RedForce caught in perfect storm
RedForce debt management has been thrust into the limelight once again, with residents in several municipalities revolting against it.
The company said negative criticism is expected in their line of work.
“Debt-collection agents have always had a bad reputation, even in the Bible. Simply because no one wants to be reminded of their debts. However, as a company, we pride ourselves on ethical and effective methods of collection and seek only to recover the monies due to our clients, in a holistic and professional manner, thereby maintaining and protecting the relationships that they have with their residents,” said RedForce lawyer Margaret Malambo in a response to detailed questions about the company and its operations.
“We always consider the debtor’s financial position when making payment plans, and strive to be fair and transparent in our engagements. What we are doing is not radical or new; we are simply employing the very same practices that local authorities have developed internally, but at an advanced and persistent level, with the incorporation of our own tactics and know-how,” she said.
Late last year, angry Katima Mulilo residents, including senior citizens, took to the streets to demand the removal of RedForce, saying they were never consulted over its operations.
They claim that, without notice, they were surprised when water at their houses was being disconnected due to outstanding municipal bills.
On Monday, Katutura residents upped the ante in their quest to remove RedForce debtcollectors by taking their fight to the doorsteps of the Namibia Competition Commission (NaCC), the Ombudsman, and the Anti-Corruption Commission.
The municipality of Walvis Bay this week announced an investigation into how RedForce Debt Management secured a debtcollection contract with the local authority. This move follows a High Court order obtained by RedForce to halt the termination of their contract by the municipality.
The Walvis Bay Town Council had unanimously decided to terminate RedForce’s services on 23 April, but the court order temporarily halted this decision.
Lawyer Metcalfe mentioned that the termination notice will eventually be issued in accordance with the consultancy service agreement between RedForce and the municipality.
In recent months, residents of Keetmanshoop, Okahandja, Rundu and other towns have registered their dissatisfaction with the company.
Last Friday, more than 300 residents at Grootfontein in the Otjozondjupa region marched through the streets of the town, denouncing their municipality’s decision to contract RedForce debt management.
The residents owe the municipality over N$211 million.
Walvis Bay
Affirmative Repositioning (AR) is calling for Urban and Rural Development Minister Erastus Uutoni to intervene in the RedForce saga in Walvis Bay.
AR activist Knowledge Ipinge this week questioned the way the debt collection contract was awarded to RedForce.
AR is convinced that the municipality has committed a serious violation of the Public Procurement Act by engaging RedForce as a debt-collection agency to recover overdue water payments.
The municipality is owed about N$378 million by residents and businesses, which RedForce is tasked with collecting.
RedForce this week told New Era that they have collected over N$80 million since last year.
“Documents in our possession suggest that RedForce, known for its harsh collection methods, was granted a contract surpassing the legal threshold for local authorities’ contracts without the necessary oversight or participation of the Central Procurement Board of Namibia,” Ipinge said.
According to him, the contract appears to be a direct breach of Sections 6 and 58 of the Public Procurement Act. The threshold is set at N$20 million.
The activist added that the sudden and dubious way this contract was allocated flouts the proper procurement planning required for projects, “directly transgressing the established legal protocol, which is a flagrant disregard that not only undermines legal statutes, but disrespects the very community supposed to be served.”
“We demand that the ministry immediately order the suspension of all activities by RedForce in Walvis Bay and conduct a thorough investigation to hold the responsible individuals within the municipality accountable through severe punishment,” he appealed.
Responding to questions around the threshold last week, Malambo told New Era that their appointment was done in compliance with the due procurement process, and that “the financing of our contract is not directly derived from council or municipal funds”.
According to her, the signed contract does not exceed N$20 million.
“Similarly, it cannot be deemed to exceed the thresholds detailed in the Public Procurement Act and/or Regulations for the very same reason, because the amount
that would be collected and subsequently paid to us was not known at the time the tender was advertised,” Malambo said.
Windhoek
During a heated visit to the Competition Commission earlier this week, the commission was accused of failing to adequately respond to a petition involving a debt write-off by the City of Windhoek, the introduction of prepaid electricity and water systems, and the removal of RedForce as a debt-collector on the City’s behalf.
According to Katutura residents’ spokesperson, Shaun Gariseb, they have also informed Ombudsman Basilius Dyakugha that they have no problem paying their debts but want to do so in an amicable way.
“With regards to the debt collection issue, we have the debt management department. We suggested that we capacitate this department and get rid of Red Force, because not only is their conduct bad, but we don’t even know how Red Force was appointed.”
The residents also moaned that the strenuous debts are taking a tremendous toll on poor community members, especially pensioners.
“We know the City of Windhoek must get money to provide service delivery. But we have a problem with how the City of Windhoek is run. And now, they are forcing money out of us. A pensioner who is only getting N$1 400 pays that whole N$1 400,” he said.
According to Hendrik Mauyoma, a lawyer at the Ombudsman’s office, the City has been ignoring of their advice while also dodging to meet them.
“It’s true that the City of Windhoek is a problem for us. It’s a challenge for us to meet them. Apart from the issue at hand, we also have a lot of other cases against the City of Windhoek that we want to go and resolve, to sit around the table and talk to these people about. We have compiled all the cases that we have against them. We want a meeting and this time, we’ll try to get them. The Ombudsman has the power to subpoena them to come here,” Mauyoma stated.
Meanwhile, the director of enforcement at the Competition Commission, Paulus Hangula, said: “Towards the end of last year, around October, we started seeing the issues coming out in the media with regards to debtcollection. RedForce was one of the entities that had been mentioned, and it appeared to us that it was all the municipalities within Namibia. As we have indicated to the Ombudsman, we then engaged 15 municipalities to determine what the issue is as far as RedForce and debt-collection are concerned because that’s what we picked up from the media publications at the time.”
Hangula continued: “We engaged 15 of them, and from those 15, only six responded. Now, we have also emphasised that the City of Windhoek is one of those that have not responded, as we have indicated to the Ombudsperson. We have had various follow-ups to establish what is happening as far as the residents of Windhoek are concerned, but they have not been forthcoming.”
Katima Mulilo
In Katima Mulilo, the situation is no different.
However, town council CEO Raphael Liswaniso said it is
premature for the council to decide on RedForce’s fate.
“In this inquiry, however, we wish to inform you that the issue is now in the domain of the honourable minister [Uutoni], and we will only be able to provide clear directions once the minister has provided feedback on the issue,” he informed New Era when quizzed on the matter.
Around June last year, the town council roped in RedForce to recuperate N$145 million owed to it by residents.
Liswaniso said the matter of water disconnections due to unpaid municipal bills is not a new practice, or influenced by the appointment of the debt-collector.
Meanwhile, he clarified that the town council still follows standard operating procedures, which require that all those residents with unpaid bills lose access to water until their accounts are settled or they have made the necessary arrangements to settle, whichever comes first.
“Regarding amounts owed by residents and businesses, we are making efforts to recover such monies through established avenues provided for under the law. The specific amount owed to the town council by defaulting residents is currently being assessed and monitored,” he indicated.
Further, he said the town council is sensitive to the needs of qualifying pensioners who may require special assistance with their municipal dues.
Liswaniso mentioned that it should be noted that council service delivery is not discriminatory and requires a collective effort from both pensioners and the unemployed residents of the town to address the issues of service delivery.
Equally, he informed residents with incorrect invoicing dates that they could visit the town council finance office, which is readily available to ensure that any discrepancies regarding their billings are promptly corrected and communicated to those affected.
The town council urges all those residents and businesses who owe municipal services to promptly make payments to ensure continued access to essential services.