The outcome of the gamble that the government took to introduce relaxed emergency public procurement measures is affecting South Africa’s response to Covid-19. The very same healthcare sector and environment that should be improved to handle Covid-19 is fraught with corruption and malpractice in the procurement and supply of personal protective equipment (PPE). The new emergency Covid-19 procurement approach is doing more harm than good. This is the harm that Corruption Watch, in April, warned the National Treasury about.
Corruption Watch was concerned about the potential of looting and corruption under a procurement system that is an exception to the obligations in terms of section 217 of the Constitution. Section 217 requires state procurement to be fair, equitable, transparent, competitive and cost-effective.
“Given the rampant corruption that has characterised public procurement, procurement under the emergency instructions must be subject to tight scrutiny,” said Corruption Watch’s David Lewis. Speeding up the procurement processes created a fertile ground for corrupt opportunists.
The writing has always been on the wall that we are entering another phase of corruption alongside State Capture. For example, a report in the Mail & Guardian exposed the blanket scandal in KwaZulu-Natal.
The involvement of families of high-profile ANC members
Allegations abound of the abuse of power for private gain, and public loss resulting from suboptimal decisions in procurement choices or nefarious overspending on project implementation. The truth is that South Africa is in the belly of the beast of corruption, and our leaders are falling to corrupt activities like dominoes instead of being at the forefront of taming the beast. Government officials, politicians and high-ranking members of the African National Congress (ANC) are said to be wallowing in the benefits of the sea of Covid-19 corruption.
“One of the shameful achievements of the African National Congress in its 25 years of governing post-apartheid South Africa is that it’s living up to the political stereotype of what is wrong with post-colonial Africa – unethical and corrupt African leaders who exercise power through patronage,” as Mandisi Majavu wrote in The Conversation.
The allegations of Covid-19 corruption are mounting. A report last week in Daily Maverick alleged that “the Free State provincial treasury has awarded contracts worth R2.7-million to the sons of ANC secretary-general and former Free State premier Ace Magashule”. You cannot blame the public for being sceptical and suspicious of this contract.
These revelations come hot on the heels of President Cyril Ramaphosa’s spokesperson, Khusela Diko, having to take leave because of a suspicious PPE tender awarded to her husband, whose company has no track record of doing business in the health and medical sector.
There are also reports alleging that a barely six-month-old company of the daughter of former Gauteng premier and ANC NEC member Nomvula Mokonyane benefited from the Gauteng health department’s Covid-19 procurement contract “handouts” worth between R2.7-million and R3-million to supply soap to the department.
Monopolisation of Covid-19 procurement also hit home with Ramaphosa’s son Andile said to have “landed a R6-million contract to modify taxis in Gauteng to comply with Covid-19 regulations”. The list of questionable Covid-19 contracts goes on and on.
As usual, many of these allegations are met with those fingered declaring their innocence. The public cannot be blamed for believing that families and children of current and former government officials are always fortunate enough to win tenders.
How to tame the Covid-19 corruption beast?
Below are a few interventions I propose:
First, let there be no holy cows in the application of the law and justice.
This intervention has been much talked about by our public officials. For instance, it was reported by Daily Maverick in 2018 that Nhlanhla Nene, then reappointed finance minister, declared that there would be no holy cows in the fight against corruption.
The government has declared that combating corruption is a national priority, while acknowledging that “corruption in both the private and public sector has a detrimental effect on the government’s effort to deliver effective services to the people”.
There is one problem though: in law, we often talk of appreciation of the status of things and acting with such appreciation. Unfortunately, Covid-19 tender scandals have shown that the state and our leaders are failing to act in accordance with their appreciation of the ill of corruption in ensuring accountability and prosecution of those among their ranks.
To refer to the ANC spokesperson, Pule Mabe, answering questions about Ace Magashule’s sons’ Covid-19 contract – not that I believe him – “we won’t tolerate any looting of public resources”. Not believing him stems from taking the easy way out of challenging “anyone to go and lay charges if the matter is criminal”. The “no holy cows” approach to fighting corruption means that the government and leaders of political parties cannot cling to the comrades-in-arms mantra as an excuse not to abhor corruption.
Instead, they must send a clear and strong message against kleptocrats in their ranks. This entails supporting the law enforcement agencies in their investigations and allowing the National Prosecuting Authority (NPA) to conduct the prosecution of members of the political elite or their families and acquaintances.
But, again, not much can be written home about our law enforcement agencies, which are captured by politicians and have a fetish for low hanging fruit (an example is the Hawks jumping to investigate the Masondo and Gigaba stories, contrary to its real mandate of combating organised crime).
Second, implement punitive findings of inquiries and commissions to instil accountability and respect of the law against corruption.
South Africa has made frequent use of commissions and inquiries over the years, with the Zondo Commission being the latest. Testimony at the commission has pointed to corruption or corrupt practices, the undue flow of money and other resources out of the public purse, and abuse of power and influence. Still, the noted acts of impropriety in the government’s decision-making and by government officials have not jolted the government into cleaning its ranks of delinquent ministers and other public officials.
Instead, we often hear them being defended by conveniently resorting to legal principles such as “innocent until proven guilty in a court of law”. When they close ranks in defence of their buddies, the “no holy cows” war cry against corruption is deliberately forgotten.
Third, implement the country’s anti-corruption laws indiscriminately.
South Africa is not short of legal and regulatory frameworks to deal with corruption relating to the procurement of medical supplies and PPE. Since price gouging or price inflation in the provision of PPE may give rise to criminal and civil liability, use of this legislation will set a firm precedent for asset forfeiture orders against the corrupt.
The Prevention and Combating of Corruption Activities Act of 2004 contains clear provisions on how to deal with active and passive corruption. Nothing prevents the NPA from using this act to deal with cases of corruption and bribery, including fronting, kickbacks, and brown bags or under-the-table payments to government officials who manipulated the tendering process.
Further, under-the-table payments made to government and public officials who rigged Covid-19 procurement contracts attract tax evasion laws. South Africa’s organised crime and anti-corruption legislation imposes severe criminal and civil penalties on offenders. Yet, for some reason, there is always an excuse given to avoid enforcing the legislation against corrupt figures.
Fourth, reimagine our public procurement processes and measures.
A study by PwC on Identifying and Reducing Corruption in Public Procurement in the EU, prepared for the European Commission, noted what has been done across the EU to prevent corruption in public procurement. “[A]dministrative data on tenders, bidders, projects and contractors are collected and stored in a structured way, accessible for controls, investigations and analyses,” states the report.
Fifth, maintain transparency rules during public emergencies.
In light of section 217 of the Constitution, public procurement is generally presumptively fair and transparent. The reason is simple: public money is being spent and taxpayers have a right to know how their money is used, even during a Covid-19 emergency. Exemptions from transparency in public procurement during Covid-19, if maintained, should be properly managed. Public procurement transparency is a critical anti-corruption mechanism, even under normal circumstances.
Some countries have gone a mile further with regards to making both the bidding and procurement information publicly available. For example, Mexico – though itself bulging under the weight of Covid-19 corruption – has in place a disclosure of information system managed through the central procurement system called Compranet. Compranet is informed by the Mexican Law of Acquisitions, Leasing and Services of the Public Sector (Ley de Adquisiciones, Arrendamientos y Servicios del Sector Público, LAASSP), which makes the publication of procurement information on Compranet mandatory for federal institutions’ procurement. The information published on Compranet includes tender procedures (solicitation documents, minutes of the clarification meetings and the opening of tenders), contract awards history and formal complaints.
The latest reforms of Compranet include publishing information related “to subcontracting, modifying agreements, joint bid proposals and exceptions to open tenders”. These reforms are aimed at making more information available to stakeholders on public procurement processes to enable them to conduct audits to prevent corruption. The example made is that “information on subcontracting and joint bids may help competition authorities identify bidding patterns indicative of collusion and bid-rigging”.
To promote government accountability in public procurement, some Organisation for Economic Cooperation and Development (OECD) countries involve a range of stakeholders in the procurement process, “including anti-corruption offices, private sector organisations, end-users, civil society, the media and the general public”. Mexico, which is also a member of the OECD, put in place a system of “social witnesses for certain tender procedures”.
Finance Minister Tito Mboweni’s draft Public Procurement Bill, which was published for public comment, may be the starting point of this change to consider interventions such as citizen social witnesses in public procurement.
Sixth, clean the national and provincial tender boards of corruptible employees and officers.
Employees of tender boards are prone to corruption. To address this, some countries introduce pre-employment screening and in-employment screening of individuals involved in public procurement. Job rotation for these employees at the Tender Board is also another measure to minimise the pattern of corrupt activities.
Seventh, structure better the conflict of interest management (CIM) procedures and processes.
In its 2016 report, titled Preventing Corruption in Public Procurement, the OECD noted that corruption risks in public procurement are “exacerbated by the complexity of the process, the close interaction between public officials and businesses, and the multitude of stakeholders”. Thus, addressing vested interests and CIM in the procurement process is crucial. Following the Covid-19 corruption scandals, many in South Africa called for the review of CIM in public procurement. However, conflict-of-interest disclosures are not always worth the paper they are written on. These CIM forms are often weakly crafted, with no legal status, or status that attaches immediate legal consequences.
As Carlos Barsallo, president of the local chapter of Transparency International in Panama, said, “There was corruption before the pandemic and it continues now with no pause and no sense of remorse whatsoever.” DM