Criminal Matters Amendment Bill [B20-2015]: public hearings

Meeting report

Eskom submission
Mr Neo Tsholanku, General Manager: Legal and Compliance, Eskom, said the basis of Eskom’s comments were aimed at urging the Committee to favourably consider the re-introduction of electricity theft into the statute books. Members will recall that section 27 of the Electricity Act of 1987 created the crime of theft of electricity. This crime was repealed in early 2000 and ever since then Eskom has been trying to have it re-introduced. Its proposed amendments are directed at achieving this and the driver for this concern is the fact that Eskom suffers losses of close to R4.7 billion annually due to what it terms electricity theft.

Mr Tsholanku said Eskom recommends amending the definition of “basic services” to remove the phrase: “the interference with which may prejudice the livelihood, well-being, daily operations or economic activity of the public”. The reason this is proposed is because the retention of the phrase will make the burden of proof onerous. This is submitted drawing from subsections 27(2) and (3) of the Electricity Act, which did not contain as onerous a burden. The request is to repeat what was contained in the Electricity Act. The proposed definition would then read: “means a service provided by the public or private sector, and includes a service relating to energy, transport, water, sanitation and communication”.

Mr Tsholanku said the second proposed amendment is to add the words “or diverting from”, “basic service dispensing system or machinery” and “measuring device” to the definition of “essential infrastructure”. It would then read: “means any installation, measuring device, basic service dispensing system or machinery, facility or system whether publically or privately owned, the loss, damage of, tampering with or diverting from which may interfere with the provision or distribution of a basic service to the public”. The reason for the inclusions is because what Eskom terms electricity theft is perpetrated through all these means. People divert from Eskom’s electricity-providing infrastructure, divert from its meters and from its basic service dispensing machines. The amendment would allow Eskom to pursue convictions relating to any of these forms of diversion. Eskom also proposed having “divert” be a defined term, defined as “means the branching off or abstracting of a basic service from essential infrastructure by any means”.

Mr Tsholanku said Eskom proposes the inclusion of the word “steals” in clause 3(a) which is where the offence is to be created. This will allow the crime to cover the theft of essential infrastructure. Further, the creation of a clause 3(c) which would read “diverts from essential infrastructure”.

Mr Tsholanku said Eskom would also like the Committee to consider regarding the proposed sentences to also include fines, escalating as the person repeats the offence. The first offence being R15 000, R30 000 for a second offence and R60 000 for a third or subsequent offence. Eskom has had numerous internal debates and after submitting the proposal would like the Committee to consider increasing the fines to R150 000 for a first offence, R300 000 for a second offence and R600 000 for a third or subsequent offence. The intention is to create a broader ambit within which the judicial officer will be able to exercise their discretion, rather than to prescribe to the judicial officers.

Mr Tsholanku said one may ask how have others been convicted of electricity theft? There has been a case where two people were convicted in relation to theft of electricity, but those people were part of a syndicate which had unlawfully obtained electricity dispensing machines which belonged to Eskom and then sold tokens to the community. The sentences imposed are indicative of how serious the problem is, because the persons were sentenced to a total of around 168 years imprisonment. He had already indicated that Eskom suffers losses of around R4.7 billion annually. The submission also indicates that there are about 80 ways of stealing electricity and the tampering is not just done by customers. It is also done by syndicates and lately Eskom has come to realise that some Eskom staff are involved. However, the intention is to have the sanctions apply equally to all offenders, even Eskom staff.

Mr Douglas Birchwood, General Manager, Eskom, said the first case study he would take the Committee through involved Eskom receiving information from a farmer about people who offered to tamper with electrical installations. Eskom then set up an operation with the organised crime division of the South African Police Service. The two people who had offered the service then met with a “farmer”, who was in fact a police captain acting as a farmer. Eskom set up the installations to enable this operation. The people went to the farm and tried to charge R10 000 to tamper with each meter. It took the people 30 minutes and they bragged that they operate throughout the country, doing residential properties, lodges, farms, industry and they make a living out of it. The people were subsequently arrested in December 2008 and the case was finalised in Lydenburg Magistrates Court in October 2014. One suspect turned state witness and the other was found guilty. The people were charged with 37 counts of fraud, theft and malicious damage to property. The theft charges, because of the holes in the Act, were not successful, but they were found guilty on the fraud charges, leading to a sentence of seven years imprisonment in January 2015. The magnitude of the damage in that instance is demonstrated by the fact that the people had been tampering at least since 2002. In one instance a farmer took a bond out on his farm worth R1.7 million to pay Eskom the lost revenue which resulted from tampering with his meters. Eskom finds that it has many such examples and this case was one where criminal prosecution was successful, but it is felt that the proposed amendments to the Bill will greatly enhance the ability of municipalities and Eskom to prosecute for this theft. This form of theft is really a burden on South Africa’s economy, and Eskom estimates that the theft losses are in excess of R10 billion per annum. The only way to deal with the problem is to systematically address it. There are a number of other cases which are currently before the courts. One farmer has agreed to pay R3 million for lost revenue and several other cases run into the millions. In Eskom alone, there are in excess of 900 000 conventional meters and the potential for loss is hugely substantial. He then spoke to pictures in the submission, which depicted two meters which had been duly sealed and then tampered with. One had had a similar seal used after the tampering and the other had had the same seal re-sealed. To an untrained eye it is very difficult to identify these losses and the only way is to audit every single meter, testing their functionality. The syndicates are becoming more sophisticated in their operations and in the eight years which he had been involved with these matters the number of modus operandi employed had increased from half a dozen to over 80. This is a never ending problem Eskom has to deal with and it believes the minor amendments proposed will greatly increase its ability to successfully prosecute. To give an indication of the magnitude, Eskom recently had a shopping mall which was tampered with. This customer had three different tampering incidents over a period of six months. One tampering was particularly concerning as it had been effected to the pole-mounted current transformer/voltage transformer unit which poses a serious health risk. This customer ended up paying Eskom just over R1 million for the revenue lost as a result and this shows that it is happening across all aspects of business.

Mr Tsholanku said the problem is that Eskom can recover, but it cannot prosecute for theft. As pointed out there are safety risks involved in tampering and some of the cases of people being electrocuted are due to attempts to tamper.

Mr Louis Maleka, Senior General Manager, Eskom, said to give an idea of the impact and veracity of the concerns, Eskom can electrify between 150 000 and 300 000 households per annum within the range of R4.5 billion rand and the concern is that this problem is depriving approximately 300 000 households of electricity.

Discussion
Mr L Mpumlwana (ANC) said he was worried, because Eskom seems to be putting people from informal settlements and “izinyoka” on the same level, because lots of electricity is stolen by people who have no money. Yet Eskom proposes that these people must be imprisoned for 30 years or pay R60 000 fines. Is that not too much? Secondly, could Eskom demonstrate how the ordinary crime of theft could not cover the proposed crime of electricity theft. It seemed to him, that Eskom was concentrating on the “big guns”, but it also affects ordinary people and therefore the discretion should be left with the magistrate or judge.

Mr Tsholanku said Eskom knows that the judicial officer has a discretion and the intention is to widen the discretion with the proposed sanctions, rather than to take discretion away. This is particularly so, because it is known that some of the people found tampering are old grannies who do not do it themselves and at times it is done for them unbeknownst. The intention is not to send old ladies to prison, but to in some way punish them at the discretion of the presiding officer. Eskom is only increasing the scope of the discretion by increasing the applicable penalties. They are cognisant of the fact that big conglomerates are involved and hence the proposal to increase the scope of the penalties. As far as the normal crime of theft is concerned, the problem is that theft can only be committed with regard to a corporeal object. As electricity is not corporeal it cannot be stolen. The case which he had referred to earlier where the sentence handed down totalled 168 years, the judge had commented saying that because we are now living in a technological world there may be a need to push our jurisprudence in the direction of theft covering both corporeal and incorporeal assets. As the law stands you cannot steal something you cannot touch and this is why Eskom is proposing changing the law to create the offence of theft of electricity.

Mr W Horn (DA) wanted Eskom’s comment on the proposal of the definition of basic services. The way he understood it the original Bill, the definition was framed so as to target basic services, not generally, but with regard to the purpose of the Bill, namely to protect critical infrastructure. If you take the definition away, which speaks to why infrastructure would be critical then it, on the one hand, does not deal with basic services anymore and, on the other hand, opens up the Bill to being used to target more than critical infrastructure.

Mr Tsholanku said the aim is to assist in providing for a situation where one is prosecuting for tampering, such that you are not faced with a cumbersome burden of proof. If the words are not deleted, then the prosecution will must also prove that what was tampering was intended to prejudice the livelihoods, wellbeing, daily operations or economic activity of the public, rather than the simple act of tampering or diversion. Eskom is therefore proposing that the burden of proof be made lighter.

Mr B Bongo (ANC) said he welcomed the proposal and felt that it was long overdue, because a serious message needs to be sent to people involved in this crime.

The Chairperson said one area, which is of great concern, where no reference was made was cable theft and what is Eskom’s position?

Mr Tsholanku said direct reference was not made, because it was felt that the crime of cable theft was covered sufficiently in the initial Bill. Rather the main concern was to provide for the crime of electricity theft which was removed from the statute books.

Mr Mpumlwana asked how the extent of the crime would be measured. In other words how will Eskom know how much electricity has been stolen.

Mr Tsholanku said it is a technical process which you take the meters through, that allows Eskom to see how much could been billed which was not. The tampering occurs through a slowing down of the meter so that it does not give accurate readings and that can be picked up through a technical process.

Mr Birchwood said a number of different models have been developed that deal with different tampering scenarios. Eskom believes that it has a recipe which is 99% accurate and to date it has been successful with in excess of 96% of its recovery efforts, based on the model. The process depends on the particular circumstances and Eskom can use historic or future trend analysis to determine consumption. If there is a balanced load installation and one phase is out, what was used on the other phases can be used. In some cases Eskom uses the meter error percentage. A lot of the process is a data analysis exercise to determine the value and Eskom has been very successful in determining those lost values.

Legal Aid South Africa (LASA) submission
Ms Cordelia Robertson, Regional Office Executive: Legal Aid South Africa, said LASA recognises the importance of essential infrastructure in providing basic services to the public. LASA believes there is an unacceptably high instance of crime relating to essential infrastructure which poses a risk to among others public safety, electricity supply, communication and transportation. Thus LASA welcomes legislation that will deal more effectively with essential infrastructure related offences, where these are the result of organised criminal activities.

Ms Robertson said LASA submits clause 3 should not be used to deter legitimate service delivery protests. Thus the creation of the offence in clause 3 is welcomed, provided this is limited to organised crime where the perpetrators have the deliberate intent to tamper with essential infrastructure, as defined. It is however, LASA’s submission that the imposition of discretionary minimum sentences for essential infrastructure related offences is a serve form of punishment. LASA therefore has reservations about the imposition of minimum sentences where a minor offence is committed. LASA similarly cannot agree with the provisions of clause 4 which makes all offences under clause 3 fall under schedule 5 of the Criminal Procedure Act which deals with bail. Nor can LASA agree with clause 6 which makes all offences of clause 3 subject to minimum sentencing.

Ms Robertson referred to the sentiments of Chaskalson P in S v Makwanyane at paragraphs 122-123 where he stated as follows “The greatest deterrent to crime is the likelihood that offenders will be apprehended, convicted and punished. It is that which is presently lacking in our criminal justice system; and it is at this level and through addressing the causes of crime that the State must seek to combat lawlessness.

In the debate as to the deterrent effect of the death sentence, the issue is sometimes dealt with as if the choice to be made is between the death sentence and the murder going unpunished. That is of course not so. The choice to be made is between putting the criminal to death and subjecting the criminal to the severe punishment of a long term of imprisonment which, in an appropriate case, could be a sentence of life imprisonment. Both are deterrents, and the question is whether the possibility of being sentenced to death, rather than being sentenced to life imprisonment, has a marginally greater deterrent effect, and whether the Constitution sanctions the limitation of rights affected thereby.”

Ms Robertson said it is LASA’s submission that while in certain cases sentences of life in prison may be called for the current system of minimum sentences as set out in Act 105 of 1997 is not in and of itself a sufficient deterrent. Indeed the greatest deterrent to crime is the likelihood that offenders will be apprehended, convicted and punished. It remains so that this is what is presently lacking in our criminal justice system and it is at this level that the state must seek to combat lawlessness.

Ms Robertson said in conclusion LASA welcomes any proposal to curb crime relating to essential infrastructure in the Republic of South Africa.

Discussion
Ms C Pilane-Majake (ANC) welcomed the Chairperson of the Committee to the meeting and invited him to take up the chair. [She had been elected as acting chairperson up to this point].

Ms Mothapo said she thought LASA would come up with proposals, rather than to object with what is contained in the Bill. Therefore, perhaps it would be better if LASA could propose solutions.

The Chairperson said the Committee values the insight of LASA and it would be helpful for them to provide advice, to move the process forward.

Mr Bongo said the submission by Legal Aid is too academic, when the Committee intends on being practical about the problems on the ground. These are very serious crimes and to be academic when practical solutions are sought is problematic. These crimes affect service delivery on the ground, electricity is stolen and then people will protest against government. “We want to suppress any form of academic debate at this stage, we want practical things so we move faster”. However, minor the crime is whether it is one household or a syndicate they ought to be classified as the same, because of the seriousness of the crime. The intention of the legislature in this instance is to send a very serious message. His advice to LASA was for them to send the Committee their proposals on how to find a solution.

The Chairperson said perhaps the Committee should say if we become academic, it should be for the purpose of laying the foundation for practical solutions. So let us not just be academic, let us do so to move towards practicality, because as Mr Bongo is saying the Committee is seeking to address a very serious problem on the ground.

Ms Breytenbach said unlike the previous speakers she found LASA’s submission refreshing. She asked for Mr Bongo not to interrupt her, saying that if there was something he did not understand she would explain it later. LASA is not responsible for drafting legislation, they are here to tell the Committee what their difficulties are with the proposed legislation and their submissions are quite concise in that regard. LASA has to deal with the fall out of this legislation; the jails are full and minimum sentences are contributing to that problem. LASA highlighted all of that and she therefore found the submission perfectly concise, understandable and refreshing.

Mr Bongo asked for Ms Breytenbach to be called to order, because she ought not speak to him in the Committee. In view of the spirit which the Committee has adopted in the past, having requested every presenter to come up with proposals on how to deal with the situation. Presenters are before the Committee to assist it and you cannot just come before the Committee to lament. Therefore, one should be progressive in one’s thinking Ms Breytenbach.

Ms Breytenbach asked for Mr Bongo not to address her directly either.

The Chairperson said order means that there is a chair whom both Members ought to speak through. He though that the officials from LASA can hear for themselves and have heard what Mr Bongo has said and do not need anyone to defend them. At the end of the day the Committee is looking for solutions and LASA has been given time to address Members, because it is believed that they could be of assistance in finding a solution which can take the country forward.

Mr Mpumlwana said he appreciated what LASA was trying to do and what they were saying was to make a distinction between criminals or “izinyoka” and ordinary people in the townships. He agreed that there ought to be some form of distinction. If the punishment is blanket, then anyone involved will be subjected to the provisions and may potentially have to be imprisoned for 30 years. Therefore, the Bill ought to make some form of distinction.

The Chairperson said he may be disadvantaged because he did not listen to the submission, but Members ought to distinguish between the problem of overcrowding in prisons and what is before the Committee. For present purposes, Member have to look at the desirability or otherwise of the Bill before them.

Ms Cordelia said at this stage all the comments are noted.

Submission by South African Local Government Association
Mr Sizwe Ramaremela, Councillor South African Local Government Association (SALGA), said a written submission has been made to the Committee on SALGA’s position regarding the Bill. It will be agreed that damage to infrastructure through theft and vandalism is costly. These actions also disrupt water supply, putting people’s lives at risk and causes disruption to municipal services. This is the major concern of this level of government and SALGA therefore accepts the Bill’s imposition of stricter measures against people involved in these activities. Once passed into legislation it will go a long way in addressing challenges caused by theft of essential infrastructure.

Mr Ramaremela said in addition to the theft of infrastructure, local governments also experience the challenge of illegal use of services due to illegal connections. This also has a debilitating effect on municipal services and ultimately the community. A case in point is that a municipality has 100 000 illegal connections, leading to a loss of approximately R150 million per year. SALGA therefore has two recommendations to the Committee. Firstly, the Bill ought to be broadened to deal not only with damage to essential infrastructure, but include the theft of electricity and water. SALGA proposes that the Bill address illegal connections and unlawful use of services. Once people have connected illegally, whatever product they use flowing from that illegal connection will also be captured under the ambit of the Bill. Secondly, the policing of stolen infrastructure also needs to be strengthened and municipalities could assist in this regard. In order to do so and combat the threats created by such actions, SALGA proposes that the powers granted to the police in terms of the Second Hand Goods Act, including powers of entry, search and seizure, be extended to metro police and traffic officers. So that when these officers come into contact with these cases, they do not have to wait for the arrival of police officers and can act themselves. Lastly, SALGA supports the Bill and believes that it will go a long way in dealing with these matters.

Discussion
The Chairperson asked what SALGA’s view is on situations such as Tzaneen where there are several dams, but there are nearby townships which do not have access to water. By failing to provide such people with water, when water is in abundance, is government not tempting these people to engage in illegal actions. Should we rush into extending the Bill to water, before government is satisfied that it has done all it can do to provide access to water.

Mr Ramaremela agreed and this is an issue which SALGA has raised with the Department of Water Affairs. There are situations where pipelines are being constructed and one finds that the bulk water supply passes through several villages and yet there are those who are adjacent to the dam who are not getting water. We need to take steps to ensure that communities which are next to infrastructure actually benefit. The matter has been raised with the Department of Water Affairs, because they are in charge of bulk water supply and SALGA would welcome a situation where the Department consults with municipalities to ensure communities around a particular area can benefit from whatever projects are embarked upon.

The Chairperson said Members who are confronted with such situations, believe that local government is unfairly tarnished and that this is a matter that needs urgent attention. Lots of water is in private hands, yet people have no access, which is a human right and this discredits government and especially local government. He was therefore happy that SALGA was aware if the issue and encouraged working together with Parliament towards a solution.

Ms Lorette Tredoux, Executive Director: Governance and Intergovernmental Relations, SALGA, on an issue raised by a Member before regarding poor people, said it is understood that in some communities there is no access. Other than those exceptions, municipalities have indigent registers and people who cannot afford are provided with 50Kwh and 6Kl of water a month. There are municipalities which out of their own budgets exceed that and therefore the poorest of the poor do not necessarily need to illegally connect to obtain services. Therefore, municipalities are not just leaving such people to their own devices, rather they advocate for responsible use and interactions with municipalities. With regards to electricity it is also very dangerous to tamper with the installations.

The Chairperson said he had had to drill two boreholes on his private property and when he is at that residence, the community thinks these boreholes belong to government, because he works for government and demand water from him. Therefore, when he catches them stealing he has a problem of conscious. He wanted to say that SALGA is an important organisation which must help local resolve this problem.

Mr Horn said the Chairperson should not shy away from an opportunity to practice Ubuntu and allow people to use his boreholes. He asked SALGA to comment on the proposal to bring in the crime of theft of electricity, specifically whether to codify this will make any difference, as it is already possible to prosecute people who through illegal connections steal electricity. Why should it be made a specific codified theft, if it can be dealt under current provisions?

Mr Ramaremela said the main position of SALGA is that we need to ensure that law enforcement agencies join hands in combatting the problem. Municipalities seem to not be winning the fight and this is why the second suggestion was made to give metro and traffic police powers to deal with these issues. That is the point of emphasis as local government.

Ms Breytenbach said she had missed the explanation of why the ordinary crime of theft is not sufficient. Secondly, is there any information on how successful prosecutions of theft of electricity have been?

Ms Tredoux said currently it is very difficult for municipalities. Prior to the constitutional era, municipal by-laws had a deeming clause which, where there was an illegal connection, deemed the owner of the property to have used the electricity. Due to the Constitution it is not possible to have this in by-laws any longer. Prosecutors have indicated that the municipality needs to prove who made the illegal connection, by catching them red handed. The legal advice received indicated that it would even be problematic to hold people who directly benefit from illegal connection liable. It has therefore been very difficult to successfully prosecute. It may be an incorrect opinion, but that was the advice given to municipalities.

The Chairperson said that is an unfair question, because the Committee has all the information and statistics about what is happening.

Mr Bongo agreed with the Chairperson. He then welcomed the submission and said he felt it was progressive, but to take both issues at once may create problems. Particularly, as dealing with issues of water will require much broader consultation and involving issue of water may derail this process. If legislation regarding water is to be done, wide consultation will be required. Progressive as the proposals are, he thought one issue should be taken at a time. Then perhaps it could be taken up later.

Ms Pilane-Majake said she noted Mr Bongo’s comments and agreed that for the logistics around the Bill the Committee should stick to what it has.

The Chairperson said he agrees with the last two speakers, but it was good of SALGA to raise this issue. Committees do not work in silos and Members would follow up the matter with the relevant Committee, because the matter is serious and could discredit government.

Mr Ramaremela acknowledged the advice and said it would be taken on board. What will be done is that when issues around water are dealt with they will be considered separately. For the purpose of this Bill SALGA will focus on the electricity and will refine its comments to help fast track the Bill.

The Chairperson said with no representatives from COSATU present to present its submission, that concluded the business of the day. He then declared the meeting adjourned.