Parliament summons Malatsi over controversial B-BBEE policy direction

Daily Maverick

26-05-2025

Communications Minister Solly Malatsi has been called to appear before Parliament on Tuesday, 27 May, to explain a proposed policy direction that could significantly alter the way South Africa regulates empowerment in the ICT sector – and possibly open the door to long-blocked players such as Starlink.
The summons follows a public backlash from parliamentary communications and digital technology committee chairperson Khusela Sangoni Diko, who questioned both the legality and motivation behind the minister's move, describing it on social media as a 'spectacular mess up of process and glaring invitation for litigation'.
The policy
On Friday, 23 May, Daily Maverick reported how Malatsi gazetted a Proposed Policy Direction to the Independent Communications Authority of South Africa (Icasa), instructing it to align its ownership regulations with the Amended B-BBEE ICT sector code.
The key shift? Recognising Equity Equivalent Investment Programmes (EEIPs) as an alternative to the existing 30% equity ownership requirement for electronic communications licensees.
Malatsi's statement stressed a need to 'unlock investment' and 'accelerate broadband access' by offering multinationals alternative ways to meet empowerment obligations, such as investing in local suppliers, skills development, infrastructure and small businesses.
'Transformation is non-negotiable,' Malatsi said. 'Even if companies are not rolling out large-scale infrastructure, they will be required to make commitments that are substantive and clearly aligned with South Africa's socioeconomic development goals.'
Chairperson raises red flags
Shortly after the policy was gazetted, Diko publicly criticised the move. In a tweet posted on X on 23 May, she questioned whether the policy was a deliberate attempt to favour Starlink, saying it could amount to, 'From what could be construed as unfair regulation to attempts to circumvent the law through policy directives not worth the paper they are written on'.
A more detailed response, attributed to committee member Stan Itshegetseng and shared by Diko, argued that the minister's directive might be legally flawed. It pointed out that Section 9(2)(b) of the Electronic Communications Act (ECA) required a minimum of 30% ownership by historically disadvantaged individuals for applicants seeking individual licences.
The statement asserts that EEIPs, while legitimate under the Broad-Based Black Economic Empowerment Act, cannot override the ECAs hard ownership threshold – a threshold, it emphasises, that is embedded in licensing law, not just empowerment scoring.
'The minister is effectively attempting to recast licensing law through policy directive', the statement read. 'That is not within his powers. Only Parliament can amend the ECA. Only courts can resolve interpretive contradictions between the ECA and B-BBEE frameworks.'
What does this mean?
What's at stake? A fundamental question about whether policy can reinterpret law.
Is this about Starlink? Malatsi hasn't named it, but the committee has.
Parliamentary scrutiny begins
The portfolio committee has now formally invited Malatsi and the Department of Communications and Digital Technologies to appear before it for a briefing in Parliament scheduled for Tuesday, 27 May, at 9am.
According to the committee, the policy direction 'appears to be in contravention of the Electronic Communications Act and in favour of low-Earth orbit satellite provider SpaceX.'
Diko declined to speak further on the matter, saying she would wait for 'the committee's collective wisdom' to be expressed.