ESKOM must put Counter-Corruption Measures in Place to Prevent another Free-for-all Fraud says leading South African Think Tank

ESKOM must put Counter-Corruption Measures in Place to Prevent another Free-for-all Fraud says leading South African Think Tank
ESKOM must put Counter-Corruption Measures in Place to Prevent another Free-for-all Fraud says leading South African Think Tank

Leading counter-corruption think tank the South Africa Regional Centre of Excellence in Integrity (SARCOE) is calling upon President Cyril Ramaphosa to put in place strategies at ESKOM and other state-owned corporations that will prevent hundreds of billions of Rand being lost to corruption and fraud, as happened under the corrupt stewardship of former President Jacob Zuma.

Professor Lee Marler, one of the Founders of Pavocat (a specialist counter-corruption company) and a Director at SARCOE said, “The wholesale corruption at ESKOM during the Zuma years has left the South African people with a debt of R392 billion. The shameful activities of Zuma the Gupta brothers and his cronies must never be allowed to happen again.”

Prof Marler continued, “That is why SARCOE is calling on President Ramaphosa to put in place strategies that will help to defend publicly-owned corporations such as ESKOM from corruption in the future, ensure past corruption issues can be dealt with, and see those who were responsible for that corruption brought to account.”

As the sole shareholder of ESKOM and up to 24 other corporations, the South African Government should have expected significant income to be generated for use through the public purse to support communities, support economic activity and regeneration, and fund public sector organisations alongside the revenue from taxation.

The corrupt activities and wholesale fraud allegedly committed by people like Zuma and his cronies have deprived South African taxpayers of R100 billion. In addition to the loss of revenue, the corruption at ESKOM has left the South African people with an unreliable power grid that is not fit for purpose.

ESKOM has been forced to resort to “Stage 6” power outages across the country to manage demand in the face of insufficient power generation capacity, leaving millions of South Africans in the dark, and the economy without the energy it needs to maintain current levels, let alone grow.

The South African National Prosecuting Authority has investigated or is in the process of investigating or prosecuting numerous individuals, including former president Jacob Zuma, and former ESKOM CEO Matshela Koko.

The Judicial Commission of Inquiry into State Capture Report: Part IV provides information about the diversion of public funds to private enterprises and the dissipation of funds derived from state capture.

Corruption and mismanagement at ESKOM have contributed to the “free-for-all” seen at the company, which has resulted in the South African people being saddled with an R392 billion debt.

ESKOM counter corruption measures could help to start reducing the debt that the company is carrying.

Prof. Lee Marler said, “SARCOE fully supports measures being taken under President Ramaphosa to stamp out corruption and bring those responsible for fraud, money laundering, and the theft of public money through corrupt activities to account.

Auditors Deloitte & Touche LLP in a report published about ESKOM corruption cases have said that there is a “material uncertainty relating to Eskom’s ability to continue as a going concern” referring to “various irregularities reported in prior financial periods.”

The tragedy of corruption at ESKOM and other publicly-owned corporations is the impact it has had on the people of South Africa. It is simple to talk about stolen money and assets, but the true cost of corruption is the impact on everyday life, where South Africans struggle to keep the lights on and heat their homes. It impacts the economy and therefore the availability of employment.

The knock-on effect of a stagnant economy is lower tax revenues for the government and less investment from the public purse where it is needed.  This spiral leads to poverty, lack of security, in this case, energy, and human rights abuses, which have been documented by Amnesty International.

Prof Lee Marler said, “The South African people deserve better. The national scandal of ESKOM corruption must be stamped out. Strategies, processes, and training must be instituted to ensure compliance in integrity and accountability to remove the opportunities for malign actors to manipulate and take advantage where they think public money is vulnerable, and this is exactly what SARCOE was set up to deliver”

Prof Marler continued, “Those individuals who attempt to corrupt and subvert organisations and processes for their own personal gain must be identified, investigated, and prosecuted. Only once the scourge of corruption is brought under control and eradicated will South Africa be able to fulfill its very significant potential”

ESKOM counter corruption case study