uMngeni-uThukela Water has formally adopted best practice principles as contained in King IV with respect to ethics and fraud prevention planning. This enables, amongst other aspects: greater accountability and transparency; an integrated approach to corporate governance in view of economic, social and environmental spheres; and a greater integration between the role and function of the Ethics Committee and other Board committees.

The Board acknowledges its responsibility to ensure that uMngeni-uThukela Water is a fair, transparent and ethical entity and will continue to exercise oversight through its already fully functional Ethics Committee as prescribed in Section 29.1.1 of the Treasury Regulations in the PFMA as well as in line with the requirements of section 72 (4) of the Companies Act (Act No.71 of 2008).

The Ethics Committee accounts to the Board through the Audit Committee and any high risk areas identified are managed and mitigated at that level. The Committee provides assurance to the Board that there are effective ethics management systems, institutional-wide prevention of fraud and corruption and ensures that complaints are effectively managed, appropriately followed-up and efficiently investigated. The Committee is satisfied that it has fulfilled all its statutory duties and duties assigned to it by the Board, through the Audit Committee, during the reporting period.

The Ethics Committee has an Independent Chairman – who is neither a member of management nor a member of the Board. During the reporting period, the Chairmanship of Mr S Shabalala ended. The Board, through the Audit Committee, appointed Ms Precious Mvulane as the new Chairperson of the Ethics Committee. She is the Managing Director of GAD Consulting Services Inc. Ms Mvulane is a Chartered Accountant (SAICA) and a Registered Auditor (IRBA). She has over 18 years’ experience in different finance roles, i.e. auditor (internal and external) in the private and public sector. She has also been involved with governance structures for the past 11 years and sits on various boards as an audit committee member. One of these boards is the IRBA (her own professional body) and IBASA.

Ethics performance is included in the scope of internal audit and reported on in the company’s integrated annual report. Ethics is imbedded in uMngeni-uThukela Water’s group corporate culture as all polices, structures, systems and processes are in place to ensure that the various boards, employees and service providers are familiar with, and adhere to, the company’s ethical standards – whereby awareness is made to all staff at staff information session, supplier forms and induction sessions.

uMngeni-uThukela Water has in place a Fraud Prevention Plan as well as a fraud implementation plan which flags mitigating controls in high risk areas. Management has adopted this approach by putting mechanisms in place, to manage the organisations vulnerability to fraud. These mechanisms are designed to prevent, deter and detect fraud.

The Ethics Committee met three times during the year to execute its role and responsibility as prescribed by applicable legislation and included monitoring the entity’s activities against legal or best practice requirements relating to:

• Social and economic development, including, EE and B-BBEE,
• Good corporate citizenship, including promotion of equality, prevention of unfair discrimination, Corporate Social investment and reduction of corruption, sponsorship, media and advertising,
• Environment, health and public safety, including, impact of the organisation’s activities, products and services, biodiversity management, waste management, energy efficiency and carbon footprint reduction,
• Consumer relationships, including, advertising, public relations and consumer protection,
• Labour and employment, including, the organisation’s standing in terms of the International Labour Organisation Protocol on decent work and working conditions, employment relationships and contribution toward education and development of its employees and disciplinary handling,
• Financial ethics, including, irregular and wasteful and fruitless expenditure, and
• Fraud and hotline call management.

uMngeni-uThukela Water uses its external whistle-blowing hotline service managed by an external service provider as a means of fraud detection and as a means of encouraging an ethical culture. This 24 hour – 365-day facility provides an anonymous and confidential communication channel for all stakeholders to report suspicions of fraud or otherwise unethical conduct.

All hotline calls are investigated and appropriately followed through using a hotline protocol which ensures that all calls received are dealt with in a transparent and consistent manner. Trends and information of the hotline calls are further used to improve internal controls. UMngeni-uThukela Water endeavours to create and maintain awareness of this facility and ensures that the phone number is adequately advertised by means of posters, intranet, staff information and induction sessions, supplier forums as well as and other means deemed effective and appropriate.