The Bhutanese Leading the way.
One of the most important steps in the gradual but deliberate process of political reforms and democratization in Bhutan by His Majesty The Fourth King was a Kasho in 1992 delinking Bhutan Broadcasting Service (BBS) and Kuensel from the government or the then Communications Ministry and now Ministry of Information and Communication (MoIC).
The aim of the Kasho was to let these two national media outlets operate autonomously away from the government and allow for the growth of a professional media.
This was followed up with allowing private media in 2006 under His Majesty The King.
However, what has now left people in BBS board and management uncomfortable under the collar is that in 2021 the BBS had to sign an Annual Performance Compact (APC) with not only the Ministry of Finance which is its owner or shareholder but also the MoIC.
For the 2022 APC, the BBS has already had to send a draft to the MoIC for approval.
The BBS had to sign the trilateral APC with the MoIC as the BBS has been allotted as one of the SOE portfolios to the MoIC.
Another change was that earlier in 2020 the APC was signed between the Chairman of the BBS board and the Finance Minister, but this time around the BBS board was left out and the trilateral APC was signed directly between the BBS CEO and representatives of the MoF and MoIC.
The BBS Board was not even aware and found out only later making the board redundant in this process at least.
BBS CEO’s objections
The BBS CEO Kaka Tshering said he welcomes the APC as he thinks that SOEs performance should be evaluated.
However, he said he has two issues with the current APC.
The first is that the BBS board and Chairman is being bypassed with him having to sign directly with the two ministries. He said the board is the highest governing body in any SOE and the board being out of the picture is wrong.
His second objection is with the APC being signed in a trilateral manner involving the MoIC, when the 1992 Kasho had delinked BBS and Kuensel from the MoIC. He said this is ‘very, very tricky.’
The CEO said that the first APC in 2020 was signed between the BBS Board Chairman and the MoF but in 2021 the BBS had to sign with the MoIC too as the portfolio ministry.
He said in the case of other SOEs the idea of portfolio ministries is not a big issue but in the case of BBS the 1992 Kasho comes into play.
The CEO said that while the Kasho delinked BBS from the MoIC and granted it autonomy the idea of the portfolio ministry and signing the APC with MoIC would make BBS beholden to the portfolio ministry.
In response to a question, the CEO said that there is no real impact on the ground right now as the MoIC does not interfere or dictate the news, but he said the worry is for the future when things could change in the years to come.
Board member’s concerns
A board member said that, in the past, the BBS CEO would report to the board and the board would sign the APC with the Finance Ministry which represents the government as the shareholder of BBS but, in 2021, the BBS CEO was asked to sign the the APC with MoF and MoIC which was identified as a “portfolio” ministry.
The board member also pointed out that a Royal Kasho in 1992 had delinked BBS and Kuensel from the Communications Ministry to enable their professional growth. The two companies became corporations with independent boards even though the majority of nominees are from the government.
Another contradiction is that the ICM Act of 2018 designated BBS as a Public Service Broadcaster (PSB) by a Charter or a bye-law. PSBs everywhere else in the world function independently with a financing arrangement signed with the government.
However, the same board member said that this government has not interfered in the functions of the board, and in fact the Prime Minister has left the BBS governance of BBS to the board.
PSB status of the BBS ?
Section 180 (2) of the ICM Act 2018 already recognizes the BBS as a Public Service Broadcaster to be governed by an appropriate bye-law or charter approved for this purpose.
However, the government is yet to come up with the bye-laws for the charter to operationalize BBS as a PSB which would give it more autonomy and stable financing.
The ‘Broadcasting Policy’ of the government put up on the MoIC website on January 2020 states that ‘New legislation should be adopted to transform BBS into a true public service broadcaster.’
On the issue of independence of BBS, the policy says, ‘The independence of BBS should be formally guaranteed – including through the manner in which its governing board is appointed, the powers of the governing board, which should include the appointment of the Director General, and the way in which its funding is provided – and these guarantees should be respected in practice – including by government officials refraining from attempting to give instructions to BBS.’
It goes on to says that as a part of the guarantee of independence, the BBS should report annually to parliament rather than directly to the government and the rules and processes relating to staff should, as far as this is appropriate, be delinked from the Bhutan Royal Civil Service Commission.
The policy says the mandate of BBS should be set out clearly in law, after a broad public consultation as part of a process to determine what that mandate should be.
In terms of funding, the policy says the budget for BBS should be proposed by BBS and approved by parliament, after consultation with government.
It says the law should place clear limits on the overall amount of funding that BBS may obtain from commercial sources including the maximum amount of time that may be devoted to advertising which should be in the range of 20-25 percent.
None of the policy recommendations above on BBS by the government itself has been implemented 4 years after the ICM Act and 2 years after the Broadcasting Policy.
The BBS CEO said that nobody can ignore the fact that BBS is a PSB by law now to be governed by bye laws or a charter approved for this purpose.
Examples of PSB in other countries are the BBC in the UK or the NHK in Japan.
BBS finances and the APC
Kaka said that a problem with the APC is that around 50 percent of it is to do with revenue generation while the other 50 percent is mainly on infrastructure related issues like FM towers.
He said that as a PSB the main focus in the APC for BBS should be on the quality of programing, timely news, competent analysis, biting stories etc.
The annual budget of BBS is around Nu 300 mn while it made around Nu 40 mn in 2021 mainly from commercial advertisements.
Kaka said under international norms a PSB should be fully funded by the state.
Private media houses in the past have said how even this 40 mn revenue of BBS is from a limited advertisement pie contributes to the sustainability crisis in the private media.
Kuensel did not sign on
The Kuensel MD and its former Editor Ugyen Penjore said that he first heard about this kind of APC in a meeting of SOE CEOs, and in the meeting, where the Finance Secretary was present, he said that Kuensel cannot sign such an APC as it would not be respecting the 1992 Kasho.
While the Finance Ministry which owns 51% of Kuensel respected this view and did not insist on an APC with MoF and MoIC, there was a catch.
Kuensel did not receive the Performance Based Variable Incentive (PBVI) given to the other SOEs in 2021 by the MoF.
The Kuensel CEO currently signs a performance compact with the board.
MoIC Minister
The MoIC Minister Lyonpo Karma Donnen Wangdi said the MoIC is the portfolio ministry for the BBS as it is the media and the ministry is there to sort out any problems faced by BBS.
He said the Department of Information and Media is under the MoIC and the aim is to ensure better functioning of BBS and to see if there are any issues.
Lyonpo said that he had not heard any objections to the APC until now and he said that as the BBS MD himself said the government has never made any attempts to influence the content of BBS.
Finance Minister
The BBS as a SOE is owned by the MoF and it was on the directions of the MoF that BBS was assigned its portfolio ministry of MoIC and was made to sign the APC.
MoF Minister Namgay Tshering said that the APC signing started in mid 2020 with SOEs to track their performance, have good corporate governance and ensure they fulfill their mandates. He said it was also brought in to avoid duplication of efforts and the crowding out of the private sector.
He said initially the APC was signed between the Chairman of the board and himself, but later in 2021 as an improvement and as part of the lessons learnt, the ministries were involved since most of the SOEs had social mandates related to those of ministries.
Lyonpo gave the example of the Ministry of Agriculture and Forests and related SOEs like Food Corporation of Bhutan, Bhutan Livestock Development Corporation, Farm Machinery Corporation Ltd. He said the ministries were put so that there is no duplication of efforts.
Lyonpo said that if the SOEs perform then they get the PBVI and though it could not take off in full due to the pandemic it is there.
He said that since Kuensel did not sign the APC there is no way to give PBVI as there is no basis to rate the performance.
He said that the government finances the BBS and if there is no improvement in its mandate, content and corporate governance in its lifetime then he asked who is accountable. He said the government can only hold the board accountable and change the board members and he asked if that is sustainable.
Lyonpo said the MoIC as a policy making organization can provide policy support to BBS.
The minister said the APC is in fact a mechanism that avoids political influence and control on BBS.
When asked about the PBS status and funding by Parliament, Lyonpo said that even in Parliament any ruling government would have a majority.
He said he is all for a fixed state funding for BBS as a PBS as long as the relevant law is passed.
Lyonpo said he is even open to discussing the APC issue if the BBS Board and management have any issues.
MoIC Secretary
The MoIC Secretary Phuntsho Tobgay said that the Digital Migration of BBS was supposed to happen 10 years ago, but it still has not happened yet.
He said that MoIC comes in the picture when it involves very important and strategic goals and objectives.
The secretary said the media shapes societies and this is important in building a shared national consciousness and values like Tha Damtshi, GNH etc.
He said the media is the glue that binds society and also plays an important role in a just and harmonious society which includes exposing corruption. He said the media also needs to tell the story of everyday heroes. He said there needs to be a media audit too.
The secretary said that SOEs depend on the government for financing as they have social mandates, but as corporate entities they should also look at how sustainable they can be otherwise if the government provides a crutch then a dependency starts developing. He said SOEs need to function efficiently.
