In 2002 Eskom was converted into a public company in line with the Eskom Conversion Act (13 of 2001) and as such the legislative framework applicable to any corporate entity in South Africa is applicable to Eskom – for example the Companies Act, the National Environmental Management Act, the competition laws, labour laws and tax legislation, to mention a few. In addition, Eskom is also subject to legislation specifically applicable to state-owned entities – notably the Public Finance Management Act, Promotion of Access to Information Act and the Promotion of Administrative Justice Act.

It is therefore important that Eskom is able to operate within the policy, legal and regulatory framework in an effective manner. There is a need to improve the compliance framework and ensure that Eskom implements best practices in this regard.

To this end, during the year under review the board approved the compliance charter which broadly sets out the mandate, authority and responsibility for compliance. Furthermore, Exco approved the compliance strategic framework which provides the foundation for a comprehensive integrated compliance management programme for the organisation.

A project team has been put together to fast-track some of the initiatives in the strategic framework, notably those relating to the establishment of a compliance capability throughout the business. These include a review of the consolidated legal register, setting up divisional compliance offices as well as analysis of the roles of the various specialised compliance functions with a view to standardising compliance operations.

From a consolidated perspective, reporting commenced on a quarterly basis to the board audit and risk committee on the status of various reporting obligations of major Acts. The report currently covers approximately 560 compliance items and will be expanded and refined as the strategic framework is rolled out.