Nkandla Security Upgrades: Public Protector and SIU Reports: consideration 30/09

Meeting report

Briefing by Parliamentary Content Advisors
The minutes of 25 September 2014 was adopted. Under matters arising, Dr M Motshekga (ANC) said the issue raised by the Public Protector, that remedial actions be enacted should be laid to rest. Mr M Maimane of the Democratic Alliance had argued that the remedial actions in the Public Protector Report had to be followed. Dr Motshekga said the Public Protector had herself said that her findings were not binding, they were recommendations. His view was that the phrase ‘take the remedial actions’ must be based on the mandate of Chapter 9 institutions – to strengthen and support constitutional democracy. Chapter 9 institutions could not have overriding powers over all three arms of state that they were mandated to serve. This would be absurd and it was not the intention to create an adversarial relationship between the executive and the Public Protector.

Ms M Kubayi (ANC) said the minutes needed to stipulate that the opposition parties had left the meeting and withdrew their participation and that after their withdrawal, the meeting continued and there were extensive discussions.
 
The Chairperson said that as the Committee needed to look at forwarding recommendations, he had asked parliamentary content advisors to make inputs to assist the Committee.

Mr Shuaib Denyssen, Committee Content Advisor, discussed the commonalities and differences between the reports of the Public Protector and the Special Investigating Unit (SIU). He said it was not to be expected that the reports would reach the same conclusions. They would have different conclusions because the bodies had been constituted with different objectives in mind which in turn would mean their legal and statutory frameworks would suggest a particular methodology and this would influence the results. A complexity to be noted was which statutory framework and legal measure guided the Nkandla project.

For the Public Protector, the statutory and legal framework was the National Key Points Act and the report contained specific reference to the declaration of cost which the Minister of Police should hand over to the President. The Public Protector placed huge focus on this National Key Points Act.

For the SIU, the investigation was based on Cabinet Memorandum of 2003. The SIU gave special attention to adherence to the Public Finance Management (PFMA), National Treasury (NT) regulations and practice notes and the implementing department, the Department of Public Works (DPW) and Supply Chain Management (SCM) policies.

The second matter of complexity was costing. For the Public Protector, the President had to consider, accept and sign off on the declaration of cost the Minister of Police gave him as per the National Key Points Act . In addition the Public Protector emphasised an internal document apportioning the share of cost to the state and to the President. This actual internal document had not been found, but a costing had been done by a private quantity surveyor, R&G Consultants, and this was in the Public Protector Report.

The SIU referred to the specific cost for the project as being drawn from the budget of the implementing department, the DPW. This costing had to follow PFMA, NT regulations, Supply Chain Management (SCM) and other departmental policies. Both reports shared the point that the DPW professional team, a senior architect and senior quantity surveyor and structural, civil and electrical engineers had been slowly removed from the start of the project, therefore the amounts came from the private professional team as led by the principal agent, Mr Makhanya (the architect). So the responsibility for costing shifted from the department to the private consulting contractor and its leader. A comparative reading of the reports showed that costing could only be looked at with an understanding of and a focus on the actual contracting between the DPW and the principal agent.

Further commonalities were that the DPW, SANDF and SAPS staff did not follow statutory and legal measures. The Public Protector and the SIU Reports both noted this was contrary to the regulations of NT and the SCM of the DPW.

The two reports had a difference of focus. The Public Protector Report did not refer specifically and with enough emphasis on the DPW roster administration system and the SIU delved sharply into the roster system.

The SIU further focused on the NT regulatory framework and the DPW’s SCM policy. This resulted in Makhanya Architects/R&G Consultants doing the design and costing on behalf of the DPW as if they were the professional team of the DPW. The process of handing over control to private consultants started with a request by the project manager of DPW dated 1 September 2009. Both reports noted this. Makhanya/R&G were then appointed to ensure complete integration between private and public renovations. By 11 September 2009, Makhanya/R&G with Ubongo structural and civil engineers and later with Igoda as electrical engineers, became the team that effected the work. The handover of the costing of the work lay at the core of the escalation of the cost of the project. Both reports reflected how the Public Protector and SIU agreed that non compliance lay at the heart of the project differences. There were 11 costing exercises and only one by the DPW . This one was the one which excluded the checking of security measures by the SANDF and the SAPS.

Other differences were the origin of the investigation. The SIU investigation came from Proclamation R59 of 2013. This directed the SIU to investigate the validity of processes used to engage consultants and contractors who installed security upgrades and to look at the payments made to them. In addition, the Act directed the SIU to take disciplinary steps to prosecute and institute civil proceedings where relevant.

The Public Protector responded to complaints from the public. These were listed in the report as 12 aspects which could be summarised as: there was no legal authority for the expenditure. Even if the expenditure was legal, the upgrade was excessive and transcended legality. The procurement process was improper, in violation of government frameworks and policies, and resulted in excessive amounts being spent and the conduct of the President may have been unethical.

For the Public Protector, the National Key Points Act and its schedules were the measure against which to judge the public complaints. The Act established that the Minister of Police must sign a National Key Points Act declaration and this was signed on 8 April 2010 and provided detail of the security measures that had to be installed and requested the President to pay for such security measures. In her report the Public Protector quoted from the declaration that ‘the owner/occupant is responsible for the implementation of this report to ensure that the minimum standard of security was maintained’.

The SIU held a different view. The upgrades were not installed based on the National Key Points Act and that Act was not the relevant statutory and legal framework to use. All measures were installed in terms of Cabinet Memorandum 2003, which listed ten steps that had to be followed.

The process starts with a request from the Presidency, then SAPS did a threat analysis, then SAPS and the State Security Agency formulated security measures that they proposed. This was submitted to the interdepartmental security coordinating committee for a technical assessment, the DPW submitted a cost estimation of the structural component of the security measures. SAPS advised the Minister of Safety and Security of the measures and the cost, the Minister approved the measures and communicated it to the Presidency, the Presidency communicated this to the SAPS who submitted this to the DPW and the Minister of Public Works approved the costs of the structural measures. Only then did the DPW look at its roster system to see which contractors and consultants were available to start the process. Regarding costing, SAPS would fund the officials doing the assessments, but DPW was the implementing department.

Mr Ivan Kinnes, Content Advisor to the Portfolio Committee of Police, said page 2 of the SIU Report said the Act required the SIU to go beyond investigation to ensure officials were disciplined where the state suffered loss and damages. He detailed the establishment of the SIU and the types of cases the SIU investigated by proclamation such as serious malpractice and maladministration in the affairs of any state institution, intentional or negligent loss, unlawful and improper conduct. The SIU could enter premises, collect evidence and institute civil cases or refer cases for prosecution. The SIU reported to the President who could request progress reports of cases. The SIU was accountable to Parliament. The mandate of the SIU was to investigate and to recover monies.

It differed from the Public Protector in that it could institute or conduct civil procedures against anyone in a tribunal or court. The SIU could refer matters to the Public Protector and had to then provide a copy of the proclamation to the Public Protector. Similarly the Public Protector could refer cases to the SIU. In the SIU Report, the SIU was approached by the Public Protector to look at bank statements of seven officials and 14 contractors and consultants. It did this and found no evidence of additional deposits.

Discussion
Ms M Kubayi said she appreciated the clarity the inputs had given on what the SIU mandate and responsibilities were. She wanted more clarity on the ‘original cost’. It was important that people be held accountable where procedures were not followed.
 
Ms Maseko asked what informed the upgrades, if the DPW and the SAPS staff did not follow statutory and legal measures? In the Public Protector Report it stated that one of the complaints was that the conduct of the President may have been unethical. In which way did the President violate the National Key Points Act ? She wanted clarity on the National Key Points Act to understand where the Public Protector derived its powers. She said if she understood it correctly from the SIU Report, ‘the Minister must approve measures and indicate to the President these measures’ . The measures, not the costs, were communicated to the President. Later in the report it stated that the DPW approved the costs of structural upgrades. So which costs did the Public Works Minister approve?

Mr F Beukman (ANC) said that on the question of security and non security measures, there was debate on what comprised security and non security measures. With reference to the ten-step decision in the Cabinet Memorandum 2003, what was the level of basic expertise expected from the people doing the threat analysis? Did they need to have special training or follow certain protocols? This might help evaluate the differences in the reports.

Dr Motshekga found the analysis of the content advisors useful as it clarified many things. Regarding the violation of the code of ethics, his view was the President had not violated any code of conduct because the report itself did not say so.

On the process of initiation of costing and the request and approval of upgrade measures, he said the President assumed office and the Office, not the individual, necessitated a threat analysis. When the security upgrading measures were put before the President, it did not appear that the President had powers to veto it but merely noted it and sent it back. The decisions were not taken by the President, so how could one attribute any guilt to him.

The opposition parties claimed the Public Protector Report was superior to the SIU Report. It was clear that the Public Protector and SIU derived their powers from Acts of Parliament and the President implemented legislation. Parliament made laws and the executive implemented them. He was not sure that by issuing a proclamation assigning duties to the SIU which flowed from legislation, one could not have the opposition say the SIU Report was an executive report and inferior to the Public Protector Report. He wanted further clarification on this.

The way the determination was made whether the chicken run and cattle kraal upgrades were security measures appeared to have been done arbitrarily. If these features already existed and had to be moved because of the security measures implemented, the enhancement did not constitute undue benefit to the President because this would imply a determination of guilt on the President and this enhancement came about because of the omission or commission of officials.

Regarding Ms Kubayi’s question on original cost, Mr Denyssen explained that a professional team of the DPW consisting of a senior architect, a project manager, senior quantity surveyor and structural and electrical engineers had estimated the initial cost to be R27m for the structural aspects. The acting DG had done an in loco inspection. There had been no request from the President for this and no threat analysis was done by SAPS. The Director General’s actions were outside of the normal processes of Cabinet Memorandum 2003. Both reports had noted this. Confusion could have arisen because of the amount of costing done by the private consultant, R&G Consulting, that was guided by assessments of the private team comprising an architect, a quantity surveyor, structural, civil and electrical engineers acting with a DPW project manager, with the DPW professional team becoming quieter from the start of the project. On what informed the costing, he said it was informed by the private team of professionals. The project manager had gone to the regional manager saying that there were not enough funds based on the private consultant’s costing.

He advised that the legal office be requested to look at the question on the National Key Points Act .

Regarding the security assessment question of Mr Beukman, Mr Kinnes said officials of the State Security Agency took the lead to do the assessment and SAPS and SANDF might be involved. Internationally, when doing security assessment, the assessor had to be highly trained and take into account the existing premises, the President’s needs regarding travel and taking into account minimum information standards. A final recommendation went to the DPW to implement the infrastructure changes. Personnel changes went to the respective departments.

Dr Motshekga said it appeared that there was outsourcing of authority to the principal agent. If this was so and the principal agent used that authority to enlarge the value of non security measures, how could one then talk about unjust enrichment by the President.

Ms Maseko said according to the SIU Report, the upgrades were not installed in terms of the National Key Points Act and so this was irrelevant. It was upgraded based on the Cabinet Memorandum 2003, so what informed the Public Protector’s use of the National Key Points Act in its report?

Ms B Ngcobo (ANC) said the documents that were supposed to be available were not available and so posed a problem for the use of the National Key Points Act by the Public Protector.

Ms D Dlakude (ANC) reiterated the reasons why the cattle kraal and the spaza shop had to be moved during the upgrades. How could it be said that the President benefited, when he did not have a say in this movement? Was the SIU work within the law? The Public Protector had also referred some matters to the SIU. The President when he responded to the report, had made a proclamation for the SIU to further investigate some matters.

On the role of the Minister and Deputy Minister of Public Works, mentioned in both the reports for interference, it was said that the President should have known what happened at his homestead. The Ministerial Handbook said that ministers should not interfere with anything done at their houses, yet some of the Committee expected him to have known about everything at his house. Were the reports not contradicting each other on this matter.

Regarding the ten steps, Mr Beukman said that if one looked at page119 of SIU Report, the totality of the SAPS and SANDF assessment on security were contained in different reports. There was no coordinated effort on what the requirements were. No consolidated list was compiled. The Committee would need to look at additional recommendations as one gap identified was the coordination of the security role.

Ms Kubayi disagreed with the SIU that the President should request the upgrade process because the SANDF in their assessment should not have to wait. She said there were policy gaps that needed discussion.

The Chairperson, in reply to Ms Maseko’s question, said page 427 of the Public Protector Report as to why Public Protector referred to the National Key Points Act, noted that in 10.1.3 of the report, the Public Protector indicated that the ‘National Key Points Act having been inexplicably dragged in halfway through the implementation of the Nkandla project, its provisions had to be complied with’.

Mr Denyssen said the reliance on the National Key Points Act was with a specific focus on cost as a matter of complexity. The National Key Points Act should only be looked at where and for what reason it was brought into the report, that is as a matter of cost. Regarding the ten steps, he said it came from discussion of Cabinet Memorandum 2003 and was the steps to be followed with the PFMA, with SCM policies of the DPW and with the Ministerial Handbook guidelines.

Regarding the Presidency, he said at step 7 of the 10, the Minister of Safety and Security would have determined that some structures at the private residence constituted a danger. The State Security Agency threat analysis was thus communicated to the President. When the Minister approved the security measures, where did the President fit in and did the President have a say in these measures? The cabinet memorandum was not clear. Between step 7 and 8 the Minister of Safety and Security approved cost and communicated this to the President and the Presidency gave approval to SAPS in step 8. Nowhere did it say the President may or may not have a say.

On alleged interference of ministers and deputy ministers, the PFMA was clear that executive authority did not interfere with the accounting authority, which was the DG, who was responsible for the budget and SCM.

Regarding Mr Beukman’s question on policy gaps, Mr Kinnes said one had to take into account that security agencies guarded their territories jealously and did not share information. Who took ultimate responsibility was a gap in policy.

The Chairperson said an issue that had consistently been raised was who did the determination as to what was appropriate state security processes to be followed when securing the residence of the President and the executive. He did not see in either report the presence of the relevant state security arm in determining what was security and non security items. In the Public Protector Report, the work done by R&G Consultants determined what was or was not security.

Mr Kinnes said if DPW approved amounts that were for structural arrangements, it was their responsibility to ensure that it was carried out while other departments covered the HR expenditure. He could not say offhand that they did consider non security costs as these would have needed to be highlighted as non security costs, for him to say so definitively.

Ms Kubayi wanted to flag the issue of the actual mandate of the project and felt there was a need to highlight this as something the executive had to strengthen. The Public Protector Report and findings were premised on the National Key Points Act but that Act did not give a full mandate to the Public Protector.

The SIU Report talked about the Cabinet Memorandum 2003 as its mandate and the ten steps that had to be followed. In this case the Presidency would need to request the upgrade which she felt was problematic as the SAPS and SANDF then could not act if there were security vulnerabilities.

Both reports noted how the original process started with the DPW initial assessment. The initial assessment of the DPW was wrong. To what extent were there cost escalations based on the actual work?

The Public Protector and SIU Reports together with the Report of the Joint Standing Committee on Intelligence (JSCI) said the cost should not be greater than R100m. R146m then was the escalation and this was the amount that went into consultancy fees and other things. The JSCI report noted the actual cost breakdown was 24% on private residence security, 52% on governmental infrastructural costs and 24% on consultancy fees and other costs. The JSCI, a multiparty committee, had done an in loco inspection of Nkandla. It was becoming apparent that R146m was involved in corruption. The SIU were looking to recover R155m of lost state money. This was the first issue the Committee needed to note.

Regarding the ten step Cabinet Memorandum 2003, the State Security Agency did a threat analysis while SAPS did the evaluation. This was a policy gap which needed to be resolved so that organisations like the SAPS and SANDF had more coordination.

Ms Kubayi said that officials needed to be held accountable. The Public Protector reflected that the Minister and Deputy Minister let the private sector come too close to the project and made the state vulnerable. The closeness of the executive to the process exposed the executive and the state to this level of corruption. She said the report should indicate that the appointment of Mr Makhanya was unlawful in the manner that it happened. The DPW professional team abandoned their responsibilities and left the private team to run the project and exposed the state. Officials who had done wrongful things and acted irresponsibly could not be protected. The Committee should support processes undertaken to recover the money and to hold officials accountable.

On the issue of coordination between DPW, SAPS and SANDF and the security intelligence office, she said none of the reports noted one list of security issues or on what was and was not a security measure. The SIU talked about the movement of the chicken run and the cattle kraal. However, what was contentious was the escalation in the amount, a 30 square metre room escalated into a 100 square metre room.

All the reports note that the President did not request the upgrades nor did he steal state money.

Ms Dlakude said the security upgrades were relevant and previous presidents had this done to their housing. Three reports said the President did not mislead the National Assembly. He and his family were responsible for building the houses. The security features had to be incorporated into the designs while the process was taking place. There was serious looting of money, serious corruption during this process, serious flouting of processes and no monitoring and oversight of these processes. The Committee was expected to close all the gaps to ensure that this kind of looting did not take place. The SIU had already started the processes against corruption. The President did not benefit or misuse state funds. The reports kept mentioning Ministers and Deputy Ministers and DPW officials and the DPW professional team that neglected their roles which lead to private professional teams taking over the process.

On the land on which the homes were situated, it was on Zuma family trust land and Ingonyama Trust land, with the President’s house being on Zuma trust land.

Mr Beukman said the SIU Report indicated that the lead time for the project to start was problematic. There were assessments in 1999, in 2004 and 2007 yet none of the significant proposed upgrades had been effected and only two items, fire extinguishers and intruder alarms had been effected in the period. There was a clear gap between the evaluation and implementation departments. Perhaps a dedicated unit should be established and the evaluation process should start earlier. Perhaps there should be one lead department.

In the SIU and Public Protector Reports there was SCM non compliance and overcharging by some contractors. This was fraud. Some contractors had not been vetted by the State Security Agency, had the incorrect Construction Industry Development Board (CIDB) grading certificates or did not have tax clearance certificates.

All reports noted the security of the President as important and only two out of the ten processes being followed. Role players did not carry out their duty. Most of the work was on Ingonyama Trust land. There was a need to look at the control exercised

Mr Beukman said the Public Protector had said Cabinet Memorandum 2003 should be updated but he felt it should be overhauled and that the NT should assume a particular role.

Regarding security upgrades, he said the Committee needed to get assurance that the upgrades were relevant and applicable for the residence of the head of state. The SIU, during an in loco inspection, had noted a number of matters of concern over the upgrades that had been effected.

Dr Motshekga said all the reports were equal before the eyes of Parliament and Parliament had to consider the merits and demerits of the recommendations of these reports. There had been an application by the opposition to suspend the proceedings so as to get legal opinion. There was a tendency to disregard the doctrine of the separation of powers and ask the courts to intervene. If this was allowed to continue it would be the beginning of the erosion of the doctrine of separation of powers and the de-legitimisation of the constitutional arrangements that underpinned the constitutional democracy.

The mandate of Parliament was to make laws and oversee their implementation. Parliament could not outsource this function to outsiders. Therefore the opposition was out of order to call for the suspension of Parliament’s work to get legal opinion elsewhere and this was a delaying tactic. The opposition had not been acting in good faith and had taken Parliament for a ride.

The Committee was not mandated to review reports but to consider the reports and their recommendations and report its findings to Parliament for Parliament to decide. All the reports contained sufficient information to enable the Committee to make its own findings without calling for witnesses which would amount to reviewing the reports. The fact that some opposition parties felt the President had not answered some questions put to him by the SIU and Public Protector were matters of opinion and did not warrant the President’s appearance before the Committee. It had been imperative for the President to introduce Mr Makhanya to the officials to enable them to synchronise the existing and new plans. This introduction did not exempt the officials from the regulatory framework and the application of the law. This introduction could not be reasonably construed as an instruction to the officials to omit or commit something and therefore it was a false excuse to say that political pressure was brought to bear.

The Minister of Police as originator of the project was obliged to determine if any extra costs would arise and inform the President of such costs so that he could accept such costs. This communication was not done. The communication was done after the fact. The excess should be determined without assigning culpability or guilt to the client. In his view, asking the President to pay an amount was out of order. The omission and or commissions of officials which enhanced the security upgrade without the President’s knowledge should not or could not be translated into an offence or transgression by the President.

The opposition suggested the President had to pay an amount of R90 000, because he had unlawfully or unduly benefited, this was at best an insult to the President.

Chapter 9 institutions had to investigate, determine and recommend remedies to state institutions and should not issue reports and instructions which officials had to comply with within a certain period. The instruction of the Public Protector to the President to pay within 14 days resulted in the opposition rushing to Parliament saying that the President should pay within 14 days. He commended the Public Protector in regarding the matter as one of national interest that required consideration by Parliament. And the Public Protector was correct to refer the matter to Parliament. The opposition however wanted the implementation of the report without discussion and consideration of the report. The Public Protector, in terms of the Constitution, was not a judge nor did her recommendations have the same status.

The disruption seen at the Committee derived from a policy gap. Perhaps it should have been made clear that reports of national interest should come before Parliament for consideration before the authors of those reports issued instructions to the state institutions concerned, demanding compliance. How could affected persons comply when the matter was still under discussion?

The Committee had to distinguish between the Office of the Public Protector and the reports of the Public Protector. The Office of the Public Protector was a creature of the Constitution while the reports of the Public Protector were not a creature of the Constitution. There was no threat to the Constitution. The ANC was the number one defender of the Constitution. Those who walked out claiming the Constitution was under threat were the people threatening the Constitution because they were saying that if the minority parties, singly or collectively, do not agree, then Parliament should not take decisions. This was tantamount to saying that the democratic majority must not rule in this Parliament. The ANC was not a dictator, the best ideas would prevail in service not to the ANC but to the people of South Africa. He called on the opposition to come back because their actions were despicable.

Ms Ngcobo said that with all the security measures that had taken place, the question must be asked whether the President was secure.

Ms Maseko said the opposition missed an opportunity to contribute as they had called for the establishment of the Committee. The behaviour of two DA members was of concern as they had made continuous calls for measures, then left the Committee. Cabinet Memorandum 2003 needed a re-look and it needed to be strengthened. Corruption was not tolerated and there should be a lead department and project manager. Only two of the ten points were followed. Who did the security evaluation? Was that person qualified and vetted?

The SIU Report noted it was still concerned with the quality of security around the President’s house. The
Committee needed strong recommendations for structural measures and follow up to ensure that what occurred, never happened again.

Ms Dlakude said the ANC were the first to move and submit names to create and serve on the Committee.
After the elections, it was only because new members had to be sworn in and the budget votes occurred that delayed the work on the Nkandla matter. She suggested that a draft report be compiled by the following week.

She said the President in his response had said he was shocked by the corruption that took place during this process. He said processes were not followed, that some contractors dealing with the security features had not been vetted by the State Security Agency and their CIDB construction certificates were not in order. The Committee should recommend that proper assessment be done at the President’s home to see if the work was up to standard.

Ms Kubayi said part of the Committee’s responsibility was to look at the President’s response.

The Chairpersons said a draft report would be tabled at the next meeting on 9 October at 11am

The meeting was adjourned.