Address by Mr. Andries Nel, MP, Deputy Minister of Justice and Constitutional Development at the Black Management Forum Conference on “Systemic Corruption: A Real Threat to Constitutional Democracy, Job Creation & Economic Stability: How Does South Africa Fare?”, Gallagher Estates
5 Oct 2012
Programme Director and Manager Director of BMF, Mr Nicholas Maweni
The newly elected President of the BMF, Mr Bonang Mohale
The newly elected Deputy President of BMF, Ms Koko Khumalo
Members of Parliament
Honoured Moderators and Speakers
Ladies and Gentlemen
I would like to start off by convey the greetings and total support of the Minister of Justice and Constitutional Development, Minister Jeff Radebe to this important gathering.
Thank you very much for inviting the Ministry of Justice and Constitutional Development to be part fo this important conference on: “Systemic Corruption: A Real Threat to Constitutional Democracy, Job Creation & Economic Stability: How Does South Africa Fare?”
We thank you because government welcomes every opportunity further to build and strengthen a national consensus and broadest possible range of partnerships in the fight against crime and corruption.
We welcome every opportunity to advance a common understanding of the nature, causes, extent and effects of corruption on our society and the detrimental effects it has on constitutional democracy, job creation and economic stabilty.
In successive State of the Nation Addresses President Jacob Zuma has highlighted five national priorities. These are the creation of decent work and sustainable livelihoods, education, health, rural development and food security as well as the fight against crime and corruption.
These priorities are mutually dependent and reinforcing. Achieving these priorities requires of us to work together. It requires continuing popular participation in the processes of governance. It requires of the nation to act in partnership, mobilised around a clear vision of the kind of society we wish to become, each sector contributing to the realisation of the common good. It requires citizens to have the means to exercise their human rights, and for the checks and balances necessary in a law-governed society to exist. It requires that the democratic developmental state should have the organisational and technical capacity to realise its objectives.
The state institutions supporting constitutional democracy have an invaluable role to play in this regard.
President Zuma, speaking in his capacity as President of the ANC, delivering the statement of the National Executive Committee of the ANC on the occasion of the 98th anniversary of the ANC emphasised the fact that: "Corruption poses a serious threat to our struggle to build a caring society and it erodes the moral fabric of our society. It is a threat that must be fought both inside and outside the state."
He addressed this theme in his capacity as President of the Republic in his State of the Nation Address in 2009 when he said, "We have repeatedly stated our commitment to fight corruption in the public service. We will pay particular attention to combating corruption and fraud in procurement and tender processes, application for drivers’ licences, social grants, identity documents (IDs), and theft of police case dockets."
The importance of fighting corruption is highlighted in a Practice Note on Mainstreaming Anti-Corruption in Development released in December 2008 by the United Nations Development Programme, where it is argued that, "Regardless of the country context, evidence from across the globe confirms that corruption hurts the poor disproportionately and hinders economic development, reduces social services and diverts investment in infrastructure, institutions and social services.
Moreover, it fosters an anti-democratic environment characterised by uncertainty, unpredictability and declining moral values and disrespect for constitutional institutions and authority. Corruption, therefore, reflects a democracy, human rights and governance deficit that negatively impacts on poverty and human security."
In our context this means that it will be so much more difficult to achieve the goal of improved healthcare if there are corrupt staff and administrators in our hospitals and clinics who steal medicine and grant tenders to charlatans who fail to deliver or who bleed the scare resources of the state by overcharging for basic items through tenders that were awarded through corrupt means.
We will struggle to achieve the improved education that our nation needs if there are teachers and administrators who corrupt the process of purchasing stationery and textbooks and literally take bread out of the mouths of schools children by eating money intended for school feeding programmes.
We have established a number of mechanisms to fight corruption, maladministration and the inefficient use of public resources such as the Special Investigating Unit, anti-corruption hotlines, whistle blowing legisation, specialised units in the South African Police such as the Hawks. We must empower all citizens to make use of these mechanisms in addition to the Office of the Public Protector and other state institutions supporting constitutional democracy.
In demonstration of the commitment to deal with corruption, at international level, SA has acceded and ratified a number of international anti-corruption instruments which include the United Nations Convention against corruption, the SADC protocol against corruption, and the Organisation for Economic Co-operation and Development (OECD) Convention on combating bribery of foreign officials in international business transactions.
In pursuance to our commitment to good governance, and high standards of integrity and ethical conduct in the Public Service, government is implementig the Public Service Anti-Corruption Strategy, which includes:
- Management of Professional Ethics and Prohibition of corrupt individuals/businesses.
- A comprehensive legislative framework (e.g. Public Finance Management Act (PFMA)/Municipal Finance Management Act (MFMA), Protected Disclosure Act, Prevention and Detection of Corrupt Activities Act, etc).
- Institutional capacity development to fight corruption by implementing Minimum Anti-Corruption Capacity (MACC) requirements for departments, and
- Partnerships with stakeholders.
To deal with the scourge of corruption holistically, various institutions have been created to fight corruption both in the public and in the private sector. These include:
- An Inter-Ministerial Committee led by the Minister of Monitoring and Evaluation in The Presidency.
- Actions by the Auditor –General and the Public Protector.
- Department of Public Service and Administration – Anti Corruption UnitDirectorate Priority Crime Investigation (DPCI).
- Asset Forfeiture Unit (AFU).
- Multi-Agency Working Group - National Treasury, and the
- Justice, Crime and Prevention Security Cluster’s Anti-Corruption Task Team (ACTT).
Government has also been an active participant in the National Anti-corruption Forum (NACF), along with business and civil society and supports Cosatu’s Corruption Watch.I will return to the latter again later.
Corruption is a crime which has often, and appropriately, been referred to as a cancer. Appropriately so because the defining feature of cancer is that it turns health cells that are necessary for the effective functioning of the body into malignant entities that consume resources but undermine, and ultimately destroy the body as a whole. Cancer is often an insidious, silent killer that develops slowly and undetected until it is too late effectively to treat and eradicate.
Similarly, the challenge that we face in our fight against corruption is to ensure early detection, prompt and effective treatment. With proper systems reinforced by vigilance on the part of all our people, the cancer of corruption too can be beaten!
We recall the slogan used by freedom fighters in Latin America, "Un pueblo unido ja mas sera vencido", A people united will never by defeated. Let us unite.
Ladies and gentlemen,
It is for this reason that government supports initiatives such as Corruption Watch launched in January under the leadership of COSATU. It is because of our commitment towards combating corruption that the Minister of Justice, Minister Jeff Radebe participated in and delivered a strongly worded message of support at the lauch of Corruption Watch pledging our full support and cooperation with civil society in their contribution at combating corruption. For the same reason we are here today to share information to strengthen these partnerships and enhance our overall anti-corruption strategies.
At that launch of Corruption Watch in January, we shared information which I am confident is still relevant today. We indicated then that as government have taken progressive steps to combat corruption, particularly those aimed at hitting criminals where it hurts most: in the pocket. We reiterated our commitment to ensure that criminals must be denied the opportunity to benefit from ill-gotten wealth.
The achievements of the Asset Forfeiture Unit demonstrate clearly that economic crimes, and corruption in particular, can be combatted successfully within the Rule of Law. Indeed for the first time in the history of this country, the so called “top dogs” of crime are made to face justice and give account of their assets. It is therefore necessary re-highlight the achievements of the Asset Forfeiture Unit (AFU), with the recall of some of the important cases such as:
- The Gems case where the AFU achieved a settlement that involved over R60 million in excess interest charges being paid back to over 30 000 workers by a micro lender.
- The freezing of an estimated R1.5 billion of alleged proceeds of crime in the David Kingmatter.
- The Delport case, in which the AFU obtained a freezing and seizure order of R80 million and to date this is the largest value of assets ever seized in a single case within South Africa.
- The Boekhoud case where the AFU seized assets worth about R100 million, including a platinum refinery in the United Kingdom.
- In two of its most important matters to date, the AFU has also seized property worth more than R10 million from Cape Town attorneys Mohammed and Chohan who had allegedly defrauded the RAF and impoverished accident victims of their money.
- In the past 10 years, the AFU, working with a number of partners, has made a significant impact on crime and there has been a constant increase in the number and value of cases done. We can be proud that we are making true progress in the fight against corruption.
To date, the AFU has:
- Frozen assets to the value of more than R3.35 billion in more than 1 700 cases.
- Forfeited assets to the value of more than R950 million in more than 1 400 cases.
- Deposited more than R230 million into the Criminal Asset Recovery Account (CARA) enabling us to channel these illicit proceeds of crime into further corruption-fighting activities.
- Assisted victims of crime to the amount of R400 million.
- Where required we took criminals to court and we succeeded in clarifying the law by obtaining 243 judgements, including 6 judgments in the Constitutional Court and 23 in the Supreme Court of Appeal.
The Justice Crime Prevention and Security Cluster has furthermore included in its Delivery Agreement with the President (as contained in Outcome 3: All people in South Africa are and feel safe) various specific anti-corruption activities. Let me just highlight some of these:
- To ensure we address this scourge we are giving focussed attention to convicting at least 100 people with illicit assets of R5 million or more through specific interventions including the allocating of dedicated investigating and prosecuting personnel and using a team approach of project teams of investigators and prosecutors. In this regard, we can report that as at June 2012, cases of 66 people with illicit assets of R5m or more are being investigated, 28 are at pre-trial and 14 have progressed to trial stage.
- Close monitoring from the Cluster side on progress of all court related matters in this regard continues.
- Improving the vetting of officials focusing on those in the supply chain management.
- Fast tracking of case finalisation through expedited case flow management and the use where appropriate of dedicated courts on continuous rolls are focus areas, and
- Preservation and forfeiture of property orders to limit the access of suspects to proceeds of crime which are often used to delay trials by extensive litigation, are used whenever possible.
- Since the ACTT was set up in 2010, more than 392 suspects have been investigated with 183 persons appearing in court, and resulting in 9 convictions.
- In addition, the capacity of the Special Investigating Unit (SIU) grew from an initial 70 to more than 600 at present and they have acted on more than 100 proclamations since they started. In particular, the Unit has been moving decisively to focus on large-scale procurement and other irregularities across government, involving many billions of rand.
However, we today wish to indicate that in our view such initiatives are not enough and we will therefore continue with the fight against corruption until we have rooted it out of every facet of government, of our economy, of various civil society institutions and in the private sector.
While we quoted examples of significant statistics regarding very serious forms of corruption to prove our achievements, we need to also discourage the small forms of corruption which occur at lower levels of society, because it is also the small bribes regarding free drinks, lunches, teas, traffic fines, small presents and being paid small amounts for assisting in jumping the queue as which then grows into an insidious culture of impunity and high levels of corruption. Once there is an impression that corruption is acceptable, we would have lost the battle in a long war against this scourge. An African saying declares that even a baby mamba is a mamba!
Ladies and gentlemen,
These types of activities as well as the mistaken belief by some that expensive lifestyles can be sustained through the commission of crimes with impunity is simply unacceptable. Within the Justice Crime Prevention and Security Cluster all these activities are therefore focus areas for eradication. We cannot and we will not tolerate lawlessness. However, the battle in the this fight can only be won when the whole of society comes to the party. It is for this reason that we believe in cooperation as a basic thrust towards combating corruption.
I know for sure that it is easier to point fingers and play the blame game, but the reality is that much of the corruption that we are speaking about in government is not just misusing State resources by employees on an individual basis, but also the dispensing of procurement to undeserving businesses. As we often say, it takes at least two parties to commit corruption and often it comes from both the corrupt employees responsible for procurement and the corrupt business entities which tenders for business or the delivery of services on behalf of government, who jointly conspire to commit acts of corruption to the detriment of the poor.
That is why we must applaud the Gauteng Government for prioritising the internalisation of government work by for instance starting a campaign to hire engineers instead of procuring engineering work to third parties resulting often in a complex business relationship that leaves much room for corruption and inefficiency. Part of the corruption is also the awarding of procurement to undeserving entities for kickbacks.
This further escalates the cost of the given project as the undeserving business entity balloons the costs to cover firstly the kickbacks, secondly the hiring of the engineering company or service provider that actually does the job on behalf of the tender recipient and thirdly to ensure own lucrative profits for effectively acting as a middleman!
It is for this reason that we must ponder on what mechanisms we can put in place to ensure that while we endeavour to empower black businesses through the BEEE strategy, we must nonetheless ensure we do not short change the Fiscus, which by extension is short changing the tax payer as well as the public that are recipients of shoddy services such as in housing and road construction due to corruption. Another related corrupt act in this regard is that of fronting in terms of BEEE which is not only corrupt but also undermine our BEEE strategy and targets towards ensuring that our economy is reflective of our country’s demographics.
Ladies and gentlemen,
Corruption is an obstacle to democracy and the rule of law. We believe that by increasing transparency and eradicating corruption, we will optimise the use of the scarce resources of our country in achieving our developmental goals.
I would like to conclude with a further challenge: We need to prepare everyone in our society, but especially those who control the means of public communication, for what is bound to emerge from the successful fight against crime and corruption.
We need to make everyone understand that we should not be disheartened by the successes of the decisions that we have made, the policies that we have formulated, the laws that we have passed, the institutions that we have established. Certain decisions were made at the dawn of our democracy. It is time for these decisions to turn around and make us the society we want to be.
We do not become angry with the sea when it cleanses itself and we find filth on the beach. The sight and smell of filth on the beach might offend our senses. However, we must rejoice in the fact that the sea, through its slow but powerful rhythms, its ebb and flow, has the means, the checks and balances, to cleanse itself - sometimes even of the seemingly uncleanseable. We must take comfort in the fact that, whilst the filth lies rotting on the beach, we can swim confident in the knowledge that the water is clean.
I thank you!
Issued by: Department of Justice and Constitutional Development
5 Oct 2012
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