Further to last week?s article on the speech made by ITA President and Torque IT CEO, Mthunzi Mdwaba, concerning letters sent by multinationals to the ITA, Computing SA has obtained copies of these letters. Sent to Mdwaba in his capacity as ITA President, the letters from Dell Inc., Hewlett-Packard Co., IBM Corp. and Oracle Corp. were received in late October, around the time that the final charter draft was being finalized.

Says Mdwaba: ?These letters were received between the completion of the fourth and fifth drafts, when we had received submissions from all parties, including the multinationals. We were surprised to hear, at the same time, that they were lobbying government, because they had not told us about it.

?We were working from the premise that we had an agreement with everyone, and that the channels are open to everyone for further talks. Beyond the agreement, we had continuous meetings with the multinationals, including on the day before the fourth draft was finalized, when we told all the parties that where there is a lack of clarity with issues, including the issue of equity ownership, the multinationals would be dealt with like any other constituency, as issues relating to the scorecard were not unique to them,? he says.

?Having agreed that issues would be clarified in the fifth draft, and having an interim period between then and the delivery of the charter, I felt we would have time to go deeper into issues. But when I heard of their behavior, I thought it was consistent with how they had behaved since the beginning of the process. They had been already lobbying the Department of Trade and Industry, the Department of Communications and other government departments. Then these letters came,? says Mdwaba.

The letters from Dell (dated Oct. 11) and HP (undated) say, in very similar language, and signed by the South African heads, Stewart van Graan and Thoko Mokgosi respectively, that said heads, as members of the ITA, ?are disappointed to note that there has been very little communication or dissemination of information on this important project? (i.e. the charter), to quote Dell?s letter. HP?s says the same thing in slightly different terms.

The letters note that, as far as the writers are concerned, the ITA?s objectives are ?to promote and protect the interests of its members, to promote, support or oppose as may be deemed appropriate, any legislation or other measures affecting the interests of members, to collect and disseminate information likely to be of use to members?.

Both letters also state that the companies are uncertain as to the ITA?s position on the charter. ?We are uncertain about the standpoint of ITA with regard to the objectives of ITA relating to the ICT Charter,? says HP?s letter.

Both letters request that Mdwaba call a Special General Meeting so that the ITA can obtain a mandate from its members to sign the charter on their behalf.

Dell?s letter notes that, ?were the ITA to sign the charter without a firm mandate from the membership, then we may seriously consider disassociating ourselves from the position of the ITA on this matter?.

Seeking clarity

Says Dell SA MD, Stewart van Graan: ?It is important to note that points of view that do not totally coincide should not be seen as dissenting or anti-transformation. All we were doing was seeking clarification of the ITA?s position, as a member of the association, and trying to find out if a mandate had been obtained. We have no intention of disassociating from the ITA, but may disassociate ourselves from this particular instance.?

According to HP Chief Financial Officer, Gois Fouche: ?The letter needs to be seen in the context that it merely addresses a governance issue, in terms of ?What mandate does the ITA have to sign off the charter on behalf of the multinationals?Æ. From HP?s point of view we need to obtain permission from our parent in this regard.?

?HP is a member of the ITA and will continue to be so, it is merely a case of us disassociating ourselves in terms of the sign-off of the charter draft that is going to government,? Fouche says.

Oracle?s letter, dated Oct. 21, states that, with regard to the signing off of the ICT Charter by the ITA: ?Oracle Corporation (South Africa) Pty Ltd, at present a member of the Information Technology Association of South Africa, hereby does not recognize the Information Technology Association as its representative in matters relating to the ICT Charter, including the signing of the final draft of the ICT Charter.

?Oracle Corporation (South Africa) Pty Ltd is a wholly owned subsidiary of Oracle Corporation, a company incorporated in the United States of America. In light of corporate governance requirements and Oracle Corporation?s responsibility to its shareholders and stakeholders, Oracle Corporation (South Africa) Pty Ltd may not in any way endorse the ICT Charter Final Document. Such endorsement must be made by the relevant office bearers within Oracle Corporation, this requirement having been communicated to the ICT Charter Working Group through the American Chamber of Commerce.?

Says Kelvin Reynolds, Oracle SA MD: ?This is purely a governance issue. We sent the exact same letter to the CSSA for the exact same reasons.

?We signed the equity clause in the fourth draft on the understanding that the final draft would have to be reviewed by our principals. All we are doing with the letters is exercising good governance, because our principals have not yet reviewed the final draft.?

This would seem to be the crux of the conflict -- that the multinationals need to get approval from their parent companies on the charter and, as such, cannot allow the ITA to sign on their behalf. The final charter draft was released to stakeholders on Oct. 22, and was due to be signed on the 23rd. This would not have given the multinationals time to let their principals review the document. As far as Computing SA was aware, at the time of going to press, the final version had not been signed.

IBM?s letter, dated Oct. 22, was sent by its senior attorney, and states: ?We are aware that a number of IT companies have expressed concerns over the signing of the Charter in its current format. We concur with some of these concerns, and confirm that IBM South Africa (Pty) Ltd does not support the ICT Charter in its current format, and believes that it should not be signed.?

Computing SA attempted to contact IBM to comment on its letter, and was informed, via its PR company, that IBM would not be commenting directly, but would release a statement through the American Chamber of Commerce (AmCham), of which IBM country GM, Mark Harris, is president. At the time of going to press, no comment had been received.

Executive director of AmCham, Luanne Grant, says that AmCham had informed the ICT Charter Working Group all along that the final version would need to be signed by the multinationals/ e-principals at the respective head offices, and that the multinationals had signed the equity clause in the fourth draft in the spirit of moving along. ?In terms of good corporate governance, the local offices of listed multinational companies cannot sign off anything related to shareholders or equity. Any sale of ownership must be signed off by the multinational"s board, this is a normal part of corporate governance considerations,? she states.

Says Mdwaba: ?An organization with 100-plus members cannot take sides with seven or eight of them, we would rather act as a conduit for information. We have debated most of the issues, and found sanity on most of the issues. The multinationals do not support the fact that the ITA wants to act as an information disseminator, they feel that the ITA should take a stand.?

HP, Dell and Oracle reconfirmed their commitment to the charter process, when commenting on the letters, and expressed their intention to continue to participate in the process going forward.