Flouting the Law

Intellectual Property RightsOn a recent trip to India, I was quite fascinated by the lack of respect for the law there from a number of perspectives. For a country that’s over-burdened with an inherited bureaucracy, the most obvious flouting that strikes one is corruption. Corruption in India, however, is not always deemed acceptable practice by the public – certainly not by the likes of Anna Hazare, a prominent anti-corruption activist that even went on a hunger strike in protest. Stay a little longer in India, and one is sure to notice a more publicly acceptable flouting of the law: specifically those pertaining to Intellectual Property Rights (IPR).

The IPR challenges in India span across a number of different sectors including technology, education and more recently coming to the fore, pharmaceuticals. In the technology sector, even Microsoft has all but surrendered to piracy of their Windows platform in India. They literally cannot afford to enforce the use of genuine product there given the enormous size of the market – they would risk a move of both usage and development to alternative platforms which would likely kill their international business model.

With respect to education, the somewhat controversial Nobel laureate Amartya Sen famously commented in a public discussion with South African, then finance minister, Trevor Manuel, about the taxes on books – specifically about how short-sighted such moves are when a primary goal of developing nations such as India and South Africa is to promote and push education of the masses. He argued that government should be doing everything possible to facilitate increased penetration of books and knowledge. One wonders what comment he would have given about the free copying of textbooks and other academic material in India. Such moves certainly do help promote education and bring otherwise expensive texts within reach of many who would otherwise be unable to access them.

More recently, the Indian Supreme Court’s decision to reject a motion by Novartis, a Swiss pharmaceutical firm, to patent an updated version Glivec has raised further IPR issues in the Indian market. Glivec, their cancer drug, stands to help many more people if it remains affordable – something that will clearly not be the case had the patent gone through. This however was not the reasoning that drove the decision. India has been exceptional in ensuring that frivolous patents applications are thrown out, a move that is sure to anger many in the industry.

The decision obviously raises questions about the value of research – particularly for pharmaceutical companies who spend millions of dollars before they arrive to the market with an acceptable product. If they cannot protect their IPR with respect to their research there is no incentive for them to conduct the research in the first place – others would simply be walking away with profit at their expense – an unacceptable equation for any commercially viable business venture.

So what is the acceptable rule of thumb here. Should IPR be neglected if there is clearly mass public benefit in doing so? If so, how does one factor in the social impact in IPR related court rulings. The answer is not quite that simple. Book publishers and technology companies, like the pharmaceutical companies, are profit making enterprises. For them to continue doing what they do, they need a financial incentive – the social incentives are clearly not sufficient. Using price discrimination for countries like India – i.e. charging them less and the likes of the UK or USA more, is difficult if not impossible to monitor and manage commercially. The likely solutions are government subsidies to these enterprises, or these companies refusing to engage in business with certain markets. Both of these are fraught with complications. Possibly the best solution would be to maintain drug prices at an acceptable level that keeps the medication within reach for most – now which pharmaceutical company would be altruistic enough to even consider that option?

Other laws that are being continually flouted in developing countries include those around online gambling. This is the case not only in India but is evident with the many South African online casino options available. This is despite the landmark ruling against a local online casino, Piggs Peak, based out of Swaziland. The problem once again lies not in the law but the apparent lack of interest or incentive for government to enforce them.

Comparing SABC to the BBC

On a recent visit to the UK, I met a number of media companies and local journalists including a few members of the editorial team at the BBC. It was clear only minutes into the conversation that the issues facing the broadcasting industry there were significantly different from those the SABC are currently grappling with in South Africa. They were more future-focused and ranged from harnessing the opportunities brought about by technology changing journalism and interactivity, to how to manage a changing public demand for content.

In South Africa, the SABC’s key challenges appear to be almost exclusively internal. Between political bickering about news coverage, the evident SABC leadership crisis, exposed fraud and abundant corruption, there is little time to consider customer service and needs, let alone any thought leadership on the future of broadcasting. Of course, this is not to say that the BBC does not have its own internal leadership issues – it certainly does. However, the scale is different by an order of magnitude.

The broadcasting industry focus and public media attention in the UK lies more on equity, technological progress and quality of service. A quick glance at the BBC editor blogs will easily validate that. There is a substantial platform for interaction with the end customer – not only through the likes of World Have Your Say and the multitude of reporter blogs, but more directly so on BBC editorial content and general programming.

SABC photo

SABC head office – Johannesburg. Photo by Mike Powell.

In South Africa, you’d be hard pressed to find a place to voice similar opinions on the SABC, other than next to your water cooler at your own office. The fact that senior BBC editorial staff usually reply to many of the comments, concerns and feedback adds to the sense of customer focus that is so lacking at the SABC.

The recently published findings of forensic reports on the SABC shed more light on its lack of customer focus. It appears that the SABC leadership team are more concerned with self-enrichment and political positioning than with the job of broadcasting.

Consider the following findings in the SABC audit:

  1. “Irregular contracts” to the value of close to R200 Million (over US$23.5 Million) that were deemed by the SABC’s own internal audit team to have delivered “no significant value”
  2. Evidence of tender awards where there were clear conflicts of interest with the negotiating parties
  3. “Irregular expenditure” around sponsorship for events (a la ICT Indaba)
  4. Providing a politically connected family with free exposure worth millions for their newspaper, the New Age
  5. Hiring Hlaudi Motsoeneng as Chief Operating Officer after ignoring its own governance structures. This, incidently, is a person who had lied about twice failing high school matric.
  6. Appalling recruitment and due diligence practices including hiring the likes of Justice Ndaba who had forged 3 qualifications including an MBA to secure his position. To aggravate the situation he was allowed to continue working even after this was discovered!
  7. Last month, the SABC suspended its Chief Financial Officer, Gugu Duda for “procurement irregularities”.

When it comes to reporting, the question of the impartiality of the public broadcaster is always on the table. In this respect, the SABC is no different from the BBC. Locally however, the bias appears more explicitly. For example, the SABC was asked to avoid media coverage for local firebrand Julius Malema since he has become a thorn in the ruling ANC government’s side. Complying to this kind of direct request is unlikely to go down well in the UK. In South Africa however, it seems par for the course.

It is unfortunate that there is a complete lack of accountability at SABC. How can it then expect tax payers to cough up an additional R6 Billion (over US$700 Million) to fund a digital strategy when its house is in disarray and there is ample evidence of what can only be described as looting? When failing to meet 68% of a total of 89 goals set for the broadcaster constitutes an “overwhelming success”, what chance is there the SABC will come even close to anything like the BBC?

* * *

You are not alone if you think that betting on the SABC pulling itself out of its current mess is like putting your faith in online gambling in South Africa or on the likes of this excellent website in the UK. Sadly, you probably stand better odds of success if you buy lottery tickets online and keep your fingers crossed. One can only hope that the South African public raise enough of an raucous about the SABC so that the government is forced to take stock and more importantly, action, to rectify the situation.

Stay tuned for our forthcoming editorials on interactive TV, social issues around human trafficking, online gambling legislation in South Africa and more.