Business Maverick


After the Bell: The ultimate futility of anti-corruption legislation

After the Bell: The ultimate futility of anti-corruption legislation
(Photo: Adobe Stock)

Even with the greatest legislation in the world, if you can’t investigate and successfully prosecute, passing legislation is an act of showmanship rather than commitment.

Some things would be funny if they weren’t depressing, and depressing if they weren’t funny. In the wake of the Zondo Commission’s findings about rampant corruption in government, there was a feeling — hard to know where it came from — that SOMETHING MUST BE DONE.

One of the things that really had to be done was that the government tender process needed to be substantially reformed, which was essentially the thrust of the four volumes of the commission’s findings.

So Treasury started working on something called the Public Procurement Bill, which was released for public comment earlier this year. It included a clause that automatically excluded public representatives and their families from the state procurement process. No longer would former president Jacob Zuma be able to appoint ministers who would appoint the playthings of the Guptas to positions where they could sign multibillion-rand contracts that benefitted, say, his son Duduzane Zuma. The dark days of State Capture would henceforth be decisively over.

The Bill wound its way through the tortuous parliamentary process and finally, on Friday, the final, or near-final version, was presented to the parliamentary finance committee. And … surprise! The clause that automatically excluded the family members of public representatives from state tenders was scrapped, at least in broad terms.

This came in the same week that Ricardo Hausmann issued his thoughtful paper about some of the causes of South Africa lagging behind its counterparts, which included preferential procurement and cadre deployment.

The section of the Bill that automatically excludes public representatives from the state procurement process has survived, but when you think about it, this is not such a big deal. If you are an MP, you already have to worry about the registration of members’ interests. Politicians are not stupid enough to sign the tenders themselves. Sorry, let me amend that. Most politicians are not stupid enough to sign the tenders themselves.

US Senator George Santos, for example, apparently used campaign funds to buy lingerie, Botox injections and OnlyFans subscriptions. Well, at least it wasn’t public funds, but there are hundreds of other examples.

In most cases, however, politicians get someone in their families to sign the doccies. Take Deputy President Paul Mashatile. He lives in a R24-million house in the Waterfall Country Estate in Midrand, Johannesburg. The house was built by a company with loans granted by the Gauteng Partnership Fund over a period that overlapped with Mashatile’s terms as human settlements MEC.

But of course, he wasn’t the loan applicant — his son Thabiso and his son-in-law Nceba Nonkwelo were. They were going to build student accommodation. They didn’t. A law firm, Gildenhuys Malatji Attorneys, said because of outstanding documents it was unable “at this stage to make conclusive findings whether all applicable policies, procedures and other laws and regulations were followed in approving Nonkwelo Investments as a participant to the EEPF [Entrepreneur Empowerment Property Fund] programme”.

Even if they had followed the letter of the law, Mashatile himself would not be on the hook, although his family might be. He just lived in the house. That’s okay then.

So why did Treasury scrap the clause that excludes family members of public representatives from state tenders? In its document presented to Parliament, it argued that this section “has far-reaching implications and may be difficult to monitor or identify in many instances. However, some submissions supported this provision.” So, it wasn’t scrapped entirely, but it was watered down and then evaporated.

The problem, Treasury said, is that there is a constitutional provision that allows people to perform their chosen profession unhindered. To me, this is just nonsense. There are hundreds of regulations that bar people from performing their chosen profession in specific circumstances where the public may be at risk. Doctors cannot doctor without being qualified, etc.

As it happens, this is just the start of the problems with this Bill. Stellenbosch University Professor of Public Law Geo Quinot says these problems include overlaps with other legislation, different approaches in different provinces and the absence of whistle-blowing arrangements.

The worst problem is that Treasury has simply cut and pasted the regulations cited in the Preferential Procurement Policy Framework Act and the 2017 Preferential Procurement Regulations into this legislation. “And it is no secret that those mechanisms have not worked — in fact, their failure is a huge driver of the current reforms,” Quinot says.

The grand takeaway here is that, in the end, honesty cannot be forced into place with a legislative sledgehammer. That’s why there is a distinction between rules and principles: rules are prescriptive; principles form the basis of the rules. People are either going to be honest or they are not going to be honest.

Even with the greatest legislation in the world, if you can’t investigate and successfully prosecute, passing legislation is an act of showmanship rather than commitment. Piles of legislation are not going to make any difference unless the politics change to ensure politicians know they will be booted if they are found out.

That’s just how things work — or don’t. DM


Comments - Please in order to comment.


    The main substantive issue in public procurement is price.
    If the price is fair, it shouldn’t really matter who the supplier is – and it is relatively easy to determine and monitor what constitutes a fair price.

    • D'Esprit Dan says:

      I would add quality and delivery into that, or you’re just encouraging supply of the cheapest, nastiest rubbish into the procurement chain. And I think we already have that, just with massively inflated margins.

    • Michele Rivarola says:

      Michael price alone cannot be the determining factor for public sector spending in SA more so as we emerge from decades long of purposeful exclusion. The problem with the current legislation is its enforcement and beyond that its application. I was involved in some of the discussions about the PPB with Prof Quinot and there more areas of consensus with the participants (from private and public sector alike) than discord, and universal agreement that a decisive hand is required to tackle procurement corruption. There were many proposals for improvements put forward to the PPB but not many seem to have been implemented in its current format. S217 (3) provides for redress however redress must be affordable and additionally cannot be exclusionary as some seek to do. The problems in procurement have not been so much with pricing but with actual delivery where the price paid did not match the product delivered and many times where someone was being paid for something they did not deliver at all. These are people problems created and enabled by poorly drafted legislation, the lack of consequence management and enforcement. At the end of the day the more the PPB will seek to exclude the more it will face legal challenge and be stalled which is not what SA needs.

  • Carsten Rasch says:

    The red tape involved with getting government business is hugely involved, a rat’s nest of bureaucracy designed, it appears, to keep everyone but the cadres out. Honesty & integrity is not something the ANC’s cup runneth over with. The solution, if it’s really what Treasury wants, is obvious – blockchain.

  • D'Esprit Dan says:

    Tim, the opening line about legislation being showmanship, rather than commitment is spot on. Every year, more and more red tape is introduced into every sphere of our lives, ostensibly to catch the crooks. It doesn’t work, because criminals don’t obey the law! The most obvious example is probably the birth certificates for kids travelling into or out of SA to combat child smuggling. Do people smugglers actually comply with any documentary requirements? Seriously? No. They smuggle – so the tourism industry took a battering so that a useless Minister who didn’t have the backbone to demand that Home Affairs and the Police and Justice clean up their act, could look good in public. It didn’t work.

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