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The Dullah Omar Institute has released a new study and report that fingers confusing legislation as a key enabler of state capture at South Africa's troubled state-owned entities - and calls for a "State-Owned Enterprises Act" to regulate, among other things, the appointment of boards at parastatals.
The institute, based at the University of the Western Cape, released its report and legal framework on Monday.
The report and legal framework recommend reforms that the institute says will eliminate corruption and improve service delivery for South Africans.
Two key flaws
The research focused on two key flaws in the appointment and dismissal of SOE board members, namely, the procedural issues and the substantive criteria used for appointing board members.
According to the institute's report and legal framework, executives at parastatals face little accountability relative to the power that comes with their positions.
Additionally, the law for appointing state-owned enterprise boards is currently fragmented, as each entity is governed by at least two, but often even three different laws, as is the case with Eskom.
Institute director Professor Jaap de Visser said the overall purpose of the framework was an improved functioning of state-owned entities that would ultimately lead to improved service delivery benefiting all South Africans.
"In particular, we want to see an improved accountability structure for the executive leadership, legislative oversight and public engagement with those SOEs," said De Visser.
"Our aim is to suggest options for law reform, criteria for board membership and criteria for appointment processes that recognise the role of the public in these appointments."
'Muddled processes'
The report said a "State Owned Enterprises Act" could be developed to provide clear recruitment processes for all executives and board members, as well as to provide disciplinary measures and removal procedures.
"The only solution for the muddled practices around the nomination, appointment and removal of board members and executives of state-owned companies is uniform, overarching legislation that will regulate the position in all state-owned companies, as also recommended by the Presidential Review Committee," the report said.
The report said legal confusion over governance related to state-owned enterprises created the conditions that enabled state capture.
