Transcript

       

ETHICAL LEADERSHIP: ISSUES, CHALLENGES AND OPPORTUNITIES

MAINTAINING AND ENHANCING GOOD GOVERNANCE: LESSONS FROM THE SOUTH AFRICAN ARMS DEAL

Prof Harry Herbert Ballard Head of Department

Department of Public Management Faculty of Business

Cape Peninsula University of Technology Cape Town, South Africa

and

Adv Yasmin Nanabhay Lecturer/Legal Advisor

Faculty of Business Department of Public Management

Cape Peninsula University of Technology Cape Town, South Africa

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ABSTRACT The paper attempts to evaluate the reasons why corruption is still rife in South Africa,

despite the enactment of legislation and policies which attempt to prevent and combat

corruption. The South African Arms Deal is selected as the case-study to test this

phenomenon from a qualitative paradigm. The paper will analyse and present the

lessons gained.

INTRODUCTION

Ethics and law, professionalism and accountability form the cornerstones of good

governance amongst governments worldwide. These concepts ought to positively

influence public governance and non-adherence or lack of adherence thereto may

inevitably lead to corruption within the public sector. At most schools of public

administration around the world, these concepts are taught as an integral part of the

management programmes, to adequately equip prospective public officials, to promote

and enhance sound ethical behavior. Despite the foregoing, unethical conduct is still

prevalent in the public sector in South Africa.

The paper analyses statutes enacted by the South African legislature, most notably, the

Constitution of the Republic of South Africa Act of 1996.The Constitution places

immense responsibility on all public officials to conduct their affairs in accordance with

the democratic values and principles enshrined in the Constitution. Of particular

importance is the establishment of certain institutions that would strengthen a

constitutional democracy, as contained in Chapter nine of the Constitution. The paper

includes a discussion on ethics and good governance in South Africa, with particular

reference to possible causes for unethical behavior. In this regard, reference is made to

the King Report on Corporate Governance for South Africa, which although not

enforceable provides clear guidelines to ensure compliance to corporate governance

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principles within both the private and public sectors. As a concluding note the paper will

analyse and discuss lessons gained from the Arms Deal.

ETHICS AND GOOD GOVERNANCE IN THE SOUTH AFRICAN PUBLIC SECTOR

A public sector official when employed by any of the three spheres of government,

namely national, provincial or local, finds him or herself in a very special situation, which

is to serve the government to which he or she owes obedience and loyalty and above all

to serve the nation. The latter obligation requires complete adherence to the democratic

principles and fundamental rights which are enshrined in the basic values and principles

governing public administration, as contained in the Constitution of the Republic of

South Africa Act, 1996. Section 195(1)(a) of the Constitution (1996) states that a high

standard of professional ethics must be promoted and maintained.

In terms of the foregoing, the public sector official is vested with the following powers:

• powers of authority (example, to grant or refuse a residence permit);

• powers to exercise discretion in decision-making (example, to appoint a

preferential service provider); and

• powers to influence political office bearers (example, to provide reliable and valid

information to influence political policy).

In the exercise of these powers the public sector official must define an ethic “…as a

singular, logically deduced, self-created and self-chosen choice to think and behave as

deemed most correct to the individual.” (Gildenhuys, 1996).

Possible causes for unethical conduct could be inter alia: inadequate control and

accountability; complicated legislation; inadequate policies, systems and procedures;

and ineffective management and organizational arrangements.

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In addition, the King Committee on Corporate Governance developed the King Report

on Corporate Governance for South Africa, 2002 (King II) which although not

enforceable provide clear guidelines to ensure compliance to corporate governance

principles within both the private and public sectors. The King II report propagated an

inclusive approach rather than an exclusive approach with a greater emphasis on the

non-financial aspects of performance.

The King II report (2002) defined the characteristics of good Corporate Governance

which included the following seven (7) principles: discipline; transparency;

independence; accountability; responsibility; fairness; and social responsibility.

Although the King II report was published after the Arms Deal appeared in the public

domain, the paper will further include an evaluation as to whether, the above principles

were adhered to during the Arms Deal procurement process.

PROCUREMENT MANAGEMENT IN SOUTH AFRICA

The level of public spending and the various sectors in which it takes place, impacts on

the economy and influences the country’s Gross Domestic Product (GDP). The impact

can also be global. Furthermore, the impact is also felt by the various communities as it

relates to the social being and welfare. Government should therefore act ethically,

equitably and to uphold public accountability.

Government can ensure the survival of certain sectors of the economy when it decides

to procure goods and services from that particular sector. Procurement thus enforces a

divergence of legal, ethical and political aspects. Government therefore has an

obligation to uphold all the principles of governance especially as it relates to public

accountability.

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At the time the Arms Deal case arrived in the public domain, national, provincial and

local government departments had a large collective buying power with an estimated

consolidated figure of R 56 billion. The amount constituted approximately 13% of GDP

and represented 30% of all government expenditure. It is clear that public sector

procurement had a significant effect on the South African macro economy in terms of

consumption and investment spending.

In view of the foregoing, to ensure the effective delivery of services in the correct

quantity and quality resulted in the Green Paper on Public Sector Procurement Reform

in South Africa in 1997 – an initiative of the Ministry of Finance and the Ministry of

Public Works to deal with inter alia:

• the need for value for money;

• the need to eliminate corruption;

• the implementation of procedures of control and accountability;

• uniformity of procedures, policies, documentation and contract options; and

• effective monitoring and reporting.

The achievement of the foregoing was tested during the Arms Deal case-study.

A broad definition of procurement, as submitted by Du Toit, Knipe, Van Niekerk, Van

der Waldt and Doyle (2002:202) relates to the whole process of acquisition from third

parties (including the logistical aspects) and covers goods, services and construction

projects.

Du Toit, Knipe, Van Niekerk, Van der Waldt and Doyle (2002:203) cite Baily (1994)

when utilizing a well known definition of the aim of procurement which is to purchase the

right quality of material, at the right time, in the right quantity, from the right sources, at

the right place. Therefore, one of the objectives of procurement management is inter

alia, to purchase effectively and efficiently and to acquire by ethical methods to obtain

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value for money. Procurers normally apply the 80:20 principle which hypothesizes that

80% of the items bought represent only 20% of the total purchase value.

Du Toit, Knipe, Van Niekerk, Van der Waldt and Doyle (2002:213) state further that the

same is true for the public sector – in most states the government seldom produces

through state owned businesses the goods and services that public institutions need in

order to carry out their activities. Governments therefore, usually resort to the market to

buy and contract their needs.

Du Toit, Knipe, Van Niekerk, Van der Waldt and Doyle (2002:215-217) submit three

core principles of government procurement, namely: value for money; commitment to

competition; commitment to best practices and innovative procurement processes.

The first core principle according to the same authors includes all procurement

decisions which should be based on a comprehensive appraisal of all the options in

each set of circumstances, such as:

• the status of the firms involved (example, quality assurance, design capability);

• the products/services offered (example, to what extent they meet the minimum

requirements);

• the immediate cost of acquisition (example, pricing arrangements, payment

terms, transport costs);

• delivery (example, operational and financial effects of early or late delivery);

• operating costs (example, service and maintenance costs);

• product support(example, quality of after sales service);

• replacement arrangements (example, replacement timeframes);

• strategic and structural (example, the impact of procurement on price, availability

and competition of future supplies).

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The second principle of government procurement according to Du Toit, Knipe, Van

Niekerk, Van der Waldt and Doyle (2002:215) is a commitment to competition by

government. Du Toit, Knipe, Van Niekerk, Van der Waldt and Doyle (2002:215) state

that government should adopt policies to ensure that procurement plans and methods

enhance the competitiveness of its businesses and strengthen supplier markets through

the development of international best practice systems and practices.

Du Toit, Knipe, Van Niekerk, Van der Waldt and Doyle (2002:215) are of the view that

only through a fully competitive process where government has ensured that it has

received as many tenders/project proposals as possible, can the procurement

objectiveness of openness, integrity and equity be achieved. In terms of the focus and

locus of this paper it is interesting to note that the authors, Du Toit, Knipe, Van Niekerk,

Van der Waldt and Doyle (2002-216) submit that the goal of the administrative process

is to make sure that the contractual association is formed with the most suitable supplier

in the market for the products or services rendered.

Du Toit, Knipe, Van Niekerk, Van der Waldt and Doyle (2002:216) further point out that

the most suitable supplier is the one who:

• is financially stable;

• is technically and commercially able to provide the products or services needed;

• proposes the best offer in terms of value for money;

• on the basis of their track record, is able to execute the contract efficiently and

effectively.

The third core principle in government procurement is a commitment to best practices

and innovative procurement processes. The principle ensures continuous improvement

in public sector procurement processes; public procurement needs to be benchmarked

against international best practices.

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CONSTITUTIONAL AND LEGISLATIVE FRAMEWORK IN SOUTH AFRICA In this section, the paper will focus on highlighting and explaining how the Constitution

(1996) and other legislation, places a firm obligation to act in a manner that positively

influences public governance. To begin with, certain sections in the Constitution would

be highlighted and thereafter reference will be made to various other legislation related

thereto.

The following table explains the various pieces of legislation, firstly, highlighting the

objective of the legislation, the relevant section numbers in the legislation and then

stating the implications of the legislation.

NAME OF LEGISLATION

OBJECTIVE OF LEGISLATION

CHAPTER/ SECTION NUMBER

IMPLICATION

1. Constitution of the Republic of South Africa, 1996

To establish a society based on democratic values, social justice and fundamental human rights, lay the foundations for a democratic and open society

1.1 Chapter 5 Section 83

This section places great responsibility on the President to carry out all the functions of his office, in a manner that is in harmony with, and that does not contradict the values and principles entrenched in the Constitution.

1.2 Section 84 The powers and functions of the President, subsection 2(f), specifically mentions that the President has a function to appoint commissions of enquiry. (A function the President omitted to do during the Arms Deal process.

1.2 Section 91 and Section 92

Relates to Cabinet. It clearly indicates that members are both collectively and individually accountable to Parliament for the exercise of their powers and the performance of their functions. This places great responsibilities on all members to carry out their

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duties and functions in accordance with principles of good governance.

1.3 Chapter 9 Institution

Certain state institutions were brought into existence in order to strengthen a constitutional democracy in the Republic.

1.4 Section 182 (1) – The State Institution created – Public Protector

The Public Protector has the power (as regulated by the Public Protector Act, 1994 to investigate any conduct in state affairs, or in the public administration in any sphere of government, that is alleged or suspected to be improper or to result in any impropriety or prejudice. It is also the function of the Public Protector to report on that conduct and to take appropriate remedial action

2. Public Protector Act, (23 of 1994)

To report on improper conduct and take appropriate remedial action in order to strengthen a Constitutional democracy in South Africa.

2.1 Section 6(4)(a)

The Public Protector has the power to investigate on his/her own initiative or on receipt of complaint, any alleged – improper or dishonest act/omission/offences referred to in sections 17, 20 and 21 of the Prevention and Combating of Corrupt Activities Act, (2004), in respect of public money. The Public Protector is given power in terms of this act, to investigate on his/her own initiative any alleged abuse or unjustifiable exercise of power, or other improper conduct or undue delay by a person performing a public function.

3. Public Audit Act, (25 of 2004)

To give effect to the provisions of the Constitution establishing, and assigning supreme audit functions to the Auditor-General

3.1 Section 3 Auditor-General is accountable to the National Assembly.

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3.2 Section 5(1)

Auditor-General may carry out an appropriate investigation or special audit of any institution referred to in Section 4(1) of all national and provincial state departments, if the Auditor-General considers it to be in the public interest or upon the receipt of a complaint or request.

3.3 Part 3 Section 10

Auditor-General is obliged to submit an annual report to the National Assembly on his/her activities and the performance of his/her functions.

4. Special Investigating Units and Special Tribunals Act, (74 of 1996)

To establish a special investigating unit to investigate serious malpractices or maladministration in connection with the administration of state institutions, state assets and public money. According to this act, ‘public money’, may be defined as money withdrawn from the National Revenue Fund or Provincial Revenue Fund, and any money acquired, controlled or paid out by a state institution.

This legislation, emphasizes the legislature’s recognition that malpractices do exist in state institutions and should suspicion of such malpractice arise, these are the steps that should be taken: The Special Investigating Unit (SIU) is an independent statutory body that is accountable to Parliament and the President. It strength lies in it its powers to act speedily to save, recover and protect public assets through the civil law procedure and litigate through a special tribunal. (Montesh, 2001:31). The SIU is an autonomous state institution (Act 74 of 1996) and is neither part of the National Prosecuting Authority or the South African Police Service (SAPS). (Montesh, 2009:39). Although the unit is on the same level as the Asset Forfeiture Unit, it is entirely independent and governed by a separate Act of Parliament. (Montesh, 2009:39)

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Section 6(b)

The Head of the SIU may refer any matter which could be best dealt with by the Public Protector to the Public Protector, and the Public Protector may do the same if its office deems it appropriate to do so.

5. National Prosecuting Authority Act, (32 of 1998) (as amended by the National Prosecuting Authority Amendment Act, (56 of 2008)

To regulate matters incidental to the establishment by the Constitution of the Republic of South Africa, 1996 of a single national prosecuting authority

5.1 Section 179(5) (of the Constitution, 1996)

This section indicates that the National Prosecuting Authority Act, as amended, must ensure that the Prosecuting Authority exercises its functions without fear, favour or prejudice. Once again the notion of openness and transparency is highlighted.

6. Prevention and Combating of Corrupt Activities Act, (12 of 2004) (PCCAA)

To provide for the strengthening of measures to prevent and combat corruption and corrupt activities; to provide for investigative measures in respect of corruption and to place a duty on certain persons holding position of authority to report certain corrupt transactions.

6.1 Section 34

Imposes a duty to report information or suspicion in relation to the commission of offences as stipulated in sections 1 – 16 or sections 20 or 21 of the act, as well as theft, fraud, extortion, forgery, or issuing a forged document involving an amount of R100 000 or more on certain persons with authority. (Pragal, 2006:23). Pursuant to S34(4) persons include the Director-General, Municipal Manager, public officers in Senior Management Service of a public body, any head, rector or principal of a tertiary institution, managers, secretaries or directors of companies, executive managers of banks, or other financial institutions, partners in a partnership, chief executive officers and persons responsible for overall management and control of the business or employer. (Pragal, 2006:23).

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6.1 Section 34 (continued)

According to section 34(2) and section 37(3), failure to comply with this duty has been a criminal offence since 31 July 1994. This duty is indeed a very useful tool, with some scholars referring to it as the “most onerous’ part of the Act”, (Swaine, 2005:22), in order to combat corruption, because the number of unprotected crimes is probably huge and hints by “insiders” are the most important source of information. (Pragal, 2008:24). According to Pragal, the PCCAA also gives effect to the obligations resting on South Africa and which derived from the OECD Convention on Combating Bribery of Foreign Officials in International Business Transactions adopted by South Africa at the OECD on 21 November 1997. (Pragal, 2006:24).

6.2 Section 35 Allows for extra-territorial jurisdiction and this allows for prosecution of these offenses outside the Republic.

7. Public Finance Management Act, (1 of 1991)

To secure transparency, accountability and sound management of the revenue, expenditure, assets and liabilities of the institutions to which the act applies. These institutions are: departments, public entities, constitutional institutions and provincial legislatures

The act emphasis the importance of effective, transparent financial management in all financial transactions.

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It is clear from Chapter 9 in the table above, that the Constitution had given birth to

these state institutions. The question is, why were these institutions created and what

purpose were they to serve? The drafters of the Constitution clearly indicate in section

181(1), that ‘the following state institutions strengthen constitutional democracy in the

Republic: a) The Public Protector…and b) The Auditor-General.’ There are a number of

other state institutions created by Chapter 9, but the paper will focus on the

abovementioned institutions. What enables these institutions to strengthen and uphold

democracy is that they are directed ‘to be impartial and must exercise their powers and

perform their functions without fear, favour or prejudice’ in terms of section (181(2)) of

the Constitution. In other words, in carrying out their functions they should be fair and

reasonable, in keeping with the cornerstones of an open and democratic society based

on freedom and equality. In terms of subsection 5, these institutions are accountable to

the National Assembly, and are obliged to report on their activities and performance of

their functions to the National Assembly at least once a year. Once again, the drafters of

the Constitution made specific mention of accountability with respect to these

institutions. The notion of accountability is one that is mentioned regularly and without

exception, in respect of all public offices held and state institutions, thus emphasizing

the importance of accountability in positively influencing public governance.

With regard to the powers bestowed upon the Public Protector, he /she may also

investigate any alleged ‘maladministration in connection with affairs of any institution in

which the State is the majority shareholder or of any public entity as defined in Section

1 of the Public Finance Management Act 1, 1999 (1 of 1999).’ In terms of section 1 of

the Public Finance Management Act, 1999 (1 of 1999), a public entity means a national

or provincial public entity. During the Arms Deal, a public official in National

Government, allegedly involved in the Deal, did fall under the ambit of ‘public entity’, as

defined in the Act.)

The next state institution created by Chapter 9, of the Constitution is the Auditor-

General. In terms of Section 188 of the Constitution, the Auditor-General must audit and

report on the accounts, financial statements and financial management of all national

and provincial state departments and administrations; and municipalities; and any other

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accounting entity required by national and provincial legislation to be audited by the

Auditor-General. In addition to the duties prescribed above, and subject to the Public

Audit Act, 2004 (25 of 2004) the Auditor-General, may audit and report on the accounts,

financial statements and financial management of -a) any institution funded from

National Revenue Fund or the Provincial Revenue Fund; or any institution that is

authorized in terms of any law to receive money for a public purpose. (Section 188(2) of

the Constitution. It is important to note that the Auditor-General is the supreme audit

institution of the Republic, has full legal capacity, is independent and is subject only to

the Constitution(1996) and the law, including the Public Audit Act, 2004 (25, 2004).

It is mentioned in section 55(2)(b)(ii), of the Constitution that the National Assembly

must provide for mechanisms to maintain oversight over the Auditor-General. From this,

it is evident that although supreme audit functions have been bestowed upon the office

of the Auditor-General, such office is indeed accountable for all its actions carried out.

With regard to the National Director of Public Prosecutions (NDPP), who is the head of

the prosecuting authority, Section 179 of the Constitution is relevant. The NDPP is

appointed by the President, as head of the national executive. To regulate matters

incidental to the establishment by the Constitution of a single national prosecuting

authority, Parliament passed the National Prosecuting Authority Act, 1998 (32 of 1998)

(as amended by the National Prosecuting Authority Amendment Act, 2008 (56 of 2008).

The next legislation highlighted in the table is the Prevention and Combating of Corrupt

Activities Act 12 of 2004 (PCCAA). The PCCAA is a sure sign of an increasing g

awareness of the threat of corruption, and it also aims to implement the obligations of

South Africa under the UN Convention against Corruption adopted by the General

Assembly on 31 October 2003 (Burchell and Milton, 2005:892). Despite the criticisms

levied upon this Act, by various commentators in the field, on the whole, the Act proves

to be a valuable and effective weapon to combat corruption in South Africa. The

strongest and most significant element of the PCCAA is the inclusion of section 34 of

the Act.

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The legislature places further emphasis on the importance of public officials conducting

themselves in an ethical manner in Chapter 10 of the Constitution which states in

Section 195(1), that the public administration must be governed by the democratic

values and principles enshrined in the Constitution, including the following important

principle- ‘A high standard of professional ethics must be promoted and

maintained.’(S195(1)(b).

Section 162(2), also makes mention that the Public Service Commission is an

independent body, and must be impartial, must exercise its powers without fear, favour

or prejudice, in the interest of the maintenance of a high standard of professional ethics

in the public service.

Of particular interest, is Chapter 13, Finance, Section 217(1) of the Constitution which

states:

‘When an organ of state in the national, provincial or local government, or any other

institution identified in national legislation, contracts for goods or services, it must do so

in accordance with a system which is fair, equitable, transparent, competitive and cost-

effective.’

It is made clear that the legislature was intent on highlighting the importance of

openness and transparency in all government transactions in all the above mentioned

Acts of Parliament.

SOUTH AFRICAN ARMS DEAL: CASE STUDY

The South African arms deal, or Strategic Defence Package (SDP) consists of a bundle

of projects which was managed as a single package which constituted the largest

armaments deal ever concluded in South Africa. The deal consisted of 28 Gripen

Advanced Light Fighter Aircraft and 24 Hawk Leader in Fighter Trainers from

BAE/SAAB, 4 corvettes from a German Frigate Consortium, 3 submarines from a

German Submarine Consortium and 30 Agusta 109 helicopters from Italy.

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The total contract value at date of signature was approximately R 24,9 million (US$3,98

million) at the rate of exchange prevailing at that time (R6,25 to the US dollar and R6,4

to the euro).

The political and public reaction was premised on the following, inter alia:

• accusations of improper behaviour by a number of political office bearers and

public sector officials were raised which questioned whether the deal was

compromised, or whether there was a fair process in place during the

negotiations and the signing of the contracts; and

• whether there was corruption and whether it was being investigate or was it

being covered up.

The design was planned to require 1,8% of Gross Domestic product (GDP) to for

acquisition of armaments as well as operating costs. The figure compared favourably to

other countries in the region, such as Nigeria, which also accepted a role in

peacekeeping, with 4,5% of GDP and smaller neighbours such as Namibia with 6,3%

and Botswana with 4,5%

Concerns regarding the irregularities in the decision-making process were raised by

various parties, including a report by the Auditor General to the Select Committee of

Public Accountants (SCOPA) in September, 2000. In its report to Parliament, SCOPA

recommended that four bodies, the Public Protector, the Auditor-general, the

Directorate Special Operations of the National prosecuting Authority and the Special

Investigations Unit be instructed to undertake a comprehensive forensic investigation of

all aspects of the SDP. According to Botha (2003:3) the South African government

declined to appoint the Special Investigations Unit despite much acrimony. The team

found in November 2001 report that there were no grounds to believe that government

had acted “…illegally and improperly”

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The above joint team on the subject of possible corruption, reported that instances were

identified of improper and possibly criminal conduct, and that these were being followed

up by the Directorate of Special Operations and the National Prosecuting Authority.

Botha (2003:5) further quotes directly from the joint report as follows:

“Whilst there may have been individuals and institutions who used or attempted to use

their positions improperly… to obtain undue benefits in relation to these packages up

until now no evidence has emerged to suggest that these activities affected the

selection of the successful contractors/bidders, which may render the contracts

questionable. As matters stand, there are presently no grounds to suggest that the

government’s contract position is flawed”

To-date no matters have been brought to court after the publication of the above joint

report.

British and German investigators suspect that bribes of over R 1 billion were paid to

facilitate the deal. Current President Jacob Zuma, the previous President, Thabo Mbeki,

the Chief of Acquisitions at the Secretariat for Defence, Chippy Shaik and his brother

Schabir Shaik and the late Minister of Defence Joe Modise were mentioned as

recipients. Andrew Feinstein, an ANC Member of Parliament and former African

National Congress leader of Parliament’s public accounts watchdog SCOPA, resigned

when the party moved to curtail investigations in to the arms deal.

Botha (2003) attempts to defend the allegation of biased decision-making, as the

weapon system on the corvettes had drawn a fair amount of attention, as the then Chief

of Acquisitions, appeared to have a conflict of interest. His brother was a shareholder in

ADS, the company which was appointed to integrate the weapons system. A local

company who had also quoted had stated that it was unfairly treated. Botha (2003:4)

states that the above joint team found that Armscor do not contract directly with sub-

contractors and that the prime contractor is responsible for the total product.

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On 3 August 2010 the Mail & Guardian reported that MAN Ferrostaal which led the

German Submarine Consortium was awarded a contract of more than R 6 billion to sell

three submarines to the South African Navy. The newspaper in question further

reported that the company undertook to build a R 6 billion stainless-steel mill at Coega

in the Eastern Cape, providing 1 000 direct jobs and 3 000 indirect jobs. The Mail and

Guardian (3 August 2010) stated that:

“A former South African official who had access to such information informed us

in confidence that Ferrostaal paid R 30 million to current President Thabo Mbeki

to gain the arms contract in the first place. When questioned by investigators in

South Africa, Mbeki claimed that R2 million was given to his former Deputy

President, Jacob Zuma and the rest went to the ANC.”

The Mail & Guardian (3 August 2010) further reported that the Sunday Times had stated

that the draft report compiled by the Attorney-General in May 2001 included statements

that “…deviations from the approval process occurred…” and that “…good procurement

practices were lacking…” during the submarine bidding process. The Mail & Guardian

(3 August 2010) stated that for example, tippex correction fluid was apparently used on

the evaluation working papers – contrary to instructions… and that the corrections made

were not initialed by anyone.

ANALYSIS AND DISCUSSION

The analysis and discussion of the arms deal case study will be in accordance with the

following framework:

• inadequate control and accountability;

• complicated legislation;

• inadequate policies, systems and procedures; and

• ineffective management and organisational arrangements.

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Inadequate control and Accountability The Constitution (1996) states that the Executive will be accountable to the legislature.

In order to ensure compliance with this provision two (2) types of committees have been

established, namely, Portfolio Committees and the Standing Committee of Public

Accounts. In the Arms Deal, Professor Woods (9 May 2011), who was the chairperson

of SCOPA, at the time, admits that the findings and proposals of this committee were

not accepted by the Executive nor the Legislature. In terms of Section 84 of the

Constitution (1996) the proposal made by SCOPA to establish a Commission of Enquiry

into the Arms Deal, was ignored by Cabinet.

In terms of Section 91 and 92 of the Constitution (1996) which propagates good

governance were not adhered to as explained above.

The then chairperson of SCOPA, indicated on 9 May 2011, that even though the office

of the Public Protector was made fully aware of the possible ramifications resulting from

non-compliance with good procurement principles, it did not react with the appropriate

remedial action on this matter.

In terms of Section 188 of the Constitution (1996) the AG must audit and report on the

accounts, financial statements and financial management of inter alia national

department to SCOPA. The then chairperson of SCOPA, indicated that the AG at the

time of the Arms Deal, did investigate the matter but was too evasive in his findings. In

the same interview, it was submitted that the AG was not prepared to conduct an

appropriate investigation or special audit. The interviewee alleged that the AG report

was edited by Cabinet.

The above statements are supported by a report published by the Mail and Guardian on

3 August 2010.

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As stated by Botha (2003:3) the SA government declined to appoint a special

investigating unit to investigate the concerns regarding the irregularities in the decision-

making process. The exclusion of the SIU, contradicts the provision contained in The

Special Investigating Units and Special Tribunals Act, 1996 (74 of 1996). The purpose

of this Act was to establish a special investigating unit to investigate serious

malpractices and maladministration in connection with the administration of State

institutions, State assets and State money.

Complicated Legislation A further possible cause for unethical conduct is complicated legislation. In SA, there

exists seven (7) statutory Acts, including the Constitution (1996) which seek to uphold

ethical behaviour and good governance in the public sector. The legislation is complex

and requires a high degree of interpretation and application. Furthermore, the legislation

requires competent organs of state and public sector officials and politicians to be

competent and committed to upholding the tenets of good public governance. An

example would be, the PCCA Act, which contains a number of definitions for the term

corruption, which is confusing to the reader. Ineffective Management and Organizational Arrangements

As previously stated, with regard to accountability, the AG is obliged to submit an

annual report to the National Assembly on his/her activities and the performance of

his/her functions. The Constitution (1996) stipulates that the National Assembly must

provide for mechanisms to maintain oversight over the AG, which clearly indicates that

this office is accountable for all its actions that were performed. The above provisions

were never enforced to hold the AG accountable for his actions or omissions in the

Arms Deal.

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All the events and activities performed by the various organs of government were not

fully reviewed as per the example pointed out above, which establishes firm grounds for

maladministration, which means bad management as it relates to public affairs.

As indicated previously in the case study, a former SA official alleged that Ferrostaal

paid R30 million to the former President, Thabo Mbeki to gain the arms contract in the

first place. (Mail and Guardian, 3 August 2010). The PCCA Act defines the above

payment as a gratification which includes money whether in cash or otherwise, to

induce a certain state of affairs. The former President was not excluded in terms of the

Act, as he is a member of the legislative authority.

Inadequate Policies, Systems and Procedures In South Africa today, as mentioned, a number of legislation exists which seeks to

uphold principles of good governance and ethics. Arising from this statutory framework,

a number of policies, systems and procedures have been compiled which attempts to

support this legislation and provide clear guidelines to the political office bearers and

officials. The policies, systems and procedures are deemed to be adequate, but not

necessarily effective, because of weak implementation due to a lack of political and

administrative will.

CONCLUSION

To conclude the following lessons are presented in terms of the Arms Deal case:

• the separation of powers between the legislature, executive and judiciary must be

strictly upheld and adhered to;

• all organs of state which support constitutional democracy must be independent,

impartial and autonomous and must perform their functions without fear, favour or

prejudice;

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• no person or organ of state must be permitted to interfere with the functioning of

these organs which includes the President;

• all the principles of good governance must apply to the procurement management

function especially as it relates to transparency, accountability and fairness;

• draconian legislation be introduced to sanction any person or organ of state on

prima facie evidence of corruption, maladministration and unethical conduct;

• political and administrative will must exist to ensure the foregoing; and

• finally, public forums be established to ensure transparency and accountability on

matters which have become controversial in the public domain.

The above lessons can only be implemented with the necessary political will by all

political representatives, executive organs of state and government officials. If no

political will exists, the monitoring and evaluation of the effective implementation thereof

will serve as a mere paper exercise with no sanction of the guilty parties.

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LIST OF REFERENCES Books Du Toit, D. Knipe, A. Van Niekerk, D. van der Waldt, G. and Doyle, M. Service

Excellence in Governance. 2002. 1st Edition. Sandown, Heinemann.

Gildenhuys, GSH. 1996. Ethics in the Public Sector. 1st Edition. Pretoria. Van Schaik

Printers.

Legislation Public Protector Act 23, 1994 (23 of 1994).

Constitution of the republic of South Africa Act 1996, (108 of 1996).

Special Investigating Units and Special Tribunals Act 1996, (74 of 1996).

National Prosecuting Authority Act 1998, (32 of 1998).

Public Financial Management Act 1999, (1 of 1999).

Prevention and Combating of Corrupt Activities Act 2004, (12 of 2004).

Public Audit Act 2004, (25 of 2004).

Journal articles Grobler, E & Joubert, S.J. 2004. Corruption in the Public Sector: An Elusive Crime.

Acta Criminologica, 17(1) 2004.

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Lambrechts, D. 2004. The Prevention and Combating of Corrupt Activities Act as an

investigative instrument pertaining to bribery and corruption. Acta Criminoligica, 17(3)

2004.

Montesh, M. 2009. An Analysis of the role of the South African Asset Forfeiture unit

and the Special investigating Unit. Acta Criminologica, 22(2) 2009.

Pragal, O. 2006. Assessing South Africa’s prevention and Combating of Corrupt

Activities Act. Acta Criminologica, 19(2) 2006.

Sylvester, J & Seegers, A. 2006. South Africa’s Strategic Arms Package: A critical

Analysis. University of Cape Town, South Africa, 2006.

Van der Merwe, A. 2006. The Nature and Causes of Corruption: The Perceptions of

KZN Public Service Managers and Anti-Corruption Agents.Journal of Public

Administration, Vol 41, no 1, 2006.

Van der Walt, B.J. 2001. Corruption: A many –Headed Monster. Keynote address AT

Conference on Business Ethics hosted by Excellante International, Johannesburg,

August 2011.

Vyas-Doorgapersad, S. 2007. Corruption in the Public Sector: A Comparative

Analysis.Journal of Public Administration, Vol 42 no 5, 2007.

Webb, W. 2009. Prevention is Better than Cure: Promoting Public Service Integrity. SA

Crime Quarterly, 27 March 2009.

Newspaper publication Mail and Guardian published on 3 August 2010.

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Report King Report on Corporate Governance of South Africa. 2002. (King II). Pretoria,

Government Printer.

Interview

Prof Gavin Woods, University of Stellenbosch, 9 May 2011.


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