Eskom Holdings SOC Ltd. Chief Operating Officer Jan Oberholzer negotiated a contract with a construction firm in which he held shares and asked a subordinate to find a job for his brother-in-law without disclosing that he was a relative, according to probes commissioned by the company.
A payment approved by Oberholzer to another contractor was also questioned by an independent counsel in his 15-page report, which was not released publicly but has been seen by Bloomberg. Eskom declined to comment. Oberholzer could not be reached for comment.
The previously unreported findings came in documents related to a personnel grievance filed by a senior executive, Mark Chettiar. While the April 4 report, produced through a separate process independent of the grievance, by Nazeer Cassim, a former High Court Judge, cleared Oberholzer of corruption, it concluded that he breached Eskom policy. In a statement in April, Eskom’s board said there was no need for the company to take any action against Oberholzer.
Eskom, a nearly century-old monopoly that generates most of the nation’s electricity, is saddled with 450 billion rand ($26.7 billion) in debt and can’t supply the country with sufficient power. It’s battling to right itself after years of mismanagement and corruption documented in public testimony over the last two years to a state judicial commission. Chief Executive Officer Andre de Ruyter took over in January pledging to root out graft and improve operations.
Oberholzer, a former employee of Stefanutti Stocks Holdings Ltd., signed a submission to Eskom’s investment and finance committee recommending an increase in a contract with the construction firm, Cassim found. At the time, Oberholzer held shares in Stefanutti Stocks, the value of which had declined to 6,000 rand from an initial 600,000 rand.
“Oberholzer breached the provisions of the Eskom policy -- he should have abstained from the transactions in totality,” Cassim said. “I propose and recommend that the CEO or a nominated board member counsels Oberholzer on the matter.”
Eskom has since said it overpaid Stefanutti Stocks. The construction company denied on July 10 that it was overpaid.
On another matter, Cassim said that if a 42 million- rand payment Oberholzer promoted or authorized to construction company Aveng Ltd. had not already been the subject of litigation between the two firms “there is no reason why the issue cannot be the subject matter of a disciplinary hearing.” Chettiar last year made a submission to the state graft commission about the procedures followed in authorizing that payment, which has yet to be made after the commission recommended it be held back.
In an April statement, Eskom said it would wait for the litigation to be completed before it decided whether to take any disciplinary action.
In separate documentation relating to the grievance filed by Chettiar on Sept. 13 against Oberholzer, the COO admitted to calling Chettiar and asking him to find a job in Cape Town for Gregory Jacobs, his brother-in-law. He said there had been “no pressure.”
Chettiar, who declined to comment, has since faced an internal disciplinary procedure initiated by Oberholzer over the allegations he made and documents show that he has been moved to a training job in human resources against his will. In his report, Cassim said Oberholzer shouldn’t have taken action against Chettiar, as he had done so “hastily and emotionally.”
In that grievance Oberholzer was accused of “use of the F word and shouting at the top of his voice with continued threats of firing people for non-performance.”
Oberholzer apologized for his language, according to documents related to the grievance.
After nearly seven decades of oil exploration in the Niger Delta, the Nigerian oil industry now makes up 65% of government revenue and 88% of foreign exchange earnings. But this oil wealth has come at a terrible cost to the local people and their environment.
Decades of oil spills and gas flaring have transformed the Niger Delta into one of the most polluted places on Earth. About 300 oil spills occur in the region each year and in 2011, a spill at Shell’s Bonga oil fields released 40,000 barrels. Over 350 farming communities were affected, and 30,000 fishermen were forced to abandon their livelihoods.
Although local people are supposed to be compensated for oil spills caused by technical failures, this rarely happens because of a flawed process for determining the cause of spills. The 6.5 million local people whose livelihoods depend on fishing, and many others who survive on farming, have watched their futures drain away with the oil.
Faced with increasingly desperate prospects, many young men in the Niger Delta have turned to militant violence. When I’ve discussed my research on the experiences of young people in this region with friends and strangers, many have been quick to question my decision to focus on the grievances of violent young men. I have never felt that criminality is the only explanation for militancy. Instead, I wanted to shine a light on the experience of local young men to help tell the story of this exploited part of the world.
Where exclusion and violence collide
In a country where many young people are unemployed, feelings of economic exclusion are common. But for young men in the Niger Delta, unemployment is one problem among many.
The culture in which young men are raised expects them to marry and to become providers. But marriage is often an elaborate process in Nigeria that requires lots of money. For many young men lacking modern jobs and the ability to farm and fish, marriage is simply too expensive. “We are the head of the house, but we cannot control the house” is a popular analogy that I often heard said.
United by shared grievances, young men began launching attacks against the oil industry in 2003, torching pipelines, kidnapping oil workers for ransom and killing soldiers deployed to protect oil facilities. Politicians also found a way to use militants by paying them to terrorise opponents and help win elections.
In 2004 alone, over 100 people died in violent clashes between rival militant groups and security forces. By early 2007, oil production had fallen by 40%, forcing the federal government to launch the Amnesty programme two years later which offered young men monthly payments of US$400 (£318) and development projects in return for dropping their weapons.
But many of these projects – including oil contracts – were awarded to militant leaders. Many more young men became militants because of this programme and the lucrative settlements it offered. Through violence, they were able to insert themselves into the oil economy through the back door.
Finding a future
Aside from turning to violence, young men in the Niger Delta are responding to their experiences of environmental harm in different ways. Some have become activists, demanding improved regulations and campaigning for their polluted land to be restored. Others are asking for modern jobs in the oil industry to compensate for the rural livelihoods they’ve lost. Those with the means to travel are migrating to cities in search of a better life.
But for Ken, a young man from Bodo village, travelling is not an option. Township life is hard, he says, but he is deeply attached to his native home. He likes the mangrove forests. He enjoys watching the dances by women in his community. He likes the friendliness of the villagers, and relishes his wife’s soup made with periwinkles and freshly plucked vegetables from their backyard. He enjoys rural life and doesn’t want to leave.
Transforming the lives of local residents will require radical changes, starting with how the region’s oil money is spent. Young men from the communities most affected by pollution shouldn’t be passive recipients of oil revenue who are only brought into the oil economy when they resort to violence.
While money remains a big concern, my research indicates that many local people would rather have a healthy natural environment than financial rewards from oil companies. Despite near constant protests against pollution, and the UN Environment Programme’s call for immediate remediation of contaminated lands and rivers, not a lot has improved in the last decade. The hope of a better life is waning for many, and most of the young men I spoke to are convinced that oil has meddled with their destiny.