Traditional Courts Bill: Proposed withdrawal, Special Investigating Unit 2011 Strategic Plan & Budget

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Justice and Correctional Services

29 March 2011
Chairperson: Mr L Landers (ANC)
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Meeting Summary

The Committee agreed with a proposal from the ANC that the Minister of Justice should be asked to withdraw the Traditional Courts Bill from the National Assembly, and instead to introduce it, as a Section 76 Bill, in the National Council of Provinces, so that the NCOP could conduct public hearings in the provinces.

The Special Investigating Unit (SIU) presented its strategic plan for 2011 to the Committee. The SIU emphasised the need to work closely with other enforcement and investigative agencies. It had expanded significantly over the last five years, and had multi-disciplinary and specialist capabilities. It had broadened its funding base, with about half its funding coming from departments who instructed it to undertake investigations. The focus was shifting from large-scale fraud and corruption cases involving multiple instances, such as the social grants and housing subsidy matters, to procurement-related fraud and corruption in government. It now worked proactively to improve systems and processes to prevent corruption, including data mining, making different IT systems compatible, and improving South Africa’s position on the Transparency Corruption Index. It would participate in the goal of the Justice, Crime Prevention and Security Cluster to successfully convict 100 people who had accrued more than R5 million through illicit means. Its strategic objectives included increasing the impact of forensic services, achieving its own optimum form, improving on weaknesses and building cooperation, as well as its own capacity and funding. SIU was still using temporary contracts until it could fill its longer-term goals, but found short term contracts useful in achieving more flexibility and meeting different needs in different investigations.

The SIU outlined and described the roles of the Anti Corruption Task Team in the Justice Cluster, the Multi Agency Working Group on Procurement in the Finance Cluster, and the Special Anti Corruption Unit (WASPS) in the Department of Public Service and Administration. It then gave a performance overview, noting that declining figures reflected the change in focus and conclusion of some investigations. New indicators were suggested to National Treasury. Some of the key investigations, including the Tshwane and Ekurhuleni metropolitan municipalities, the South African Broadcasting Corporation, the Departments of Public Works, Arts and Culture and Police, were outlined.

SIU noted that one major challenge it faced was that the Public Finance Management Act (PFMA) gave Accounting Officers power to determine whether investigations would be undertaken, in which SIU had no say, and that SIU had no locus standi to pursue civil matters. These were being discussed in the National Treasury Group and amendments would be proposed by the Judicial Matters Amendment Bill. A new model was being proposed to National Treasury involving bail-outs where departments might not be able to pay for investigations, or claim lack of funding. The SIU then tabled a comparison of budget growth and projects income from 2001 to 2010, noting overall growth, with allocations expected to increase on average by 7.6% over the next three years, mostly due to the need to increase capacity.

Members commended the work of the SIU. They asked about Mr Hofmeyr’s position as head of the SIU and the Asset Forfeiture Unit, questioned if South Africa could successfully address fraud and corruption and asked about agreements for investigation with Eskom, details of the SAPS investigations, whether the ongoing SAPS Headquarters lease could be cancelled by the SIU, and the investigations into the municipalities. They also asked if the data mining posed the risk of invasion of privacy, whether the SIU could become the prime anti-corruption independent unit following the judgment of the Constitutional Court in the Glenister case, and called for clarity on the staff establishment and surplus. Members also enquired if the SIU had engaged with other portfolio committees and departments around housing testing and corruption in municipalities, and interrogated the Department of Public Works lease and targets. Members commented that corruption diverted money away from service delivery and asked if the numbers of potential cases and their effects on individuals could be quantified.

Meeting report

Traditional Courts Bill: ANC Proposal for withdrawal
Mr J Jeffery (ANC) voiced the Study Group’s concerns about the processing of the Traditional Courts Bill (the Bill). This was introduced in the last Parliament, public hearings were conducted, but the process was not completed, and a Report was adopted. The Bill was then revived in the current Parliament. The public participation process needed to be repeated. However, the Portfolio Committee was faced with a lot of new legislation, and some of the public input had already indicated that extensive hearings were needed in the provinces. The ANC therefore proposed that the Minister of Justice should be asked to withdraw this Bill, and reintroduce in the National Council of Provinces (NCOP), who could then conduct provincial hearings and process the Bill, with it coming to this Committee as the second house. This was not a matter that needed to be referred to the NA as the Minister had the power to withdraw the Bill.

Ms M Smuts (DA) noted that since the DA had first made this proposal, she would be delighted to support it.

The Committee agreed with the proposal.

Special Investigating Unit (SIU) Strategic Plan 2011 presentation
Mr Willie Hofmeyr, Head of Unit, Special Investigating Unit, noted that the Special Investigating Unit (SIU) functioned very much as a Commission of Enquiry, with current powers. It was separate from law enforcement agencies but worked closely with them. Its major functions were to investigate corruption and maladministration, not simply crime. The SIU Act gave it some powers, but there were some problems that he would elaborate later in his presentation. Each investigation was mandated by a specific proclamation from the President. The SIU’s powers included subpoena, search and seizure, interrogation under oath and it even could compel a person to give self-incriminating evidence, with the proviso that this evidence could then only be used in civil, but not criminal proceedings. The SIU had no powers to arrest or prosecute, but worked with the Hawks and the National Prosecuting Authority (NPA), and it also had no power to take disciplinary steps although it could assist departments to do so.

The SIU had expanded significantly over the last five years, growing from about 70 to about 600 staff. It had moved away from its original origins as having mostly law-enforcement detectives from the former Commercial Branch, to now having multi-disciplinary capabilities, with forensic investigators, lawyers and accountants, and had built specialist capacity on cyber-forensics and data analysis. One of its other innovations included broadening the funding base, since now about 50% of its budget was by way of allocation from National Treasury (NT) and the other 50% derived from departments who paid SIU to undertake investigations. The advantage for the partnership model was that SIU essentially competed with private forensic companies, at about 40% of their cost. This extra funding had enabled it to build considerable investigative capacity.

The SIU was dependent on close cooperation with other bodies and worked with the Accountant-General (responsible for compliance with the Public Finance Management Act), NT, South African Revenue Services (SARS) and the Financial Intelligence Centre (FIC), as well as with oversight bodies such as the Auditor-General (AG), Department of Public Service and Administration (DPSA) and the Public Service Commission. Its focus over the last five years had been large scale fraud and corruption, but through multiple small cases, like the social grants corruption, housing subsidies being given to public servants, and similar issues. Over the last two years, the focus had shifted to procurement-related fraud and corruption in government. SIU worked with departments to improve systems and processes to prevent corruption, with a far more proactive approach.

Mr Hofmeyr stressed that data mining, or data analytics, could be used proactively to find evidence of irregularities, and this was a potent tool doing comparison, across departments, of supplier database addresses or details. This enabled a more honed focus. Initially, the databases across government were not compatible but SIU had now written programmes to ensure that they did correlate in format.

Mr Hofmeyr outlined the vision, mission and values of the SIU, and noted that the strategic goals were to contribute to the reduction of corruption and the perceptions of corruption. It aimed to make this contribution part of the broader anti-corruption strategy of government. Its commitment to various outputs in the new delivery agreements was outlined. It was working to eradicate corruption, once it had understood the scale of the problem, and needed to create investor trust and willingness to invest in South Africa, by taking corruption-related action in a defined number of highly visible cases. The Justice, Crime Prevention and Security Cluster had a target, over the next three years, of successfully convicting 100 people who had accrued more than R5 million through illicit means. Mr Hofmeyr admitted that this was a huge challenge. It was also working to improving South Africa’s position in the Transparency Corruption Index (TI) from position 55 to position 40 over the next three years.

The SIU’s strategic objectives remained largely unchanged, as it aimed to increase the impact of forensic services in the public sector, achieve its optimum institutional form, improve on certain weaknesses and build cooperation with law enforcement partners and other stakeholders. This cooperation, a major focus over the past few years, had resulted in significant success. Internally focused objectives of building on capacity and funding would enable it to deliver on external objectives, and these included growing human resource capabilities, investing in technology, improving systems and processes, building an engaged, diverse and competent organisation and develop effective and accountable leadership.

Mr Hofmeyr noted that some government partners had cut their own expenditure in 2009/10, by not calling for investigations, and during this time the SIU had adopted a three to five-year strategic planning process. In 2010/11, SIU had become part of new government initiatives, and there was a significant increase in impact, workload and funding, and the focus of investigations shifted to procurement. The Logic Model tried to fit together the activities of individual departments to achieve a joint outcome, although until then the Public Finance Management Act (PFMA) had not encouraged inter-departmental work. Joint outcomes focused the Clusters more specifically in their work.

One of the large challenges facing the SIU was the need to build capacity to investigate corruption. It had grown from 67 to 600 staff over nine years, and the trainee investigator programmes were addressing employment equity challenges. There were some successes but more needed to be done. Over the last year, SIU had entered into innovative work with private investigators, at half of the full-time rate of the AG, and this would assist it until the new capacity drive met its longer term goals. Short-term contracts, because they did not require retrenchment pay, also helped to stretch the funding, although SIU retained its goal to build sustainable long-term capacity.

Three key initiatives reflected the shift in government focus. An Anti Corruption Task Team (ACTT) had been set up in the Justice Cluster, which included Hawks, SIU and NPA and Asset Forfeiture Unit personnel, supported by SARS, FIC and the Accountant-General. Large strategic and human resources were devoted to this Task Team. The Multi Agency Working Group on Procurement (MAWG) was set up by the Minister of Finance, in the Finance Cluster, to deal with irregularities in the procurement system, focusing on closing systems gaps and identifying irregularities. There were similar role players to the ACTT. The Special Anti Corruption Unit in DPSA (WASPS) focused on investigation and prosecution of serious disciplinary cases against senior public servants. SIU was supplying much of the capacity to do the work although WASPS would build own capacity.

The performance overview of the SIU was outlined (see slide 13). He noted that many of the figures showed a decline because many of the current indicators had been based upon the multiple small investigations, whereas it would in future devote more time to single, larger investigations, which should result in significant savings for government. Savings and prevention of future losses were dropping as more fraudulent social grants were cancelled, and this project would be phased out. Evidence prepared for criminal action would again drop as the numbers in the past had been linked to the social grants investigation, and the same comments also applied to the cancellation of driving licences and numbers of acknowledgment of debt signed.

SIU had, in discussions with NT, suggested new indicators. SIU aimed to make about 84 contributions to the completed investigations in the JCPS Cluster. The second target related to measuring the value of procurement matters where SIU found irregularities. In the housing sphere, the main focus would be on large contracts, and the Department of Transport was not renewing its investigations into illegal driving licences.

Mr Hofmeyr spoke of some of the key investigations (set out fully in slide 15). 18 proclamations were issued, of which 16 were new, and the social grants and housing were renewals. He noted two investigations at Tshwane and Ekurhuleni metropolitan municipalities. He then gave specific details on some of the investigations. In the SAPS matter, the SIU had supported the Public Protector (PP) into investigations into Head Office, but was focusing more on the serious irregularities in building 333 police stations. R330 million had been spent, but many of the stations were not built through a tender process, but merely on production of three quotes, not even for the same work, and other irregularities included lowest quotations not accepted, fronting, builders not submitting quotations, conflicts of interest, and payments exceeding budget.

In the Department of Public Works (DPW) about R35 million was paid to entities in which public works staff had undeclared business interest. This included a R374 million contract at the border post, where there might be recovery of about R46 million. There was one lease in Pretoria, where the State was paying R217 000 per month without relevant approvals being obtained, and this contract to date amounted to R7 million. There was a direct link between a contractor and DPW official.

The Department of Arts and Culture showed misuse of funding ring-fenced for the Soccer World Cup, R16 million not used for related projects and R26 million being used from earmarked budgets, as well as unauthorised expenditure.

The investigations by the AG into the South African Broadcasting Corporation (SABC) identified 20 employees who had received payments into their private businesses of R3. 4 million. The SIU had identified another 20 individuals whose payments to their other business interests exceeded R2.5 billion in that period. There were 8 dockets registered with the SAPS and five had been finalised for submission to the NPA.

In the Tshwane Metro matter, the SIU had identified 65 officials who had interests in companies doing business with the Metro, and were receiving payments as active vendors, with R185 million being paid from 2007 to 2010. Much of this was discovered through data mining. Irregularities included deviation from approvals, collusion between officials and service providers, deviations from tender specifications and payment for work not completed.  In Ekurhuleni Metro, the SIU was reviewing 10 waste management tenders, involving 19 contracts, exceeding R500 million in value. In one contract, payments for R37.8 million were made to service providers without delivery notes, and various irregularities were apparent in ICT contracts. Much disciplinary action had been taken.

The SIU had been working with the Department of Rural Development and Land Reform (DRDLR) to capture all the information in active files electronically, in order to safeguard it. In KwaZulu Natal (KZN) one of the charges related to a KZN businessman and three officials, including several farms falsely transferred.

The Department of Human Settlements was one of longest running investigations, where about half of the 10 000 projects funded showed problems. Some people had paid for defective, incomplete, or unbuilt houses. There were 20 cases with serious irregularities and those would be the first investigations done. However, when SIU wished to institute civil action to recover from contractors, especially for shoddy workmanship, this cost around R2 million for each investigation, because expensive private sector resources were needed to quantify the damage. The Minister of Finance, in his last Medium Term Budget Policy Statement, had spoken of a law easing the burden on the State to prove damages, by shifting the burden of proof or claiming double the contract amounts where there was corruption. More drastic measures needed to be taken to deter people. SIU realistically did not have the capacity to touch more than a small portion, because of the costs, so legislative reform was necessary.

Mr Hofmeyr outlined the challenges that the SIU faced in addressing corruption. One was the scheme of the PFMA giving Accounting Officers full power, which meant that this person also could decide who was to undertake the investigation or whether to take disciplinary or criminal action. The Prevention of Corruption Act made it an offence for a senior official not to report, yet often reports would lie without being acted upon. Some matters were under discussion in the National Treasury Group , as custodian of PFMA.

The SIU was considering, for itself, how it could be more sustainable and effective. SIU suggested that this Committee might wish to look at a model similar to the AG, where a department would have to pay for all investigations, and, where the department or entity might not have money, for NT to bail it out. However, lack of funding was often used as an excuse by a department who did not wish to be investigated.

The Judicial Matters Amendment Bill, to be introduced shortly, contained amendments to the SIU Act. The Special Tribunal that was established for litigation did not work, and the amendments were also intended to address the number of judgments that had questioned the locus standi of the SIU to undertake civil litigation, which had impacted on its ability to act in such matters to date.

The SIU’s current establishment was 668 funded posts, expected to grow to 706 in the next three years. It was not always possible to fill all posts with permanent staff, because 50% of its funding was changeable. That was the reason for using consultants, contract workers, and temporary staff. Although SIU was busy with an aggressive recruitment drive, the permanent posts had declined over the last three years.

Mr Hofmeyr tabled a comparison of budget growth and projects income from 2001 to 2010. He noted that overall growth in income from R21 million in 2011 to R320 million in 2010. He noted the increase, then decline in project funding, noting that SIU was vulnerable to dropped project funding. It had instituted savings over the past two years. He then tabled the financial information, showing the audited outcomes for 2007 to 2010, and the medium term estimates from 2011 to 2013. For 2011, the revenue was set to increase by 9.8% per annum, with an average increase over the Medium Term Expenditure Framework (MTEF) of 7.6%, which would largely be put to increased capacity. Expenditure was similarly projected to increase by an average of 7.6%, to R375.2 million by 2013, accounted for by increased personnel expenditure and increase of investigative capacity. Consultants had been used during 2008/09 to assist with the organisational redesign process.

Mr Hofmeyr summarised that the SIU had made considerable impact in the last two years. There was a massive increase in the demand to assist in addressing corruption in government and State institutions, although capacity to deal effectively with investigations remained a challenge. Partnerships with other government institutions, as described, had started to improve the coordination.

Mr S Swart (ACDP) commended the SIU’s work. He asked if there was any finality on Mr Hofmeyr’s own position in both the Asset Forfeiture Unit (AFU) and SIU.

Mr Hofmeyr responded that the Minister had agreed that, whilst there should at some stage be a proper process, there was no immediate need to address it.

Mr Swart wondered if South Africa was losing the battle against fraud and corruption, noting the huge scope of the 16 new proclamations (plus 2 that had been carried over), and also enquired how this Committee could assist.

Mr Hofmeyr agreed that corruption was a serious problem, but making that admission was already part of solving the problem. The fact that the Clusters were given targets showed a determination by government to deal with the matter, and to address South Africa’s slipping ranking in the TI index. The better the investigative capacity, the more would be uncovered, but this did not necessarily indicate that the country was becoming more corrupt. Many resources were being put to addressing corruption, the interaction with the Hawks was impressive, and he hoped that visible and ongoing progress would be made in the fight against corruption.

Mr Swart questioned the agreement with Eskom, and asked whether that related to investigations around conflict of interests or also included investigations into negligence around the shut-downs, and concerns around the ANC’s investment at Chancellor House. He also referred to the Public Protector’s report that former Minister Moosa had failed to control the conflict of interest when Medupi contracts were awarded to Hitachi.

Mr Hofmeyr explained that the SIU was asked by Eskom to look at internal issues, although it would also like SIU to look at entities outside Eskom. At the moment, the SIU had no formalised powers, but was undertaking some data mining, which had identified some serious conflicts of interest with undeclared businesses. He would not like to speculate on future instructions.

Mr Swart asked at what stage the SIU would be able to proceed with recovery of assets in relation to the South African Police Service (SAPS) Headquarters leases, and also asked whether the SIU would be able to stop the leases pending the final investigations by the Public Protector.

Mr Hofmeyr said that the Public Protector was still investigating the Durban leases, and he referred to his earlier comment that it was very difficult for the SIU to make interventions if the Accounting Officer was unwilling to allow these to happen. The Public Protector had asked National Treasury to continue its work on the leases. He was not sure whether money was being paid at this point.

Ms D Schafer (DA) asked under what circumstances the SIU could institute civil action to cancel the lease. It seemed that not enough was being done by the various entities.

Mr Hofmeyr said that the SIU would undertake civil litigation wherever possible, but where the Accounting Officer did not wish to authorise it, SIU was unable to proceed, as only the Accounting Officer had locus standi. It had requested amendment of the legislation to correct this situation and enable it to do the civil litigation, seeing that it had the capacity to do so. The Public Protector said that NT should take the necessary steps to persuade the Accounting Officer to undertake the investigations. The SIU was trying to find a solution within the context of the current wording of the PFMA.  

Ms M Smuts (DA) wondered if the same applied to Chief Executive Officers of other entities.

Ms Smuts noted the data mining exercises, and asked if these posed any risk of intrusion on privacy.

Mr Hofmeyr responded that although he did not have personal expertise on this, certain practical issues had been faced when the SIU was investigating the social grants. It had been able to approach private companies and ask that they allow a comparison of the social grant database against their own payroll, but this was a slow and individual process. SIU had subpoenaed some payrolls. Use of data mining could be invaluable where there were large fiscal implications. There was a need to look carefully at the issues, although he did not think that there was a need to protect anyone committing fraud in government.

Mr J Jeffery (ANC) added that the sub-committee’s work on the Protection of Personal Information Bill was at quite an advanced stage, and that other institutions such as the Financial Intelligence Centre (FIC) had commented. If SIU wished to look at the draft and make proposals from its side, this might assist.

Ms Smuts noted that the SIU was the only effective anti-corruption unit in South Africa, and although the Hawks were doing quite well, they dealt with priority crimes, not anti-corruption. The majority Constitutional Court judgment in the Glenister case had said that Parliament must create an independent unit that showed independence in appointment, tenure and removal procedures. Leaving aside the need to amend Chapter 6 of the Police Act, she wondered if the SIU could not be turned into the necessary unit. It would also be necessary to consider sections 205 and 206 of the Constitution. It was possible that Parliament could be involved in appointment processes.

Mr Hofmeyr said that it was not appropriate for him to make any input into the public debate around this, although no doubt his views would be sought by the Minister.

Mr Jeffrey said that the Constitutional Court judgment in the Glenister case, although not directly addressing the SIU, had also made some remarks that were pertinent to it.

Mr Jeffrey asked why SIU had not participated in the last budgetary review process under the Money Bills Amendment Procedure and Related Matters Act (MBAPRMA).

Mr Hofmeyr said that it was not invited.

Mr Jeffrey asked if the SIU was aware of the need to submit Annual Performance Plans and when this would be done.

Mr Hofmeyr noted that these were being prepared and would be submitted before due date.

Mr Jeffrey questioned the staffing figures presented. No institution ever said that it received sufficient budget, but SIU had received more than the Public Protector and South African Human Rights Commission. He asked if the funded posts were funded from the National Treasury allocations. He asked why the Estimates of National Expenditure figures showed totals different to those on the SIU slides.

Mr Hofmeyr responded that because SIU was raising some funding itself, it had ended up with quite a complex situation, where some of the staff were on contract. The split funding made recruitment more difficult, as SIU was not always able to secure the best possible staff on short-term contracts. Some staff had very unusual or special skills in one area - such as being able to track down people in the deepest rural areas for the social grants investigation – but may not have the types of skills required for other investigations. SIU was trying to convert temporary contracts into more permanent employment, but it must be remembered that the SIU had a core group, but also had to be able to grow or shrink its staff establishment according to its particular needs. The figures shown in the presentation related to operations only, so the figure of 439 did not include all staff, and excluded IT and administrative staff. He had purposely tried to present all operational figures on one page. The full staff establishment could be provided.

Mr Jeffrey said that he appreciated the problems that if the SIU was asked to investigate municipalities, they may not be able to afford the costs, and agreed it would be useful if NT could pay.

Mr Jeffrey asked for an explanation of the budgeted surplus of R13 million in the current financial year.

Mr Hofmeyr explained that the table in the presentation excluded capital expenditure, which was why there appeared to be a surplus. More detail on spending would be contained in the financial statements. He added that the Department of Transport had paid SIU R20 million in advance for its investigation into driving licences, and SIU had to hold, but not spend, this money. NT had given permission for a rollover of this amount. SIU often did roll over significant figures each year.

Mr Jeffrey wondered if the SIU had engaged with the Portfolio Committee on Cooperative Governance and Traditional Affairs on corruption, or with the Portfolio Committee and Department of Human Settlements about testing of housing.

Mr Hofmeyr said that the SIU had not approached the Portfolio Committee on Human Settlements, but had worked with the National Department of Cooperative Governance and Traditional Affairs (COGTA), who had referred all 23 municipalities in the North West to the SIU for investigation. The Tshwane investigations also originated from this Department. Wherever COGTA put administrators in place, it would approach SIU and would assist in getting funding for the investigations. He confirmed that the scale of the matters did pose a challenge.

Mr Jeffrey approved of the disclosure provisions, and commented that perhaps there needed to be some form of security clearance of contractors, to avoid a situation where they might be persuaded, for instance, to build a police station in such a way that it would be easy to get access to police dockets after completion of the building.

Mr Hofmeyr said that there was always a problem that people could be bribed.

Ms S Shope-Sithole (ANC) noted the figures given for corruption in the metros, particularly Ekurhuleni, where an ICT contract for R32 million was awarded to a company with which the Executive Director of the Municipality had a relationship, and was in fact subsequently employed by them. She asked what had happened to discipline this individual and to recover the money. She stressed that corruption diverted money away from service delivery, and Members of Parliament had to explain to their constituents why individuals had benefited but the communities’ position was worse.

Mr Hofmeyr said the SIU shared these concerns as there was no doubt that corruption impacted most severely on the poor, meaning that it needed to be attacked at the root, as well as after the event. The Tshwane investigation was still at the early stages, but Ekurhuleni matters were being investigated by SAPS and the Asset Forfeiture Unit, and the Anti Corruption Task Team would try to make recovery. It was often difficult to prove corruption beyond a reasonable doubt, for a criminal matter, and even when it was possible to prove this on the balance of probabilities in a civil action, a party to the transaction might say that it had delivered services of value, even if it had done so in a corrupt manner. The Courts had to date tended to be lenient and allow the fraudulent party to recover something, although a recent Supreme Court of Appeal judgment had taken a sterner view. The Minister of Finance’s suggestions were based upon legislation passed in America to address this type of problem. This also highlighted the need to look at deterrents.

Ms D Schafer (DA) wondered if the National Home Builders Registration Council and the Department of Human Settlements could not be involved in testing housing. Although she agreed with the principle of deterrents, she was not comfortable with the proposals, pointing out that contractors may not be prepared to undertake this work and that the Department should surely be checking on correct building methods.

Mr Hofmeyr said that the suggestion was to recover punitive damages where corruption could be proven in a civil matter, on the balance of probabilities. The reality was that although the Department of Human Settlements was supposed to certify building standards, it was difficult for government to employ real experts. There was no “quick fix” to the problem.

Ms Schafer did not see anything in the SIU budget emphasising government’s increased commitment to addressing corruption, and asked if SIU was discussing an increase in government funding with NT.

Mr Hofmeyr responded that all departments had needed to pare their demands in the wake of the recession.  He pointed out that there had been significant increases to SIU over the years, from R20 million to the current R180 million. There were discussions about further funding.

Mr Jeffrey pointed out that in fact the doubling of the SIU budget over a period of six years indicated that perhaps government was more concerned at funding corruption than human rights.

The Chairperson indicated that this was a correct approach, given the impact of corruption on human rights.

Ms Schafer asked how many cases the WASPS were currently handling.

Mr Hofmeyr said that this was a priority and that the Auditor-General had identified about 2 500 cases of public servants doing business with government, which was being pursued through MAWG, and DPSA was looking at the most serious. Some were already with the Courts and others would be processed soon.

Ms Schafer sought more details on the lease commitment of R217 000 per month, asking how many staff and properties were involved.

Mr Hofmeyr said this apparently related to one large and expensive house.

Ms Schafer asked under what circumstances government departments could appoint the SIU to do investigations, and pointed out that perhaps the Department of Justice and Constitutional Development (DOJ) needed its assistance.

Mr Hofmeyr responded that the Department of Justice had already asked the SIU for assistance on the courts problem. He explained that SIU could undertake some work without a proclamation. For instance, the Eskom proclamation was still to be made, but the SIU had already started with some issues that did not require law enforcement powers, such as in-house audits. In the SABC matter it did have a proclamation, and the Hawks were working closely with SIU on serious criminal matters.

Mr S Holomisa (ANC) noted the quotation by Kofi Annan at the start of the presentation document, and asked if the SIU had managed to assess the number of individuals who were possibly affected by the corruption in various departments.

Mr Hofmeyr responded that this was difficult to assess. A Victimisation Survey had indicated that about 1.5 million adults were approached every year and asked to pay a bribe, of whom about did pay. A wider problem was the significant amount of government budget that went to waste, for instance by arranging to sell something worth R0.5 million for R5 million. It was often very difficult to prove the bribe, especially when the parties arranged that although nothing would be paid immediately, a benefit would be arranged several years down the line. He noted that the KwaZulu Natal Department of Finance had taken the innovative approach of setting up a database of maximum prices that should be paid, to get around the problem that three exceptionally high quotes might be obtained.

Mr Holomisa noted that part of the SIU’s income depended upon departments calling for, and paying for investigations, and he wondered whether the SIU could meet its commitments if this source of revenue were to be reduced.

Mr Hofmeyr noted that the model requiring payment for SIU services was a good one, as money spent on training staff to undertaken investigations was increasing public service capacity and skills. However, when departments were faced with budget cuts they tried to cut their spending, which was why NT was asked to consider the possibility of “bailing out” entities who needed the investigation but could not afford to pay for it. This would assist the SIU in dealing with any financial instability, but SIU was already protecting itself by not employing all its staff on a permanent basis.

Mr Holomisa noted the strategic plan goals to “reduce” corruption, rather than “eliminate” it.

Mr Hofmeyr agreed that it would never be possible to eliminate corruption altogether but there was much that could be done to reduce it.

Mr Holomisa asked if there was any indication how many officials in the JCPS Cluster might be corrupt.

Mr Hofmeyr said that it was difficult to assess this. The Directors General were working on the baseline of what had been detected. A survey had been done on bribes, noting total numbers of bribes per annum, but the number of cases actually in the system was small, so the challenge was what could be put in place to address the issue, recognising that it was very difficult to fight crime if those responsible for enforcement could not be trusted.

Mr Holomisa questioned how the target of convicting 100 people over the next three years was set.

Mr Hofmeyr said that he was not sure if this was a scientifically-based calculation, but was prompted by the perception that the rich and powerful were getting away with corruption and that  bringing such people to book would not only assist in real terms but also alter the perceptions.

The Chairperson appreciated the input of the SIU and wished to put on record that it remained a centre of excellence. The anomalies pointed out should be addressed through debate in this Committee and elsewhere. He noted that the SIU would often recommend that charges be pursued, but sometimes this was not seen to happen. He hoped the proposed Judicial Matters Amendment Bill would address the problems of its locus standi and its ability to undertake civil litigation. The Committee was willing to support and assist wherever possible.

The meeting was adjourned.



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