Is Dentons up to ‘diving’ the murky depths at Eskom?

by | May 4, 2015 | Eskom, General | 0 comments

THE choice of Dentons to do Public Enterprises Minister Lynne Brown’s “deep dive” into the financial malfunctioning of Eskom is an interesting one that has elicited quite a bit of muttered, and possibly green-eyed, comment in the legal fraternity.

While Dentons has been in Africa for about 50 years, it has been in Cape Town only since 2012 via an association with Kapdi Twala, a local law firm described on the Dentons website as a “tier one black law firm”. Kapdi Twala does not feature in the widely used Hortors Legal Diary — but then neither does Dentons. A Johannesburg office of Dentons opened earlier this year. It seems that attorney Noor Kapdi, a University of Cape Town BProc graduate in 1984, is in charge there. He calls Dentons a “challenger brand”.

A Jutastat search reveals that Dentons has not featured in the South African Law Reports at all, while Kapdi Twala has made it into the reports only once. This is not auspicious in terms of track record.

Worryingly, Dentons boasts, on its website again, that it has advised Eskom in the past. This obviously foreshadows the prospect of a conflict of interest, one which Dentons will no doubt stoutly contend is manageable in the context of an investigation of the affairs of Eskom encompassing a “deep dive”, as Brown jocularly put it during her press conference earlier this month, on the eve of the Dentons appointment. Managing the conflicts that loom may turn out to be akin to Dentons having to confess to being slightly pregnant.

It would obviously be in the public interest to conduct an objective and thorough “deep dive” into Eskom in order to turn it around and shake the skeletons out of the cupboards and boardrooms in which they appear to lurk.

Whether Dentons has enough feet on the ground in SA and the general wherewithal to do the job properly remains to be seen. Certainly, hard-pressed taxpayers do not want to find that the depth of the dive is measured in the cost to the fiscus rather than in the positive results of cleaning up the mess in Eskom’s affairs.

It may well be asked why a firm of attorneys has been selected for the tasks involved in the “deep dive”. There are firms of accountants and economists out there who may be scratching their heads and wondering why they were overlooked and excluded from the deep-diving team.

Let us assume, for the sake of argument, that it is indeed appropriate, after a competitive procurement process, to appoint a firm of attorneys to investigate the probity, legality and economic integrity of the goings-on in the boardrooms and workshops of Eskom, in its planning and procurement divisions, and in particular in its maintenance and upkeep of its plant and equipment. Can a relatively small firm with offices only in Johannesburg and Cape Town really be expected to bring enough human resources to bear to find out what ails Eskom?

This is a parastatal that employs 48,000 and is tasked with generating and distributing electricity for the entire country.

Dentons is going to have its work cut out comparing the activities of Eskom with the requirements of the Public Finance Management Act and with the values and principles that inform the conduct of the public administration, by which Eskom is bound in terms of the Constitution.

It is public knowledge that the ever-changing board of Eskom has helped itself to generous bonuses while running Eskom’s generation capacity into the ground. It is also well known that Eskom does not have the wit to keep its coal dry. Worse yet, it apparently pays more per litre for its vast diesel supplies than the retail customer at the forecourt pump.

It is not for one moment to be imagined that Eskom is a golden goose that exists to lay golden eggs for its board, staff and suppliers. Dentons will have to interrogate this impression. All of the alleged misfeasance and malfeasance could not come about if Eskom had even a nodding acquaintance with the rules of the game.

These rules include the promotion and maintenance of a high standard of professional ethics: accountability, transparency and the promotion of efficient, economic and effective use of resources, including human resources. The basic values and principles governing the administration of Eskom also require that “good human resource management and career development practices, to maximise human potential, must be cultivated”.

Eskom is also meant to be development oriented, which leaves the objective observer wondering how it was managed into a position in which it is obliged to “load shed” with increasing frequency.

And, by the way: “Services must be provided impartially, fairly, equitably and without bias” in accordance with section 195(1)(d) of the Constitution. The way in which Eskom carves up its clientele on rates charged and divides distribution of electricity between the municipalities and its own distribution department bears investigation by anyone conducting an appropriate “deep dive”. If Dentons takes time to compare the running of Eskom with these values and principles, it is inevitable the “deep dive” will uncover a long litany of infringements of the supreme law of the land. How best to address them will be the meat of the inquiry report.

When it comes to procurement of goods and services, a system that is fair, equitable, transparent, competitive and cost-effective must be in place. This is what section 217 of the Constitution requires. Whether it is the position in relation to the procurement of goods and services by Eskom is an open question. A deep and dark fissure beckons into which the “deep dive” must go if the malaise in Eskom is to be addressed constructively and effectively.

And, finally, there is the small matter of cadre deployment. Successive boards have been littered with deployed cadres of the national democratic revolution. It will be the duty of Dentons to draw to Brown’s attention the findings of the high court in Molokoti v Amathole District Municipality in which Judge Jeremy Pickering came to the unambiguous conclusion that cadre deployment is illegal and unconstitutional before he relieved the deployed cadre before him of his position and replaced him with the best candidate for the job.

Dentons has been given an unenviable and complex task. It is to be hoped that sufficient human resources can be brought to bear to genuinely get to the bottom of all of the alleged and apparent misfeasance and malfeasance. It is Eskom that has brought the country to the state of load shedding that is being experienced. This dire situation is because Eskom has not been led, run and supported as it should have been.

Good luck with your “deep dive”, Dentons. Paddling, wading, swimming and surfing won’t do; the minister wants a deep dive.

• Hoffman is a director of Accountability Now.



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