Parliamentary Inquiry into Department of Water and Sanitation: terms of reference

Meeting report

Opening Remarks
 
Chairperson Johnson welcomed Members to the meeting and explained that the purpose of the meeting was to discuss the terms of reference, and the draft guidelines and the programme of inquiry into the establishment of a Commission of inquiry, which had been drafted by the technical team. In an effort to protect the public purse, any transgression had to be treated as such and be tested in any court of law.

Mr Godi explained that the purpose of the meeting would assist in taking matters from theory to practice.

Ms R Lesoma (ANC), Chairperson of the Portfolio Committee on Public Service and Administration, conveyed apologies from the Minister of Public Service and Administration and informed Members that she would take up issues related to the Department of Public Service and Administration (DPSA) and the Public Service Commission, and would table them before the Committee.

Draft Terms of Reference

Ms T Chiloane (ANC) sought clarity on whether the Committee would discuss the draft guidelines before the terms of reference.

The Chairperson clarified that the discussion would start with the terms of reference, and then proceed to the focus areas.

Mr E Kekana (ANC) requested the drafters to give an overview, because the documents had just been received by Members.

Following Mr Kekana’s request, the Chairperson asked the researchers and content advisors to take Members through the document by giving a short synopsis, without getting into detail.

Mr Frank Jenkins, Senior Parliamentary Legal Adviser, took Members through the terms of reference which set the legal foundation for the inquiry into the challenges facing the Department of Water and Sanitation (DWS).

• Part A, which was the background, explained the decision taken by SCOPA and the Portfolio Committee on Water and Sanitation, to set up an inquiry.
• Part B, which outlined the rules of the National Assembly, gave power to the committees to investigate anything under their area of control.
• Part C highlighted the objectives of the inquiry and what the inquiry would be looking for as an outcome, such as the laying of criminal charges, the recovery of money lost and the responsibility of recovering money from accounting officers within the Department.
• Part D set out the terms of reference which looked at what was identified to be wrong in the Department, the dispute between the Auditor General of South Africa (AGSA) and the DWS, witnesses/previous accounting officers who would be summoned for purposes of information and the compliance of laws.
• Part E set out the time frames which would focus on the last five years from 2012 to date.
• Part F highlighted the procedure of the joint inquiry where there would be an evidence leader, and witnesses would be identified under the provision of the Powers, Privileges and Immunities of Parliament and Provincial Legislature Act, No.4 of 2004.

The Committee would also be allowed to call for submissions -- either written or oral -- for public participation. The document was a work in progress, as other issues from AGSA or the public may come up and would need to be added to the terms of reference.

Mr D Ross (DA) asked if an extra bullet could be added on the effect of limiting water supply by water boards to residents for non-payment by municipalities. Could the extent of the problem be identified by looking into how many towns were facing limitations of water supply?

The Chairperson informed Mr Ross that his concern would be discussed later, and proceeded into the reviewing of the draft document, where he asked Members if they had any comments to make on the background.

Mr T Brauteseth (DA) sought clarity on what the Chairperson was referring to.

The Chairperson confirmed that he was on page one of the document.

Mr Godi requested the background to be re-looked at so as to narrate the sequence of events leading to the terms of reference. It should start from the Budgetary Review and Recommendation Report
(BRRR) of the Portfolio Committee on Water and Sanitation, followed by the SCOPA meeting held on the 27 February 2018, the joint meeting on 20 March, where it had been formally agreed by both committees on what action would be taken, then the meeting on 27 March with AGSA, the Special Investigating Unit (SIU) and National Treasury, which had eventually led to the developing of the terms of reference. As a result, SCOPA had requested to become part of the Commission of Inquiry.

Ms Lesoma added that the background should be drawn as far back as to include previous financial audit reports, to give a sense of what else had been done, since the issues had been persistent.

The Chairperson agreed, because the persistent trend from 2015 had been what had led to the BRRR report. It had become particularly clear in 2016/17 that the Committee was heading for a big challenge with the DWS.

On the objectives of the inquiry, Ms Chiloane asked about the witnesses who would be called to provide evidence to the Commission of Inquiry. Were they going to be identified by the Committee, or did the list include other witnesses who had information that they wanted to volunteer to the Committee?

Mr Brauteseth suggested that a mechanism be created where the Commission would be advertised and witnesses would be called upon, while also enabling them to contact Members of the Commission. This was because whistle blowers had previously assisted in gaining inside information which had allowed the Committee to investigate further.

The Chairperson suggested that the calling of witnesses should not be included in the objectives, because it spoke to the ‘how’ of the Commission, which should come in later.

Mr M Hlengwa (IFP) referred Ms Chiloane to page 3 of the document on procedure, which defined the process of identifying witnesses.

Chairperson Johnson suggested that the objectives of submitting the joint report with recommendations for discussion and adoption to the National Assembly, and the laying of criminal charges on implicated individuals, should also be removed.

Mr Godi, on the contrary, was of the opinion that the objectives should give a sense of what the Commission intended to achieve. As such, all objectives should remain, because they gave a sense of what would be achieved once the inquiry was completed.

Mr Hlengwa agreed that the objectives sufficed, because the procedure and time frames gave greater detail on how the objectives would be achieved.

Mr L Basson (DA) suggested that the objective of laying criminal charges should include implicated officials, politicians and other persons, where applicable.

Mr Brauteseth, in an effort to make it simpler, suggested that it should include all implicated persons.

Mr Kekana raised concerns on the Commission limiting itself to criminal charges being laid because criminal charges were too specific. Could the objective be rephrased to ‘consequence management,’ because criminal charges and disciplinary hearings would be covered in consequence management?

Ms Lesoma sought clarity on who was going to lay charges. Were they going to be laid through the Committee, or through the Speaker after the report had been submitted?

Mr Brauteseth suggested that an additional objective be included which would recommend the initiation of disciplinary procedures against implicated persons. Committee Members could not lay criminal charges because they were members of the public.

Mr Godi agreed that the additional objective on disciplinary action should be added, because it was not always that criminal charges would be laid. Irregular and fruitless expenditure sometimes required disciplinary action where a crime was not involved. His wish was for the Commission to always attach activities to individuals, and not just make general statements. The attendance of an official from the National Prosecuting Authority (NPA) who had power to refer cases to the police had also been requested, which would allow for practicality in the laying of charges. It was therefore important to include the laying of criminal charges as an objective.

Mr Hlengwa sought clarity on the implications of the Powers and Privileges Act on witnesses justifying what they said before the inquiry in a criminal procedure, because he was under the impression that the oath had a caveat of some sort on immunity. This was important in determining how the Commission would go about the laying of criminal charges.

Mr Jenkins explained that the Powers and Privileges Act gave immunity to witnesses under oath and information said, produced or submitted could not be used against them in court proceedings, unless they were found to have deliberately misled Parliament. If anyone gave evidence on themselves, it could not be used against them because it was connected to the Constitution, where individuals had the right not to incriminate themselves in criminal proceedings. Evidence on other persons could, however, be used by the NPA, but the Criminal Procedure Act allowed individuals to request immunity in a court of law when giving evidence that could implicate them in a criminal offence. The purpose of immunity was to ensure Parliament got full disclosure and nothing stopped the South African Police Service (SAPS) or the NPA from getting information from elsewhere. It was also important that the recommendations be made to the accounting officer or executive authority in the case where the accounting officer had been implicated, with time frames attached to action.

On the objective of recovering money lost where applicable, Mr Jenkins recommended that the accounting officer, and not the Committee, institute proceedings to recover money because it would cost the Committee money to institute such a process.

The Chairperson emphasised that the objectives were supposed to be a guide and could unfortunately not capture everything suggested by Mr Jenkins.

In response to Mr Ross’s question on the implications of limiting water supply to citizens, Mr Godi commented that the scope, worth and outcome delivery of respective water and sanitation projects on affected citizens, under the terms of reference, covered his concerns.

Ms Chiloane asked if infrastructure could be included in sanitation projects, or if it was the same thing.

The Chairperson agreed that it should include water and sanitation infrastructure projects.

Mr Godi responded that infrastructure was already covered under the sanitation projects, because a project involved the laying of infrastructure first.

On the non-adherence to key pieces of legislation governing finances and corrupt activities, Mr Ross highlighted that the non-adherence related to Departments. In terms of Treasury regulations, where there had been gross mismanagement over five years and persistent breaches of financial management, Treasury should have been able to implement its regulations and withhold funds to the Department in line with section 2 (1) (6) of the Constitution. There should therefore be an additional point on non-adherence of institutions, because institutions had an obligation to prevent the persistent breach of financial management.

Mr Godi responded that it was an ancillary point, because the main duty of the Commission was to check departments and, in the process of checking them, the obligations of institutions would be embedded in the probing of the Department.

He asked if the Department’s dispute against the findings of AGSA on its 2016/17 financial year had been resolved.

Mr Andries Sekgetho, Business Executive: AGSA, responded that the Department had withdrawn its re-appeal on audit outcomes on 20 April, but AGSA was still going on with its own investigation to finalise the factualness of the audit outcome, because the Department had not said that it agreed with the audit findings on its withdrawal, but had merely stated that it was withdrawing in the interest of building a relationship with AGSA.

Mr Godi said that departments had a right to reject AGSA’s findings, but for it to be followed up by the Commission, it should be based on the manner that perpetuated a negative attitude towards compliance.

The Chairperson emphasised that what lay behind the contestation was of greater importance than whether or not there was a contestation, to avoid a misdirection of the Commission’s work.

Mr Sekgetho agreed with the process, but what had motivated the contestation was the outcome of the work AGSA had done. The findings were related to irregular, fruitless and wasteful expenditure, but if the outcomes could be disputed and be disregarded, the findings would also have the potential of being disregarded. Such financial mismanagement could, however, be tied to the financial mismanagement of the Department or, if it was a matter of addressing behaviour, then it could be tied to the issue of consequence management and non-compliance thereof.

Ms Lesoma asked if the terms of reference were going to be adopted today.

The Chairperson clarified that the aim was to interact and adopt the terms of reference to pave way for what was expected of the committees.

Ms Lesoma informed Members that the DPSA had a Public Service Commission (PSC) that dealt with some of the issues that would be addressed by the joint inquiry, such as non-compliance on payments and appointments. As such, the inquiry could run into a space that they were not intending to run into, and in the process question the oversight capabilities of the DPSA. Could a better way be found of incorporating institutions and committees that had already addressed issues related to concerns raised by the joint inquiry, to allow monitoring on both ends?

Mr Jenkins agreed that if a matter revolved around issues related to the public service, like human resources (HR), it definitely belonged to the Committee on Public Service and Administration, but nothing stopped the joint inquiry from picking issues of non-compliance on human resources. Such matters would be included in the final report and referred to the respective committees to take action.

The Chairperson agreed that where the Committee had no competence to handle issues within their mandate, it would indeed refer the matter to the respective Parliamentary Committee, and where law enforcement was required, it would come in in an integrated fashion.

Mr Ross suspected a huge transgression by officials doing business with the State, especially in water trading entities, and suggested that an additional point be added to investigate the extent to which state officials were doing business with the Department. This was because there was no cohesive legislation dealing with this matter and it was important for purposes of accountability on the misuse of funds.

The Chairperson agreed that it should be added to the terms of reference.

Mr Kekana sought clarity on the purpose of including the Constitution and the Water Act regarding compliance and non-compliance by the Department in respect of its oversight of efficient water service delivery to citizens, because it was still part of non-adherence to legislation. Could the drafters explain what the intention of the point was?

Mr Jenkins responded that it could indeed be merged with the point on non-adherence to key pieces of legislation based on indicators from reports such as those of AGSA.

Mr Godi explained that the issue of compliance and non-compliance in respect of the Constitution and water legislation was about service delivery, and should therefore replace the point on the scope, worth and outcome delivery of water and sanitation projects on affected citizens.

Mr Ross suggested that both points be merged instead of replacing one with the other. 

The Chairperson suggested that the point on compliance and non-compliance should instead be merged with the point that spoke to the disbursement of funds for major projects, because it was all in reference to service delivery.

Mr Ross agreed to collapse it, to simplify the terms of reference.

Mr Godi suggested that water projects be added to the oversight of efficient and effective service delivery to directly cover projects, separate from the general delivery of water services.

The Chairperson explained that according to the Constitution, reticulation belonged to a local municipality, which left the Department only with the responsibility for providing water in bulk. Could the Committee be specific to avoid assumptions that everything to do with service delivery rested with the Department?

Ms Lesoma agreed with the Chairperson, and suggested that the Water Boards be accommodated because they were used to supply water to municipalities.

Mr Ross suggested that the Committee confine it to bulk water supply.

The Chairperson requested that other water entities  -- water boards, the Trans-Caledon Tunnel Authority (TCTA), the Water Research Commission (WRC), Catchment Management Agencies (CMAs) and irrigation boards -- be included alongside the Department.

Ms Lesoma suggested that the nomination of Board members be removed from the point of interrogating the legal, financial and social aspects of directives issued to water boards on behalf of the DWS, because it had already been captured.

The Chairperson agreed, and further suggested that both points on the interrogation regarding compliance by the Department to relevant labour laws and challenges related to concurrent functions of water service at a national and local level, be deleted because they had already been covered under the point of compliance and non-compliance.

Mr Basson referred to the time frames, and requested that the inquiry deal with matters prior to 2012 if they arose in the process of investigation.

The Chairperson agreed, but with caution.

Mr Kekana suggested that the scope be limited to issues from 2012, because anything prior to 2012 would be problematic.

Mr Basson explained that the Department’s projects were multi-year projects, with corruption running over several years, and therefore if corruption started prior to 2012, it had to be dealt with.

Mr D Mnguni (ANC) raised concern over opening the scope up too wide, because it ran the risk of the inquiry not being completed on time. He understood the issue of the multi-year projects, but would appreciate having a specific time frame. If one could not be agreed on, then it would be good to limit the scope to 2012.

Mr Brauteseth said that contracts that were functional in 2012 but were started in earlier periods would of course be looked into, because the Commission would not limit itself to looking at half of a contract. The time frames were also pretty relaxed. Could Members agree to limit the time frame to 2012, which would however be dependent on the issues being investigated?

Mr Hlengwa agreed with Mr Brauteseth that a multi-year project touching on 2012 would be subject to investigation. However, he cautioned the Committee not to be “jacks of all trades,” but to confine themselves to issues that had arisen in the recent financial years, which may eventually give rise to the need for separate investigations into multi-year projects.

Mr Godi said that Members were all in agreement on the scope being limited to five years from financial year 2012/13. The timeframe of five years was, however, dependent on the issues under investigation.

Ms Lesoma appealed that the Committee on Public Service and Administration be allowed to look at the final draft of the terms of reference, and to get back to the joint committee.

The Chairperson acknowledged her request and said that it would indeed be addressed later.

Mr Basson took Members back to the time frame, and suggested that the five-year time frame be replaced with a seven year time frame, because 2012 to date was a period of seven years, and not five.

Ms Chiloane sought clarity on the same matter, as she thought it would be a six-year time frame.

The Chairperson clarified that those details would be addressed by the technical team.

On the issue of having an over-arching leader, Mr Brauteseth suggested that the point be expanded to include their role of leading evidence in a focus area, after which Members would then conduct the interrogation.

Mr Ross agreed that it was important to give structure to their role.

Ms Chiloane suggested that Chairpersons be assigned the role of deciding who the team leaders would be in the different committees for purposes of participation.

Mr Ross clarified that it had already been decided that the Chairpersons would allocate Members to different teams.

Mr Godi said he preferred Members of Parliament to lead the process and then once they were done, the evidence leader would come in to check if anything had been left out, rather than the process being run the other way round.

The Chairperson and other Members agreed with Mr Godi’s proposal.

Mr Basson asked if the teaming up of Members from both committees still stood.

The Chairperson responded that those were the details that had been initially agreed upon, and were not far from the proposal of doing it in groups and focus areas. The Committee was, however, in agreement on the Chairpersons appointing groups that would lead the respective focus areas.

Mr Brauteseth asked the Chairperson to work out a process on how the teams would actually work. He agreed that Chairpersons should appoint leaders, but Members should also be allowed to approach the Chairpersons if they had expertise in a particular area and were interested in being evidence leaders.

Mr Godi suggested that all witnesses be subpoenaed, not only some, because they would be more obliged to give evidence that was not misleading, given that they were under oath.

The Chairperson asked Adv Jenkins to comment on members of the public who may want to come before the Committee to give evidence.

Mr Jenkins explained that all witnesses, regardless of whether they were under oath or not, were not allowed to mislead Parliament. It was not necessary to subpoena all witnesses, such as Directors General (DGs), because they were obligated under the constitution to appear before Parliament, but it could be done. All witnesses would be put under oath right from the start and the consequences flowing from that could be explained to the witnesses to remind them that they were obligated not to give misleading information. Witnesses and whistleblowers from the public could also be put under oath to protect them from litigation against themselves. The whistle blower legislation also protected such witnesses.

Mr Kekana proposed that the identifying of witnesses by the Committee be scrapped to allow for the invitation of all witnesses.

Draft Guidelines on scope of Inquiry

Mr Godi suggested that the scope under the financial focus area should include root causes, individuals, consequence management and recovery, to pin cases of commission and omission to specific individuals. The scope for deviations should not specify deviations not approved by National Treasury, because the Commission would be interested in all deviations, including those approved by National Treasury.

Mr Basson requested that the scope be changed to reflect from 2012/13 to date.

Mr Ross proposed that a comparative analysis be done by AGSA or the research team on irregular expenditure from year to year, to simplify the presentation.

Mr Sekgetho agreed that AGSA would assist where they could.

Mr Godi suggested that the question of how information would be collected on irregular expenditure would be dealt with after an agreement was reached on what to include in the focus areas. Could fruitless and wasteful expenditure also be added?

The Chairperson confirmed that the Committee was therefore going to deal with principles.

Ms Lesoma asked where system issues would be covered in terms of internal controls and risk, because they were important in rescuing the situation in the Department.

The Chairperson agreed that it was a valid point, and should be included in the financial focus area because it spoke to the internal controls within the Department.

On human resource management, Ms Lesoma suggested that the root cause be identified in the high turnover of DGs, rather than identifying the status of the appointment of permanent DGs, so as to remedy the situation.

Mr Godi suggested that the issue of DGs be rephrased, because it was related to instability and the scope should be limited to the period in which the high turnover was registered. Identifying the reason for instability was of importance.

Mr Kekana suggested that the organogram of the Department be included, because it would cover the Deputy Director General (DDG) structure.

Ms Chiloane suggested that it be specified to include senior management.

Mr Basson proposed that the organogram be provided from director level to the DGs’ position, because problems in the Department were related to actions of directors.

Mr Godi suggested that the scope be limited to the DDGs and senior management level.

Ms Lesoma agreed that there was no need to have the whole organogram, but to limit the focus to senior management because other levels would automatically fall under them.

The Chairperson specified that current interest spoke to the stability or lack thereof of senior management and as such, including directors would widen the scope.

Mr Godi added that the scope should speak to the appointment and number of DDGs in relation to the organogram.

The Chairperson sought clarity from AGSA on the Department’s policy on restraint of trade. Could it form part of the recommendations at the end of the report, because it was of great concern?

Ms Lesoma responded that in terms of public service regulations, there was no legal framework for a cooling off period. Could the point on qualifications, experience and expertise of senior government officials be deleted, because it was already taken care of under the recruitment process?

Ms Chiloane supported the Chairperson’s concerns on the restraint of trade. and encouraged his Committee to pursue the matter further because several issues had been raised in SCOPA, where employees engaged in business with government departments immediately after they resigned, and were particularly related to corruption.

Mr Kekana suggested that the conflict of interest of public officials be collapsed into the vetting process.  

Mr Godi was of the opinion that conflict of interest should actually stand by itself, because it had its own processes and procedures.

The Chairperson made it clear that the scope of other infrastructure projects that may not have been listed would be identified as and when they arose.

Mr Kekana suggested that the issue of supply chain management (SCM) must be looked into, because there was a procedure that outlined the procurement of infrastructure projects.

Mr Godi explained that Mr Kekana’s concerns were covered under the scope. In relation to Mr Basson’s point on the actions of directors, the element of the appointment of project managers should be looked into at this level, because it pointed back to the directors.

Mr Kekana clarified that SCM had areas that were not included in the document, such as the advertising of infrastructure projects.

The Chairperson agreed that the entire process on SCM should be included as part of the focus areas.

Mr Basson asked how the Commission would deal with projects where the Minister had political interference, because the previous Minister hadplayed an essential role in the collapse of the DWS through infrastructure projects.

Ms Lesoma sought clarity on how the Commission would deal with the manipulation of expression of interest. The Commission should also look into the signing off of completion before actual completion.

The Chairperson sought clarity on the issue of implementing agents. Would it be included as part of the directives?

Ms Chiloane sought clarity on the use of consultants within the Department. Was the DWS using its own officials or was it hiring service providers to do work for the Department?

The Chairperson explained that consultants such as LTE and Khato Civils had been mentioned as implementing agents. This had come about after the Department had issued a directive to the Lepelle Northern Water Board, which had advertised and appointed the consultants as service providers.

Mr Stephen Kheleli, Senior Audit Manager, AGSA, advised the Committee to look into the capacity that sat with the construction unit and how consideration on the allocation of work was done between the unit and external agents. This was because the unit had been created to cater for a number of projects, but over time the number of projects allocated to that unit had declined. However, resources within the unit had not declined in the same proportion. This created a situation where people who could work were sitting idle because work had been moved elsewhere.

The Chairperson tied this to the Ministerial directive that worked against the construction unit. Directives had been given to stop the construction unit and have projects advertised to private service providers, who would complete the tasks started by the construction unit.

Mr Kekana sought clarity on the scope of implementing agents. Was the Commission looking into the internal controls of implementing agents? Total control of implementing agents should be monitored, not just internal controls.

Mr Godi agreed with Mr Kekana’s suggestion.

Mr Kheleli wanted to check if the ‘Drop-the-Block’ water-saving project had been added as one of the infrastructure projects, because it had given AGSA problems.

The Chairperson sought clarity on whether the Ministerial directives were limited to only Lepelle Northern Water and Mhlathuze.

A member from the technical team responded that it was not only limited to the two boards, and other boards would be included.

The Chairperson asked for the other water boards to be included by Thursday,10 May, which was accepted by the technical team.

Mr Godi emphasized the importance of including the implementation of ministerial directives, because this was where irregular and non-compliant expenditure came in.

Ms Chiloane suggested that the Commission should not limit its investigations only to the SIU, but should include all investigations.

The Chairperson agreed that the Commission should include all investigations, because the outcome of the Commission was to give recommendations and check whether the recommendations were implemented.

Mr Kheleli wanted to make sure that the TCTA was included, together with the water boards and the CMAs, on matters relating to governance.

Referring to the governance of water boards, catchment agencies and the TCTA, Ms Lesoma suggested that the Commission was not only interested in probing the rationale for appointments, but was seeking to understand if due legal processes had been implemented and followed on the appointment of Board members.

Mr Godi suggested that there was no need to change the probing of the rationale, because it had to do with the rationale and non-rationale of exercising power and authority. With the appointment of people and extension of terms, one needed to explain one’s decision, even though they had the legal right to exercise power.

Ms Lesome clarified that she was not asking for the rationale to be deleted, but that it should be followed by the prescript of some law.

The Chairperson agreed that a law was necessary, and raised concern over the private sector capturing the Department. This was because of the growing trend of the private sector having a hand in the work of government departments on a daily basis.

Mr Kekana suggested that both probing and legal processes be included in checking the appointment of Board members.

The Chairperson confirmed that both points were valid and complemented each other, because they were trying to find a balance between the appointment of Boards and chief executive officers. They were important in seeing that a due process was followed, which did not tamper with operational procedures but at the same time had an element of rationale.

Ms Lesoma suggested that the Commission should look at the unintended relationship between the DWS and the private sector -- for example, in the sponsoring of events where private institutions may have their own intentions. The scope should therefore look at the potential relationship between the private sector and that of the Department to avoid situations where the private sector crafted a situation in its favour.

The Chairperson informed Members that the list of possible witnesses to appear included officials, audit committees, past Department officials, project managers, implementing agents, private sector service providers, the Reserve Bank, whistle blowers, National Treasury, Board members, AGSA and audit firms.

Ms Lesoma added that it should include any other persons, instead of binding the Commission to the list of institutions provided.

Mr Brauteseth agreed that it would be necessary to have an option of having any other persons as witnesses.

The Chairperson concluded by informing Members that they would finalise the programme next week, and proposed that it be reviewed thoroughly by individual Members to avoid spending too much time on it.

Mr Brauteseth requested that Members should not to be limited in the number of questions they intended to ask. Could the Chairpersons also ensure that Members were allocated to their respective teams by next week?

The Chairperson confirmed that they would finalise the programme next week, together with the terms of reference and areas of focus.

The meeting was adjourned.