/ 23 October 2021

High court reinstates Umgeni Water board

Umgenifarms Village 4313 Dv
Umgeni, the country’s second-largest water board, supplies municipalities in KwaZulu-Natal and parts of the Eastern Cape and has been rocked by allegations of corruption and mismanagement for nearly a decade. (Delwyn Verasamy/M&G)

The high court in Pietermaritzburg has set aside the dissolution of the board of Umgeni Water Amanzi and the appointment of an interim board by then water and sanitation minister Lindiwe Sisulu on the grounds that the decision was unlawful and irrational.

Last year Sisulu — who is now the tourism minister — dissolved the board along with those of a number of other housing and water entities after she was appointed to the water and sanitation portfolio in 2019 on the basis that its appointment by her predecessor, Gugile Nkwinti, had not been sanctioned by Cabinet.

Sisulu replaced the board with an interim one, headed by former ANC Youth League leader Magasela Mzobe as chairperson in a move which sparked claims that Sisulu was appointing key figures from the radical economic transformation faction in the ANC to entity boards to bolster her campaign for the party’s presidency in 2022. 

A number of board members, including Vivisin Reddy, approached the court for an interdict preventing the appointment of the interim board and for a review of Sisulu’s decision. They failed in their interdict application, but were granted the right to approach the court to review the legality of the decision to dissolve the board.

Umgeni is the subject of two presidential proclamations which have seen the Special Investigating Unit (SIU) probing IT and other contracts which were allegedly awarded unlawfully. 

The former chief executive officer, Thami Hlongwa, resigned on the eve of the tabling of a forensic investigation into contracts awarded to companies owned by tenderpreneur Sibonelo Shinga, who was murdered last year.

Judge Piet Bezuidenhout found that Sisulu’s decision to dissolve the board, which was communicated to its members on 3 August 2020, with no prior notice nor invitation to provide reasons why they should not be terminated, was “unfair and not in terms of the Constitution nor procedurally fair.”

For this reason, they were entitled to bring the review application.

The court said the reason put forward by Sisulu for the dissolution — that the board had not been confirmed by cabinet in terms of the Water Services Act  — was not valid. The interim board which she had appointed had also not been ratified by cabinet.

The court found that because Reddy and the other board members “were not given an opportunity to be heard” the “whole procedure was therefore procedurally unfair.’’

“There is also no provision in the Water Services Act for the appointment of an interim board. The appointment of the interim board was also not approved by cabinet and such appointments must therefore be set aside,” the judgment reads.

“The termination of their appointments was unreasonable and irrational. Applicants were appointed for a 4 year term and it could never have been the intention of the legislature, nor could it be rational that the minister can at any time merely appoint or terminate the appointment of a board member at his/her whim,”’ the court said.

Summary dissolutions of boards “at any time as the minister wishes, even if they did nothing wrong….which would result in chaos and make it impossible for a board to function.”

Sisulu, the court ruled, did not have an “absolute right without any resource” to appoint or remove boards at whim.

“This could never have been the intention of the legislature. Such decision must be made applying the principles of natural justice.””

It is not clear at this stage whether Sisulu’s successor, Senzo Mchunu, who met with the interim board on Friday, will appeal the ruling or move to dissolve the interim board and reinstate Reddy’s board.

Mchunu’s spokesperson, Kamogelo Mogotsi, had not responded to queries from Mail & Guardian at the time of publishing.

Sisulu’s spokesperson, Mphumzi Zuzile, said Sisulu “noted” the decision to reinstate the board.

“The minister is consulting with her legal team, given that the minister, in her capacity as the minister of human settlements, water and sanitation, had been a successful respondent in similar cases in other courts in the country.

Umgeni spokesperson Shami Harichunder said the entity noted the judgment in the matter, which it had not opposed.

“Umgeni is on the record as stating that it will unreservedly accept the high court’s judgment on the matter.

Reddy said that the judgment raised questions about the real reasons why Sisulu had dissolved the board in the first place.

“Our stance that the decision was illegal was correct. As a board which was dissolved for no good reason beyond the political ambitions of an individual we have been vindicated,’’ Reddy said.

“We look forward to our reinstatement and working with the new minister,”’ Reddy said.