- Bloomberg reports that the office of South African President Cyril Ramaphosa said it welcomes the decision of the Energy Council of South Africa to end work with Bain & Co. after it objected to the relationship.
- Bain was banned from doing any business in South Africa in 2022 for a period of 10 years for its role in orchestrating the capture of the country’s Revenue Service.
- The Energy Council of South Africa appointed Bain to assist with its project management office six weeks ago on a pro-bono basis – without making a formal announcement.
“It’s a welcome development,” Vincent Magwenya, Ramaphosa’s spokesman, said. Earlier in the week, the president’s office had issued a statement asking the council to reconsider the relationship.
On Sunday, 15 December 2024, The Presidency raised its concern about the appointments of McKinsey as a supporting partner to the B20, the business engagement group that meets on the sidelines of the G20 and coordinates the participation of business in the G20, and Bain to the Project Management Office of the Energy Council of South Africa.
“Whilst the Presidency or government has no control over the B20 processes, it does not endorse the appointment of McKinsey in this regard. Similarly, the Presidency does not condone the inclusion of Bain in supporting the activities of NECOM. The appointments do not contribute to the engendering of public trust and promotion of good governance, given the well documented role of the two firms in state capture and corruption. The Presidency calls on business to reconsider its position and to appoint more suitable partners for these important endeavours,” the Presidency said.
“Energy Council CEO James Mackay’s assurance that Bain has undergone “due diligence” and implemented “reforms” is both tone-deaf and misguided. The argument that Bain has been readmitted to BLSA or had its UK ban lifted does little to absolve the firm of its historical and systemic misconduct. This appointment can only be described as a slap in the face to millions of South Africans demanding accountability and ethical governance,” said Tebogo Khaas, Chairperson of Public Interest SA.
Energy Council of South Africa not new to controversy
The Energy Council South Africa (ECSA) claims to represent the country’s energy sector. It is alleged that ECSA was formed following a meeting between Sasol CEO Fleetwood Grobler and Minister of Mineral Resources and Energy Gwede Mantashe either in late 2021 or 2022. It was Mantashe’s idea that there should be an energy council that mirrors the minerals council so that government could engage at a single point of contact with the energy sector of South Africa.
Sasol and Anglo American played a key leading role in setting up the council. The founding members make up the country’s biggest air polluters namely, Sasol, Anglo, Toyota, Exarro, Naamsa, TotalEnergies, Eskom IDC, CEF. Each contributed seed capital of R1million except Naamsa (R100k). The EU (European Climate Foundation) and UK’s FCDO oddly, also contributed to the tune of around R6 million each.
ECSA, which was housed rent free inside Sasol’s head office in Sandton in its first years of operation, is accused of driving a fossil fuel agenda. They have since sought to attract members from the renewable energy sector. Link to the full list of ECSA members here.
International independent power producer, Globeleq, is currently represented at board level at the council in the form of John Smelcer who is Interim Chief Development Officer at Globeleq. Globeleq, along with their partners, are currently refusing to pay around R254.8 million outstanding in bid bonds for 12 projects that failed to reach commercial close in REIPPPP Bid Window 5. Read more
Bain and capture of SARS
In 2015, Bain led a restructuring of the South African Revenue Service (SARS) then under the leadership of Tom Moyane, which resulted in the destruction of a large part of its capacity.
The first revelations about Bain & Company’s involvement in the dismantling of SARS emerged during the Nugent Commission set up by President Ramaphosa in 2018. This commission had to determine, among other things, whether deviations from established processes had unfairly favoured politically connected individuals and/or individuals connected to SARS senior management.
The Nugent Commission had also pointed out in its final report of December 11th, 2018, the lack of transparency of Bain & Company during the investigation.
Author: Bryan Groenendaal
