Eskom inquiry: preparations

Public Enterprises

21 June 2017

Chairperson: Ms D Rantho (ANC) (Acting)

Eskom inquiry: preparations

List of Documents for Eskom Inquiry
List of potential witnesses for Eskom Inquiry
Terms of Reference for Inquiry into Eskom Board
Public Protector State of Capture Report

Meeting Summary

Documents handed out: Parliament Researcher analysis of Eskom’s Denton Report (not available)

The Portfolio Committee on Public Enterprise met to prepare terms of reference and to discuss the required documentation and lists of witnesses for an enquiry into Eskom, with particular reference to the pension pay out and reappointment of Brian Molefe. The decision to undertake the inquiry had been taken on 23 May 2017. Although Mr Molefe had subsequently left Eskom, the inquiry needed to look into issues of corporate governance at Eskom.

The Committee also discussed the instruction by the Chairperson of the Committees to undertake an investigation into the allegations of state capture. It was decided to focus on the Brian Molefe case initially, but subsequently move into a broader inquiry into state capture.

The terms of reference were agreed upon by all parties. A list of relevant documents and potential witnesses drawn up by the secretariat was approved by the Committee, with a number of amendments. Special attention was placed on the clause that said the Committee could add any other witnesses or documentation at any time during the inquiry. The Committee was adamant that the Minister and Deputy Minister of Public Enterprises should be made aware that they should attend the inquiry in order to give their versions of events.

Concern was expressed about the technical support that would be required, but the Committee Secretary agreed to arrange the necessary support with the Chairperson of Committees. The Committee was also warned that they would have a very heavy programme in August to complete the enquiry and should be prepared to work long hours, even into the early hours of the morning.

The Chairperson made the point that everyone sitting on the Committee, regardless of their political affiliations, had agreed to undertake the inquiry. She appealed to the Committee to remember that they were to work as Members of the Public Enterprises Committee, and not as members of political parties. They were to work as a team, and everyone had to have the same mission and vision and should not be found wanting in executing the Committee’s mandate of oversight. The Committee needed to have the inquiry, regardless of who did not want it. The Committee could not fail the nation. It was not so much about the Committee, it was about the country.

The Public Enterprises Committee was the first committee in Parliament to address the cancer of state capture.

Meeting report

The Chairperson explained that the meeting was a follow-up to the meeting of 23 May 2017 when certain information had been received which suggested there was a need for an inquiry. The Committee had consequently decided to open an inquiry into issues at ESKOM. The purpose of the meeting was to set up the inquiry. The inquiry would not be started on that day, as the Committee needed to prepare for it.

In accordance with the Act of the National Assembly (NA), the Portfolio Committee (PC) had to maintain oversight of, inter alia, any body or institution to which oversight was assigned to the Committee. Rule 227.1.c of the NA further stated that a PC could monitor or investigate any executive organ of state, etc. The rules permitted the Public Enterprises Portfolio Committee to initiate an inquiry into Eskom. The initiative to set up an inquiry was in accordance with the Constitution and rules of the NA. The purpose of the meeting was therefore to establish the terms of reference or the scope of the inquiry, to determine the material evidence required, to determine the formal process, and to determine the potential witnesses. A document containing the terms of reference had been drawn up by the Committee staff and distributed to Committee Members. The Committee would discuss the terms of reference during the meeting.

Apologies were received from the Minister of Public Enterprises, Ms Lynne Brown, the Deputy Minister, Mr Ben Martins, and three Members.

Ms N Mazzone (DA) requested that the Chairperson send a full list of dates to the Minister and Deputy Minister to ensure that they attended the Inquiry. The Chairperson agreed that the Minister and Deputy Minister’s offices would be made aware of the inquiry dates, and of everything that was happening.

The Chairperson pointed out that everyone sitting on the Committee, regardless of their political affiliations, had agreed to undertake the inquiry. She said that certain things had happened since 23 May 2017, which the Committee had not anticipated. The re-appointment of Mr Molefe had been rescinded, and he had left Eskom. The Chairman of the Eskom Board had resigned. However, that did not stop the Committee from carrying on with the inquiry. The new Chairman of the Eskom Board would be appointed on the coming Friday.

Mr N Singh (IPF) wanted to raise a point before they discussed the terms of reference. On 12 May 2017, the IFP had tabled a resolution to appoint an ad hoc committee to determine what was going wrong at Eskom. It had been tabled, but following the tabling, there had been correspondence from the Speaker where the resolution had been amended to exclude reference to Mr Brian Molefe, as what had happened to him did not fall within the purview of Parliament. He said that an ad hoc committee was ready to be presented to the National Assembly, although the IFP fully supported the enquiry by the Public Enterprises Portfolio Committee. He had a document dealing with the tools that were necessary for an enquiry, and he would circulate it. The tools would include adequate researchers, forensic advisors, et cetera.

Ms Mazzone interrupted, explaining that the ad hoc committee was at that moment being discussed in the Chief Whip’s Forum, together with a request for an inquiry into state capture. Nevertheless, the Public Enterprises Portfolio Committee had been given the go-ahead to establish an enquiry into Eskom.

Mr Singh understood that what fell within the purview of Parliament was Eskom, but not the appointment of Mr Brian Molefe. The IFP fully supported the inquiry by the Portfolio Committee for Public Enterprises, but wanted to ensure that the Committee had all the tools necessary to conduct the inquiry.

The Chairperson said that it was first necessary to adopt the terms of reference of the inquiry and then the Committee would draw up a list of resources it required, and submit the list to the Speaker. The Chairperson understood that the ad hoc committee had been rejected. Regardless of whether the Speaker decided to go ahead with an ad hoc committee, the Portfolio Committee had work to do and would not be held up.

Mr R Tseli (ANC), on a point of order, said that the Committee was losing focus and should concentrate on the terms of reference.

Mr Singh said that he felt that he had been completely misunderstood, as he had given background to the ad hoc committee, but he fully supported the enquiry.

Ms G Nobanda (ANC) proposed that the Committee moved on to adopt the terms of reference, which would indicate the resources that they would need for the inquiry. She was quite sure that the Chairperson of Committees would ensure that they had the resources needed.

The Chairperson had noted that Mr Cedric Frolick, the House Chairperson, had issued a directive to affected committees to urgently investigate the ‘state of capture’ emails. The Chairperson wanted to include that directive as part of the programme in the third term. The Committee would have to get the emails, read them and then discuss how to take them forward. If it became necessary to include the state capture emails in the inquiry, the Committee would do so.

Preparation for inquiry into Eskom

Mr Disang Mocumi, Committee Secretary, read out the terms of reference for the inquiry into the Eskom Board, as per the rules of the National Assembly, including the procedure to be followed. He had prepared a list of documents that might be required for the Eskom inquiry. He also handed out to Committee Members a list of potential witnesses for the Eskom inquiry, including individuals and institutions.

Mr Anoj Singh, Group Chief Financial Officer (CFO) of Eskom, who was attending the meeting, clarified that one of the persons named on the list, Ms Elsie Pule, was Group Executive for Human Resources at Eskom.

The Chairperson reminded the Committee that they were in it together as Members of the Public Enterprises Committee, and not as members of political parties. They were to work as a team, and everyone had to have the same vision and mission and should not be found wanting.

Mr Tseli said the issue at hand was important to all Members, and they were doing it as a collective in the interests of the people. He was interested as to how they would deal with the media in relation to the inquiry. The office of the Chairperson needed to interact with the media with the necessary sensitivity so that they could be proud of the results of the inquiry. As far as documents were concerned, matters of corporate governance and state reputation needed to be restrained, not silenced. He had come across news that different political parties were trying to punt. He believed that the Committee should rely on the Office of the Chairperson to engage with the media whenever necessary. He added that there might be additional documents required, and that those could be added when the need arose.

Mr M Gungubele (ANC) said that, going forward, the Committee should deal with matters on a multi-party basis, hiding nothing. There could not be political power games. Partisanship needed to be restrained when they were looking into issues of corporate governance and matters of state reputation. The background to the inquiry had been articulated. The terms of reference proposed by officials seemed to suggest the interrogation of the minimum essential issues and ideal objectives, which he approved of. He liked No. 3 of the terms of reference, which suggested that the proposed terms of reference could be amended should the Committee so agree. At a relevant time, the Committee could add names to the list of witnesses and additional documents to the list of documentation, as proposed by Mr Singh. On behalf of the ANC, he wanted to state that they were happy with the documentation as it stood.

Ms Mazzone wanted to congratulate the Acting Chairperson, as well as the Committee, that they had gone beyond their partisan political positions and were looking after the best interests of South African citizens. The Committee was executing its political mandate of oversight. The Public Enterprises Committee was the first Committee in Parliament to address the cancer of state capture. Its first engagements with Eskom had proved that they were all after the same thing, and that was the truth. She was grateful that the Committee had accepted her inputs into the list of witnesses and the documentation. The Committee had started a process where they had to be prepared for one month of inquiry, from 1 August 2017.

To the list of documentation, she wanted to add the Eskom Board minutes related to the Optimum Mines and the Kusile and Medupi power stations, which also dealt with load shedding, the Board minutes pertaining to Impulse International, and the minutes relating to the Koko nepotism scandal. The Committee needed to be more specific when requesting documentation. For example, they would require the first and original Denton Report, prior to the removal of names as requested by Mr Ben Ngubane. The original, unsanitised PWC Report was required. The list of witnesses presented included exactly who they needed to interview. However, when they were looking at the state of capture, they had to call Mr Duduzane Zuma, Mr A Gupta and Mr T Gupta. Ms Mazzone would also like to see the Board members of the Optimum Mine called in as potential witnesses.

Ms Nobanda noted that some of the requirements of Ms Mazzone went beyond the scope of the inquiry which was related to the issue of Mr Molefe and his retirement package. She thought that some of the issues raised by Ms Mazzone should be kept for the state capture inquiry, so that they did not confuse the two inquiries. Ms Nobanda proposed that the Committee stuck with the names proposed by the Secretary and kept Ms Mazzone’s names for the state capture inquiry. The Committee had to accept the terms of reference for the inquiry into Brian Molefe’s retirement and pension pay out.

The Chairperson confirmed that Ms Mazzone had said that the three documents, which she had read as per the instruction of the Chair of Chairs, should be put in the basket for the state capture inquiry. The current inquiry was on the Brian Molefe case. The Committee had put the state capture inquiry into the programme. The Committee had an extended programme on Tuesday and Wednesday so that they could divide their time between the two.

Mr Gungubele said that they should not create the impression that they would ignore the state of capture documents when they referred to the Brian Molefe case.

Mr Singh said that the documents that had been prepared by the researchers represented a very good starting point. He believed that the original inquiry of 23 May 2017 had been overtaken by the more recent events, but they still had to look into the retirement package of Mr Molefe so that other entities did not do similar things. However, it was a moot point as Mr Molefe was no longer at Eskom. Clause 3 -- the sunset clause which indicated that the terms of reference could be changed at any time by the Committee -- was crucial. All the Members of the Committee had sat on inquiries and knew that one sometimes had to change course midstream. However, having sufficient documentation at the beginning was very important. The SABC ad hoccommittee had set the benchmark for committees in Parliament.

The Committee had been talking about coal contracts and it should acquire the original contracts, particularly the coal contracts that had been entered into by various parties with Eskom. The emails that had been circulated recently which referred to state entities, especially those related to Eskom, needed to be acquired and studied. He wanted the Minister to be specifically invited to be present at the Committee, to present her version of the events. The National Energy Regulator of South Africa (NERSA) was an important role player, as was the Public Protector. He also believed that an opportunity should be provided to anyone who wanted to give information, such as whistle blowers. He remained concerned about the availability of financial and human resources.

Mr Tseli said that certain developments had taken place, but the approach should be that whatever had happened in the company should not recur. The Committee should be careful not to exhaust the list of documents to prevent anyone saying that a particular document or witness was not on the original list. The phrase “any other relevant documents” would cover the introduction of any documents at a later stage. Likewise, the phrase “any other witnesses” would suffice to add additional names. The last point related to paragraph two of the inquiry. Ms Nobanda had suggested that some of the issues raised in the meeting were not relevant to the inquiry. He suggested that if Members wanted to include other matters, those should be directed to the Acting Chairperson’s office so that the relevance of the proposed documents could be determined. Possibly they needed to take out the clause that “during the course of inquiry, any other matter could be included” and rather direct additional documents to the Acting Chairperson’s office.

Mr Gungubele said that there were issues that the Committee could not exhaust at that meeting. Brian Molefe had become a symptom of a problem, and those were issues that would lead to a greater understanding of what had occurred, and what needed to be investigated. The biggest challenge would be the logistics of the process, including finance, documents, engagement with witnesses, etc. The key was how the technical and logistics arrangements were made, so that in August everything would happen according to plan. The entire July had to be dedicated to thorough planning and preparation for the inquiry in August. The technical leader of the support team would have to engage with witnesses and select the ones who had relevant information for the committee. Enquiries of that nature were messed or made up by the logistical competency in preparing the programme.

The Chairperson explained that from August, the Committee would include the Gupta email leaks, and everything that had been discussed in the meeting would be included in that enquiry. She understood Mr Singh to say that the appointment of Brian Molefe was irrelevant, but that had been the reason for the Committee determining the need for an inquiry. The governance of Eskom that had resulted in a decision to give the CEO a R30 million retirement package and then to reappoint Mr Molefe, had given rise to serious questions about how Eskom was governed.

They would probably go over time on the dates indicated in the programme, and might even have to deal with the inquiry on Fridays and Saturdays in order to manage the issue effectively in a short space of time. The directive given by the Chairperson of Chairs included a list of documents that they would need. The coal contracts, as well as cost-plus mines, would have to be looked into. There might be links between the two inquiries and they would overlap, and then they would need to look into state capture in the Molefe enquiry. It was impossible to separate the issues. The Chairperson stated that she would obtain advice as to whether it was correct to call Mr D Zuma and the Guptas, as the rules stated that the Committee could call anyone. She asked for the cooperation of the Members.

Mr Singh said that they could not adopt the list as handed out, but that they should include all the proposals from the Committee Members. He also noted that the all potential witnesses should be interrogated beforehand to ensure that they were relevant witnesses and added value.

The Chairperson proposed that the terms of reference be adopted with the amendments. It was proposed by Ms Mazzone and seconded by Mr E Marais (DA), supported by Ms Nobanda.

The Chairperson looked at the programme ahead that indicated that the Committee would meet on Tuesdays and Wednesdays the following week and then on the 1st August. During the recess, the Chairperson would possibly call a Committee meeting to prepare for the hearing on 1 August.

Mr Gungubele suggested that the Committee adopt the programme as a draft so that the Secretariat could make changes when necessary. The draft programme was adopted, but Mr Singh pointed out that there could be National Assembly meetings on some Thursdays. There would also be constituency time in August.

The Chairperson asked the Secretariat to inform the Committee as to how things would be prepared.

The Secretary said that the Chairperson‘s office would have to communicate with the Speaker on the scope of the inquiry, as well as the logistical details. The staff would have to present the process to the Chairperson, including the amended documents and witnesses, the travelling costs and the legal advice available to witnesses, as well as the order of witnesses. The Secretariat would work with the legal advisers, especially in relation to witnesses, and would keep Members informed via emails during the recess.

The Chairperson said that the Committee would enquire into the appointment of Mr Molefe. He had left Eskom in 2016, after the release of the state capture report, joined Parliament and had then been re-employed by Eskom. There were allegations that his re-joining of Eskom was a compromise regarding his retirement package. Those were the unanswered issues. The Committee needed to have the enquiry, regardless of who did not want it. The Committee could not fail the nation. It was not so much about the Committee, it was about the country.

The meeting was adjourned.