Eskom inquiry: legal opinion

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Public Enterprises

16 August 2017
Chairperson: Ms D Rantho (ANC) (Acting)
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Meeting Summary

The Parliamentary Legal Office presented a legal opinion on the proposed process for the Committee to conduct the inquiry into State Owned Enterprises. On 25 July 2017, the Committee had considered the process to be followed in conducting an inquiry into the governance failures at Eskom. The Committee was of the view that the inquiry should follow a similar process to the one followed by the Ad Hoc Committee on the SABC Board Inquiry. Using the SABC Inquiry as a benchmark, it was proposed by Members that an evidence leader be appointed to question witnesses. It was suggested that a member of staff be appointed as evidence leader or alternatively, an outside expert be appointed to undertake this task.

The Constitutional and Legal Services Office advised against the procurement of outside experts to lead the inquiry. The Office advised that the inquiry into state capture of SOEs might extend beyond the current issues identified and could take considerably more time than envisaged. More so, procuring the services of an outside expert was cost prohibitive and impractical. It confirmed that the Committee was entitled to conduct an inquiry as part of its oversight mandate. The Constitution envisages that the parliamentary process be conducted in a multiparty environment to enable the various interests of citizens to be represented. Only elected representatives were able to fulfil this obligation. While Members must receive support from staff and have access to resources or ensure that they effectively conduct oversight they should not relinquish this power to unelected officials or third parties. Members must both lead and direct oversight processes. In addition, Members enjoy parliamentary privileges which empower them to carry out their oversight responsibility without the threat of civil or criminal liability. They are afforded these protections to ensure parliamentary processes are conducted in a robust and effective manner. Parliamentary privileges do not apply to members of staff and third parties.
The Committee inquiry would be a fact-finding one and its purpose was not as narrow as the SABC inquiry. The SABC ad hoc committee had adopted a quasi-judicial process with an evidence leader putting questions to witnesses on a defined set of concerns. As this was a quasi-judicial process the SABC ad hoc committee had to ensure stricter adherence to administrative law principles including to the rules of natural justice. However, the use of an evidence leader was not the only option available to the SABC ad hoc committee. The process could also have been conducted by Members questioning witnesses as a previous inquiry into the SABC board had done. The closer an inquiry resembles a quasi-judicial or administrative process, the greater the need for the Committee to follow the rules of natural justice.
The Acting Chairperson said the inquiry on State Owned Enterprises had to be kick-started as soon as possible. Also, the Committee has been keen to employ an experienced evidence leader to prepare for the inquiry and to lead it, but Parliament had indicated that its advocate would not be available. Parliament further indicated that it could not engage the services of an external expert to be an evidence leader, citing resource constraints.

Members expressed serious concern at the failure of Parliament to provide necessary resources for the Committee to conduct its work effectively. Failure by the State to provide resources to unearth such irregularities within SOEs was not fathomable. On the request for an evidence leader, Members fully understood their obligations. However, there was need for an evidence leader to guide the work of the Committee. Hence, it would be misleading to assume that Members were seeking to delegate the inquiry to an outside person. A Democratic Alliance Member said it was “absolutely ludicrous” that Parliament could not avail resources to engage the services of an external legal services provider in an effort to deal with state capture. There was going to be massive evidence to be gathered and collated, and it was simply impossible for Members to do the admin and legal side of the inquiry while executing their oversight role.

The Committee agreed that a sub-committee would approach the Speaker’s Office to make a plea for adequate resourcing and an evidence leader. Also, the Committee would need to invite potential whistle-blowers and witnesses, but must ultimately decide on who would present evidence before it. Protection of witnesses must be clearly communicated and the possibility of having closed discussions with some of the witnesses had to be considered. The process should be fully supported so that the Committee gets to the bottom of issues. The matter could not be delayed any further as time was of the essence.
 

Meeting report

Opening Remarks
The Acting Chairperson said the inquiry into State Owned Enterprises had to be kick-started as soon as possible. The terms of reference in relation to irregularities within Eskom had been drafted, but had to be amended to include additional witnesses. Also, the Committee was keen to employ an experienced evidence leader to prepare for the inquiry and to lead it, but Parliament had indicated that Advocate Ntuthuzelo Vanara would not be available. Adv Vanara was the evidence leader for the ad hoc inquiry into the SABC. Parliament further indicated that it could not engage the services of an external expert to be an evidence leader, citing resource constraints.

Constitutional and Legal Services Office legal opinion regarding the inquiry
Ms Sueanne Isaac, Legal Advisor: Constitutional and Legal Services Office, Parliament, took the Committee through proposed process to conduct the inquiry into State Owned Enterprises (SOEs).

Ms Isaac advised against the procurement of outside experts to lead the inquiry. The inquiry into state capture of SOEs might extend beyond the current issues identified and could take considerable more time than envisaged. More so, procuring the services of an outside expert was cost prohibitive and impractical. Other portfolio committees may also request to follow a similar process in future and this will be unsustainable.

Ms Isaac confirmed that the Committee was entitled to conduct an inquiry as part of its oversight mandate. The Constitution envisages that the parliamentary process be conducted in a multiparty environment to enable the various interests of citizens to be represented. Only elected representatives are able to fulfil this obligation. While members must receive support from staff and have access to resources or ensure that they effectively conduct oversight they should not relinquish this power to unelected officials or third parties. Members must both lead and direct oversight processes. In addition, Members enjoy parliamentary privileges which empower them to carry out their oversight responsibility without the threat of civil or criminal liability. They are afforded these protections to ensure parliamentary processes are conducted in a robust and effective manner. Parliamentary privileges do not apply to members of staff and third parties.

The Committee inquiry would be a fact-finding one and its purpose was not as narrow as the SABC inquiry. The SABC ad hoc committee had adopted a quasi-judicial process with an evidence leader putting questions to witnesses on a defined set of concerns. This was done as its recommendation to the National Assembly required that evidence be adduced and weighed up to establish if there were grounds as listed in the SABC Act to find the board unfit [to hold office]. As this was a quasi-judicial process the SABC ad hoc committee had to ensure stricter adherence to administrative law principles including to the rules of natural justice. However, the use of an evidence leader was not the only option available to the SABC ad hoc committee. The process could also have been conducted by Members questioning witnesses as a previous inquiry into the SABC board had done. The closer an inquiry resembles a quasi-judicial or administrative process, the greater the need for the Committee to follow the rules of natural justice.

Furthermore, the Standing Committee on Public Accounts (SCOPA) for example had illustrated how effective oversight inquiries can be conducted. It was advised that regard be had to such a process. SCOPA divides various issues amongst members with each Member required to lead questions on specifically assigned areas. The rest of the members were then allowed to ask further questions. This process allowed members to direct, steer and own the process of the inquiry.

In conclusion, the Constitution mandated the National Assembly and its committees to conduct oversight. This process was distinct from statutory inquiries. The inquiry to be conducted by the Committee was in terms of this oversight mandate.

Discussion
Dr Z Luyenge (ANC) expressed “total dismay” at the failure of Parliament to provide necessary resources for the Committee to conduct its work effectively. The Committee was dealing with Eskom, Denel and Transnet as it was ‘smelling a rat’’ in those particular entities. There was a hypothetical view to the effect that financial irregularities at Eskom ran into a trillion rand; being looted by families and individuals. Failure by the State to provide resources to unearth such irregularities within SOEs was not fathomable. On the request for an evidence leader, Members fully understood their obligations. However, there was need for an evidence leader to guide the work of the Committee. He/she would not dictate the terms. Hence, it would be misleading to assume that Members were seeking to delegate the inquiry to an outside person. Also, there was no need to make comparisons and reference to the terms of the SABC ad hoc committee inquiry as well as SCOPA. The proposed Committee inquiry was unique in nature, and urgent.

Ms N Mazzone (DA) said the need for inquiries into state capture was part of an urgent instruction given to portfolio committees by the House Chairperson, Mr Cedric Frolick. Therefore, it was “absolutely ludicrous” that Parliament could not avail resources to engage the services of an external legal services provider in an effort to deal with state capture. There was going to be massive evidence to be gathered and collated, and it was simply impossible for Members to do the admin and legal side of the inquiry while executing their oversight role. The understanding of how the process would unfold was that an evidence leader would be required to create the skeletal framework, and Members would lead the robust discussions. That an evidence leader would not enjoy the same protection as Members was not the issue. It was contradictory to use the SABC inquiry as a benchmark. It was well-appreciated by Members as well as Parliament that this was the first inquiry of its nature to be embarked upon, hence no previous inquiry should be used as a benchmark. Also, SCOPA was investigative in nature thus should not be placed in the same ambient as the Committee. It was essential to get to the bottom of why there is a sudden pushback in acquiring an external evidence leader when this was not the case in the past. How seriously was Parliament taking the oversight role and mandate of the Committee? An external evidence leader was one of the resources the Committee would need to conduct the process effectively.

Mr M Gungubele (ANC) commented that it was well-understood that Members, as politicians, must lead/direct the process. However, the argument that legal experts to assist Members could not be availed as they would not be protected and did not enjoy immunity afforded to Members was not helpful. He questioned the motivation of advising against a quasi-judicial process. A quasi-judicial process was an attempt to be fair in conducting a process that could negatively affect the image and integrity of persons. On precedence setting, there was no such principle in terms of how parliamentary committees work. Each committee has to take own decisions and approach based on its own merits and situational differences.


Mr N Singh (IFP) said the objective of the Committee for the past months was to identify graft and corruption within public enterprises. Hence, it found it fit to carry out an inquiry. The Committee had already received unsatisfactory representations from the SOEs. It was thus necessary to conduct a full-blown inquiry. The Committee needed assurance from the powers that be, in Parliament that it would be capacitated with the necessary resources and expertise. Members must not allow any elements to hinder the process. He emphasised that people involved in wrongdoing should be prosecuted.

Mr S Swart (ACDP) emphasised the need to urgently deal with allegations on the unprecedented levels of state capture. Although Members might possess some degree of legal expertise, there was need for an inquiry leader. The matter could not be delayed any further as time was of the essence.

Mr F Shivambu (EFF) said the legal opinion was unhelpful. Advising that the inquiry process could be too expensive was an administrative and cost consideration, not a legal opinion. A thorough and impactful inquiry on irregularities within SOEs was needed.

Mr R Tseli (ANC) said the Committee could not be expected to deal with such a complex matter without legal expertise. He shared the same frustration as the other Members. He suggested that the inquiry continue with or without an evidence leader. He suggested that the Office of the House Chairperson be invited to the next meeting so that the Committee could share its frustrations. The issues had to be dealt with as the Committee had other mandates to attend to as well.

Ms Isaac responded that the request from the Committee was for parliamentary legal advisors to look into possible risks associated with conducting an inquiry. It was within the Committee’s power to choose its desired process. The cost aspect was raised as an attendant risk. Furthermore, having an evidence leader would mean the process would be quasi-judicial, hence the need to adhere to the laws of natural justice.

Mr Swart said it would be helpful to separate the envisaged process from the SABC matter. Having an evidence leader did not mean the inquiry purely becomes a quasi-judicial process. Witnesses involved would need to be afforded adequate protection against victimisation as high level individuals had been implicated.

Mr Singh suggested that the Committee consider the oversight route as it was less litigious. A full quasi-judicial inquiry could delay the process. He suggested that a Committee delegation be sent to the Speaker; to outline the resources needed to undertake the oversight process. It was important for the Committee to invite written evidence from whistle-blowers. It would then reserve the right to invite some of them to present oral evidence.

Mr N Kwankwa (UDM) commended the legal opinion for pinpointing probable risks involved. However, nothing stopped the Committee from inviting legal advice from a different source. Also, the investigative framework must not be limited going forward.

Mr Shivambu agreed with the proposal of having a sub-committee approach the Speaker’s Office to make a plea for adequate resourcing and an evidence leader. The Committee would need to invite potential whistle-blowers and witnesses, but ultimately decide on who would present evidence before it. Protection of witnesses must be clearly communicated and the possibility of having closed discussions with some of the witnesses had to be considered. The process should be fully supported so that the Committee gets to the bottom of issues.

Ms Mazzone indicated that the proposal to send a multiparty delegation to the Speaker was welcome. The Members must go to the Speaker’s office with a strong mandate as Parliament had an obligation to adequately resource oversight processes.

Mr Gungubele agreed with sentiments expressed by Members. He pointed out that a quasi-judicial process was not litigious. The point was if the Committee is to undertake an intensive inquiry, the process had to be credible. He commended the concerted effort by parties in dealing with maladministration and corruption. Recouping stolen money did not require any ideology but technique, hence the need for unity. Furthermore, a cost-benefit analysis was critical. If people allegedly misappropriated large sums, then a failure to deploy just a fraction of the sum in an attempt to recoup such funds would be problematic. Also, the certainty around an inquiry process had become a serious source of concern. It had to be expedited.

The Acting Chairperson emphasised that in as much as the Committee would not want to delay the inquiry process, it should not be conducted willy-nilly. It had to be conducted according to the law and within the confines of parliamentary provisions.

The Committee agreed that the Acting Chairperson, Ms Mazzone and Mr Singh would approach the Speaker’s Office with recommendations and an outline of the resources it needed to conduct its oversight mandate in relation to Transnet, Denel and Eskom.

The meeting was adjourned. 
 

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