Dear OUTA Members and followers
The past few weeks have seen tremendous developments in our country whereby OUTA’s role was catapulted into driving and advising on protest matters, whilst still conducting its work in challenging many matters of maladministration and corruption unfolding in Government institutions.
The sheer magnitude of public participation in Friday 7th April’s protest marches throughout the country was remarkable. It must be noted that this was a march not organised and mobilised through political or labour movement structures. This was civil society in action, well ahead of expectations and was a matter I reflected on in more detail in an opinion piece for the Daily Maverick.
In this month’s edition, we reflect on our recent decision to pull out of the e-toll test case process with SANRAL. In short, we believe the exercise gave rise to delays that were not advancing the cause. Our decision has added strength to the process of having our winnable case(s) heard sooner. More about this development in the in this newsletter.
Whilst the protest action swelled, OUTA continued to engage with authorities on the SASSA debacle, as well as Eskom’s energy dominance complaint and other areas. OUTA’s work goes well beyond protest action only. In fact, it is the work we do in fully utilising our legal, research and investigations teams expertise that ensures we are able to impact the change required, despite the setbacks of President Zuma’s irrational conduct or the ratings downgrades.
I personally believe that setbacks such as the recent Zuma antics are the challenges we need to refocus to improve our resolve and strengthen our cause. These developments certainly do not and should not give rise to a feeling of hopelessness, for if they do, then it’s time to throw in the towel. And that’s not an option for us at Team OUTA. Irrational and irresponsible conduct by those in authority is what feeds our energy at OUTA. It heightens our determination to work faster, smarter and harder to make the difference. There is a brighter future for SA and collectively, we must seek it out, fight for it, work together and steer the country away from the national depression that it will slip into if we stand by and do nothing.
The Star recently fell for the ‘spook’ tactic by headlining “SANRAL wins e-toll fight”, on Friday March 24th, reporting that a legal precedent had been set after Sanral obtained a default judgement for unpaid e-toll bills against an undefended business owner whose business was in the process of liquidation.
After OUTA explained to the editor that a default judgement had no binding legal force and effect, on Monday The Star street posters seduced readers by proclaiming “OUTA: ‘SANRAL are liars’”. The lead story was headlined “E-tolls: Sanral, OUTA go to war.”
The militaristic metaphor is poor. OUTA and SANRAL are not at “war” but at “law”. There are some similarities between ‘warfare’ and ‘lawfare’: tactics need to be guided by overall strategy, and a winning strategy will be based on superior moral norms and principles. But there are important differences. In warfare truth is the first casualty. In lawfare the truth is held hostage by the side who lacks it, and is kept trussed up by endless legal proceduralism to delay its final liberation by the court of law. While the opposing legal teams make business for themselves by straining out obscure legal jots and tittles, their clients employ PR spin doctors to use every available means to try and mislead the public as to the real legal state of affairs.
Last year, following thousands of summonses issued to e-toll defaulters, OUTA persuaded SANRAL to play things by the the constitution in quest of closure on the long running saga. Our respective legal teams formally agreed to argue a test case with our members collectively represented by OUTA, so that the question of lawfulness could be efficiently and conclusively ventilated in the Courts.
Alas, SANRAL’s delay tactics continued and whilst negotiating with OUTA on a test case at the front door, SANRAL resorted to devious tactics against unsuspecting road users through the back door, in search of so-called default judgments, which they manipulatively and misleadingly trumpeted as “precedent setting”. OUTA quickly swept their claims aside and set the public minds at rest – default judgments are never precedents for cases that are defended.
Today, SANRAL continues to serve legal summonses on motorists with unpaid e-toll bills, hoping to catch those who not fall under OUTA’s e-toll defence umbrella. One has to ask why? Why don’t they bring their matter and face up to the myriad of serious and strong facts and issues against OUTA, which they will have to face up to at some stage in this challenge.
We believe that SANRAL believes seeking a win by picking on unsuspecting citizens and businesses – in hope of a poorly defended case for a win – may spook the public into compliance. What SANRAL does not realise that that one win even in a defended case, is not precedent setting. Every case is different and each member of the public has the right to fight for their rights.
Accordingly, in response to the delays of the ongoing drawn our test case process OUTA called off the drawn-out test case process to get our cases to court sooner rather than later.
Paradoxically, while SANRAL continues with its lawfare tactics to try to indefinitely hold this truth hostage in the courts of law, another truth gathers veracity in the court of public opinion: SANRAL actually have no confidence in their own case. These are but tactics in search of a winning strategy, and is an implicit admission by SANRAL that they have no defensible legal or ethical basis for e-tolling.
Since the end of March 2017 with President Zuma’s irrational cabinet reshuffle decision, the calls and messages to OUTA have heightened ten fold, with hundreds of requests weekly to drive a tax revolt.
The logic and rationale behind the calls for a major tax revolt are clear and simple. People are paying taxes and government is failing them with a diminishing return in the use of taxes collected. The contractual obligation between Government and society is lop-sided and Government is not pulling their weight or carrying their side of the agreement so to speak. This gives rise to the need and cries for action.
But what action?
Naturally, a tax revolt would hurt Government by starving them of their oxygen. No money equals no salaries for civil servants and no Treasury pot to plunder. It has massive ramifications. But the sheer weight of this action, if it was ever pulled off to even half the levels required to have an impact, would need to be an incredibly well coordinated, planned and executed strategy.
A growing number of people are weighing into the discussion, including Tax Ombud, Judge Bernard Ngoepe, who recently cautioned Government that taxpayers concerns about the unethical conduct of the administration of their money could generate a reaction to scale back payment of taxes. Similar concerns have been raised by Judge Dennis Davis, who likened the higher levels of corruption to a heightened appetite for a tax revolt.
This is precicely where the country is today. The calls for a revolt on tax payments are at an all time high.
SARS Commissioner Tom Moyane has indicated the actions have already begun. His recent statement of “South Africa is seeing the beginning of a disturbing trend whereby tax compliance levels are beginning to deteriorate” indicates a large number of provisional taxpayers seem to have submitted nil returns in recent months.
However, we need to be clear about the fact there is no provision in the Income Tax Act or Tax Administration Act that allows citizens or corporates to legally withhold taxes from SARS.
Unlike e-Tolls – which is a new tax currently being challenged on its legality and practicality – the problem with a tax revolt is it requires the withholding of VAT, PAYE, Company Tax and a host of other taxes. These are not new taxes. Neither can they be challenged as to their legality. So the challenge becomes one of principle which on its own, evokes many different reactions from society.
To pull it off would be a mammoth task, not an impossible one, but the practicality thereof would be an incredible challenge. Illegal as it would be, the call for a tax revolt of this nature it is one that is gaining popular support but will only be possible if Business Leadership SA (BLSA) and Business Unity SA (BUSA), supported by their big business members and other significant institutions, got behind the decision.
There are other avenues to be taken and these will flow through the court, with a number of angles being contemplated by OUTA and other institutions.
These actions are multi-faceted and aside from e-Tolls, the appetite to challenge TV Licenses and other irrational taxes such as the recycling taxes, carbon taxes and other indirect taxes (such as Electricity Tariff hikes, municipal tax increases etc) are already underway.
The work we conduct in this regard, across a number of fronts and often done in conjunction with other entities and officials behind the scenes, is a journey and the reason OUTA is in for the long run.
click on images to enlarge and view the gallery
OUTA has received many such endorsements and accolades from contributors, but the above example is chosen because the writer showed herself eager to be an active participant in a process of social change and civil intervention toward greater justice.
By supporting OUTA’s work, Georgette and thousands of others have become change agents directly involved in the fight for right. They know something has gone terribly wrong in the way power is being exercised by President Jacob Zuma, and it has gone way beyond a mere question of politics. And they are doing something about it.
When the calls from civil society emerged for protest action, OUTA supporters requested guidance on where, what and how to get involved and to protest against President Zuma’s cabinet reshuffle,
“By participating in the protests something clicked inside me” a young ‘born free’ protestor confessed. “I realised for the first time that representative democracy divorced from participatory democracy is like writing a blank cheque every five years, naively hoping that political parties will work out a fair and just amount to fill the blank spaces. One has to get involved, and support watchdog organisations like OUTA, so they can both bark and bite, and thus make sure that the money we have to pay in tax is an investment in our future, not organized theft by the politically corrupt and commercially greedy in cahoots with each other”.
Participatory democracy meant participating in the civil society alliance with Save South Africa and others to constructively channel the public outrage on what we dubbed Freedom Friday.
The turnout was a resounding success and while President Zuma may shrug this off as a racist based protest, not even he can ignore the size and clear message sent to him from all walks and sectors of the South African public.
A maxim from the professional golfing circuit says “you drive for show, but you putt for dough”.
The massive public protests were impressive ‘drives for show’. Sinking the ball requires the concentrated, intelligent and patient capacity to match and surpass those who use public funds for private enrichment. Even though the course appears to have been rigged in favour of the corrupt and the powerful, eventually a point is reached where they become reckless and ever more flagrant in their abuse of power.
There are numerous signs that the tipping point is here. Team OUTA is in this for the long run and our journey is aimed at ongoing justice for the numerous transgressions that need to be accounted for.
In the absence of market forces to keep tariffs affordable, NERSA – the National Energy Regulator of South Africa, was established to provide a forum for tariffs to be determined on a rational and defensible basis.
However, the sums of money involved in Eskom’s budgeting are so large that even calculators can’t ordinarily handle the size of the numbers, let alone ordinary consumers. Ted Blom, OUTA’s Energy Portfolio Director, rounds off monetary measures down to the nearest R100 million.
Ted’s depth of insight into energy economics and Eskom’s perverse management of our national energy generation and distribution has made him the go-to man for media on Energy issues. Often a scheduled three-minute radio interview goes on for much longer, not because Ted won’t stop talking, but because the interviewer won’t stop asking questions.
Ted is aware that to millions of poor, working class and even most middle-class citizens who keep the economy going and the fiscus funded with taxes, Eskom’s ‘small change’ is a lot of money. He has doggedly kept a close eye on how Eskom’s acquires and spends its billions and uses every available space to hold them to account.
OUTA calls it the “re-domestication of Eskom” strategy because Eskom has gone rogue, unbridled and answerable only to self-serving interests, rather than to South African citizens.
Ted recently noticed NERSA had advertised a public hearing to consider Eskom’s proposal to innovate a “Critical Day Price (CDP) tariff” that Eskom hoped to smuggle past NERSA, in search of excessive tariff hikes on days where Eskom suddenly faced underestimated demand.
OUTA was the only organisation who turned up at the hearing to argue against the proposal. And won. NERSA denied Eskom’s application.
“It was simply a case of burdening the South African consumer with another complex tariff structure,” said Ted, who further accused Eskom of secrecy and slated the contention that the new Tariff would be revenue neutral – as their very own appendices showed otherwise.
Ted’s final attack on the tariff was that although it would appear to be a voluntary tariff option during its initiation phase, Eskom had slipped into their application the right to convert it to a “mandatory tariff” at a later stage.
Besides using Eskom’s own weapons against them, Ted has also learned to speak their language and decode the acronyms.
The “Multi-Year Price Determination” (MYPD) process is the process NERSA uses to determine electricity prices over a number of years. Having developed a capacity for exposing the self-justification and rationalisation used by State Owned Entities, OUTA will, in concert with other stakeholders, make presentations to NERSA at the MYPD to challenge Eskom’s modelling of future supply, demand and tariff projections, to question assumptions and interrogate the arguments Eskom present for electricity tariff hikes.
The Nuclear Challenge. OUTA continues to support SAFCEI and EarthLife Africa in their multipronged legal argument to show that Eskom is building a proverbial house upon sand rather than rock – in its case for new Nuclear Energy procurement. With our economy having languished in the doldrums for a number of years, the only conceivable logic for the proposed nuclear build is an abstract and highly theoretical scenario of an ‘energy-supply-led’ recovery. Even before the recent downgrade of South Africa’s global credit rating that scenario was highly fanciful – a dangerous ‘solution looking for a problem’ risk that, given the enormous sums of money involved, no responsible government would have countenanced, even if was technically within its lawful powers to pursue.
The rationality for Eskom’s ongoing existence is derived from a technical planning instrument known as the Integrated Resource Plan (IRP) for Energy that the Department of Energy formulates with energy stakeholders. The credibility of the IRP has been called into question for want of academic rigour, consistency and sensitivity to changing global and domestic circumstances. OUTA has now entered the fray to contribute as best we can to ensure a credible IDP process, that honestly addresses the increasing likelihood that the energy demand of our economy is likely to decrease, and that the need for extra energy, let alone expensive Nuclear options, is simply not going to happen within the projected time frame ending in 2030.
OUTA’s input and challenge to Government’s National Energy Efficiency Strategy (NEES). While we believe any call for energy efficiency strategy is a good one, it needs to be based on facts and sound assumptions. OUTA has presented and tasked Government to follow professional and acceptable processes in this regard.
Challenging Eskom’s Dominance with the Competition Commission. OUTA is now working out a strategy to force the unbundling of ESKOM to break the “command and control” business model, believing it is fundamentally contrary to constitutional values, and a violation of the Bill of Rights, notably Section 24, which sets out the duty of organs of government and State Owned Entities to “protect the environment for the benefit of present and future generations”. Ted argues that on the Generation side, Eskom should rather invest in cleaning up their dirty and inefficient existing coal-fired power stations, instead of building massively expensive new plants. On the Distribution side, he argues that for want of better maintenance and management, the national grid currently wastes 25% of electricity generated. He believes the nub of the problem is the concentration and centralisation of power in one structure.
SAA – Dudu Case
SAA Board chair Ms Dudu Myeni has served notice of intention to defend our application to have her declared a delinquent director. This is a positive development because it means that the matter will now be fully adjudicated by the court and thus be precedent setting in law. Had she declined to contest, and a default judgement made, this would have left us with a half-baked case.
OUTA engaged with the Parliamentary Portfolio Committee on Communications to express our concerns about the waste of money under Hlaudi Motsoeneng’s tenure. OUTA laid corruption, racketeering and fraud charges against him three months ago, but so far the lack of response from the police has been disappointing. We have escalated our concern by writing to the Acting Commissioner of Police, and the new acting head of the Hawks, hoping that the departure of Berning Nthlameza will yield some progress.
Meanwhile we are encouraged that the new Interim board of the SABC has been quick to get out of the starting blocks, and have written to the Chair Krish Naidoo, assuring him of our support in the mammoth process of pulling the National Broadcaster back from the brink.
SASSA Grants Debacle
Was Minister Bathabile Dlamini’s astonishingly inept handling of this fiasco a deliberate self-created crisis, arising out of a political cum commercial conspiracy? Or was just it just a bureaucratic cockup?
Because OUTA aspires to be trusted for our discretion, our competence in handling sensitive issues and our networking within legal and media circles, we were privileged to receive and impart meaningful information that suggests it was in fact a cock up of a conspiracy.
Evidence seems to point to toward Minister Dlamini having suddenly received orders from above, to favour a two year extension of Net 1’s contract. The strategy appears to have been predicated on a deal between the Jacob Zuma faction of the ANC and Net 1 to firm up the political fortunes of his favoured successor to the Presidency, Dr Nkosasana Dlamini Zuma and the financial fortunes of Cell C, in which Net 1 is heavily invested.
NoseWeek alleges that the deal would have netted the mobile phone numbers of 11 million grant recipients so that the Zuma faction could target them with political messages by SMS to persuade them to vote for her. If that is true, the intervention of the Constitutional Court has put paid to the deal.
OUTA is in the meantime closely following developments, and keeping in close touch with its own sources to expose dirty dealings, and to play our role as a politically non-aligned civil society organisation to help liberate the truth in this situation as well.
A New Portfolio for OUTA – The Water Challenge.
Water is a resource not only protected by the Constitution of the Republic of South Africa, but the management of this life-giving, scarce resource is also regulated by our Constitution. With water being such an essential and scarce resource, the lack of good governance within the Department of Water and Sanitation (DWS) is a great cause for concern to every citizen. Politics and posturing for control of the spend of water infrastructure is the issue that will hold South Africa to ransom. We therefore decided to launch a special portfolio to look into this the mismanagement and corruption within the water sector.
The portfolio which is managed by Julius Kleynhas, aims to investigate the following:
– the second phase of the Lesotho Highlands Water Project which is Gauteng’s primary source of water;
– the abuse of capital grants used for water and sanitation infrastructure projects to supply water to communities; and
– the DWS’s effectiveness in monitoring and ensuring compliance with drinking- and sewage water quality throughout Municipalities.
The water portfolio will aim to expose maladministration and corruption and take the relevant actions to ensure that this critical resource is developed, managed and protected.
N2 Wild Coast
While OUTA was preparing to emboss ‘Freedom Friday’ on the calendar of history by marching in protest on the urban streets to the Union Buildings to tell President Zuma to go, on Thursday 6 April another historic event occurred which can be dubbed “Tell the truth Thursday”.
It was the day that Mr Skhumbuzo Macozoma, the new CEO of SANRAL, finally did what his predecessor Nazir Alli never did. He met with the Amadiba Coastal residents at their Traditional courtroom under the jurisdiction of their Traditional leader Nkososana Duduzile Baleni and her councilors to hear exactly how they felt about having the N2 mega-highway bisect their community.
The biggest bone of contention against SANRAL’s shortcut is that it will pass within two km’s of the mineral rich coastal dunes of the Wild Coast. The local residents want SANRAL to prove their claim that the scheme has nothing to do with the Xolobeni mining by realigning the road inland far away from the coast.
Mr Macozoma promised that he will take their grievances and objections back to his board, and the Minister of Transport, acknowledging that it is quite clear that the community have decided that they do not regard the N2 shortcut as a beneficial development for them, and that they are quite capable of determining their own development aspirations and infrastructure needs. Spending three to four billion rand of tax payers money on mega bridge crossings over the Mtentu and Msikaba gorges is nowhere on their list of priorities.
Having helped facilitate the meeting, OUTA was there with a camera to capture the interaction. A full unedited recording of the meeting will be provided to the Amadiba legal team to hopefully prove to the High Court that SANRAL have failed dismally in their constitutional duty to consult, and that the only remedy is for them to go back to the drawing board again.
Besides its evidentiary value in court, the film provides it is a very encouraging antidote to prevailing despair and pessimism that grips our country, because it shows participatory democracy in action, and testifies that it IS possible for ordinary citizens to hold Government to account by claiming their constitutional rights.