Trollip legislative proposal to amend Executive Members' Ethics Act 1998, Davidson legislative proposal to prohibit contracting between national organ of State and political office bearers, Van Rheede Van Oudtshoorn Special Petition on pension

Private Members' Legislative Proposals and Special Petitions

01 November 2011
Chairperson: Mr S Thobejane (ANC)
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Meeting Summary

Mr A Trollip presented his private member’s proposal to amend the Executive Members’ Ethics Act, No 92 of 1998. The purpose was to put in place safeguards that would limit the scope of influence for Presidential influence-peddling. He noted that the President and his family ought to display the highest standards of transparency and accountability. However, in the past, the President was not subject to adjudication in respect of his interests, or those of his family, in the same way that applied to other Cabinet Ministers. The proposal therefore sought to add in extra sub-sections into section 2 of the Executive Members’ Ethics Act, to, firstly, make it easier for the public to access the President’s declaration of interests, by requiring them to be published on the Presidential website, secondly, to require that the President’s compliance with general  standards of ethical conduct should be adjudicated upon by the Public Protector, that adjudication of any gifts or conflicts of interest declared by the President also be adjudicated on by the Public Protector, in the same way that the President or Premier adjudicated conflicts of interest or gifts declared by other members of the executive, and that all State deals in which the family members of the President were involved should come under specific scrutiny by the Auditor-General, to ensure that all tender processes were followed and there were no special favours. Examples were cited of instances since 2008, where the President’s family had been involved in deals where the correct tender procedures were not followed, some resulting in serious detriment to service delivery and workers. It was stressed that these amendments were not intended to target a specific individual, and aimed to ensure that State resources were allocated on the basis of fair tender procedures, not on the basis of political connections. Members suggested that the name of the current President be removed from the proposal, asked how far back the investigations into suspect deals had gone, and questioned why the proposer had suggested that the Public Protector and Auditor-General be involved, as this would change their mandates. It was stressed that although in theory the supply chain management processes were good, the practice and implementation was not. The Chairperson wondered if the purpose of the amendment would be served merely by adding “the President” to the list of those covered by the Act, in section 2, but the proposer noted that he had, for very specific reasons, also wanted to extend this to family members who could, by proxy, also exert considerable influence.

The Committee was informed that although it had written to Ms Van Rheede van Outdshoorn, advising her of the option to repay a substantial portion of her pension payout if she wished to opt to buy the extra nine months’ service that would entitle her to a monthly amount, no response had been received. Members discussed the fact that although not all legal remedies had been exhausted, it was clear that she did not have the financial resources to take the matter to court. The Committee could do no more at this stage other than advise her of her options.

The Committee noted that letters had been written to various bodies calling for their comment on the Davidson proposal to prohibit contracting between an organ of state in the national sphere of government and companies whose directors were party political office bearers or public representatives of political parties, and that a draft Report should be compiled, setting out the proposal and the steps the Committee had taken, with the final deliberations and resolution to be added in after the Committee had considered the matter in the following week.

The minutes of 19 October were adopted, with amendments.

Meeting report

Mr A Trollip presented his private member’s proposal to amend the Executive Members’ Ethics Act, No 92 of 1998. The purpose was to put in place safeguards that would limit the scope of influence for Presidential influence-peddling. He noted that the President and his family ought to display the highest standards of transparency and accountability. However, in the past, the President was not subject to adjudication in respect of his interests, or those of his family, in the same way that applied to other Cabinet Ministers. The proposal therefore sought to add in extra sub-sections into section 2 of the Executive Members’ Ethics Act, to, firstly, make it easier for the public to access the President’s declaration of interests, by requiring them to be published on the Presidential website, secondly, to require that the President’s compliance with general  standards of ethical conduct should be adjudicated upon by the Public Protector, that adjudication of any gifts or conflicts of interest declared by the President also be adjudicated on by the Public Protector, in the same way that the President or Premier adjudicated conflicts of interest or gifts declared by other members of the executive, and that all State deals in which the family members of the President were involved should come under specific scrutiny by the Auditor-General, to ensure that all tender processes were followed and there were no special favours. Examples were cited of instances since 2008, where the President’s family had been involved in deals where the correct tender procedures were not followed, some resulting in serious detriment to service delivery and workers. It was stressed that these amendments were not intended to target a specific individual, and aimed to ensure that State resources were allocated on the basis of fair tender procedures, not on the basis of political connections. Members suggested that the name of the current President be removed from the proposal, asked how far back the investigations into suspect deals had gone, and questioned why the proposer had suggested that the Public Protector and Auditor-General be involved, as this would change their mandates. It was stressed that although in theory the supply chain management processes were good, the practice and implementation was not. The Chairperson wondered if the purpose of the amendment would be served merely by adding “the President” to the list of those covered by the Act, in section 2, but the proposer noted that he had, for very specific reasons, also wanted to extend this to family members who could, by proxy, also exert considerable influence.

The Committee was informed that although it had written to Ms Van Rheede van Outdshoorn, advising her of the option to repay a substantial portion of her pension payout if she wished to opt to buy the extra nine months’ service that would entitle her to a monthly amount, no response had been received. Members discussed the fact that although not all legal remedies had been exhausted, it was clear that she did not have the financial resources to take the matter to court. The Committee could do no more at this stage other than advise her of her options.

The Committee noted that letters had been written to various bodies calling for their comment on the Davidson proposal to prohibit contracting between an organ of state in the national sphere of government and companies whose directors were party political office bearers or public representatives of political parties, and that a draft Report should be compiled, setting out the proposal and the steps the Committee had taken, with the final deliberations and resolution to be added in after the Committee had considered the matter in the following week.

The minutes of 19 October were adopted, with amendments.

Minutes
Trollip legislative proposal to amend the Executive Members’ Ethics Act 1998 (Act 92 of 1998)
Mr A Trollip presented his legislative proposal. The reason behind it, and the main thrust of the proposal was to put in place important safeguards to limit the scope for Presidential influence-peddling. He noted that, particularly in regard to the State President and his/her family, the highest standards of transparency and accountability should apply. It was proposed that amendments be made to the Executive Members’ Ethics Act, No 92 of 1998, to ensure:

a) that the public would more easily be able to access the President’s declaration of interests;
b) that the President’s compliance with the general standards of ethical conduct as outlined in Section 2.1 of the Executive Members’ Ethics Code be adjudicated by the Public Protector, in the same way that all other members of the Executive must meet the criteria outlined in Section 2.1 of the Executive Members’ Ethics Code to the satisfaction of the President or the Premier, as the case may be;
c) that the adjudication of any gifts or conflicts of interest declared by the President be adjudicated by the Public Protector, in the same way that the President or Premier, as the case may be, adjudicated conflicts of interest or gifts declared by members of the Executive;
d) that State deals involving the President’s family members should come under specific scrutiny by the Auditor-General, to ensure that all tender processes were followed and there were no special favours.

Mr Trollip explained that there were serious concerns about the growing number of President Zuma’s family members and friends who reportedly had benefited from business deals with the State since he assumed office. A 2010 Mail & Guardian report indicated that the combined business interests of President Zuma and 15 adult members of his family accounted for 134 company directorships or memberships of close corporations. Mr Trollip had no objection to the President’s family being involved in business, or helping to grow the economy and dealing with joblessness. However, he pointed out that at least 83 of those interests were registered after Mr Zuma had been elected, and were linked to industries in which the State played a key role, such as mining and telecommunications.

He noted that President Zuma’s family and friends were linked to a number of controversial deals, some of which included Aurora Empowerment Systems/Padmozi deals, to the approximate value of R600 million, the Durban Metro Bus deals, valued at around R300 million, and a matter between Bucebo General Trading and the KwaZulu-Natal legislature, to the value of about R3.5 million. The Auditor-General (AG) and other entities checking compliance had reported that some deals were done either without tenders, or through dubious tendering processes. In some instances the inexperience of the Zuma-linked company linked had a detrimental impact on service delivery and on workers. The Aurora Mine debacle was one where the workers were severely prejudiced.

Mr Trollip outlined the reasons behind his proposed amendments. He pointed out that currently the President was supposed to adjudicate on his own conflicts of interest, which in itself was incorrect. In future, he suggested that all adjudication of conflicts of interest involving the President, his children and spouses should be made by the Public Protector. He further proposed that the State’s deals involving the President’s family members should come under specific scrutiny by the Auditor General, to ensure that all tender processes were correctly followed, and there were no special favours. The Public Protector should also be able to adjudicate whether the President had complied with Section 2 of the Executive Ethics Code, which dealt with general standards of ethics to which members of the executive must adhere. Once again, he noted that the President was supposed to adjudicate whether he had complied with Section 2, which was in itself a conflict of interest. Finally, he noted that currently, any member of the public wishing to view the President’s register of interests had to arrange a viewing with the President’s office in Johannesburg, and was not allowed to make photocopies, but had to manually transcribe the register. He proposed that the Registry be published on the President’s website, to make for easier access. He pointed out that the highest standards of transparency and accountability should apply to the President, and the people of South Africa should be assured that the family was not “trading on” the name of the President.

Mr Trollip then presented the specific wording of his legislative proposals, which would amend the Executive Members’ Ethics Act. Firstly, a new sentence should be added after section 2(d):
”In the case of the financial interests disclosed by the President in terms of paragraph (c), the public portion of the President’s financial disclosure must be available on the Presidency’s website no more than thirty (30) days after the disclosure has been made to the relevant official in the office of the President.”

Mr Trollip stressed that that clause was applicable to the President only as it was recognised that family members could participate in the economy of the country.

He also proposed that other new clauses be added, reading:
”(e) Require that gifts and conflicts of interest declared by the President must be adjudicated by the Public Protector.” He explained that this was in line with the independent status of the Public Protector, and the principle that a person should not adjudicate on himself.

The new subclauses (f) and (g) would read:
”(f) Require that the President must, to the satisfaction of the Public Protector, meet the criteria outlined in Section 2.1 of the Executive Members’ Ethics Code (“General Standards”), and that in deciding whether the President complied with the provisions of Section 2.1 of the Executive Ethics Code, the Public Protector must take into account the promotion of an open, democratic and accountable government.”
”(g) Require that the Auditor General takes measures to ensure that state deals involving any of the President’s family are scrutinised to ensure that correct tender procedures have been followed in each case.”

He explained again that the effect of (g) would enable members of the President’s family to do business with the State without any ambiguity, and would enable them to say, with confidence, to the public that they were awarded the tender or right to do certain work in an open and transparent fashion in a competitive environment.

Mr Trollip concluded that the position of a President afforded him or her significant power, which made his or her family and friends also, by proxy, extremely influential. There was considerable potential for individuals closest to the President to be favoured in State deals.

Mr Trollip emphasised that the purpose of the amendments was not to target a specific individual, or a specific President, but was intended to ensure that State resources were allocated on the basis of fair tender procedures, not on the basis of political connections.

He finally stated that no significant financial implications stemming from the proposed amendments were foreseen.

Discussion
Ms M Kubayi (ANC) asked why the proposal included extended families, while all public entities were required to declare. She suggested that it would be unfair for only the President to be singled out in that regard.

Mr Trollip responded that the Committee could deliberate on that issue. However, he reiterated that his concern was the considerable power that was held by a President – any President – to influence outcomes of any nature. He did not expect the financial interests of family members to be declared, but that if a family member secured tenders with the State, then the Auditor General should adjudicate whether those tenders were awarded according to prescribed tender processes. He was not exposing the President’s family to any undue scrutiny unless they did business with the State. He stressed that the Head of State should be setting an example of transparency in ensuring that none of the deals were secured because of the position of the President.

Ms M Mdaka (ANC) asked why, if Mr Trollip was referring to future Presidents, he had actually named the family of President Zuma.

Mr Trollip replied that he had mentioned those instances where it had already been found that dealings were secured outside of the tender requirements. He cited the example of Nonkululeko Mhlongo, the mother of two of the President’s children, who was awarded a multi million rand catering contract by the KwaZulu-Natal legislature in 2008. The tender was awarded without being advertised in the tender bulletin, and before the expiry of the 21-day review period for tenders. Those examples were merely illustrative of the reasons why amendments were needed.

The Chairperson said Ms Mdaka was essentially asking whether this proposal would have been brought if President Zuma was not connected for Ms Mhlongo. He understood the background himself, but understood Ms Mdaka’s concerns.

Mr Trollip apologised that at the outset, he had mentioned the current President by name, but stressed that the principle behind his proposal applied to “the President”, meaning “any future President”. When the Committee considered the proposal, he asked that the principle, and not the individual, be considered.

Ms Mdaka felt in that case Mr Trollip should withdraw the names he had mentioned from his proposal because he was attacking the dignity of the President. She proposed that the Committee consider the proposal at a later date, after Mr Trollip had withdrawn the names.

Ms M Pilusa-Mosoane (ANC) asked for clarity on the business deals that were registered in the post-Polokwane-period, and asked if there had been instances of this prior to this period, and how far back he had investigated.

Mr Trollip responded that he was sure that prior to 1994 he would have found objectionable and questionable practices too. His proposal was applicable to this term of office, and he used Polokwane as a time period because that was when the current President of the country also became the President of the governing party. He used those names for purposes of illustration, and there were facts to back up the examples cited. He would be prepared to remove the names from a portion, but said that they were relevant insofar as the motivation for the proposal was concerned.

The Chairperson pointed out that Ms Pilusa-Mosoane had asked how far back the investigations had gone.

Mr Trollip replied that he did had not specifically investigated the position further back than the time of the Polokwane Conference, because that was the period for which he had been in Parliament. His proposal was intended not for the past, but for the future. He reiterated that he was quite sure that if he had looked further back he would have found many objectionable and questionable practices in the past, and said that even this Parliament had passed some legislation that was found unacceptable, so he was trying to address what was happening currently in South Africa, and to prevent such abuses happening in the future.

Ms J Kilian (COPE) referred to the principle of tightening up legislation to ensure accountability and transparency, and avoid conflict of interests. The Act related to provinces as well, so perhaps the position of Premiers and provincial contracts should also be evaluated. Ms Kilian concurred that the President should not be both player and referee, and agreed that it made sense for another body to scrutinise certain deals.

Mr Trollip said he had referred to the Public Protector having to adjudicate in the instance where the President adjudicated himself, and had mentioned that Premiers did the same. If the Committee considered the proposal favourably, then it could certainly be made applicable also to Premiers, the Executive leadership in the provinces, who were in a similar position.

Ms A van Wyk (ANC) said that if the Public Protector, and, to some extent, the Auditor-General were to be involved, that would affect the mandate of the Public Protector.

Mr Trollip agreed that if the proposal were considered favourably, it would affect the mandate of the Public Protector. He had proposed the Public Protector because this was an independent authority who could do a final adjudication on the matters pertaining to the President. The Committee could perhaps suggest another more relevant body, but the principle was that someone other than the affected party must attend to the adjudication.

Ms van Wyk asked for clarity as to what the proposal around the involvement of the Auditor-General would achieve. She wondered if that process would not sideline the principles of fair tendering. Perhaps it would be better to address the correct adjudication of tenders in total, rather than have the Auditor General and his office focusing on the award of specific tenders.

Mr Trollip replied that his motivation had cited examples to highlight how the supply chain management process of this country had already been undermined during this current President’s office. In theory, South Africa’s supply chain management processes were amongst the world’s best, but there were shortcomings in their application. If a President exposed himself or herself to specific scrutiny, to set a good example of transparency to the rest of the country, it could only be of benefit for the future of South Africa.

The Chairperson noted that the law relating to procurement was sufficient but agreed that the problem was in the implementation. The same applied to the Code of Ethics 2.2(b) (i) to (v). He wondered if these provisions were necessary, if the Code of Ethics was properly adhered to. He noted that the current Code applied to Cabinet Ministers, and the President, as Head of State, was also the Head of Cabinet.

Mr Trollip agreed with this point and said that he was not proposing any changes to the Act as it stood, but rather wanted to make additions. The Code of Ethics included provisions prohibiting Cabinet Members, Deputy Ministers and MECs from doing things set out under 2.2(b)(i) to (v), but did not specifically speak to the President.

The Chairperson asked if Mr Trollip’s concerns would be addressed if there was merely a reference to “the President” added in under 2(b).

Mr Trollip said he would not like to undermine his own proposal, which was also very specific to family members of the presiding President. Whilst he agreed that the addition of a reference to the President would improve the Act, he still wanted the Committee to consider his full proposal, which would make this Act applicable to the President and his family.

The Chairperson thanked Mr Trollip and advised him that he would be informed of the determination of the Committee.

Van Rheede van Oudtshoorn Special Petition praying for pension
The Chairperson recapped that the Committee had, at an earlier meeting, listened to the presentation on the Mrs Van Rheede van Oudtshoorn’s petition, and had asked officials from the Department of Justice and Constitutional Development (the Department) in Mpumalanga to comment. The Committee was told that Ms Van Rheede van Oudtshoorn was not advised, at the time that she left her employment, that she could have purchased nine-months’ worth of pension rights, to make up ten years’ service.

Mr P Pretorius (DA) recalled that the Committee took a resolution to write to the petitioner, via Dr Bosman, to determine whether Ms Van Rheede van Oudtshoorn still wished to proceed, as she would be required to pay in a substantial amount of money.

The Chairperson it was considered unethical for Parliament to advise a person to pay R131 000 of the R194 000 she received when she left the system. She would then be left with R52 000, which was supposed to be her gratuity. The letter had advised her that it was possible for her to repay R131 000, in order to then be eligible for a pension of R1 200 monthly, but did not actually advise her to do that, so the decision remained with her.

Mr Pretorius asked whether the Committee had received a response.

The Chairperson answered that it had not.

Ms Kubayi understood that some of the information had not made available to the petitioner at the time, which was the reason she had sought assistance from Parliament. There was not much the Committee could do now other than to wait for her decision, since Parliament clearly could not prescribe what was to be done. She thought that the Committee had gone as far as it could.

Mr Pretorius was not in favour of that, saying that there could be financial implications for the State. According to the legal advice given to the Committee, not all the avenues had been exhausted. However, there was a strong counter-argument that there may be meritorious cases where a person would not be required to follow all the legal steps because of the heavy financial implications; in this case, Ms Van Rheede van Oudtshoorn clearly had no money to pursue court action.

It was agreed that the Committee could not find any reason to force the Department to reinstate Ms Van Rheede van Oudtshoorn into the system, and the final decision, based on the information provided by the Committee, was now up to her.

Davidson proposal to prohibit contracting between an organ of state in the national sphere of government and companies whose directors are party political office bearers or public representatives of political parties
Mr Pretorius asked whether submissions had been received from other committees.

The Chairperson replied that letters had been sent to the Ethics Committee, the Committee on Powers and Privileges, the Portfolio Committee on Justice and Constitutional Development, and the Presidency. Reminders were sent to them last week indicating that the Committee wished to conclude the matter at this meeting, asking them to send their positions by Monday, failing which it would be assumed that they had no comment and the Committee would take a decision.

Ms Kilian proposed that a draft report be compiled setting out the steps taken, the process followed, and the other departments or bodies contacted, ending with two alternative resolutions, as whether the Committee supported the proposal, or not. That could be tabled for Members’ consideration, so that the matter could be finalised next week.

It was agreed to allow management to compile a draft recommendation report for consideration and finalisation in the following week.

Adoption of Minutes
The Minutes of the Committee meeting on 19 October 2011 were tabled.

Ms Kilian said it was unfair to say that Ms L Adams (COPE) was “absent without apologies”. Ms Adams was alternate Member to the one Member allowed by COPE, and did not carry full responsibility.

Ms van Wyk said it was not necessary to record the alternate member at all, and said that it was possible that she may not have been aware that the permanent representative was not able to be present.

Mr Pretorius referred to paragraph stating that the study tour could not take place “because of bad weather”, and said that in fact the tour had been postponed because the Canadian Parliament would not be available at that time.

The minutes were adopted, with amendments.

The meeting was adjourned.

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