SONA 2020: Towards a New Dawn for SOEs

When President Cyril Ramaphosa delivers his State of the Nation Address (SONA) this evening, many South Africans would want to hear what plans are in place to bring them closer to a new dawn where Eskom and other SOEs function optimally.

South Africans have been subjected to Eskom’s unpredictable loadshedding schedules for some time now and talks of proposed electricity tariff increases by NERSA will place an additional burden on the public, (small) businesses and the economy.

Meanwhile, the Passenger Rail Agency (PRASA) had some positive shifts. The minister fired the PRASA Board and placed the entity under business administration. These are decisive moves signalling steps in the right direction but more is needed to have a sustained clean-up of all SOEs.

The Dullah Omar Institute (DOI) this week released two research papers with clear recommendations on how to stem the spiralling dysfunction in SOEs as the country awaits much anticipated improvements by government to the legal framework governing SOEs.

In SOE and Democracy DOI director Prof Jaap De Visser and Samantha Waterhouse, Project Head of the Women and Democracy Initiative, note that Boards are meant to ensure good corporate governance and that the power provided to the relevant Minister to appoint these Board members must be disbursed.

The paper interrogates whether there is a need for a nominations committee that could include various stakeholders such as representatives from Chapter Nine Institutions, Parliament, the executive and importantly representatives of the public. In the report it is argued that “…the duty to provide information to the public and to facilitate public participation should fall to the SOE, and be enforced. There is no doubt that the current lack of transparency, public involvement, and rigour plays a major part in enabling appointments for motives other than the public cause to be pursued by the SOE”.

In the report Appointing Directors to the Boards of State-Owned Enterprises: A proposed framework to assess suitability, Prof Lukas Muntingh, the Project Head of the Africa Criminal Justice Reform at the Institute, proposes a framework to assess the suitability of potential Board members to hold office. The suitability of SOE Board members have repeatedly come under scrutiny especially in Eskom, Prasa and the SABC.

Muntingh’s report relies on a detailed overview and proposed analysis of the nine constitutional requirements for public service found in the Constitution. His proposed framework to be used by some SOEs and others when appointing Board members, include requirements such as a high standard of professional ethics, the need for public administration to be accountable and transparency to the public.

Muntingh notes: “There is great diversity in the size and mandates of what is called an SOE and this diversity has implications for how we approach challenges in governance’’. “The framework proposed needs to be tested and amended as needed.


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