Resolution: Committee investigation into Eskom and related matters

Meeting report

Opening remarks
The Chairperson said the Committee was meeting to consider Mr Hadebe’s letter requesting it to invite Mr Andre de Ruyter to answer questions before the Committee. He noted the seriousness of the letter, which had been circulated among the Members, and said the issues raised were within the purview of the Committee. The Committee would hear Mr Hadebe’s request and then decide whether it would be prudent to invite Mr De Ruyter. Parliamentary Legal Services was also represented in the meeting to help the Committee with any legal questions they may have, especially because Mr De Ruyter was no longer the chief executive officer (CEO) of Eskom.

Mr Hadebe’s request

Mr B Hadebe (ANC) appreciated the prompt response from the office of the Chairperson in tabling the matter before the Committee to ensure that it received the attention it deserved. After watching and listening to the interview done by the former CEO, he felt that the allegations contained in that interview were very serious and as he had correctly described them, were an act of treason. There had been serious concern from ordinary members of the public, and questions had been asked as to how it had happened that the watchdog of Parliament, which was SCOPA, had not dealt with the matters raised by Mr De Ruyter. Others were of the view that these matters were well known to SCOPA, and questions had been raised as to whether he had raised them with the Committee at some stage.

He was also disturbed by the sentiment expressed by Mr De Ruyter, that he had not realised that state capture was like a cancer that was being unsuccessfully treated so it just metastasised and grew throughout the entire body of the organisation. There was a resistance to implementing controls, conducting investigations, and implementing disciplinary action at Eskom. Mr De Ruyter had said the rot within Eskom was much worse than he had anticipated when he took over the job. He went on to say there were four well-known organised criminal cartels operating at Eskom in Mpumalanga, and that assassinations were happening weekly -- to the extent that the media was no longer reporting on them as if they had become an acceptable practice.

He had been further disturbed by hearing that Eskom loses almost R1 billion monthly and that the former group CEO was aware of such material irregularities, and fruitless and wasteful expenditure, yet such issues were not reported to the Committee. The Committee had done two oversight visits to Eskom and had held numerous meetings with different Board members, and different Accounting Officers, including Mr De Ruyter, for the past three years. He had heard some of the issues that Mr De Ruyter had articulated in the interview for the first time. When Eskom last appeared before the Committee, they had presented a two-year turn-around plan, but when he was asked in the interview whether the Energy Availability Factor (EAF) would be increased, he had stated categorically that Eskom would never return to its former glory.

Mr Hadebe said the Committee was empowered in terms of section 56 of the Constitution of the Republic to summon anyone for any information that would assist in performing its functions, so the Committee, charged with the responsibility of playing an oversight role in the financial affairs, should not leave this matter for a long time and should seek answers from Mr De Ruyter. They needed to understand exactly who these politicians were who were part of the collusion with the cartels, who these senior police officers were, and the state security officials who were informed about this matter and did not act, and when they were formed. Most importantly, did the CEO act in line with his powers and functions at the time, with specific reference to section 34 subsection 1 of the Public Finance Management Act (PFMA), where a CEO or an Accounting Officer had a duty and responsibility to put in place appropriate and effective steps to prevent any losses because of criminal conduct?

Why was SCOPA not alerted to such serious allegations, including that a Minister had uttered words that blatantly promoted corruption? Surely South Africans and Parliament were interested to know who that executive authority was. It would be wise for SCOPA to afford Mr De Ruyter an opportunity to explain what measures and steps had been taken and whether he had acted in terms of section 34 subsection 1 on the prevention and conducting of corrupt activities. If there were any issues that he may be uncomfortable disclosing in public, other available avenues could be pursued.

Mr Hadebe felt that it would be best for SCOPA to hear from Mr De Ruyter, as the Committee had interacted with Eskom on several occasions recently and had practically adopted the entity, based on the nature of its challenges. SCOPA also had other law enforcement agents at its disposal every time it invited Eskom, including the Special Investigating Unit (SIU), the Auditor General of South Africa (AGSA), as well as the Hawks. Some of the challenges at Eskom had been referred to these agencies for investigation, and if the allegations made by Mr De Ruyter were anything to by, the agencies should have been alerted. There was an element of unfairness in terms of the information given to SCOPA to enable the Committee to effectively do its work as part of the ecosystem responsible for oversight and accountability.

He said the Committee could rely on section 56 of the Constitution regarding the matter. It would not be considering any summons at this point, but just to tender an invitation to Mr De Ruyter so that it could assist him in dealing with the cartels operating in Eskom and in ensuring that the investigating and prosecuting experts were able to get to the bottom of the issues. “We do not want to leave any stones unturned in exposing the Minister and those senior police officials who are involved and allegedly did not act, and we want to ensure that the officials who are involved in the cartels within Eskom and are responsible for assassinating people are arrested”, he said.

The Chairperson said the SIU had confirmed to the Committee the existence of three syndicates in coal, fuel, as well as logistics. He asked the Members to discuss whether Mr De Ruyter should be invited to the Committee.

Discussion
Mr A Lees (DA) said the information regarding fraud, syndicates and corruption at Eskom was not new information. The outgoing CEO of Eskom should not be judged by the Committee but should be invited to provide the information to it. The law enforcement agencies should also do their jobs and investigate corruption.

Mr N Paulsen (EFF) said a part of the Prevention and Combating of Corrupt Activities (PreCCA) Act 12 of 2004 section 34 (1) was already done, as it pertained to the duty of persons of authority to report corruption, fraud, extortion, etc. The Committee should ensure that the matters raised by Mr De Ruyter were dealt with by the law enforcement agencies such as the Directorate for Priority Crime Investigations (DPCI), and thereafter the National Prosecuting Authority (NPA) should consider the findings of the DPCI. The DPCI and the NPA had to answer about what they had done regarding the allegations, and they must be allowed to perform their duties. These matters should be dealt with through the legal processes.

Mr S Matiase (EFF) said the Committee must deal with the organised hypocrisy of the ruling party and the hypocrisy of the white-controlled media, who always came to the defence of Mr De Ruyter. He made an example of a former Member of Parliament, Mr Mervyn Dirks, who had made some claims that President Ramaphosa was using public funds for internal party politics and that other people were involved in that, and had requested that the matter be investigated. Mr Dirks was suspended from Parliament and his membership of the Committee had been revoked shortly after his allegations. No one knows what could have happened to the President had the matter raised by Mr Dirks been investigated, but that matter was never heard of because of the organised hypocrisy of the ruling party.

He said Mr De Ruyter must be invited before the Committee so that the hypocrisy of the ruling party could be exposed, because Mr De Ruyter was not a sitting duck, as he was appointed by the ANC. He must expose that the cartels at Eskom were linked to structures that decided who got the tenders, which was the ANC. Mr De Ruyter would not have got the job if he had not been appointed by the ANC.

Ms B Zibula (ANC) said there must be an investigation into the matters raised by Mr De Ruyter, and agreed that he must be invited before the Committee.

The Chairperson said the meeting was not about whether to summons Mr De Ruyter, but the Committee was considering a request to invite him. He asked Members to not engage on the other matters that had been raised in the interview.

Mr Hadebe agreed that the Committee might have been aware of some of the issues that were raised by Mr De Ruyter in the interview, but in the interview he had spoken as if he knew who the people involved in the cartels were, which was completely different from knowing about the existence of cartels.

The Chairperson said as much as he had heard the point from Mr Paulsen that the issue must go to law enforcement agencies, there was no legal basis for the Committee to assume that that had happened because the interview was not binding, and nothing was mentioned that could lead to legal disputes. The Parliamentary meeting with Mr De Ruyter, in whatever form it took, would be taken under oath, as per the norm for parliamentary meetings. The interview opened a door for Parliament to intervene, especially because there were issues raised that contradicted what Mr De Ruyter had said before the Committee on numerous occasions. That clarity was important before the Committee could assume that the matters were receiving the necessary attention from law enforcement agencies.

The interview had pointed to a reality that there were material facts at the disposal of Mr De Ruyter which he would have been duty-bound to report. The matters raised by Mr Matiase regarding the President may have been a missed opportunity, but he had made written submissions to the Committee. The impression that there was no communication from the President must not be made, because the matter was put on hold at the time. The issue that the Committee was currently dealing with was Mr De Ruyter’s interview, and it must be dealt with on its own merits, and the Committee must decide on a way forward.

He said the allegations that Mr De Ruyter had made would require the Committee not to engage just him alone, as he had said he had spoken to the National Police Commissioner.  He advised that this should not become a "De Ruyter fishing expedition," because the Committee was privy to the full set of issues that he had raised. The Committee must consider whether the National Commissioner did take some action if he indeed was informed of the allegations by Mr De Ruyter. The issues before the Committee had been discussed by the Committee before in one way or another, so they were a continuation of the work that the Committee had done.

The Chairperson said he was hearing a consensus from the Members that Mr De Ruyter must be invited to appear before the Committee, and requested that they consider Rule 245 (1) C of the National Assembly to initiate an investigation into Eskom, and not just the individual himself. He called for a structured approach to the invitation which would allow the Committee to delve into the issues broadly and into the material spaces arising out of the allegations and assertions made publicly by Mr De Ruyter. That would allow the Committee to draw on Parliament’s resources so it could deal and dispense with the matter once and for all. Eskom had been investigated before through an enquiry by Parliament, and it would be a missed opportunity if the Committee did not consider that seriously so that it could deal with this issue and dispense with it. Mr De Ruyter must be the first one to appear, and then the rest could follow according to the agreed structure of the enquiry by the Committee.

Mr S Somyo (ANC) agreed that Mr De Ruyter must be invited by the Committee and that the Committee must look for a broader way to deal with the matter, using Parliament’s resources. He agreed to follow the route proposed by the Chairperson.

Mr Hadebe appreciated that the Chairperson was moving with speed on the matter, as what he had wanted to establish first was an agreement in principle between the Members that Mr De Ruyter be invited. He agreed with the Chairperson’s proposal, and added that perhaps the Committee could also invite the AGSA to speak on whether they were aware of the irregularities, especially on Eskom losing R1 billion monthly.

Mr Lees wanted to know how the invitation would work, and the intricate details surrounding it.

Mr Hadebe said perhaps the legal advisor could advise the Committee on the matter.

The Chairperson said there was an agreement among Members that Mr De Ruyter must be invited to appear before the Committee, so Rule 245 (1) C of the National Assembly allowed the Committee to initiate an investigation and summon the resources of an evidence leader where necessary into the Eskom matters. He then asked the legal advisor to shed some light on how the Committee should approach the invitation to Mr De Ruyter and other involved parties.

Parliamentary legal opinion

Ms Fatima Ebrahim, Parliamentary Legal Advisor, Constitutinal and Legal Services Office, said this was a matter that did fall within the oversight responsibilities of the Committee, while there may be some overlaps in terms of policy issues that a Portfolio Committee may look at. The nominal issue was that no policy could be properly operationalised and no turnaround plan could be put in place if there were issues around the expenditure of public funds, as had been alleged. The Committee wanted to do a heightened oversight process, which was slightly different from how oversight was usually done.

The rules did not set out a process to be followed for how an enquiry should happen -- that was for the Committee to determine. The Committee could draft a terms of reference (TOR) document so that it could be clear on what exactly it wanted to investigate, what information it sought to obtain, etc. The TOR would also set out how the Committee would go about calling on witnesses, and that would have to be within the confines of the law. There were parallel processes that were being run, but the Committee must not feel that because of those parallel processes, Parliament was relieved of its oversight responsibilities.

She had noted that there may also be other processes happening in other parts of Parliament, so the Committee might need to be careful about duplication of resources, but she had heard that there were no processes initiated, and if the Committee wished, an evidence leader could be appointed to assist the Committee. The Committee also needed to have its end goal in mind, which was not only to conduct oversight but also to ensure that the problems were prevented from happening again in the future.

This included enquiring about what had been going on at Eskom over the years, including inviting the AGSA also to account on where the gaps were, and whether there were any misinterpretations of information, and where they came from. At the end of the enquiry, the Committee would want to be able to refer its findings to the relevant authorities if there were issues around malfeasance or ethical concerns that could be referred to the Public Protector. The matter was too large for the Committee to just simply invite Mr De Ruyter, and as a starting point, the Committee should ask for records so that Members could know the line of questioning to use.

Mr Lees said all his previous questions had been answered, except whether the Committee would have to apply for approval from any other parts of Parliament.

Ms Ebrahim said it would be prudent for the Committee to take the Speaker of the National Assembly into its confidence on the matter, even though that was not a legal requirement because there would be a need for additional resources.

Mr Lees said the previous enquiry into Eskom had wasted a lot of money and effort and yielded no considerable outcomes for Parliament, so the Committee needed to be sure about the answers it wanted to get and how it wanted to achieve the results it wants, not just for media coverage. The Committee need to deliberate further on the matter before it decided, but the question of inviting Mr De Ruyter had already been decided.

Mr Somyo agreed with Mr Lees that the Committee would need to be sure about what it wanted and its end goal for the enquiry into Eskom.

Mr Hadebe agreed with both Mr Lees and Mr Somyo that the Committee needed to deliberate on the modalities of how it intended to conduct the enquiry, and added that the legal advisor could perhaps provide the Committee with some possible solutions to consider before its next meeting so that it could decide on a structure to follow and be able to determine the resources it would need for the entire process. The Committee needed to know the direction it wanted to take soon.

Mr Paulsen said the Committee needed to be cautious, as Mr De Ruyter had a right to decline the invitation from Parliament.

The Chairperson said Mr De Ruyter declining the invitation would not be the end, because there were other avenues that could be taken by the Committee.

Mr Paulsen said the Minister who had been implicated by Mr de Ruyter must also come and account to the Committee because Mr De Ruyter could not be expected to account for the Minister’s shortfall in acting against the crimes happening in Mpumalanga at Eskom.

The Chairperson said the Committee was convinced that some things were rotten within Eskom, and Mr De Ruyter had made utterances which presented an opportunity for the Committee to investigate further into them. He thanked Mr Hadebe for his letter of request and noted its importance, and said that it had been tabled because it raised serious matters which could not be overlooked. Arising out of the Committee agreeing to invite Mr De Ruyter to appear before it to speak on the issues and allegations that he made, he may not be the only person who needed to appear before the Committee because of the allegations. Therefore, the Committee planned to invoke its right to conduct a Committee Investigation into Eskom and related matters, and the AGSA and the National Police Commissioner were some of the parties that could be invited by the Committee, along with Mr De Ruyter.  

The Committee would request the Parliamentary Legal Services to draw up a first draft of the Terms of Reference for the Committee, and the options available for the Committee to consider during its meeting next week on Wednesday with the Department of Public Works and Infrastructure (DPWI). He requested that Members make submissions on what the Committee should consider, avoiding the need for it to deal with the issues in an ad hoc manner. It was possible that the Committee could adopt the final TOR after having met with Mr De Ruyter, and the Committee would decide on that next week, as well as when the enquiry into Eskom would start. The preliminary list of the persons to be invited to appear before the Committee would be considered as well.

Mr Lees said the Committee needed to see the full picture of the TOR before it decided on the enquiry and agreed that the Committee had to decide on the structure before it proceeds.

Mr Hadebe said it would be prudent for the Committee, if possible, to also get a rough estimate of how much it would cost if it were to outsource evidence leaders.

Ms Ebrahim said the Committee’s decision was in order, and the document would be ready next Wednesday, but it would be presented by another person from Parliamentary Legal Services as she would not be able to attend the meeting.

Committee’s study tour to India  

The Chairperson asked Members to consider the Committee’s draft report of its study tour to India.

Mr Somyo expressed his appreciation for the logistical arrangements for the trip, for the presence of the Ambassador -- who was ever-present throughout the trip -- and that the Committee was fully briefed to their satisfaction in every session that was held.

The Chairperson also expressed his appreciation for the way the entire trip was handled and the hospitality that was received, noting that the Committee’s messages had been sent to the Ambassador.

Mr Hadebe moved for the adoption of the report and was seconded by Mr Lees.

Read Report: ATC230309: Report of the Standing Committee on Public Accounts on its study tour to New Delhi in India, from 30 January to 5 February 2023, dated 8 March 2023

The Chairperson thanked the Members, and reminded them that the Committee would meet with the DPWI next week.

The meeting was adjourned.