Committee investigation into Eskom and related matters: Terms of Reference & process
Public Accounts (SCOPA)
15 March 2023
Chairperson: Mr M Hlengwa (IFP)
Draft Terms of Reference (Not made public)
The Standing Committee on Public Accounts (SCOPA) convened in Parliament to consider the draft Terms of Reference for its oversight enquiry into allegations of financial impropriety and the misuse of public funds at Eskom.
The Committee had received a legal opinion that the allegations regarding the financial administration within the entity fell squarely within its oversight mandate.
The DA pointed out that the Committee had a limited scope and argued that an adhoc committee – which was under consideration by the House – would be a better mechanism to investigate the power utility. Others felt that the Committee’s work should continue and if the House determines an adhoc committee should be established, then the Committee will hand over the information to it. There was a suggestion that Committee conduct its investigation jointly with the Portfolio Committee on Mineral Resources and Energy and Public Enterprises.
Committee members agreed that the former CEO of Eskom must be invited to make a written submission on his allegations. There was also consensus that the Eskom Board, the Minister of Mineral Resources and Energy and the Office of the Auditor-General will also be engaged.
.No decision was taken on the terms of reference.
The Chairperson welcomed the members, Parliamentary Legal Services and the media to the meeting and asked the Parliamentary Legal Advisor to read through the draft Terms of Reference on the oversight enquiry into Eskom on the alleged financial impropriety and misuse of public funds and related matters.
Draft Terms of Reference
Adv Frank Jenkins, Parliamentary Legal Advisor, Constitutional and Legal Service Office, read through the Terms of Reference focusing on the background of the oversight enquiry, the legal framework supporting the Committee, the objectives and purpose of the enquiry, its format as well as the appointment of evidence leaders, the process for the invitation of witnesses and public participation. The Terms of Reference also looked at the partnerships that will need to be considered by SCOPA, the timeframes and venue of the enquiry and the resources that will be needed.
Ms B Van Minnen (DA) said there is consensus among Committee members that they need to do an in-depth investigation into Eskom because the allegations that were made by Mr de Ruyter and the information that the Committee received from Eskom in the past four years pushed the Committee into that direction. She indicated that there is also a need for the best possible vehicle to drive the enquiry on Eskom and next Thursday, the 23rd of March, Parliament is going to be debating the possibility of establishing an ad-hoc Committee to do the same enquiry into Eskom and was concerned that this might be a duplication of resources.
There is no time pressure for the Committee to agree to the Terms of Reference before next week and if the Committee does go ahead with the enquiry, there will be delays in trying to prepare for the facilitation of participation, and the clock is ticking in terms of the term of Parliament. The Committee would not want to get caught up in something that it would not be able to finish.
SCOPA needs to wait until after the debate next Thursday. A suitable vehicle will include other Committees such as the Portfolio Committee on Mineral Resources and Energy and Portfolio Committee on Public Enterprises. She was concerned that the investigation may be limiting SCOPA in its investigation and that the enquiry could delay other SCOPA mandates as it will be time-consuming and daunting. The Committee should wait until after the debate next Thursday to ensure that it moves together with the rest of Parliament.
Mr S Somyo (ANC) said paragraph 4.2 of the Terms of Reference captures the direction that needs to be taken by the Committee and proposed that it might be necessary to correspond with the key parties in Eskom including the former CEO, the Auditor-General South Africa (AGSA), the Eskom Board, as well as the Ministry. SCOPA cannot afford to delay the process any longer because time is of the essence, and it must focus on delivering its own mandate as soon as possible regardless of the outcome of the debate next week Thursday.
Mr B Hadebe (ANC) said the legal opinion received by the Committee on 7 March 2023 acknowledged the seriousness of the allegations made by Mr de Ruyter given the magnitude and extent of the allegations of the misuse of funds and the period in which the allegations played out. The legal opinion also noted that any oversight regarding the issues will require a dedicated and concerted effort on the part of SCOPA. The allegations regarding the financial administration within the entity fall squarely within the oversight mandate of SCOPA.
The legal opinion said in order to fulfil its oversight mandate, SCOPA will require further information to ascertain the veracity of the allegations, however, it does not appear that at this stage Mr de Ruyter’s allegations are substantiated in documentary evidence. SCOPA is advised that as a starting point, it may wish to address the correspondence to Mr de Ruyter requesting him to provide information including records which can form the basis of further discussion in the Committee on any relevant issue including, but not limited to these 4 issues:
- Any information he may have on the alleged misuse of public funds in Eskom.
- Information relating to whether there were any instructions from any Minister or Member of Parliament or other officials or persons to dispense with any financial prescripts in the expenditure of funds by Eskom.
- Whether any official or public representatives have benefited or are benefitting unlawfully from the expenditure of public funds by Eskom.
- Whether there are any records showing the unauthorised, irregular, fruitless, and wasteful expenditure and evidence related to whom may have benefitted from some.
The Committee may request Mr de Ruyter to respond to the matters in writing in the form of an Affidavit. The legal opinion also states that after consideration of all information submitted to it by Mr de Ruyter, SCOPA may determine whether there is a need for Mr de Ruyter to appear before it to further amplify any of the information in the written Affidavit. It is not the role of SCOPA to deal with any alleged ethical breaches of any member of the Executive or to deal with operational policy issues relevant to Eskom.
The legal opinion advised that for practical purposes, it may be wise to first engage Eskom who is the legal custodian of the financial records and should be asked to account on the steps it intends to take or has already taken in relation to the allegations. The Committee is also advised that it can write to the Eskom Board to account on the steps that it intends or has taken regarding the allegations in writing or in a physical meeting. The SIU can also be approached and other investigative agencies, as well as the AGSA. He also agreed to a joint approach in the enquiry with the PCMRE and PCPE. He said the ANC proposes that the Committee start with writing to Mr de Ruyter and the Board to provide information, and then if needed, it may consider writing to the Hawks, the SIU and other investigation agencies to pursue criminal investigations. The Terms of reference were progressive and clear.
Mr A Lees (DA) said there is unanimity to get to the bottom of Eskom malfeasance in every aspect and the best vehicle to get to the bottom of the Eskom issues in their entirety is the establishment of an ad-hoc Committee. However, if there is some reluctance to this, then SCOPA may proceed on its own even though it is limited in its scope. The need to deal with Eskom in its entirety is not within SCOPA’s purview and needs the establishment of an ad-hoc Committee, but SCOPA is within its rights to continue with the inquiry if it remains focused on its mandatory issues. They want real investigations to be done and people to go to jail and there are consequences for all the malfeasance.
Adv Jenkins said in his experience of working with SCOPA, under normal circumstances, they would invite the AGSA in a closed briefing session about the audit report to get to the bottom of the issues and get an idea of the management attitude. The Committee would also ascertain the AGSA’s view about the allegations made by Mr de Ruyter and whether these matters are captured within the Audit Report. He said Mr de Ruyter needs to answer the questions because he was the one who made the statements and only he knows why he made the statements. The Board has an oversight function over Eskom, and it is necessary for the Committee to understand what it is doing about the various issues raised by Mr de Ruyter. The Committee needs to have a multifaceted approach to the enquiry, and this can include the Committee having an investigating team.
The Chairperson said preparatory work needs to be done for the Terms of Reference to be complete and some of the gaps need to be filled. Whilst there is a vote scheduled for there to be an ad-hoc Committee, the Committee must not relegate itself to be in a default position if other processes do not work out in Parliament. He proposed that the Committee must invite Mr de Ruyter to make a written submission to it on the issues that he raised in the interview and if the ad-hoc Committee is approved, then the Committee would hand over the enquiry to it because SCOPA does not know what structure the ad-hoc Committee will have.
He said there is a list of people that the Committee would like to invite as shown in Annexure B of the Terms of Reference. He then suggested that the Committee write to Mr de Ruyter to get him to respond in writing to the issues highlighted by Mr Hadebe and then invite him to engage with the Committee in the week of the 18th to the 21st of April, and if the Terms of Reference must go to the next steps, the Committee would fill the gaps with the information received. If the adhoc Committee is approved, then the Committee will hand over the information to it. The Committee will also engage with the AGSA to give a written response and write to the National Police Commissioner to provide a written response on the actions he took after Mr de Ruyter reported the allegations of financial misconduct at Eskom and whether a case has been opened.
Mr Hadebe concurred and said the Committee’s work should continue despite the motion to establish an adhoc committee before the House. He further proposed that the Committee also write to the Board about what steps they have taken or intend to take in relation to the allegations. In addition, they should write to the Minister of Mineral Resources and Energy, as well as the AGSA, the latter must respond to whether there has been any misrepresentation on the audit of Eskom.
Ms Van Minnen also agreed and added that previous members of the Board may also need to be invited. There were a lot of acting positions and changes so these people may have some other information that could clarify some issues about what is happening at Eskom.
Mr Lees said the starting point provided by the Chairperson was good and asked that the draft copies of the invitation letters to the parties are circulated to the members of the Committee before they are sent so that they can add whatever they wish to if necessary.
Mr Somyo said the Committee should first confine its letters to Eskom (Mr de Ruyter, the Board, the Ministry) and then later, consider approaching the AGSA and other bodies.
The Chairperson stated that the starting point would be to get Mr de Ruyter to make a written submission and sought clarity if the Powers and Privileges Act would apply and if he would not be prejudiced if he appeared before the Committee because he was no longer the CEO of Eskom.
Adv Jenkins said he can be protected and that even if the Committee asks him to respond in writing in the form of an Affidavit, he would be sworn in in terms of the Act and can be protected as a witness.
The Chairperson asked members to send their proposals to the Committee Secretary by close of business on Thursday so that the Committee can endeavour to have the correspondences sent to Mr de Ruyter, the Board, and the Ministry by next week, and the AGSA will brief the Committee at some point as a standard operating procedure to give more details on the matter.
The meeting was adjourned.
Hlengwa, Mr M
Beukes, Ms AJ
Hadebe, Mr BM
Lees, Mr RA
Somyo, Mr SS
Van Minnen, Ms BM
Zibula, Ms BT
Download as PDF
You can download this page as a PDF using your browser's print functionality. Click on the "Print" button below and select the "PDF" option under destinations/printers.
See detailed instructions for your browser here.