Legislative failure, state capture and incompetence: Nepotism in a new outfit

The Dullah Omar Institute (DOI) will release two research papers and a visual infographic this week dealing with board appointments to SOE. Research on the topic of appointments was prompted by mounting evidence of the governance failures in SOEs resulting in huge financial losses to the state and ultimately the tax payer.

In  ‘SOE Boards and Democracy’ Jaap De Visser, Director of the Institute and Sam Waterhouse, Project Head of WDI argue that solving problematic SOE appointments by changing the policy and governance framework may be an important, but not the only requirement to address governance failures at SOE.  As part of their proposals, De Visser and Waterhouse reflect on Parliament’s current oversight role and interrogate whether there should ‘be a more direct role for Parliament in the appointment process’ considering that ‘significant decisions are made by organs of state without public involvement and public scrutiny’. They further argue that Parliament’s involvement in nominations may possibly enhance transparency and lead to additional public engagement.

In ‘Appointing Directors to the Boards of State Owned Enterprises: A Proposed Framework to Assess Suitability’, Lukas Muntingh, Project Head of ACJR proposes a framework directly based on the constitutional principles and values in section 195(2) of the Constitution applicable to the public administration, including SOEs. The framework provides an effective tool to assess, based on evidence, if the appointment of directors of SOE Boards were in line with the requirements in s 195(2) of the Constitution. The key issues are transparency, accountability and the discretionary power of Ministers to make appointments. Muntingh argues that ‘SOE reform will require significant structural reforms and the most significant of this is breaking the relevant Minister’s stronghold on discretion when making appointments’.

South Africans have been faced with and negatively affected by SOE failures, most recently those of PRASA and Eskom along with the distressing evidence presented at the Zondo Commission of Inquiry.  Motlatsi Komote, a Researcher at DOI notes that ‘The infographic that we designed aims to reflect on these experiences and provide information to various members of the public. It follows the life of Siphokazi, a young journalist affected by the daily realities of SOE failures. She sets out to provide information to many others like herself on the often intricate concepts and governance challenges facing SOEs. This visual aid raises crucial questions about the public’s power as indirect shareholders and stakeholders in government to hold the relevant Minister accountable’.

Members of numerous civil society organisations provided input on the two research papers in a CSO consultation on SOE Boards held on 18 November 2019 in Cape Town. Attendees were of the view that public participation is essential in holding state institutions such as SOEs accountable.

For further enquiries: Motlatsi Komote 072 872 2200