Special Investigating Unit 2014 Strategic Plan and budget: Committee Researcher introduction & SIU briefing

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Justice and Correctional Services

10 July 2014
Chairperson: Dr M Motshekga (ANC)
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Meeting Summary

The Committee Researcher briefed the Committee on the legislative mandate of the Special Investigating Unit (SIU), which investigated maladministration and corruption in state institutions, including the 2012 amendments that had led to a revision of the Strategic Plan and budget, since it was now empowered to charge departments for its investigations, using a model similar to that of the Auditor-General, could initiate court proceedings for recovery of money or refer matters to the relevant bodies for prosecution, make recommendations to government departments on disciplinary action needed, and could second other staff. Its strategic plans were in line with the President’s State of the Nation emphasis and the National Development Plan. There was a need for it to have some flexibility in employment numbers, because it could not make accurate predictions on workflow, being dependent on Presidential Proclamations. The new Head of the SIU, appointed after the position had been vacant for 21 months, had emphasised the need to transform the SIU, both to meet its new mandate, but also to improve turnaround times on investigations and reporting mechanisms. Quality of forensic investigations, and development of strategic partnerships, were key focus areas, and it was now investigating larger and more systemic instances of corruption, rather than the disparate and relatively small matters that it had worked on in the past. Although its budget was channelled through the Department of Justice, it reported to the Minister. In this year, the budget reflected its dual funding, with R296 million from a baseline grant and the rest from revenue-generating activities. Challenges were outlined as the filling of vacancies, improvements needed to its in-house capacity to deal with litigation, the need to hire in specialist skills, revenue collection, establishment of Special Tribunals, and reduction in turnaround times.

The Special Investigating Unit also summarised the content and impact of the legislative amendments, and detailed how the SIU went about its investigations and work when a Proclamation was issued. The SIU, instead of merely reporting to the President on anti-corruption, specifically pursued remedies for corrupt activities. The distinction between corruption and maladministration was stressed. The Head of the SIU amplified on the new funding model, but stressed that SIU still sought cooperation from departments and entered into terms of engagement, to try to minimise any disputes on fulfilment of the mandate. The SIU was trying to drastically shorten its completion times, to six months from the Proclamation being issued, and it was also noted that the augmentation of its powers allowed for more effective steps to be taken to prevent the continuation of corruption at an earlier stage. Age of evidence was also relevant to the success of the investigations. It was currently busy with 46 matters, and eight new Proclamations were made in the last six months. There had been nine applications for new proclamations lodged with the Department of Justice and Correctional Services. The targets and budget allocations were explained in more detail. The increase in expenditure was being driven by the planned re-establishment of Special Tribunals, in line with the provisions in the Act, although the form that these would take was not yet finalised.  Employee costs had to increase to boost forensic and legal skills, in particular. At the moment, SIU was using four-month fixed term contracts of practitioners to get the necessary skills, but would have to acquire specialist skills for itself in other areas also, like quantity surveying, over time. It was complying with labour relations at all times.

Member asked for clarity on the approach to investigations and whether SIU would act prior to the proclamations being issued. They were interested in hearing why SIU found it useful to run criminal and civil proceedings concurrently. A large part of the discussion was devoted to trying to get information on the SIU’s report on Nkandla; whilst the SIU conceded that there were delays, which were in part due to the SIU only managing to get access to assess the premises on the previous Thursday, the DA asked specifically which parties had not cooperated, what their  relationship was to the Department of Public Works (DPW), what work they performed, what measures had been taken by SIU to secure their timeous cooperation, and whether SIU envisaged any problems with submitting a report to the President, who may himself be implicated. They asked whether the body had approached the President to make proclamations itself. When the questions were not answered specifically, the Chairperson ruled that they were not to be answered at this meeting, since the meeting had been called to deal with the budget of the SIU, but that he was prepared to allow a further meeting to explore the points. The DA recorded its dissatisfaction with the ruling, and asked for it to be reduced to writing. The DA said it would be completely incorrect, and a neglect of its function, for Parliament to support an appropriation process where it had been unable to ask thorough questions about where the money was going. DA Members stressed that in no way were their questions intending to impugn the independence of the Unit or its Head. EFF Members asked if the SIU was not inherently in conflict by being given a mandate by the executive and having to investigate the executive, and wondered if this hampered its ability to pursue matters, which led to questions on possible overlaps of mandate.  Further questions related to Parliament’s access to reports of the SIU, whether Parliament could help it follow up on recommendations, the delays in setting up Special Tribunals, and why its targets seemed to be low in relation to the extent of the problem and cost of corruption to the country. Members and the SIU were in agreement that, whilst deterrence was important, the focus should lie on getting money that had been stolen returned to the fiscus. This led to whether there could be recovery on collusion in the construction industry. Members discussed the need for more skills, whether SIU should not take in more interns, why it was not using the Justice College for training, its gender balance and use of outside experts, with some Members accepting the need for flexibility but others asserting that it should be focusing on building in-house skills. They asked how many cases had been referred for prosecution and been prosecuted, whether departments were relying upon exemptions from payment for SIU services, and cooperation with other bodies.

Meeting report

Committee Researcher analysis on Special Investigating Unit(SIU) strategic plan and budget
Ms Gillian Nesbitt, Committee Researcher, provided a brief overview of the Special Investigating Unit (SIU) strategic plan and budget. She noted that the President had expressed support for anti-corruption agencies, in the latest State of the Nation Address (SONA). This was echoing the emphasis placed on that by the National Development Plan (NDP), which spoke to building a resilient anti-corruption unit, through a multiplicity of anti-corruption agencies. The NDP also warned of overlapping mandates, which should potentially be reviewed.

The Special Investigating Unit (SIU or the Unit) was an independent statutory body, whose mandate was derived from the SIU Act 74 of 1997, which was recently amended. In terms of this Act the President issued proclamations which gave the SIU its legal standing to investigate, and determined the scope of the investigation. The SIU investigated maladministration and corruption in state institutions.

The SIU's 2012 Annual Report listed its major activities as including investigation into non-compliance with the Public Finance Management Act (PFMA) and tender process irregularities. The SIU however did not get involved in criminal proceedings, it merely identified criminal behaviour and referred it to the South African Police Service and the National Prosecuting Authority. If assets needed to be recovered then it would use the Asset Forfeiture Unit anti-corruption task team. It also made recommendations to the various departments on disciplinary measures or the cancellation of contracts.

Ms Nesbitt indicated that when the SIU last briefed the Committee, it had said that it had 25 active proclamations, but currently it was dealing with 46 proclamations. This posed a challenge because it could not control its work flow, creating human resources problems, which used to be dealt with through contracting independent forensic analysts. She said that perhaps where the documentation spoke of flexibility in employment numbers, this was what was being referred to.

Amendments to founding legislation had resulted in the SIU becoming a fully-blown investigation unit, with the power to pursue its own cases in court. The Judicial Matters Amendment Act 11 of 2012 had brought about three key changes. Firstly, the SIU was now empowered to launch civil litigation in courts and special tribunals, in its own name or on behalf of other organs of state. Secondly, it was formally empowered to charge for its services, leading to it operating on a dual funding model. Thirdly, it was now empowered to second staff from other organs of state to augment its investigative capacity.

Adv Soni was the new Head of the SIU, who was appointed in 1 October 2013. Prior to this, only an Acting Head had been in place, for 21 months. This had an impact on the strategic direction of the Unit. When Adv Soni came to give a presentation to the Committee after his appointment, he conceded that the SIU needed to transform radically, not only in light of the legislative amendments and it needed to improve turnaround times on investigations as well as its reporting mechanisms, so that it could justify the large amounts of money dedicated to the Unit. This had led to a revised Strategic Plan for 2015-2019, and Annual Performance Plan 2014/15.

These plans now noted that performance was driven by two key objectives, underpinned by new indicators of quality forensic investigations, civil litigation, and the development of strategic partnerships. She pointed, in particular, to a new target for 66% completion of investigations initiated through new proclamations in the financial year, and a target of 20 litigation matters being completed for 2014/15.

Ms Nesbitt also stressed that the types of investigations on which the SIU was focusing had moved from disparate and relatively small matters to more systemic issues around contracting and procurement discrepancies. The Auditor-General (AG) had previously expressed concerns that the SIU was not working on S-M-A-R-T or measurable indicators, using predictive statements such as “The Unit will save Rx”.  “Re-engineering” of the SIU was also spoken of in the documents, but she noted that this was not clearly explained – it could refer to something like the planned centralisation of operations in Pretoria.

Ms Nesbitt noted, in regard to the budget, that the SIU falls under Programme 5 (Auxiliary and Other Services) of Budget Vote 24 (the Department of Justice, Constitutional Development) but it did account independently, so that the Department acted merely as a conduit for the allocation.

The SIU has a dual-funding model. For the 2014 year, the total budget was R510 million, with R296.8 million expected from a baseline grant, and the rest from revenue-generating activities. The SIU consisted of two programmes: Administrations and Investigations (the latter taking 72% of its total budget). The SIU had indicated that it had had issues around filling vacancies, particularly with many members of senior management resigning. It had also spoken to the need to improve its own in-house capacity to deal with litigation, as well as investigations, for example by hiring cyber-forensic skills and quantity surveyors.

The main challenges included the ability of the SIU to collect revenue, especially with an exemption being legislated for. There was also a need to decrease the turnaround times for investigations in order to meet its new targets. With the amendments to empowering legislation the SIU was now able to litigate matters, but it was also able to establish Special Tribunals, although the documents indicated that as yet, this had not been used, despite it being a potential time-saver, avoiding formal courts. The SIU had received an unqualified audit from the Auditor General but there were certain findings expressed by the AG. The SIU had responded to these and said that it planned to work to getting a clean audit in the medium term.

The Chairperson wanted to stress that the media had an important role to play in the work of the Committee, because the media informed the public of the operations and deliberations of this Committee. However, that gave it the responsibility of ensuring that its reports were accurate. He had been concerned about reports in the media that this Committee was trying to "clip the wings of the Public Protector". This was not the case, and he furthermore wanted to stress that this could not be done by this Committee; power vested in the National Assembly. He ended by saying that the Members of the Committee would be available and willing to double-check facts or statements, and invited the media to rather approach them to ensure accuracy.

Special Investigating Unit 2014 Budget and Delivery Plans: SIU briefing
Adv Vasantrai Soni, Head: Special Investigating Unit, thanked the Committee for moving the date of the meeting. He indicated that the Strategic Plan for 2015-19 and the Annual Performance Plan 2014/15 (APP) had been submitted to the Committee, and his presentation today was a summary.

Adv Soni said that when he assumed duties in October 2013, the SIU was functioning on the premise that its primary function was to function as an investigating unit tasked with compiling reports for the Presidency. However, in light of the legislative amendments, it would then need to re-direct itself. He explained that in the past, the President would issue a proclamation, the SIU would investigate, and a report would be compiled detailing the recommendations from matters that the SIU had identified, for submission to the President. After the amendments, the SIU had five operational activities to complete, once a proclamation was issued. When the SIU received information on delinquent employees in government, it would inform the relevant department and recommend disciplinary action where appropriate. If the investigations revealed evidence indicative of criminal behaviour, the SIU briefed the National Prosecuting Authority (NPA). Where the SIU was of the opinion that civil action was appropriate, the SIU itself may bring an action in the High Court, either to interdict malpractices or for the recovery of funds. Lastly, when these other activities hade been completed, the SIU would report to the President. He stressed that the role of the SIU had thus changed; previously, its major contribution to anti-corruption took the form of its reports to the President, whereas now its contribution included pursuing a remedy for those corrupt activities and achieving tangible results of better governance.

Adv Soni said that the vision and mission of the SIU were indicated in the Strategic Plan and APP. He summarised that they stated that SIU must provide timely professional forensic investigations into maladministration and malpractice, in order to protect the public interest. SIU was to use its forensic investigations and litigation skills in the war on corruption, by conducting forensic investigations into state institutions and seeking positive results through litigation, criminal prosecutions and disciplinary hearings. All of the above aimed to uncover and resolve maladministration and corruption.

Adv Soni wanted to clarify the difference between corruption and maladministration. Corruption entailed the exchange of a reward for the performance of a corrupt activity, whereas maladministration was neglecting to maintain proper administration practices in terms of the relevant legislation such as the PFMA.

Adv Soni also emphasised that the changes to the operational model of the SIU by the amendment of its empowering legislation would aid the achievement of its new objectives by enabling it to act proactively. A particularly important change was the ability of SIU to charge other state departments for services rendered, modelled on the Auditor-General’s arrangements. Previously, it had had to conclude service level agreements in order to justify payment for its services, based on the attainment of agreed outcomes, and this had the risk of compromising investigations because the entity being investigated could essentially dictate the extent of the investigation. Again, he stressed that this new model was similar to the functioning of institutions such as the Auditor-General, which charged the institution upon completion of the audit on it. He said that although essentially Parliament, through the amendment, had enabled the SIU to engage in investigations without active cooperation from departments, it must be remembered that cooperation was still enormously useful and s the SIU would conclude a “terms of engagement” document, detailing the steps that the SIU would take and the timeframe for the investigations. He mentioned this because of the large Debtors Book still maintained by the Unit, and said that there were disputes around the attainment of past service level outcomes, on the basis that the President had sole title to the reports produced.

Adv Soni focused on other strategic objectives. The SIU would attempt to ensure that the period of investigation was drastically shortened, through the exploitation of its new powers. The Unit had set itself an outside limit for completion of investigations, at six months from issuing of the Proclamation. The augmentation of the Unit's powers allowed the SIU to be more effective, because in the past the main focus lay on reporting, and there was space and opportunity for the corrupt activities to continue because of the time lag between investigations, the submission of the final report to the President, and actions taken to address the problem. The more proactive approach would deal with this problem. In addition, the amendment allowed the SIU to have its pronouncements of corrupt activities ratified, at its own instance, by a court of law or tribunal that would then provide the public with actual redress, such as recovery of amounts from, or removal from office of corrupt government officials This was far more potent than naming such officials and conduct in a report to the President.

Adv Soni turned to the work that the SIU was currently engaged in. There were 46 active proclamations, some of which dated back to past years, and eight new proclamations had been issued in the last six months, which was in line with the average for each of the past five years. The backlog in proclamations posed a problem for the SIU, because of the age of the evidence which was relevant to these investigations. There were also nine applications for new proclamations, lodged with the Department of Justice and Correctional Services.

Adv Soni explained the process for applying for a proclamation. When a state department had conducted an internal investigation and felt that a forensic investigation was warranted, the SIU would help motivate the issuing of a proclamation with the President, after analysing the information given to the SIU, in order to determine that the terms of the proclamation sufficiently covered the interests of society in relation to the malpractice.

Adv Soni then dealt with the performance targets and indicators over the MTEF. He explained that where the table (see attached document) referred to “Baseline established in 2013/14” the SIU was referring to areas where targets were set. He noted that, over the preceding three years, there were no targets set for new proclamations but this had been rectified in this year, and SIU had a target of working on 20 new proclamations issued in the current financial year. Under the umbrella objectives of “quality forensic investigations” and “civil litigation conducted”, the target for finalisation of new investigations was 66%. “Potential value of cash and/or recoverables”  referred to the amounts that had been agreed must be paid, and the target here for 2014/15 was R200 million. The actual value of cash and/or assets recovered was set at R100 million for 2014/15. The SIU also planned to instigate 20 civil matters in 2014/15. Whilst this was a drastic reduction from the 1 338 investigations instigated in 2013/14, he wanted to stress that these were much smaller instances of corruption. This also underpinned the SIU’s new strategic direction of dealing with larger and more systemic cases. He referred to the mention of “strategic partner relations developed and maintained” and said that in the 2014/15 financial year the SIU planned to make 50 referrals to the NPA, 15 referrals to the Asset Forfeiture Unit and aimed to bring 100 potential disciplinary matters to the attention of state departments.

Adv Soni then moved on to the budget, and briefly referred to a table covering audited figures for the past four financial years and the estimates for the next three financial years. He explained that the budget for 2014/15 was R175.4 million, an increase on the 2013/14 actual expenditure of R93.3 million. The increase in expenditure was being driven by the planned re-establishment of Special Tribunals, in line with the provisions in the Act. There was still debate as to whether the original Tribunal, which had been the Heath Commission based in East London could be revived, or whether a new Tribunal would have to be declared by the President, but whichever option was chosen, there would be increased expenses. Increases in revenue rendered and recover, for services rendered to state institutions.

The expenditure trends centred on employee costs, which were set to increase by 15% to R298.1 million, and Adv Soni explained that this was due to the need to increase human resource capacity, particularly in forensic and legal skills. The number of employees was projected to increase from 564 in 2013/14 to 668 in 2016/17, in line with the revised focus on the remedial mandate of the Unit leading to different skills requirements. The SIU was in the process of augmenting its human resources through four-month fixed term contracts with attorneys and advocates who were prepared to “lend” the SIU their scarce skills, and SIU would in return be able to learn aspects of practice which its staff would otherwise not have been exposed to. In the long term, however, the SIU recognised that it would need to make permanent arrangements for legal and forensic analysis skills, including quantity surveying.

Adv Soni described the human resources component at present. SIU had 564 staff, with 412 permanent employees and 152 fixed term contract employees. Of the 564 staff, 445 were operational staff and 119 were non-operational. In terms of gender and race, the SIU was 51% female, 59% black, 24% white, 11% Indian and 6% coloured.

Adv Soni expanded on this. The Unit did need some administrative staff, because the organisation was presently top-heavy. He explained to the Committee that the nature of the institution was such that at certain times there was a heavy workload, leading to the need for more staff than at other times, but the workload fluctuated, and so there was a great need for institutional flexibility, which at times posed problems with trade unions. Despite this, Adv Soni emphasised that since the SIU was obligated by section 32 of the Constitution to act lawfully, reasonably and procedurally fairly, it would at all times comply with the Labour Relations Act. He wanted to emphasise this up front and pre-empt any queries on the labour issues.

Adv Soni said that there were three main challenges facing the SIU. The first was the staffing, which he had already explained. In regard to the targets for Proclamations, the number of proclamations lay not with the SIU but the President, although he did want to state that since he had assumed office, the President had never yet refused to sign a Proclamation when a government department ha asked him to. When a proclamation had not yet been issued, the SIU would often second its own skilled and specialised staff to the relevant department, to determine whether the Proclamation was worth pursuing. The next challenge was the slow progress in referred cases, and here the Unit intended to restructure itself, in order to allow for greater synergy with the agencies which took the remedial action which the SIU could not attend to; these would include the heads of departments who were to conduct the disciplinary hearings, and the National Director of Public Prosecutions who attended to the criminal prosecutions.

The Chairperson asked for clarity on the SIU's approach to investigations, particularly regarding when the SIU would or would not pronounce or act in relation to matters uncovered. He asked whether this was something that the SIU could exercise discretion on, or whether it was mandatory under the relevant legislation.

Adv Soni replied that prior to the 2012 amendments, the SIU was mainly concerned with the compilation of a report to be submitted to the President. After the amendments, the SIU had to determine how best to use its powers, because it still did not have any powers to discipline the individual or recoup the funds. The SIU was, however, able to litigate itself, allowing it to move forward to effect its pronouncements, which was more effective than just pronouncing on the validity or invalidity of the charge laid, as was done previously.

Ms G Breytenbach (DA) raised two issues. Firstly, Adv Soni seemed to feel that it would be useful to run criminal and civil proceedings concurrently, and she would like to know why, considering the differing nature of the two separate procedures.

Adv Soni said that he did believe it advisable and beneficial to society to pursue actions concurrently. Criminal matters were instigated by the NPA, while the SIU itself could instigate civil actions for the cancellation of an unlawful contract or recovery of funds. He personally felt that it was probably more important to urgently pursue the recovery of the funds, even at the expense of the criminal investigation.

Ms Breytenbach then asked for information relating to the SIU's report on Nkandla. When Mr J Selfe (DA) had asked questions on this, the response given to him was that there was a delay because “parties” were not being cooperative. She thus asked who these parties were, what their  relationship was to the Department of Public Works (DPW), what work they performed, what measures had been taken to secure their timeous cooperation, when the SIU planned to submit its report to the President, and whether the SIU envisaged any issues with submitting a report to an individual who may be implicated therein.

Adv Soni said that it gave him no joy to say, to the public at large, that the SIU report on Nkandla had been delayed again. However, he was dealing with a legal process, and in the course of the investigation, all issues arising must be fully dealt with. In this case it was public knowledge that the investigation concerned security upgrades and whether there was over-charging. SIU had looked at all the documents available and had spoken to the parties who had implemented the upgrades and who had taken decisions on those upgrades. A number of parties who had not taken decisions or participated in the decision-making process or were not directly involved in the upgrades had been sent questions to answer relating to what was said by them. The names of these people could not be excluded from the report to the President, but the SIU must comply with section 32 of the Constitution, and act reasonably and with procedural fairness, giving the parties a fair opportunity to respond. When compiling a report the SIU set dates for access, assessing the value of the work done and the replies to questions. In determining this particular timetable, it had taken into account three factors: that the SIU would be given access to the premises to conduct an assessment on the work done; that the parties who were asked questions would respond within a reasonable time; and that the investigation should thus be able to conclude on a certain date. In regard to the first issue, he confirmed that the SIU was, for the first time, given access to the premises last Thursday, due to certain factors under “nobody’s control”, and the experts were now busy finalising their assessment. On the second leg, two people had not replied to questions but he had not established that they were trying to hinder the SIU, although their lack of response was delaying the compilation of the Report. He agreed that the SIU owed it to the public to finalise the issue as soon as possible. However, he reiterated that as an institution operating in a constitutional democracy, the correct processes had to be followed to gain access to a private residence.

Ms K Litchfield-Tshabalala (EFF) said that the SIU seemed to be “caught between a hammer and an anvil”, because it was tasked with investigating the executive arm of government, while at the same time receiving its mandate from the head of the Executive. She asked why the SIU was even given a budget if the institution had insufficient power to fully pursue its findings.

Ms Litchfield-Tshabalala wanted to know the reason was for the R235 million spend on employees, and its comparison to the operational costs. She heard the references to scarce skills, specifically legal skills, but asked why the SIU did not do what other departments did, and conduct in-house training. This would assist it and also aid it in absorbing previously-unemployed people.

Adv Soni agreed that the employee costs of SIU were too high, but cautioned that the SIU needed to be careful about downscaling too rapidly, lest it have insufficient capacity, as well as the delicate considerations around labour rights. It was necessary to find the correct size for the organisation. He moved on to the issue of in-house training, also relevant to Chairperson's later point, and said that the SIU had tried this route and it had not worked, because the key to acquiring true legal skills was to have a high volume of court experience, rather than attending training sessions. The parties whom the SIU faced in court had the resources to get the best legal representation available and the SIU needed to be able to counter this challenge by also having the best skills in the particular situation.

Mr M Redelinghuys (DA) said that the SIU was a creature in a specific context, and was established in 1996 when the Public Protector and Auditor-General were finding their feet. He then asked whether the SIU, as a single body, (especially given that the SIU Act was drafted to refer to more than one body) had outlived its usefulness, and asked what justified its continuation and continued funding. This was especially the case if the SIU was essentially an extension of the executive and operated “on the good will of the executive”, as it received its mandate from and reported to the President. Following on from that point, he asked how often the Unit itself had approached the President requesting a proclamation, and, if it had, what reception it had received. He echoed the sentiments of Ms Breytenbach, and referred to sections 12 (a) and (b) of the SIU Act, which made it a criminal offence to hinder an investigation, refuse to answer or obstruct the work of the SIU, and then asked, in the light of statements that some people were delaying the report on Nkandla, whether the SIU had considered approaching the relevant body to initiate these processes.

The Chairperson urged Members to be mindful that they were asking questions in Committee and said it was important to avoid generalising to the extent that it was difficult to discern whether a Member was expressing his or her own opinion, his/her political party’s opinion or the Committee's concerns.

Adv Soni responded, in relation to the suggestions that the SIU was “an extension” of the executive, that he was unsure whether it was being suggested that the SIU could not be independent because of its legislative design and mandate, or whether it was not independent under him. Quoting a recent judgment by the Supreme Court of Appeal, he said that it was not useful to make innuendos. If Mr Redelinghuys wished to make any allegations he should do so directly. If, on the other hand, the Members were suggesting that the SIU Act had rendered the SIU incapable of being independent, then there was a deep jurisprudential problem, because this suggested that no Presidential appointment could be independent. He also said that institutions like the SIU need to attract independently-minded people who were not reliant on state institutions for their subsistence. Lastly, he said that if the suggestion was that the institution itself was not independent, then he “resented” that implication.

The Chairperson interjected that it was important for Mr Redelinghuys to clarify his question, because it would be serious if he was making any indictment on the integrity of Adv Soni.

Mr Redelinghuys replied that he had not made any attack on the integrity of Adv Soni, and in fact he was appreciative of the openness and frankness shown thus far in the meeting. He said that his question was rather directed towards whether there had been any problems, from the President’s side, with the specific instance of an investigation into conduct of individuals regarding the private property of the sitting President. He could see that this might be a very difficult situation for the SIU. He reiterated that none of his questions had been intended as an affront to the integrity of the SIU, or to Adv Soni personally.

Mr S Swart (ACDP) added that he had understood Mr Redelinghuys’ comment related specifically to the issue of overlapping mandates, and that he had understood it was asked to facilitate debate around the viability of the institution.

The Chairperson reminded Members that issues around overlapping mandates had first been raised in relation to the South African Human Rights Commission and the Public Protector. However, Adv Soni had fully explained the mandate of the SIU, and there was no doubt about its positioning in the framework for the fight against corruption.

Mr Swart asked about Parliament's access to the reports produced by the SIU, because the Committee's oversight function could be of use in getting departments to follow up on recommendations. He cited the example of the SIU’s findings on the South African Broadcasting Corporation (SABC) of “rampant corruption”, yet despite this, the person who had been acting as Chief Operations Officer at the time had since been permanently appointed. Furthermore, he asked whether the SIU had considered taking this on review.

Adv Soni responded that as he understood the SIU Act (and the Judicial Commissions Act had been interpreted in the same way), the SIU was only entitled to make the report available to the President. It was then up to the President whether to publicise that report. The SABC Report was submitted to Parliament. The proclamations and the investigation into the appointment of the Chief Operations Officer were set for a specific period. This appointment now of the permanent Chief Operations Officer did not fall within the active time of the Proclamation to the SIU.

Mr Swart was concerned that the Special Tribunals had not been set up, because these bodies could serve as easily accessible and quick forums for the acquisition of freezing orders and other civil actions. It had been more than two years since the amendments were passed, and he asked if the Committee could be of assistance in any way. He also asked if the there were delays in the issuing of the proclamations. 

Mr Swart then said that when he had asked SIU for its estimate on the amount of illicit gain from procurement related corruption, the SIU had cited a figure of R32 billion. In light of this huge amount, he felt that the SIU's targets were very low, both for amounts actually recovered (R100 million) and amounts agreed upon (R200 million). Whilst he heard the explanation that the civil litigation targets and the volume of cases handled in the past was linked to their “rats and mice” nature, he still did not understand the substantial drop from 1 338 to 20 cases, pointing out that surely there must still be ongoing cases. The multi-million rand savings should not be over-prioritised. He also wanted to know what had happened to the long term measured impact targets for matters such as savings on the value of irregular procurement matters (which again represented billions of rands) and said that surely these should be targeted under the new systemic focus of the Unit.

Adv Soni spoke to the recent Constitutional Court decision in the All-Pay case, and said that the decision of the Court was not a review and the setting aside of the tender award, but rather the issuing of a new tender. This would not reflect as a recoupment by the state. He suggested that further engagement was necessary between the SIU and the Committee, to determine how “victories” were quantified and targets reached.

Mr Swart asked if there was any problem with invoicing from departments and implementation of the SIU's power to charge for its services. He also said that he appreciated the need for flexibility in the human resources division.

Ms S Shope-Sithole (ANC) wanted to know what efforts had been put in place by the Unit to ensure that where, in simple terms, money had been stolen from the state, it was then returned to the fiscus. She emphasised this because of her experience with the lack of service delivery in rural areas, and the civil unrest and poverty it created.

Adv Soni replied that the investigations were generally the easy part of the Unit’s work and it was difficult to convince the courts and tribunals that something needed to be done to redress the harm. He appreciated the call upon making sure that money was brought back. However, the final decision on return of the funds rested with the court.

Ms M Mathapa (ANC) stated that it was clearly the intention of the government to fight corruption, as emphasised by the President in SONA. Other Members had raised questions on the possibility of any overlapping mandates with other institutions supporting democracy, such as the Chapter 9 Institutions and the Auditor-General. She asked if there was any overlap between the SIU and the Office of the State Attorney, in regard to civil litigation.

Ms Mathapa asked for clarity on what Adv Soni had meant by saying that the SIU reported “directly” to National Treasury, although it was under Programme 5 of the Department of Justice and Correctional Service, and the financial accountability of the Unit.

Adv Soni explained that it was the Minister of Justice and Correctional Services, not the accounting officer for the Department, who was the accounting officer for the SIU, and this was evidenced by all proclamations having to bear the signature of the Minister.

Ms Mathapa asked whether the 86 vacancies in the Unit would have an operational impact, more so if there was a need to outsource investigative consultants.

Adv Soni said that the concern around the 86 vacancies was counter-balanced by Ms Tshabalala's concern that the spend on human resources was too high. The number of 86 vacancies was consciously chosen. The Committee was doing its best to maximise available resources rather than incur further costs. In relation to the costs of hiring consultants, the only people who would be approved on a consultancy basis would be experts, whom the Unit could not afford to hire permanently and they would, for example, be hired to determine values of capital works projects, when architects’ knowledge was required for a particular investigation.

Ms Mathapa noted that section 13A of the SIU Act permitted donor funding, provided there was no conflict of interest, and would like to know from where SIU might receive any donor funding.  

Adv Soni replied that the SIU did not accept donations.

Ms Mathapa spoke of the high numbers of relatively minor civil litigation cases that the SIU had taken on in the 2013/14 financial year, such as the example where an individual unlawfully benefitted from a social grant, to the tune of approximately R8 000. She was concerned that the SIU should not attend to trivialities.

Adv Soni said, in regard to the focus of the work, that this had included investigating welfare grants in that year. Although the individual benefit could be small, it must be remembered that, on a government wide scale, the problem was significant enough to require action, and that had been the reason to have the Proclamation issued to investigate the welfare grants. Although these types of issues would keep cropping up, the SIU was developing systems to detect and handle them.

Ms Mathapa asked that the gender demographics be unpacked by detailing the numbers of women in senior positions.

Adv Soni said that the SIU had recently appointed three women managers, but conceded that more needed to be done, especially regarding black women empowerment.

Ms C Pilane-Majake (ANC) thanked the SIU for the clarity of the presentation and commitment to the NDP’s outcome of a corruption free state. She also commended the reduction on consultancy costs and noted the need for technical skills and flexibility in human resources in order for the Unit to function efficiently.

Ms Pilane-Majake asked why the 66% target for case finalisation remained static for the MTEF period, and if the SIU did not envision any improvement in its ability to finalise cases.

Adv Soni replied that the reason the target was set at 66% was due to the nature of the investigations which the SIU conducted, which required on average three to five months of investigation and pursuit. If cases were received late in the financial year it would not be possible to finalise such cases within that year, and if the target increased, then it may result in SIU failing to reach that target.

Ms Pilane-Majake asked for the SIU's comments on the Competition Commission’s investigation into collusion in the construction industry, where a fine of R1 billion was imposed. She wanted to know whether any money could be recovered by the state.

Adv Soni responded that the SIU had applied its mind to this question and believed that what had not effectively emerged from the Competition Commission investigation was whether there had been any government collusion together with that of the construction companies. If there was, the  SIU Act’s new powers of recovery were wide enough to cover that situation.

Ms Pilane-Majake concluded that she was impressed by the way in which the SIU had engaged with its new powers, and supported the new measures that it planned to put in place, such as referrals to the NPA and pursuit of civil judgments.

The Chairperson said to the Members that perhaps it would be best for the Committee to focus on the merits of the presentation, rather than trying to defend the terrain of their parties, because these issues affected the nation as a whole.

The Chairperson noted that prior to the 2012 amendments, the SIU's main function was to report. However, it now had the power to approach the courts and take action to recover and he would not agree with questions around its mandate and whether it had the ability to pursue its purpose. He noted that Ms Breytenbach and others had raised questions around mandates overlapping with other institutions, like the Public Protector, and asked if it was indeed correct that such overlaps existed and, if so, asked what should be done to remedy the situation.

Adv Soni said that corruption was a world-wide phenomenon and different countries used different philosophical and jurisprudential approaches to the problem, manifesting in different mechanisms to fight corruption in different countries. This country needed to decide the best mechanism in its own context, to ensure that scarce resources were not looted by those not entitled to them. Any decision on the future existence of the SIU was not for him, but for Parliament, to take. He also commented that he had thought about the viability of the institutions before he had assumed the position and, through his dealings with institutions such as the NPA and the Hawks, he had perhaps discerned the logic behind having a proliferation of institutions, not least that it avoided any monopoly of power as to who could decide whom to investigate. The SIU was a fairly unique institution, internationally, because it was parallel to the judicial commissions of enquiry set up whenever there were matters of serious public concern in Westminster systems. Perhaps this called for a broader application of the Act, with the President appointing a different SIU whenever such a concern arose. The question of whether the SIU had outlived its usefulness which was not a new question for him personally, and he intended to go to the President with his views on the matter, but it was not for him to say what the future of the institution was to be. However, bearing in mind that the SIU had only recently become results driven, through the amendments, he felt it rather hasty to suggest that its new mandate could be done by another institution. He also made the point that even if a commission of inquiry was set up, and the judge heading the commission ruled that there was maladministration or corruption, that finding must still be ratified in court. There would be a “missing link” without the SIU.

The Chairperson said that there had been reference to a shortage of lawyers, but he knew of an association of unemployed graduates, which had members who were qualified attorneys, or who held Masters degrees. He found it disturbing that although the Department of Justice had a Justice College with the purpose of training staff, the SIU was making use of professionals already practising to handle some cases. He supported Ms Litchfield-Tshabalala's suggestion of building in-house capacity.

The Chairperson commented that Adv Soni had earlier said that he had not accepted the position because he needed a job, and stressed that someone of Adv Soni’s calibre, who could easily have been appointed as a judge or working in private practice, was clearly putting the public interest before his own. He believed that he spoke for the whole Committee in saying that the Committee had no doubts about the Unit’s independence, and commended Adv Soni for the work he was doing.

Ms Breytenbach reiterated that she had intended no personal attack on Adv Soni, but she was not satisfied with his reply that he did not want to reveal the names of the people delaying the investigation, unless he could give reasons as to why they should not be named. She stated that she had not received a specific reply concerning their relationship to the DPW, what work they performed at Nkandla, and whether Adv Soni foresaw any difficulty in submitting the report to the President, who could be implicated himself.

The Chairperson responded that the report of the Public Protector had been tabled in Parliament and the President was on record as saying that he would answer comprehensively. Since the SIU report was in the process, he did not feel that it was appropriate to follow a “back-door” approach prior to that. With respect, he would not allow this question, as it was something that would be answered in the comprehensive report.

Ms Breytenbach said that she could not agree with the Chairperson's assessment of the situation and that these were not issues to be dealt with in the President’s response to the Public Protector's report, but specific questions put to Mr Soni, which she would like to be answered. If the Chairperson was going to rule that the questions could not be put, then she wanted the record to reflect this specifically.

Ms Pilane-Majake interjected with a point of order. She made the point that Ms Breytenbach's concerns were genuine, and she shared them. However, she would think it problematic to allow an interrogation on issues to be contained in a report that was not in front of the Committee. In her view, all that the Committee could interrogate was process, and how far the SIU was in regard to finalising the issues.

The Chairperson said that Adv Soni had been invited here to give a presentation on the SIU’s budget, and not to give a progress report on his investigation into Nkandla. He had allowed the  initial questions because he did not want to suppress anyone, but felt that they were not relevant. He would now move to close the matter.

Mr Swart asked the Chairperson to review his decision, because the SIU was called to Parliament to report twice a year. An ongoing investigation was within the ambit of this meeting and questions could be asked on it.

The Chairperson replied that Mr Swart was correct about the SIU having to report to Parliament, but reiterated that the SIU had been asked to present its budget at this meeting, not to report. He was willing to invite Adv Soni to report to the Committee on another question, but would disallow the questions on this occasion.

Mr Redelinghuys raised a point of order. The Budgetary Review and Recommendation Report was based on the Strategic Plan and the APP. It would be completely incorrect, and a neglect of its function, for Parliament to support an appropriation process where it had been unable to ask thorough questions about where the money was going. He recorded that he was strongly in disagreement with the approach taken by the Chairperson.

The Chairperson reiterated that he had merely ruled now that the questions were premature and that the time would come for the SIU to report fully, but this meeting was intended for presentation on the budget. Mr Redelinghuys was free to comment on the issues, but the Chairperson had closed the discussion.

Ms Breytenbach asked for his “dismay” with the Chairperson's ruling to be recorded, and furthermore asked that the ruling be reduced to writing, as he was unclear what it actually was.

The Chairperson replied that he had only made one ruling and that was that the SIU was today invited to report to the Committee as it was required to do, twice a year, by the SIU Act. Adv Soni would be invited to report on the Nkandla matter at an appropriate stage.

Mr Redelinghuys then said that the SIU wanted to appropriate R300 million directly from National Treasury for 46 investigations. The Public Protector wished to appropriate the same amount for approximately 26 000 cases. He wanted to know how many of the investigations had been referred to the NPA for prosecution, how many of these were successfully prosecuted, and how many resulted in a conviction.

Mr Swart said that one of his questions was outstanding; relating to whether there had been any invoicing problems with departments, and also asked the extent to which departments may have been calling upon the exemptions to payment as set out in the Act. It was unacceptable that the SIU was underfunded, when it would result in a win-win situation to give it more funding to allow for its capacity to be increased.

Mr B Bongo (ANC) said it should be emphasised that this was a Committee of Parliament, and not a tribunal that was empowered to demand answers. He asked Adv Soni about cooperation with other institutions and asked if there was enabling legislation for this cooperation.

Ms Shope-Sithole asked if the Committee could in any way assist the SIU with its funding shortage. She was in favour of an approach that put recovery of the funds at the forefront.

Mr M Maila (ANC) wanted to follow up on the issue of the lack of legal skills available to the SIU and said that he appreciated the predicament of an inexperienced lawyer facing a top law firm in opposition, but, particularly since there were so many unemployed graduates, he wondered if the SIU might not consider internship programmes. He also said that the SIU clearly remained relevant, as long as corruption continued to be identified as a major social ill in South Africa.

The Chairperson reminded Members that Adv Soni had said that he too felt that there should be an emphasis more on recovery of the money than on punishment of the individuals, and asked if anybody differed on this.

Mr Swart replied that he felt that there still needed to be a deterrent aspect, especially considering that in general, not all funds would be recovered, although this was important in the present economic climate.

Ms Litchfield-Tshabalala said that she was still not satisfied that the SIU spent so much on investigations and itself admitted that some were inconclusive. The relevance of the SIU would, in her view, be judged by its conduct of the investigations.
The meeting was adjourned.

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