State-owned Eskom’s supplier disciplinary process has resulted in the restriction of 101 suppliers, including implicated directors and owners of supplier companies, from doing business with the utility for up to ten years.

These restrictions relate to cases from 2015 until March 31 this year, with the majority of cases stemming from the 2016 to 2022 timeframe.

The restrictions followed due process and consideration by Eskom’s Supplier Review Committee, which assesses supplier misconduct matters and determines appropriate sanctions and/or restrictions, up to a maximum of ten years, based on the available evidence and applicable policy and governance requirements.

“Fraud, corruption, procurement irregularities and supplier misconduct have affected public confidence and highlighted the need for decisive, transparent and sustainable consequence management across Eskom’s supply chain, and Eskom now aims to process and resolve newly referred supplier discipline cases within 90 days,” Eskom group CE Dan Marokane says.

“The progress achieved to date demonstrates Eskom’s determination to confront fraud and corruption in a practical and measurable way. By reducing backlogs, accelerating the resolution of new cases and ensuring that supplier misconduct attracts fair, transparent and meaningful consequences based on the appropriate legal thoroughness, Eskom is reinforcing a clear message that unethical conduct has no place in its supply chain, and accountability is central to restoring trust, integrity and good governance,” he adds.

ALLEGATIONS

Eskom has also noted the recent allegations by The Association of Private Security Owners of South Africa (Tapsosa) that 26 black-owned companies, numbered among the restricted 101 suppliers, had been referred to the National Treasury without due process.

The utility has denied this, indicating that it confirms the referrals followed Eskom’s internal governance and supplier discipline processes, “which are applied objectively and consistently and are based on assessed misconduct and available evidence”.

Eskom adds that Tapsosa is not a party to the supplier discipline matters involving the 26 restricted suppliers, and confirmed that of the 53 referrals for restriction made to Treasury, only one supplier provides security-related services.

“Eskom is therefore unable to confirm the basis on which Tapsosa purports to act on behalf of these 26 restricted suppliers, particularly where the affected suppliers and/or their legal representatives were afforded an opportunity to make representations during the supplier disciplinary process,” the entity states.

It notes that all suppliers were afforded an opportunity to respond to the allegations before decisions were taken.

These referrals related to serious supplier misconduct, including fraud, corruption, misrepresentation, collusion or other integrity-related breaches, Eskom explains.

The utility says that it did not refer suppliers to Treasury for ordinary operational or contractual performance issues, such as isolated service level agreement (SLA) failures.

Eskom has also denied claims that the companies were targeted because they acted as whistleblowers.

As of August 20, Treasury had recorded the details of 35 companies and 45 directors or owners linked to the restricted companies, on Treasury’s database of restricted suppliers, following referrals arising from Eskom’s supplier disciplinary process.

The implication of this listing is that the affected suppliers are restricted from doing business with the State for the applicable restriction period, thereby reinforcing accountability beyond Eskom and supporting a broader public-sector response to unethical conduct, the utility points out.

NEXT STEPS

Additional matters are being prepared for submission to Treasury.

Eskom posits that the enhanced supplier disciplinary framework further enables a more consistent and timely response to new allegations of supplier misconduct.

“Clear procedures for case initiation, supplier notification, consideration of representations and adjudication help to ensure that matters are managed efficiently while upholding procedural fairness and administrative justice,” the utility highlights.

It has also called on the public to report any illegal activity affecting its operations to the Eskom Crime Line on 0800 112 722 or via WhatsApp on 081 333 3323.