Redisa executive director Stacey Davidson
The Recycling and Economic Development Initiative of South Africa (Redisa) is planning to legally contest the decision of Environmental Affairs Minister Dr Edna Molewa to liquidate the tyre waste management company, with executive director Stacey Davidson going so far as to describe the move as an “abuse of State power” and a violation of “Constitutional rights”.
In an interview with Engineering News Online, Davidson argued that some of the statements contained in Molewa’s 200-page affidavit to support the liquidation were also “defamatory” and “unsubstantiated”.
Molewa claimed that Redisa was not properly managed and accused it of financial misappropriation, with the payments being made to certain companies in which Redisa’s directors had financial interests.
The urgent liquidation court application was made to “safeguard the operations and assets associated with Redisa”.
In response, Davidson described Redisa as a “solvent private company”, noting that it had been established through private funding and the network established by using resources arising from a management fee charged to tyre consumers
However, in her affidavit, Molewa also stated that Redisa had succeeded in transferring almost R30-million of public funds that were intended for the implementation of the Redisa waste tyre plan, out of the country.
“There is no misappropriation of funds, there are no missing millions, all the money is accounted for. There is no unnecessary spending, everything is recorded in Redisa’s books and it has received unqualified audits from independent audit companies such as KPMG and PwC,” countered Davidson.
She explained that the R30-million formed part of payments to foreign entities that did not meet the country’s black economic empowerment (BEE) ratings criteria. “We need to be able to allocate our suppliers’ spend, transporters spend and depot spend to the various companies per the BEE classifications. Foreign companies do not have BEE level, that is why it is narrated as ‘foreign’ – those are payments linked to foreign suppliers and these payments were made to procure much-needed equipment, which the approved plan prescribes.”
Earlier this month, Redisa was placed under liquidation after it said it would cease all tyre collection, citing the implementation of a tyre levy as the reason for the decision. The tyre levy, which came into effect on February 1, affected its funding model and Redisa was delivering a service without any payment for services.
“We ceased tyre collection based on our engagements with government since February 3, 2016. We were called to a meeting with the National Treasury and the Department of Environmental Affairs (DEA) because Treasury was planning on implementing an environmental levy on April 1, 2016,” Davidson noted.
She said Redisa outlined the impact the levy would have on the programme and attempted to deal with government’s misgivings about the tyre remediation programme andthe funding requirements.
The levy was postponed, but on November 30, 2016, Molewa issued an interim directive to take control of Redisa. “This directive was an attempt to usurp the powers of the board and give government the powers to run Redisa,” Davidson argued.
She further highlighted that the directive was challenged as being unlawful and set aside by Judge Dennis Davis on December 28, 2016, through a court order.
“We have a private, fully transparent funding model . . . with the private sector delivering public benefit and value. Government wants to shift this to an opaque model as we have seen with plastic bags, where this money is sunk into the fiscus and will never come out for the original intention,” she averred.