South Africa

South Africa

Social Grants Crisis: Sassa fails to respond to ConCourt questions, CPS contract now deemed ‘interim’

With 17 days before the current CPS contract dies a natural death, Sassa’s legal teams have worked overtime in an attempt to mop up the colossal mess caused through months of lies, deceit and obfuscation by the agency and Minister Bathabile Dlamini. On Monday, Sassa missed its deadline to answer ConCourt's detailed questions. This renders the agency technically in contempt of the highest court of the land. By MARIANNE THAMM.

Instead, Sassa filed responding papers to an application by the Black Sash and Freedom Under Law. Sassa now admits a new contract with CPS is “not a foregone conclusion”, suggests that the ConCourt lacks the expertise to supervise the new deal on its own and that the public protector, the Auditor-General or an alternative individual or institution monitor new terms and implementation. The only good news is that the country is at least a step closer to some resolution.

All negotiations with CPS have been terminated and there is no new deal. At present the payout of social grants to some 17-million recipients come April 1 is in legal limbo.

This essentially wipes out several days of furious negotiations between Sassa and CPS earlier this month in which a two-year contract at a fixed price had been agreed to.

But it now appears that the new plan presented in a draft order to the Constitutional Court by Sassa late on Monday might offer much tighter oversight and control of any “interim” (rather than new) contract with Cash Paymaster Services.

On Friday, Sassa’s acting CEO, Wiseman Magasela, in an answering affidavit to Freedom Under Law’s application to intervene on behalf of the Black Sash and filed by Magasela on behalf of Minister of Social Development Bathabile Dlamini, revealed that a high-powered Ministerial Task Team had been appointed to “oversee” a response to Chief Justice Mogoeng Mogoeng’s directive to Sassa that the agency provide a detailed account of the social grants fiasco, providing names of officials, dates decisions were made and when Minister Dlamini was informed that Sassa would be unable to act as paymaster.

Judge Mogoeng’s directive to Sassa was issued on Wednesday, March 8 and it is perhaps a measure of just how seriously this matter is being taken at the 11th hour that a Ministerial Task Team was appointed the following day to deal with the crisis.

On Monday, Sassa missed its 16:00 deadline to respond to questions by the Chief Justice, rendering the agency technically in contempt of the highest court in the land. Sassa may still apply for a condonation to file late and it appears that the appointment of the Ministerial Task Team to oversee Sassa’s response might have resulted in the delay.

But come what may, Sassa will still have to respond to the Chief Justice’s directive to reveal all.

The Ministerial Task Team is chaired by Minister in the Presidency Jeff Radebe and consists of Ministers of Telecommunications and Postal Services, Siyabonga Cwele, Home Affairs, Malusi Gigaba, Finance, Pravin Gordhan, State Security David Mahlobo and Science and Technology Naledi Pandor.

Says Magasela: “At its first meeting on Thursday March 9, 2017 (which I attended) after considering input from amongst others, the Acting Chief State Law Adviser, the (Ministerial Task Team) decided that the current negotiations with CPS should be terminated and fresh negotiations should start afresh only if and when the National Treasury gave its prior approval for a deviation from the requirement that Sassa invite competitive bids as contemplated in paragraph 8.5 of the National Treasury Instruction 3 of 2016/2017.”

Magasela further revealed that steps would be taken “forthwith by Sassa to seek such approval and that the process is overseen by senior counsel (Adv Wim Trengove SC) to ensure the process is legally sound.”

Sassa’s legal team worked the entire weekend preparing the request “for deviation and approval by Adv Trengove” and which was submitted to the Ministerial Task Team on Sunday. Trengrove told the Ministerial Task Team that “it would be appropriate for the National Treasury to allow Sassa to deviate provided it contracts with CPS for no longer than the time it reasonably requires to appoint a new contractor by a competitive bidding process.”

Minister Dlamini has now directed the Sassa CEO to make this request to national Treasury.

Magasela’s affidavit highlights some of the chaos and pressure inside Sassa as a result of the clash between officials and Minister Dlamini in terms of Sassa’s legal requirements to file reports with the Constitutional Court with regard to progress on its plan to take the payment of grants in-house.

My personal knowledge of the history of this matter is unfortunately limited. My permanent appointment is as Deputy Director-General in the Department of Social Development (the Department) responsible for research and policy development. Approximately five weeks ago I was seconded as a special adviser to the first respondent (the Minister). On Wednesday evening, 8 March 2017 that secondment was terminated, and I was appointed as acting CEO of the third respondent (Sassa). The circumstances in which this occurred were that the current CEO, Mr Thokozani Magwaza, went on sick leave on about 27 February and is still absent on medical grounds. Ms Mzobe is currently CEO of the NDA was brought in to Sassa in the acting capacity in light of the absence of Mr Magwaza during this critical period. Ms Mzobe led Sassa until March 7, 2017 when she was unfortunately taken ill.”

On Monday, while Sassa did not respond to Chief Justice Moegeng’s directive, it did file its heads of argument in the matter brought by the Black Sash and Freedom Under Law (FUL). FUL has brought an application to intervene on behalf of the Black Sash which FUL will argue at Wednesday’s ConCourt hearing.

FUL is supporting the relief sought by the Black Sash that any contract between Sassa and CPS is overseen by the ConCourt and that Dlamini be ordered to regularly report to the court. FUL is also seeking that Sassa and CPS disclose all documentation relating to the interim contract and that CPS not be entitled to charge more than it currently does under the invalid 2012 contract. It is also seeking that any interim contract with CPS should be in place for no longer that it takes for a new tender to be advertised, adjudicated and awarded.

In Sassa’s heads of argument filed with the ConCourt on Monday the agency responded that it was not opposed to the relief sought by the Black Sash and FUL that the process be overseen by the court. But it added that it also sought that “the public protector and the Auditor-General, alternatively a person(s) directed by the court, jointly; monitor the terms and implementation of the interim contract which Sassa intends to negotiate with the sixth respondent (CPS); a competitive bidding process aimed at the appointment by Sassa of a new contractor or contractors for the payment of social grants; and any steps taken by Sassa enabling itself to administer and pay the grants in future.”

Sassa also suggested that the ConCourt might not be in a “good position” to act as administrator on its own as “not all of the facts and considerations relevant to concluding a contractual agreement on reasonable terms are presently before this court. In fact, very many of them are not.

What is more, the outcome of the contractual negotiations is not a foregone conclusion. The various permutations for any contract that may be concluded are polycentric in nature. The new negotiations with CPS, if authorised by the National Treasury, like the negotiations earlier this month, are likely to be very complex because the subject matter of any eventual agreement will depend on a wide range of variables and interactions between them and the parties’ respective constraints and needs”.

Sassa also suggested that “within 20 days of entering into any such ‘interim’ contract, Sassa, the Minister, CPS and National Treasury must file with the court a copy of the contract and any drafts thereof exchanged by the parties to the contract during the negotiations leading to the conclusion of the contract”.

Within 60 days CPS must also file with the court an audited statement of expenses incurred, the income received and the net profit under the completed “interim” contract. The agency suggests that it then obtain “an independent audited verification of the details provided by CPS… which audit verification is to be approved by National Treasury and filed by Sassa with the court within 60 days of the audited statement.”

CPS has to also permit the auditors appointed by Sassa “to have full and unfettered access to its financial information for this purpose”.

The draft also suggests that any “interim” contract should contain “adequate safeguards to ensure that personal data obtained in the payment process remains private and may not be used for any purpose other than for payment of grants or any other purpose sanctioned by the Minister of Social Development”.

Sassa is also asking that at the end of the contract all personal information be given to Sassa and be “removed from the possession of CPS, its parent company and all affiliate companies, except where such a company and beneficiary have a continuing relationship”.

So far so good.

What Sassa has opposed, however, is for the court to determine the time frame and the cost of the contract with CPS. This is beyond the court’s jurisdiction, argued Sassa, and should it become involved would be in breach of the separation of powers between the judiciary and the executive.

All that is left now, of course, is for National Treasury to approve the “interim” contract. The question remains, however, will any new emergency and “interim” contract pass legal muster, particularly as it has not formed part of any competitive bid process?

For this ongoing confusion we have Minister Dlamini and Sassa officials who misled the Constitutional Court and Parliament over a period of at least six months to thank. Between them they have created a shameful crisis that has played a dangerous game of Russian Roulette with the lives of 17-million vulnerable South Africans. On Tuesday Minister of Finance, Pravin Gordhan, will appear before Scopa. Get popcorn. DM

Photo: A South African woman carrying her baby rests against a fence with thousands of South Africans waiting in line outside Gugulethu Social Services office to register for a Social Relief of Distress Grant, Gugulethu, Cape Town, South Africa 28 January 2009. EPA/NIC BOTHMA


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