will only concentrate on the most important problem areas for the purposes of this submission.
- The Bill permits the National Ports Authority to issue licenses and to enter into concession agreements with third parties for the provision of port services and facilities. This could potentially extend to port telecommunication systems, given that the definitions used in the Bill are so wide.
- To the extent that this is the case, then there is a clear conflict with Chapter V of the Telecommunications Act, which requires telecommunication service providers to be licensed by ICASA.
Provisioning of port telecommunication facilities
- The Bill empowers the Authority to plan, provide and maintain port infrastructure, including port telecommunication facilities. This is in direct conflict with the Telecommunications Act which only permits Telkom, the SNO and Sentech to self-provide their own telecommunication facilities.
- The South African government has adopted a policy of "managed liberalisation" for telecommunications, which aims to open up the local telecommunication market on a phased-in basis. Historically, the Telecommunications Act granted Telkom a statutory monopoly to provide telecommunication facilities to customers. This monopoly expired on 7 May 2002. The Telecommunications Act authorises an additional two operators to provide telecommunication facilities in the post-exclusivity period. These are: Sentech, which has been licensed to provide facilities in accordance with its carrier of carriers licence, and the SNO (second national operator), which will be licensed to compete with Telkom in the fixed line market.
- The implications of this are that telecommunication facilities may only be leased from an authorised operator, namely Telkom, the SNO or Sentech in accordance with its carrier of carriers licence.
Fees and tariffs
- The Bill empowers the National Ports Authority to prescribe fees and tariffs for port facilities and services, which again could include telecommunication facilities and services at ports.
- In this regard, there is a clash between the Bill and s45 of the Telecommunications Act which mandates ICASA to prescribe fees and tariffs for telecommunications.
Problematic definitions – s1
- In this section of the submission, we examine in detail the definitions in s1 that Telkom considers to be problematic.
- Two of the definitions explicitly include telecommunications within their ambit – namely the definitions of "port infrastructure" and "terminal infrastructure" – which s1 defines as follows:
"port infrastructure" – means the basic structure of a port, including … telecommunications and similar services.
The remaining definitions do not expressly mention telecommunications, although telecommunications implicitly fall within the scope of many of these definitions.
Two of the definitions do not include telecommunications specifically but the Bill empowers the Authority to designate facilities and services for inclusion in the definition (which potentially could include telecommunications). These are the definitions of "port services" and "port repair facilities" which the Bill defines as follows:
"terminal infrastructure" – means terminal buildings … telecommunications and similar services within terminal boundaries.
"port services" means stevedoring, cargo handling … and any other services provided within a port which are designated as such by the Authority by notice in the Gazette.
The definition of "terminal operations" refers to "related" services which could include telecommunications. This term is defined in s1 as follows:
"terminal operations" means services provided at a port terminal, consisting of handling cargo, storing cargo and delivering cargo to vessels and services related thereto.The Bill also employs terms which are not defined in s1 but which could also include telecommunications. Specifically, the Bill makes reference to "port facilities", which is a term that is not defined in the Telecommunications Act. Presumably "port facilities" are meant to refer to "port infrastructure" which is defined to include telecommunication services and facilities as pointed out above. This is particularly the case for the definitions of "licences" and "licensed operators" in s1 are especially problematic, which are defined in s1 as follows:
"port repair facilities" means dry docks, vessel repair facilities … and any other facilities which are designated as such by the Authority by publication in the Gazette.
"licence" means a licence to provide a port service or operate a port facility …
"licensed operator" means a person licensed to provide a port service or operate a port facility.
Telkom doubts that the drafters of the legislation intended to establish a dual regulatory framework in this way.
Telkom furthermore believes that the problem can be solved quite easily in the following manner:
Telkom submits that a clause worded along the following lines be incorporated into the definitions section:
- Firstly, all explicit references to telecommunications should be deleted in s1. In particular, Telkom recommends that the phrase "including … telecommunications and similar services" should be deleted from the definitions of "port infrastructure" and "terminal infrastructure".
- Secondly, the Bill should expressly exclude telecommunications from the scope of the definitions in s1. This can be done either on a clause-by-clause basis (which Telkom believes would be wordy and very cumbersome) or on a generic basis in one catchall clause (which Telkom believes would be preferable).
The definitions in section 1 shall exclude telecommunications services and facilities provided at port terminals and off-shore cargo handling facilities which are subject to regulation under the Telecommunications Act (Act 103 of 1996).
Failure to exclude the Transtel PTN from the transfer of undertaking provisions
The Bill contains a number of transfer of undertaking provisions which provide for the handover of the NPA Division’s assets and liabilities from Transnet to the Authority.
In particular, the Bill envisages that the transfer will take place as follows:
- The transfer will be affected as a going concern.
- Pursuant to the transfer the Authority will become the successor to the NPA Division.
- Upon the date of transfer, all the assets and liabilities of the NPA Division will vest in the Authority including:
- all land and immovable property relating to the Division’s business and that belongs to Transnet; and
- all moveable property and all rights and obligations of Transnet relating to that Division.
- The Bill does not specifically exclude Transtel’s assets from the scope of these provisions, with the danger that the Bill may have the unintended consequence of including within the ambit of the transfer that portion of the Transtel PTN which is located at ports.
- Transnet has historically operated its own PTN in the form of Transtel. Transtel has been constituted as a division of Transnet, and is not a juristic persona in its own right.
- Mention has already been made above of the fact that the Telecommunications Act granted Telkom had a statutory monopoly to provide fixed line telephony services, which expired on 7 May 2002. However, ICASA and the Minister are currently in the process of licensing a second national operator (SNO) to compete with Telkom in the fixed line market.
- The Act stipulates that the SNO will be made up of a consortia of companies comprising a 51% strategic equity partner ("SEP"), a 19% black economic empowerment ("BEE") component, and a 30% component consisting of Transtel and Esitel (Eskom’s PTN).
- If the transfer of undertaking provisions in the Bill are not amended to specifically exclude Transtel’s assets, then the Bill could have the effect of undermining the SNO licensing process, as the Transtel PTN will be transferred to the SNO once it becomes operational.
- In order to avoid this possibility, Telkom submits that that the following subsection should be included in s27:
Nothing in this clause should be construed as conferring a right of ownership on the Authority in any private telecommunication network maintained by Transnet.