BLSA – Many Important Questions on De Ruyters Allegations Need to be Answered

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BLSA wants to see these issues explored because it is in the public interest to know what is going on.
There’s important work to be done. Our three key network industries are in varying degrees of distress. No one needs reminding how severe our electricity crisis is as stage 6 load shedding hit again last week but, if reforms aren’t effectively implemented in the other network industries the consequences will be just as severe. The costs of having a dysfunctional rail freight and logistics sector that is unable to meet demand are already being felt with miners, farmers and producers from other sectors being unable to export their planned volumes, hitting the state’s tax revenue. And if the country’s water supply and sanitation systems are not effectively repaired and upgraded following years of maintenance neglect, the consequences will be dire. I shudder to think what would happen in the country if “water shedding’’ becomes as prevalent as load shedding.

In all three network industries, huge amounts of private sector investments are required that will involve not only local and multinational companies but also organisations such as multilateral development banks, bond market investors and possibly even state employees through the Government Employees Pension Fund. And, of course, SA’s JET-IP package is being funded by the US, UK, France, Germany, and the European Union.

These are not the sort of investors that will tolerate any hint of corruption, particularly at the very top. Many are governed by their own laws such as “know your client” that demand due diligence is conducted to ensure there is no corruption involved with transaction counterparts. These regulations are driven by the international Financial Action Task Force, the very institution that has adjudged our systems to combat money laundering, including our “know your client” regulations, to be sub-par.
Although unproven, De Ruyter’s allegations are serious. What is particularly alarming is the connection to the $8.5bn package, where he alluded to attempts to “water down” provisions to safeguard it against corruption and was told that “in order to pursue the greater good, you have to enable some people to eat a little bit”.

BLSA hopes that the JET-IP package is not now at risk with the countries that are funding it already concerned about South Africa’s international positioning. The US House of Representatives, as an example, is considering a resolution filed by Republicans last week asking the Biden administration for “a thorough review of the current and future status of the United States-South Africa bilateral relationship”.

BLSA fully supports Eskom chair Mpho Makwana’s call for de Ruyter to “walk to the nearest police station and report the matter”. It also supports the ANC Veterans League statement issued by convenor Snuki Zikalala calling on the President to afford him the protection of a whistle blower, “bearing in mind that our legislative whistleblowing protections are weak”. Let’s not forget that already someone has tried to murder De Ruyter by poisoning him and he and his family have received numerous death threats.

BLSA agrees with Public Enterprises Minister Pravin Gordhan that the news channel was the wrong forum to air those views if it was indeed the first occasion in which they were aired and believes Eskom chairperson Mpho Makwana is correct in asserting that De Ruyter should have reported the allegations to the board. Most importantly, however, De Ruyter should have laid charges with the appropriate authorities, if he has not yet in fact already done so.

The pushback by the ANC has been illuminating, attacking De Ruyter’s character but apart from the Veteran’s League, not one senior ANC member has said, “let’s investigate this properly”. After all, it’s not as if the allegations have been made by just anybody – this was the CEO of Eskom appointed by Eskom’s previous board, which in turn had been appointed by the shareholder.

Despite the massive efforts undertaken to expunge corruption from state systems through the Zondo commission, it seems the focus is to deflect from the main issue and attack De Ruyter, and so continue to protect the ANC’s vast patronage network at the expense of the country’s interests. Would it not be better to take the allegations at face value for now and commit publicly to arriving at the truth – wherever it may lead? If De Ruyter is found to have misrepresented anything, the result would simply be punitive to him personally, whether legally or merely reputationally. The alternative, to denounce the individual and in so doing avoid mentioning the elephant in the room, is far worse – a serious hit to the entire state’s reputation as a polity that is governed by the rule of law.

The one issue that needs urgent investigation is the very serious implication that a cabinet minister was aware of corrupt dealings of a fellow “senior politician” but did not report it. That is a criminal act.
BLSA is extremely concerned about the poisoned environment in which the energy market operates and believes these serious allegations, though unproven, require an urgent response from our government and appropriate agencies of state to ensure that the truth is uncovered and appropriate action taken.

Finance Minister Enoch Godongwana delivered a clear plan for Eskom’s debt transfer in his budget last week, precisely what markets were asking for. While government will take on 60% of Eskom’s debt, Eskom will need to prioritise spending on transmission and distribution capacity and maintenance of the existing generation fleet to improve availability of electricity. BLSA believes it was an excellent budget that was also strong on addressing social welfare needs.

Author: Busisiwe Mavuso

Busi is CEO of Black Leadership South Africa (BLSA)

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