Criminal suspect in NPF case is board member of authority that regulates NPF

03 Jun 2018

Section 12 of the Botswana Energy Regulatory Authority (BERA) Act is very clear on what should happen when a board member is the subject of a criminal offence: “The Minister may, in writing, suspend from office a member against whom criminal proceedings are instituted for an offence in respect of which a sentence of imprisonment may be imposed, and whilst that member is so suspended, he or she shall not carry out any duties or be entitled to any remuneration.” The minister in question is the one in charge of the Mineral Resources, Green Technology and Energy Security (MGE) portfolio.

One of the BERA board members is Kenneth Kerekang, a former Director of the Department of Energy whose name has been getting a lot of mention in the press. Criminal proceedings have been instituted against Kerekang for an offence (money laundering) in respect of which a sentence of imprisonment (a maximum of 10 years imprisonment or a maximum of P20 million fine or both) may be imposed if the court finds him guilty. The alleged laundering of P250 million from the National Petroleum Fund (NPF) occurred while Kerekang was still the Director of the Department of Energy. Parallel to the legal process is an ongoing investigation by the parliamentary Public Accounts Committee. When the NPF scandal blew up last year and Kerekang was charged, Mmegi quoted the BERA CEO, Rose Seretse, as saying that the board of directors would meet over the issue and make recommendations to the minister. On the other hand, the Act is very clear that only the minister can decide the fate of board members who fall foul of the law. It also doesn’t give the minister the prerogative of mercy – as it were – not suspending a suspect in a criminal case would amount to dereliction of duty.

Sunday Standard’s understanding of this issue is that it a Section 12 one because it involves a BERA board member implicated a high profile criminal case who is still in post despite what the law says should happen in very explicit terms. That this is a matter of public interest is plain to see because Kerekang’s current employment status compromises the integrity of the management of public funds. We crystallised such understanding through questions that we submitted to the Ministry of Mineral Resources, Green Technology and Energy Security (MMGE) in writing. The questions sought to find out why Kerekang has not been suspended since he has been charged with money laundering and how the government would recoup money that it has paid someone who, in terms of Section 12, is not entitled to such money.

To the Ministry however, this an internal issue that cannot be discussed in the public domain.

“The Ministry wishes to inform you that it is unable to respond to your questions as they relate to issues of an employer and employee. Thank you,” reads a single line response from MMGE’s Chief Public Relations Officer, Moreri Moesi.

In reality though, Kerekang is not a BERA employee but a board member. On a related note, the Ministry’s response is in stark contrast to what President Mokgweetsi Masisi said at his inaugural press conference last Thursday about the desperate need for a more transparent government.

The BERA Act creates two classes of board members: four full-time members and four part-time members. Kerekang is a full-time board member who works at the BERA offices in Lobatse. BERA’s Public Relations Officer, Tshepang Monare, would not disclose how much Kerekang earns, rebuffing request for such information by stating that the Authority “does not discuss personal remuneration matters with third parties.” Through very good sources at the MMGE headquarters, Sunday Standard learns that as Executive Director, Kerekang earns close to P100 000 a month – way more than the minister earns. The irony of it all is that BERA is using public funds to unlawfully pay someone who has been accused of laundering public money. To date, Kerekang would have earned more than half a million pula of money that he is not entitled to.

To the question of what Kerekang’s day-to-day duties are, Monare’s response was that he advises the board on energy issues. Conversely, our information is that as other full-time directors, Kerekang doesn’t really do much. Indeed such information is indirectly confirmed by the assertion that he advises the board on energy issues: the board doesn’t meet on a daily basis.

According to Monare, the NPF “still rests with the Ministry and not with BERA.” This statement answered the question of whether, as Executive Director, Kerekang ever deals with NPF-related matters. Monare adds that “when a matter is discussed where any board member feels they are conflicted in one way or the other, they recuse themselves.” Section 18 of the BERA Act itself compels them to do so and prescribes monetary (P2000 or less) and custodial (imprisonment not exceeding six months) penalty for those who contravene this legal requirement. The relevance of this particular point is that it would be unseemly to have Kerekang exercise stewardship over a fund whose money he stands accused of laundering.

However, while the Fund may still be in the custody of the ministry and while Section 18 erects a legal guardrail against unethical conduct, Sunday Standard has established that BERA exercises tangential regulatory power over NPF through the its own relationship with oil companies. BERA regulates all oil companies in Botswana, which companies pay a levy that goes into the NPF. As stated in the Act, one of BERA’s functions is to “regulate network access and storage systems access in natural gas network, gas storage, oil pipelines, petroleum pipelines and storage of oil and petroleum products including third party access to energy, transport and storage infrastructure.”

Kerekang’s job title of Executive Director – which is also used by the three other full-time board members, has been a point of contention. Monare denies that Kerekang is an Executive Director, saying only that he is a “full-time board member appointed by the minister.” Such denial notwithstanding, Sunday Standard learns that internally, full-time directors are referred to as executive directors in official correspondence. Interestingly, what BERA denies has actually been proven by none other than one board member when the board recently held public hearings on an application by Botswana Oil to be granted exclusive rights to import petroleum at Avani Gaborone Resort & Casino. The Board’s point person on electricity, Sidney Mogapi, introduced himself as an Executive Director. That is actually the title he uses in his self-authored LinkedIn profile that he has posted online. The other two executive directors are Kelebogile Moremi (Legal and Licensing) and Matsapa Motswetla (Monitoring and Inspection). The Ministry’s one-line, catch-all response infers disinclination to discuss this issue as well.

While the title that one uses may not appear to be a big deal, Executive Director is in the case of BERA. The Act makes no provision for such position. As used in the corporate world, executive director is a senior manager (an executive) in an organisation and seniority in such context has financial implications. BERA now has board members who double as senior managers and this arrangement is said to undermine the board’s oversight role and complicate operational processes. As executive directors (which the Act makes no provision for), the full-time board members have to be paid very well and that explains the generous salaries they get.

In the not too-distant future, this situation will get even more complicated because BERA is in the process of recruiting directors for all the portfolios (Petroleum, Electricity, Legal and Licensing as well as Monitoring and Inspection) that are currently overseen by full-time directors. The director positions were recently advertised in the print media and from what Sunday Standard learns, the recruitment process is underway. What this means is that there will be two groups of people doing the same job and getting paid huge sums of money.