Beitbridge border fence irregularities: progress report with Minister

Public Accounts (SCOPA)

30 November 2021
Chairperson: Mr M Hlengwa (IFP)
Share this page:

Meeting Summary

Video

The Standing Committee on Public Accounts (SCOPA) convened in a virtual meeting for a progress report by the Department of Public Works and Infrastructure (DPWI) on the investigations into the Beitbridge border irregularities. While SCOPA appreciated the progress made by DPWI following the Committee recommendations, it was frustrated by the slow progress in consequence management.

DPWI explained that the State Attorney and counsel were instructed to finalise charges against all the officials during the first week of February 2021.The charges were served on all the officials. The hearing was held on 8 March 2021, where parties agreed to the hearing date. A pre-hearing meeting was held on 30 March 2021 between the employer and employee parties, and it was agreed that the bundle of documents be served on employee representatives by 6 April 2021. The hearing for the senior officials was scheduled for May 2021. However, it was postponed due to the failure of the legal representative of one of the officials to attend the hearing.

The Committee asked for the material steps taken to expedite getting the MoU signed as it seemed to be taking a while. Members were also concerned about the Department’s argument in the declaratory order.

DPWI said that the court is bound to declare a contract invalid if the facts presented are clear that indeed an irregular procurement process was followed. In this case, the court application dealt with the declaratory order that the contracts were invalid and for DPWI to recover the overpayment. The jurisprudence is that once the court makes a declaratory order, it is not automatic that the other party will be entitled to repayment. The court retains the discretion to order what is just and equitable. In most cases, even if the contract is illegal, the court may still grant a relief that requires one to honour the repayments.

SCOPA will meet with DPWI in the first term of 2022 about the conclusion of the disciplinary process.

Meeting report

Chairperson’s opening remarks
The Chairperson welcomed the Minister and DPWI delegation. The Beitbridge border matter needed to be brought to a conclusion as other issues need to be attended to and this had gone on for an elongated period. The Beitbridge matter is straightforward and the Committee knows exactly what happened, but consequence management needs to be enacted. The corruption that took place was visible for everybody to see, and it is now time to conclude the matter.

Minister’s opening remarks
Ms Patricia de Lille, Minister of Public Works and Infrastructure, said that it is now more than a year after the Committee’s visit to Beitbridge from 4 to 6 September 2020 and DPWI has submitted its monthly reports to SCOPA. Today they will provide further updates to the Committee, and some of them are good and some are not good, especially on consequence management, as things are not going as smoothly as they had hoped.

Beitbridge border fence irregularities: progress report
Mr Imtiaz Fazel, Acting Director-General: DPWI, presented on the progress in implementing the SCOPA recommendations following its oversight visit to the Beitbridge Border Post. The presentation detailed each of the SCOPA recommendations and the progress made by the Department.

1. The Memorandum of Understanding (MoU) is reviewed to clarify the roles and responsibilities of the Department of Defence (DoD), DPWI, and the Department of Home Affairs (DHA).
Mr Fazel reported that the updated MOU to clarify roles and responsibilities for the border-line environment was submitted to DOD on 13 August 2021. Inputs were received on 5 November 2021 from DOD, and DOD requested that other stakeholders be included in the MOU (that is Department of Agriculture – for foot and mouth disease). DOD also proposed that the document be converted to an Implementation Protocol agreement. The updated MOU/Protocol Agreement is currently with DPWI Legal Services for approval of the revised content.

2. Legal action must be taken against implicated companies, and processes to recover the money paid set in motion
Mr Fazel said that the Special Investigating Unit (SIU) launched an application on 23 September 2020 to freeze the service providers’ bank accounts. The Tribunal made an order by agreement that the service providers would not make any further claims for payment from the Department, the service providers would settle any proven claim and the SIU will by a pre-determined date institute proceedings to set aside the contract.

On 17 November 2020, the SIU instituted legal action against Caledon River Properties (Pty) Ltd t/a Magwa and Profteam CC, with the Special Tribunal under case number GP17/2020. The main relief sought in the application is a declaration of invalidity of the contract concluded between DPWI and the respondents. The application is opposed, and the matter has been enrolled to argue jurisdiction which was raised as a point in limine. The matter was heard on Tuesday 26 January 2021 in the Special Tribunal. The Tribunal on 25 February 2021 dismissed the respondent’s points in limine and the matter will proceed in the absence of any appeal. Summons for losses and/or damages suffered will be issued once the Special Tribunal declares the contract invalid.The contractors have approached the SIU and requested that the parties consider an out of court settlement. There have been no further developments on the latter. The SIU and respondents held a case management meeting on 3 May 2021 and agreed on the filing process for further pleadings. The trial was held on 4-8 October 2021 in the Special Tribunal. The parties are awaiting the outcome of the court hearing.

3. Consequence management recommendation
Two of the 13 implicated officials are employed in terms of section 12 and 12A of the Public Service Act 1994 and their disciplinary process is not being dealt with by the Department. On 9 September 2020, Minister De Lille wrote to the Presidency, informing of the findings and recommendations of the Beitbridge Border Fence investigation. The Presidency acknowledged the letter on the same day. Minister Mthembu wrote to the Director-General Adv Sam Vukela on 16 October 2020 informing him of supplementary charges of misconduct for the Beitbridge Border Fence will be added to his charge sheet. The disciplinary action against the Director-General is being managed by the Presidency. Minister de Lille wrote to the SCOPA Chairperson on 16 April 2021, requesting that the Acting Minister in the Presidency, Khumbudzo Ntshaveni, be called to update the Committee on progress in that regard.

Discussion
Ms B Van Minnen (DA) said that the MoU with DOD is urgent, as the fence is defective. What concerned her after the SCOPA visit was that the former Minister of Defence admitted to SCOPA that the SANDF was facilitating a certain amount of cross border movement, and that the soldiers were at times picking up people who come across the border for various commercial activities and then take them back. She asked for the material steps that have been taken to expedite getting the MoU signed because it seems to be taking a while. She wanted to know what has been agreed upon on SANDF securing the border. The details about the court case in Recommendation 3 are not clear. On the one hand there is an attempt to declare the contract invalid and the summons will be delayed until that happens, yet on the other hand there was a trial, and the finding has not yet been released. This does not make logical sense. She asked for a comprehensive report on what the situation is.

Minister de Lille replied that to finalise the MoU, DPWI have been attempting to set up a meeting with the new Minister of Defence, which has not been easy. She has personally called the new Minister to let her know that they must report to SCOPA about the progress. Unfortunately, she is still waiting on a response from the Minister. She added that the technical people in DOD and DPWI have come up with proposals and it is now just up to the Minister of Defence and herself to ratify those technical proposals from the two teams.

Mr Fazel said that the contracts have been declared invalid and what is being argued before the court is a fair settlement. They want to ensure that they recover every cent that they paid, and the other side is arguing that they are entitled to a fair profit. DPWI’s argument is that the profit cannot be validated based on an invalid contract. It is a DPWI will endeavor to conclude the hearings in February 2022 over a 10-day period. On DOD and DPWI roles, DPWI’s role is limited purely to the provision of infrastructure, which is why they approached the market for best practice defence solutions that include physical infrastructure,as well as sensors to monitor the movement of people. DOD has an exclusive responsibility for maintaining border security.

Ms N Mente (EFF) said that she is not comfortable with the type of argument that DPWI is pursuing in court, as they have already won the first argument that the contracts are invalid on the basis that both the service provider and officials engaged in fraudulent and criminal activities. She asked what DPWI will argue to ensure that it wins the case, as she saw no reason that DPWI should be in a battle for a fair and equitable settlement with criminals. She wanted to understand the frequency with which the Audit Committee is working because it has a finding that there are no irregularities or anything untoward in the existing contracts of the two service providers. In the Audit Committee’s report, it states DPWI visited the site and did not find anything material, which was a red flag. She asked if the Audit Committee collected information to make a comparison to the expenditure and if it was involved in any level of auditing that transaction. She highly doubts that they did not find any irregularity in the existing contracts.

Mr Fazel replied that in terms of the court argument, the declaration of invalidity by the court is in DPWI’s favor, as it gives it a platform to achieve a recovery or to argue that no payments could be made under the terms of the contract. It was argued that the contracts were invalid on the grounds that a proper procurement process was not followed. He agreed that those who profit from undue activities should not be allowed to retain any of the ill-gotten gains. This is what DPWI argued before the tribunal.

Mr Christopher Makgoba, Legal Advisor: DPWI, replied that the court is bound to declare a contract invalid if the facts presented are clear that indeed an irregular procurement process was followed. Therefore in this case, the application brought to court was for a declaratory order that the contracts were invalid and, secondly, DPWI wanted to recover the overpayment amount. That Magwa Construction and Profteam argued that it was entitled to some sort of payment. SIU and DPWI argued that the erected fence is valueless, which is why they required full repayment. The jurisprudence is that once the court makes a declaratory order, it is not automatic that the other party will not be entitled to any repayment, and the court retains a discretion to order what is just and equitable. In most cases, even if the contract is illegal, the court may still grant a relief that requires one to honour the repayments.

Mr Johnny Le Roux, SIU Chief Forensic Investigator, replied that in general there has to be a discretion by the court in terms of a just and equitable remedy. The SIU presented the facts of its findings and on the possible criminality of the invoice that was submitted. The SIU at this point must sit and wait for the tribunal to make its final decision and can only wait for the outcome because it is totally up to the discretion of the tribunal.

Ms Rendani Mashigoane, Director: Internal Audit: DPWI, replied that their detailed reviews were mainly on all the projects that Magwa and Profteam were engaged on and following up on what happened since the Beitbridge project was completed. The Internal Audit looked at the procurement process undertaken on the current projects currently run within the agreement, and those are the areas where the Internal Audit did not find any material irregularities. They found some housing-keeping matters that Supply Chain Management (SCM) needed to correct with their colleagues who are project managing the project sites where they are looking into cost, time, and quality, including physical verification. During the physical verification, Internal Audit noted that most of the work done was according to the contract that they signed with DPWI. There were areas that the project managers needed to conclude and analyze. Most of those are mainly about how DPWI is project managing construction projects across the whole department in terms of their standard operating procedures and how their contracts are laid out for contractors and consultants. Other matters include the termination process for defaulting contractors and how they need to address penalties as well as variations. DPWI needs to ensure that consequence management is done timely instead of waiting for contracts to lapse. In all the areas where they did physical verification, they did not find anything material or anything that would warrant non-compliance in the projects between DPWI and Magwa and Profteam.

Ms Mente said that she was not happy with the court process for a declaratory order and the argument that thieves should have a fair and equitable share. She was still uncomfortable.

The Chairperson said that he would imagine that the declaratory order is made in the unfortunate vacuum that consequence management has not been concluded. If the disciplinary process were done, the disciplinary findings can and should form part and parcel of the submissions to the tribunal to further expose the extent of the corruption that happened. In the absence of the cthose findings, DPWI is putting the tribunal in a very difficult position in that they either rule or they suspend deciding until that is done. The fact that Magwa and Profteam’s argument is that they "were approached" is the biggest admission of what fundamentally went wrong.

Ms M Siwisa (EFF) agreed with Ms Mente and the Chairperson and she was worried because in the Medium-Term Budget Policy Statement, the Minister of Finance said that there is a possibility of an upgrade to Beitbridge, yet there are officials whose disciplinary process has not been finalised. She asked for clarity on the relevance of the Council for the Built Environment (CBE) and Construction Industry Development Board (CIDB) doing their own investigation and how their outcomes will affect the SIU outcome as well as the actions taken by the National Prosecuting Authority (NPA).

Mr Fazel replied that what Members have raised are the same arguments that the SIU and DPWI have put forth before the Tribunal that DWPI cannot compensate a company on an invalid contract. The CBE and CIDB referrals are complementary referrals, as they hold the professionals to account by their professional bodies. For example, company directors will often be members of a professional councils, such as the Engineering Council, and those bodies will charge the directors with professional misconduct, meaning that they will receive an additional sanction from their professional bodies such as they may not practice in that profession for a certain period. It is a complementary referral that will lead to additional sanctions, but it will not affect the investigation by the SIU or the NPA.

Mr S Somyo (ANC) said that the country’s borders need urgent attention, and that attention will depend on how the Parliamentary Committees act in ensuring that whatever is being done at ministry level should remain of high quality and that a qualitative approach is a necessity for fulfillment of this. He appreciates that the Ministry has acted on the SCOPA recommendations that were proposed. He also was frustrated that consequence management action has been stagnant in DPWI because the success of government departments comes from ensuring the highest level of performance and ethical conduct from employees and service providers.

Minister de Lille said that after the request for information (RFI) closed, three successful bidders were identified, and it is now up to DOD to select the best option that DPWI has presented to DOD in line with the specifications required. Should DPWI receive that before the end of November, as this is a border fence of over 3000 kilometers, the intention is to register the border fence as a Strategic Infrastructure Project (SIP) in terms of the Infrastructure Development Act of 2014. Once the Presidential Infrastructure Coordinating Commission (PICC) has accepted it as a SIP, the project will be entitled to short-term procurement procedures in terms of Schedule 2 in the Infrastructure Development Act. Part of the RFI when DPWI tested the market was also to see how DPWI can use IT in terms of border control. There are financial constraints within the fiscus, but if the border fence project is gazetted as a SIP, DPWI through Infrastructure South Africa can go out to the market to look for funding for the project. DPWI should be able to provide a progress update on the security of the SA border to SCOPA next year.

Mr Fazel said that DPWI has conducted site clearance processes on at least half of  the 3000 kilometres of border land, which means that they have done the pre-feasibility on half and have put themselves in a position to provide infrastructure solutions.The site clearance project is a pre-clearance project looking at the land topology and the feasibility of constructing physical infrastructure on the borderline. DPWI has concluded the third year of that project and is able to provide that to DOD on all the high-risk areas of the land border between South Africa, Mozambique, Zimbabwe, Eswatini, as well as parts of Botswana.

On the consequence management delays, Mr Fazel said DPWI is desperate to hold the officials to account and will conclude the bid committee disciplinary hearings within the current financial year. In terms of the two senior officials, DPWI will fight tooth and nail in court to reinstate the disciplinary hearings. DPWI does not believe that the chairperson of the disciplinary committee acted correctly, as there was no court order that gave him the basis upon which to delay the hearings. DPWI will take this to the Labour Court to overturn that decision so they can hold the officials to account.

The Chairperson said that the Committee is satisfied with the progress made on several SCOPA recommendations. It is important DPWI note that its progress is delayed in certain areas and the Committee understands that most are interdepartmental, and require strategic cooperation with the relevant departments. The only area where there is no progress is consequence management and that is unacceptable. The ramifications of the absence of speedy and effective consequence management is that it hampers other items. There is also the funeral corruption that needs to be dealt with, amongst others. “We have to make headway because it is increasingly frustrating. The fact there is no progress gives the impression you are stalling deliberately on consequence management”. It falls squarely on the shoulders of the Acting DG to ensure that consequence management is done. He must do everything legally possible and necessary to bring the Beitbridge embarrassment to a consequence management conclusion. This must be concluded by February next year, and if it is not concluded, the Acting DG will have to tell the Committee why he must be allowed to continue with his job.

The issues here are very simple, and it is common cause that corruption took place at Beitbridge, we know exactly who was involved in it, and we know the amounts as well as the companies. It is non-negotiable that DPWI needs to conclude the matter. The matter of the special advisor must also be concluded, and the same condition applies. The Committee will deal with the matter of the DG with the Presidency next week. The Committee’s appetite for patience and tolerance on the most basic matters of public administration has flown right out the window. What we need now is a clear concrete plan on border security.

Minister’s concluding remarks
Minister de Lille said that she shares the frustration of the Committee about the delay in disciplinary matters. It has become clear that some senior managers in DPWI have perfected the art of avoiding disciplinary hearings.“They play us with the law, when hearings are scheduled, they say that they are sick, or the chairperson is sick”. DPWI now has the 10 days that have been set aside in February 2022, and she hopes that in that meeting the chairperson will proceed with or without the implicated senior managers.

The Minister appreciates the support from SCOPA and added that there are other issues that DPWI needs to report on. The Department of Public Service and Administration (DPSA) and its Ministry have established a special unit to assist departments with disciplinary hearings. She had requested the Acting DG to write to the Minister of Public Service and Administration to send that unit to help DPWI with their disciplinary hearings because for the past year and a half, DPWI has been trying, but those implicated have been playing the system. It is not always easy to get cooperation amongst departments, and DPWI wants to start the procurement of a proper border fence for the 3000 kilometres of fencing. They received a commitment from the Department of Defence that DOD will finalise the specifications before the end of the year.

The Chairperson said that SCOPA will meet with DPWI in late February / early March when the meeting will have to be a conclusion on the disciplinary process – even if the disciplinary hearing chairperson and the implicated senior managers must be in the SCOPA meeting to explain themselves.

The meeting was adjourned.

Documents

Download as PDF

You can download this page as a PDF using your browser's print functionality. Click on the "Print" button below and select the "PDF" option under destinations/printers.

See detailed instructions for your browser here.

Share this page: