Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698746905874.pdf (Namibia)
•REPUBLIC OF NAMIBIA MINISTRY OF INFORMATION AND COMMUNICATION TECHNOLOGY PRIVATE BAG 13344 WINDHOEK NAMIBIA OFFICE OF 1HE MINISTER Tel:+264 61283 2389 Fax:+264 61 222343 Emall: Minister-Office@mict.gov.na 24 February 2021 RESPONSES TO PARLIAMENT QUESTIONS NO 20 AND NO 22 I am rising to respond to questions raised by Hon.

Josef Kauandenge of NUDO and Hon.

Kazeongere Tjeundo of PDM, respectively, Corporation (NBC).
in relations to the Namibian Broadcasting Honourable Speaker, allow me to provide context to the NBC's financial standing for the past five (5) years before addressing the questions from the Honourable members.

1.

As we are aware, the NBC being a non-commercial SOE, is funded by GRN.

Despite the NBC generates its own revenues through different means such as that, however, selling airtime and advertiSing space on its airwaves, amongst others.
Despite the slow growth in the domestic economy since 2016, the NBC has managed to increase its own revenue by (8% 8 percent) compounded annual average growth rate from N$83 million recorded in the FY2015/16 to N$111.5 million recorded in FY2019/20.

the corporation managed to generate N$100 million and above for the Consistently, financial year 2020/21, NBC projects to past generate N$96.7 Million despite a projected retraction in the domestic economy.
The following is a breakdown of own revenue generated per financial year and as per the defined period: four financial years.

For the current a. FY2015/16: N$83 million b. FY2016/17: N$102 million c. FY2017/18: N$116 million d. FY2018/19: N$106 million e. FY2019/20: N$111.5 million 2.

With regard to the questions raised by Honourable Tjeundo, once again, the NBC is entity in line with Section 2 of the Public Enterprises classified as a non-commercial from Act, Act no.

1 of 2019.
1 of 2019.

This implies that NBC should receive full financial support in line with its mandate.

However, despite the NBC being a non- the Shareholder commercial SOE, it still generates own revenue averaging N$ 103 million per annum i.e., if we take the past five (5) years into consideration.

This needs to be recognised and applauded.

Therefore, the NBC is one of the worst performing non-commercial state entities while the results and the background where we find facts speak differently.
commercial SOEs who do not come close to making any profit let alone break even.

I beg to differ with the Honourable's contention that, I am also saying this against 3.

Hon.

Speaker, it would be useful for the NBC as non-performing Institution.

For now, I have no choice but to applaud both the NBC Board, Management and Staff for their tireless efforts and dedication to improve the levels of NBC's own generated revenue.

the purpose of continued improvement if Hon.


Tjeundo could share his basis of regarding the at 4.

Hon.

Speaker aI/ow me to address Hon Josef Kauandenge and Hon.

Kazeongere Tjeundo's questions Simultaneously since some of the matters raised are identical.

5.

Question 1: Was there any consultations with you on the handsome bonuses that was paid to the NBC Management with the Director General excess of N$500,OOO?
receiving in Firstly, the NBC employs staff based on legally binding contracts Answer: employment which stipulate the conditions of employment including their remuneration and other benefits.

These benefits are applicable to all NBC employees, however the thereof may differ depending on various job categories or structuring of disbursement remuneration packages and on the type of contract signed.

of 6.
of 6.

Pertaining to remuneration matters, in terms of section 4 of the Public Enterprise Act, the remuneration and other service benefits of the CEO (in this case Act 1 of 2019, the Director General) and other management are determined by the Board of Directors with the concurrence of the relevant Minister, with due regard to any directives laid down by the Minister of Public Enterprises under section 4(1) (e).
The same statement denotes that when these contracts are signed and agreed based on these provisions, the Board is then fully mandated to carry out its fiduciary duty as outlined in the general principles governing good corporate governance in line with all other supporting governing statutes.

staff of a public enterprise 7.

What is especially important is that the NBC has expended about N$ 53 million for 13th Cheques/Bonuses, Notch (Merit increases) and incentive payments over the past five (5) years.
From the amount of N$ 53 million, an amount of N$ 47.6 million has been spent on employees who fall within the bargaining unit of the NBC to underscore, 2 which excludes Management and some other staff members of the NBC for the past five (5) years.

This denotes that all employees within the bargaining unit received an amount of N$ 9.5 million per annum for the past five (5) years.

These are employees who are on the conventional pay structure.
Even in this current the Board of Directors and the Management didn't refuse to make this payment of about N$ 9.5 million to that cluster of employees.

This group of staff members have contracts that run up until their retirement.

financial year, 8.
financial year, 8.

The Director General, the rest of Top Management and some other staff members totaling twenty-six (26) who opted to be on the Total Cost to Company (TCTC) pay structure, have for example, five (5) year fixed-term contracts with no guarantee of employment or extension of their contract after their five (5) year contracts end.

Part they shall receive an incentive pay based on how the of their conditions read that business is performing.
From the N$ 53 million, the TCTC group only received N$ 5.4 million calculated against a five (5) year period.

This ordinarily says that N$1.08 million has been expended per annum which was only paid out in this current financial year but was delayed for a period of five (5) years before being considered by the Board.
It to note that only 50% of the amount for which the employees on is also very important the general TCTC qualify was paid out which they accepted when informed about economic conditions of the country.

The total amount of N$ 5.4 million was hence paid to management and other employees on TCTC.

9.

The rest of the employees received 100% of their guaranteed bonuses and other payment such as merit increases religiously for the same five (5) year period annually.
10.As we all know, the Namibian Broadcasting Corporation (NBC) is established in terms of Section 2 of the Namibian Broadcasting Act (Act No.9 of 1991) with the aim to carry on a broadcasting service and is indeed a creation of statute.

Therefore, the NBC is limited in its activities and operations to what is provided for in the establishing Act and especially as far as commercial activities are concerned.
In terms of section 5 of the Broadcasting Act, NBC's operational affairs are directly managed via the strategic direction given by the Board of Directors as the supreme appointing authority within the NBC.

11.
11.

In adherence to the above, broad consultations took place starting with the previous Board as early as in the year 2018 on this matter, again at the Board Remuneration Committee (REMCO) of 28th February 2019 and continued with the new Board incentives for all staff on Total Cost To Company regarding the outstanding contractual remuneration including those who are on the Conventional/Basic pay structure.

Legal obligations that arises from contracts are fulfilled in terms of this respective contracts.
12.

Question2: What justified the Board's decision to award hundreds of thousands of dollars to NBC top management seeing that the broadcaster lost between N$30-N$40 million in the past year?

And what Yardstick was used to measure 3 they indeed qualify for performance before approving these payments, what was the justification bonuses?

The Board only served for of have been to 16 managers while the general workers that two months paying N$5.4 million demanding a salary increment for the past 3 years?
these payments were not limited to top management Answer: As indicated earlier, only but also to job levels below and were delayed for a period of five (5) years looking at how own revenue generation would proceed and grow.

These payments should not be looked at in isolation but must form part of the overall N$ 53 million paid over the past five years.
to note that all other employees within the NBC who are outside the TCTC group, have diligently received their 13th Cheques /Bonuses and Notch Increases (Merit Increases) for the past five years totaling N$ 47.6 million while the TCTC only received N$ 5.4 million for the same period.
It is also important in 2020, 13.lt should be noted that due to the negative impact of COVID-19, the real GDP was this was as per the Bank of Namibia expected to contract by 6.9 percent i.e., in the first quarter of the Economic Outlook Update for April 2020.

At the time, Calendar year 2020, the Director General projected a possible potential loss of N$ 30 million to N$ 40 million as a result of the impact of Covid-19 would have on the NBC's ability to generate own revenue.
We are all aware that into full lockdown on the 28th of March 2020 and most of the clients that does business with the immediately cancelled their campaigns for both radio and NBC through advertisement television.

It was against this background that business would potentially be impacted negatively and by so doing would have an impact on the NBC's abilities to reach its targets.

Again, this was a business prediction which is normal.

the country went 14.


The general assumption therefore was that the NBC would have generated about financial year depending on the N$55 million to about N$66 million for the current resilience of the market.

However, the actuals for the period under review, came out differently and the NBC has seen a growth pattern in own revenue which indicates that the entity will surpass the N$90 million mark from own revenue based on the current trends.

has consistently generated revenue above N$100 million 15.
The NBC's total revenue consists of the GRN subsidy and own generated revenue.

from The corporation 2016/17 to 2019/20 financial year coming from a base of about N$ 83 million and this refers to NBC's own financial performance (outside the GRN subsidy) which serves as the basis for the contractual performance bonuses as well as the 13th Cheques /bonuses and notch/merit increases which are not mentioned for obvious reasons.
16.lt is also on record that the NBC employees received a six (6) percent salary increase in October 2018.

4 17.

Therefore, although the current Board which includes two members who were part of the Board just the previous Board, served for three (3) months at the time of approval, finalized outstanding matters derived from the activities of their predecessor.

18.
18.

Question 3: The Director-General's contract was only renewed in October 2020, so how was he awarded a performance bonus after only 4 weeks of working?

It is important Answer: to note that, performance bonus/incentives are paid for the performance of a business/staff relating to past performance and not for a time that is still to come.

The Director-General of the NBC was appointed on the 1st of October 2015 for a fixed term of five (5) years for which the performance bonus was paid.
Therefore, during the current period, received any incentive payments.

the Director-General has not 19.Question 4: Is it proper and fair that a selected few elites got bonuses of N$5.4 million while the NBC is pleaded poverty and insufficient funds to employ over a hundred interns permanently who have been in the employ of the NBC for the past 10 years?
Is it justifiable that N$5.4 million goes to into the pocket of a selected few while the institution cannot agree to pay the workers sufficient salaries as they are demanding?

Answer: As explained earlier on, all NBC staff have received an amount totaling N$ 53 million for 13th Cheques/ Bonuses, Notch Increases and incentive payments, of which N$ 47.6 million for the past to the majority of staff who NAPWU Members and are in the Bargaining Unit.
These staff members are on the Conventional Pay Structure and have contracts which ends when they retire.

This means that every year for the past five years, this group received N$ 9.5 million and on top of that there was a salary increase of 6% in October 2018 (Merit five years went increases) 20.
The reference to "elites got bonuses" is also misplaced in that the majority of staff who received the contractual performance incentive on the TCTC are not part of the like the members of the Executive Team on the TCTC executive team.

They are just remuneration the annual automatic merit/notch increases of between 3.5% to 4% like the rest of the qualifying staff on the salary plus benefits.
The TCTC group only have five-year Conventionallbasic contracts with no guarantee of work, beyond their five (5) contracts.

they do not qualify for structure.

Equally, I am aware that both the Board and Management 21.

On the issue of contract employees, they are looking at means of how best not to put are busy with this matter and that people in the street.
The Board and Management could have terminated these contracts during the introduction of the austerity measures some years ago but chose not to do so.

However, in motion to downsize staff numbers without direct termination and the process involved is looking at natural attrition and taking advantage of those who retire and seek for early retirement.

the plan is still 5 22.


Regarding salary increase demands, the NBC Board and Management is of the view impact and that salary increases cannot be sustained in view of the high financial especially the above inflationary demands.

However, in order to assist employees during these times of uncertainty, Board and Management proposed a once off payment of N$ 7.6 million, ranging between N$15 000 and N$20 000 per employee falling within the bargaining unit.
The once off payment is depended on funding being secured and the Board being prudent in executing its fiduciary duties, will not act in a reckless manner by awarding the salary demands to the demise of NBC.

23.This proposal was rejected by the union representing the employees and instead they impact of are now demanding an 8% salary increase plus benefits with a financial about N$ 40 million.
24.Question 5: seeing that this is a gross erosion of good governance; will anyone be held accountable for approving these performance bonuses?

Answer: The Board of Directors have an implicit obligation to ensure that the NBC is run in the best interest of the Shareholders (Government).

Therefore, the approvals of bonuses/incentives to employees on TCTC is far from what the Hon.

Kauandenge is branding as gross erosion of good governance.
The Board of Directors have thoroughly applied their minds and were within the powers vested in them when they approved the incentives for the employees on TCTC for the past 5 years totaling to N$5.4 million.

The same Board by way, did not reject the N$9.5 million of 13th Cheques /Bonuses and Notch Increases for staff members who are on the Conventionallbasic pay structure for this financial year.

25.
25.

Question 6: Are you aware that there is mass victimization of shop stewards at the NBC just because they decided to stand up for their rights and that of their fellow workers?

Answer: On this matter, I have been briefed in full by the Chairman of the Board on behalf of his fellow Board Members.

I am aware that tension is normally exceedingly the NBC high when employer/employee and the Union are negotiating.
So far, Management have created an enabling environment within, which the employees are motivated to do a good job.

Surely like in any other institution there will those who may regard themselves above law and obviously relevant policies are in place to address such.

26.The NBC also do have a Recognition Agreement in place with the union, and therefore the rights of shop stewards to carry out their duties is recognized and allowed as such.
Furthermore, the NBC has a grievance procedure in place which forms part of the 6 overall Conditions of Employment Procedures and Policies which staff members/shop stewards are open to use to channel their grievances.

there is no mass intimidation of any shop steward as alleged, however 27.

Hon.

Speaker, Management by an dealt with a case of psychical uncontrolled shop steward.
The utterances made were bordering on potential criminal grounds given that there were inciteful and seriously threatening in nature to some of the Top Management.

Most recently the same shop steward and the union apologised regarding the incident.

unconditionally to Management threats towards Management I trust that this addresses your concerns.

I thank you.

7