S.Africa: White Afrikaans Business Organisation: Sakeliga court challenge vs two dysfunctional municipalities may be a game-changer

Its legal action aims to stop corrupt municipal officials having access to money intended for electricity and water services.

By Ciaran Ryan 30 Mar 2022 00:01

Business organisation Sakeliga is asking the North West High Court to appoint a ‘special master’ in two dysfunctional municipalities to take control of water and electricity payments and pay these directly to Eskom and water suppliers.

This would stop corrupt or incompetent officials from diverting these funds for purposes other than settling the municipalities’ water and electricity bills.

The court is being asked for a novel remedy that goes beyond temporary fixes: Sakeliga is asking for the special master to not only take control of electricity and water fees but also to take over municipal administration and ensure National Treasury’s Municipal Finance Recovery Service is being adhered to.

The special master would have to compile evidence of corruption and report to Sakeliga, the respondents and the court.

This is the latest attempt to fix the near total breakdown of local government in North West province.

Deposing for Sakeliga, CEO Pieter le Roux says a document prepared by the North West Department of Cooperative Governance, Human Settlements and Traditional Affairs shows almost every single municipality in the study underwent a total collapse of governance over the last 10 years.

“It seems as if every constitutional duty that has been bestowed upon local government within the North West Province has been neglected to such an extent that the communities involved cannot rely upon local government to provide them with the most basic municipal services anymore.”

Debt-ridden, plagued by corruption

The respondents in the case are Ditsobotla Local Municipality and Naledi Municipality, and the ministers of finance and Cooperative Governance and Traditional Affairs (CoGTA), among others.

The two municipalities cited as respondents are debt-ridden, plagued by corruption and “all fiscal control has been lost”, says Le Roux.

They are also functionally insolvent, resulting in residents and businesses failing to receive the most basic services for which they are paying.

The legal challenge may have prompted action from the North West provincial government, which met with the South African Human Rights Commission (SAHRC) in March.

The SAHRC presented evidence of myriad municipal failures in North West and “the tendency of municipalities to treat complaints, allegations, and recommendations of the SAHRC with impunity and non-responsiveness”, according to an SAHRC statement.

The old, corrupt systems would have to be replaced, and it was agreed to introduce a referral system for rapid resolution of complaints related to human rights, as well as regular meetings to monitor the implementation of the new system.

Opposition

The majority of the respondents cited in the Sakeliga case have opposed the relief sought, though National Treasury Director-General Dondo Mogajane admits that municipal performance has “unfortunately become synonymous with failure” and that municipal finances are in a critical state.

Treasury says it opposes the relief sought as it would subvert constitutionally-mandated structures for intervention.

In its reply Eskom says it has tried unsuccessfully to get Naledi Municipality to catch up on its arrears – to no effect. The municipality has failed to pay over money collected from consumers, which is unlawful.

‘Other means of enforcing payment’ needed

Tim Tyrrell, project manager at the Organisation Undoing Tax Abuse (Outa), says any attempt to hold local government to account is to be welcomed, given the deteriorating state of governance at municipal level around the country. However, the courts have put a stop to interrupting electricity supply to non-paying municipalities, so other means of enforcing payment must now be sought.

Eskom says it does not oppose the relief sought by Sakeliga.

The Centre for Good Governance and Social Justice – a non-profit organisation that is campaigning for the return of accountability at local government level – has documented the decay in numerous North West municipalities, and its coordinator Mandla Mpempe likewise bemoans the contempt for court orders by lawless municipal officials.

In January, Sakeliga said it had instructed its lawyers to request the Auditor-General SA under the Promotion of Access to Information Act (PAIA) to supply management reports in respect of 154 problem municipalities.

This follows receipt of management reports detailing corruption and lack of service delivery at Kgetlengrivier Local Municipality in North West, and a tendency for decayed municipalities to simply ignore court orders, including contempt of court orders for non-compliance.

“The purpose of the court case is to save local economies, by providing a structural solution,” says Le Roux.

“Although we and other organisations are regularly successful with interdicts and other short-term interventions, lasting solutions require control over the flow of money.

“After years of failure [by] all levels of government to intervene as they should have, we are now asking the court to order that the Special Master take control of the most important financial matters – those regarding water and electricity – until such time as National Treasury’s financial recovery plan has been properly implemented.”

Le Roux says Sakeliga is trying to defuse a situation that threatens to destabilise the whole country.

“The failure at local level is a result of a collapse of management and control at all levels of government, up to the cabinet,” he says.

“If we were to simply continue obtaining interdicts banning service interruptions by Eskom and water boards, then Eskom and those water boards would collapse financially, taking the whole fiscus with them.

“On the other hand, if we allow electricity and water to be cut off or interrupted, then it heralds the end of that local economy – property values would fall to zero and whole populations would migrate to the metros, which only shifts the pressure and destabilises the larger centres.

“A third way is required: services must be rendered and payments for those services must reach the right destinations.”

Source: https://www.moneyweb.co.za/news/south-africa/sakeliga-court-challenge-against-two-dysfunctional-municipalities-may-be-a-game-changer/

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