Annual Reports 2016/17
Legal Aid South Africa (LASA) said 2016/17 was the second year of the implementation of its strategic plan, and 93% of its targets had been achieved. Budget cuts had had a substantial impact, but strict adherence to the strategic plan had kept its financial statements healthy. However, it had had to utilise cash reserves to maintain its operational expenses, so further cuts could pose a challenge. Demand for LASA’s services continued to increase every year. It had purchased property, as in numerous cases leases of property had proved to be ineffective from a cost point of view.
A high level of performance had been maintained a new board had been instituted, as required by the Legal Aid Act. 767 656 matters had been taken up during the year. 87% were of a criminal nature, while 13% were civil matters. Budget cuts had unfortunately involved a reduction in employees’ remuneration to meet operational expenses. A language policy had been implemented at a national level. LASA had received its 16th consecutive unqualified clean audit. Brand perception showed numerous improvements, and it had been accredited with “top employer status” as a public sector employer. Most of LASA’s targets pertaining to criminal matters had been achieved.
It continued to use a mixed model of in-house legal practitioners and judicare, which was where private practitioners took on legal aid matters. 2 751 staff had been recruited in the past year consisting primarily of paralegals and legal practitioners. The various justice centres across the country continue to ensure LASA had a strong national footprint. It continued to focus its civil litigation on high impact matters. HotDocs software had been implemented to increase efficiency.
Members asked about the R2.1 million in fruitless and wasteful expenditure, and commented that it was distressing that many candidate attorneys left Legal Aid after completing their articles. What relationship did LASA have with traditional communities? There appeared to be a regression in respect of the enforcement of first generation rights. What effect had the recent budget cuts had on the ability of LASA to properly fulfil their mandate?
The Special Investigating Unit (SIU) presented its performance report, and stated that it had recognised that various improvements to their organisational framework were required. This included strengthening the stability of the operational environment, robust accountability, attaining growth and maintaining high standards of operational excellence, and demonstrating the continued importance of the SIU in the changing political and economic climate of the country.
The SIU had submitted six final reports to the Presidency and had recovered R126 million for the state. As a result of SIU interventions, R106 million in unlawful payments had not been made. R4 million worth of unlawful administrative action and contractual agreements had also been set aside because of SIU investigations. 137 referrals for disciplinary, executive and administrative action had been made, whilst 108 cases had been referred to the NPA and the Asset Forfeiture Unit (AFU) for further investigation and forfeiture orders.
Members referred to “state capture,” and asked if it was still the case that no presidential proclamation had been published authorising SIU investigations into allegations of state capture, especially in relation to Eskom? They asked about adverse media reports that had circulated to the effect that there were staff grievances regarding the restructuring process. Had those grievances been successfully addressed? It was pointed out there had been a drop in the total amount of actual assets recovered. Of the R240 million identified in the previous financial year, only R127 million had been recovered. This painted the unfortunate picture that the SIU, and other institutions of state as a whole, were not winning the fight against corruption and irregular and wasteful expenditure.
The Magistrates Commission presented an update on the status of certain magistrates who had been suspended. The suspensions had arisen as a result of the disciplinary action which had been instituted against them. Discussion was focussed mainly on the Committee’s ability to act as an appeal body, but it was argued that this would set a dangerous precedent.
The meeting concluded with deliberations on the International Arbitration Bill. Two documents had been submitted to the Committee. The first contained all the public submissions and the responses to the Department. The second dealt with proposed amendments, the majority of which were of a technical nature. International arbitration attorneys had made submissions to the Department to finalise the Bill as quickly as possible. The main concern had come from the Maritime Law Association, which had pointed out possible unintended consequences, such as potentially overriding s3 of the Carriage of Goods by Sea Act (COGSA). That Act protected local interests by allowing people to receive goods from overseas through shipping. If a dispute arose, the Act permitted parties to approach local courts. A potentially unintended consequence could then be to require people to engage in international arbitration without recourse to local courts. The Association had suggested that clause 7 be amended to address that issue.
After various technical amendments had been discussed, it was agreed that all documentation should first be prepared and that the matter be put back on the agenda for voting next week. It would be positive if an agreement was made in principle to adopt the Bill.
Legal Aid South Africa: Annual Report
Judge Motsamai Makume, Deputy Chairperson, Legal Aid South Africa (LASA) apologised for the absence of Judge Dunstan Mlambo, Chairperson, LASA, who had to attend to urgent judicial business in his division back in Gauteng. The following members of the LASA board were present:
Ms Marcella Naidoo; Adv Brian Nair, National Operations Executive Head; Mr Matome Leseilane;
Mr Patrick Hundermark, Chief Executive: Civil Legal Services; and Mr Jerry Makokoane, Chief Operations Officer: Support Operations.
The 2016/17 financial year was the second year of implementation of the Legal Aid Strategic Plan 2015-20. 93% of the targets set for 2016/17 had been met. Legal Aid had made substantial progress in delivering quality legal services to the vulnerable and poor. The strategic plan envisaged positioning LASA as a sustainable high performance public entity. To achieve that goal, the board and management had made a strong a commitment to adhering to the strategic plan. Strictly adhering to that policy had resulted in substantial success due to the 93% achievement rate. Legal Aid however still faced numerous challenges in meeting its mandate. This was largely due to a lack of financial resources. Treasury had implemented budget cuts across all government entities. This had particularly affected Legal Aid, but it was recognised that this was a challenge all state entities must face. Budget cuts had, however, resulted in negative staff retention, which was essential to their work. Without enough staff, Legal Aid would be unable to perform their work. The number of clients which were referred to them continued to increase, but without competent staff able to provide legal assistance to those clients, they would be unable to fulfil their mandate.
Budget cuts had had a severely detrimental impact on their work. Financial statements indicated that the shortfall currently faced by the entity would continue to rise if additional funding was not forthcoming. Again, this would severely impact on the ability of Legal Aid to perform their work. It was stressed that reductions in funding had a direct correlation to a decrease in the ability of LASA to train and retain sufficient and competent staff. In turn, this severely impacted on their ability to provide competent and effective legal representation to indigent clients. Reductions in funding would also have a negative effect on their ability to achieve their performance targets.
A challenge often faced by the organisation was that court records were often misplaced or not properly filed following the conclusion of cases, or took an inordinately long amount of time to be provided. This was a fundamental obstacle, as they often represented clients in appeal cases which required a record of the initial proceedings. This was a fundamental problem in the judicial system generally. Many appeals as a result could be lodged only up to four years after the initial case was concluded. When records were requested, legal aid practitioners were informed that the record could not be located or had been misplaced. The heads of court, in conjunction with the Committee, should take steps to urgently remedy this issue. The number and variety of matters taken up by Legal Aid would increase if more funding was forthcoming, particularly land claims matters.
Due to budget constraints the management of financial risk had become a priority. Increased scrutiny of the finances of the organisation had revealed that travel costs were often duplicated. It was also discovered that frivolous counterclaims had also often been instituted. Both issues had since been resolved by management. Steps had been instituted to recover the expenditure which had borne positive results. It was stressed that management had been very proactive in managing financial risk due to resource constraints.
The organisation had had to assume various duties in respect of managing property. A decision had been made to no longer rent offices and buildings. In many cases, it was discovered that landlords were overcharging and not providing the services LASA required. The solution adopted was for Legal Aid to acquire its own property.
Judge Makume made a few concluding remarks. The Board was operating effectively, with a skilled and high calibre of management. The skills and expertise of the board should be commended. Invaluable assistance had been provided on various matters, such as managing financial risk and the purchase of property. Management had been instrumental in ensuring the board had a true and accurate picture of the various issues facing the entity. Staff at all levels of the organisation had proven to be very effective, given the constraints they currently faced, and should be commended for the good work they had done thus far.
The Chairperson commended LASA for its role not only within South Africa but on the continent as a whole. He had recently attended a conference in Kigali with the LASA Chairperson and its CEO. Many delegates from across the continent had expressed admiration for the work LASA does. The purchase of property and the expansion of representation to land claims matters were initiatives which the Committee commended Legal Aid for performing.
Performance Report: 2016/17 Financial Year
Ms Marcella Naidoo, LASA Board member, gave the presentation on organisational performance. As noted by Judge Makume, the organisation had achieved the vast majority of their goals set out in their strategic plan, and had also achieved many of their targets in terms of service delivery. Sustainability reporting had been implemented which aligned with the objectives of the annual performance plan (APP). Targets set for sustainability reporting and the performance plan had both been met. A high level of performance had been maintained. The focus going forward was to maintain a high-performance level, as well as increasing the maturity level of each segment of the organisation. This applied to every level of the organisation, from legal service delivery to financial management. The primary focus was to increase the quality of the service provided to LASA clients and to ensure the organisation continued to grow and improve in delivering its mandate.
A new board had been instituted in terms of the Legal Aid Act, and would continue in operation until the next financial year. Objectives had been set to improve the development of relationships with legal aid organisations across the continent, as indicated by Judge Makume and the Chairperson of the Committee.
In the past financial year, LASA had provided assistance in 767 656 matters. This included 444 962 new matters. Of those new matters, around 87% were criminal cases, while 13% were civil matters. Legal advice had been provided in 322 694 matters, while they had assisted in 13 new impact litigation matters.
Children had been assisted in approximately 18 025 matters, of which 63% were criminal cases and 37% civil. A decision had been made to continue with the mixed-model delivery system. Justice centres continued to constitute the bulk of the services provided. A smaller amount of matters were dealt with in terms of judicare, which was where matters were outsourced to private legal practitioners. Co-operation agreements and agency agreements were also included in the mixed-model delivery system, but constituted a small percentage of the overall legal services provided.
Court backlogs targets for all courts had been met, except for regional courts. Civil court targets had been fully met. Despite budget cuts, consistent service delivery had been maintained at a national level. The maintenance of consistent service delivery did, however, require utilising cash reserves which would then impact on the utilisation of judicare legal services. Budget cuts did unfortunately require a reduction in the compensation of employee remuneration in the current financial year. Legal aid regulations had been approved and gazetted. There had been delays in finalising those regulations due to additional processes which had to be followed, linked to socio-economic impact assessment requirements.
The quality management programme had been maintained. This included both quality interventions and monitoring programmes. Feedback from judicial officers had been obtained to improve on service delivery. The judicial officer survey indicated high satisfaction results. Magistrates had given especially positive feedback regarding the quality of legal services provided. A particularly positive result was a 93% success rate in the 15 impact matters which had since been finalised.
A refinement of the client relationship strategy had been implemented, which included a language policy for the organisation at the national level. The language policy was formulated with reference to a survey conducted to determine the language preference of clients. The formulation of the language policy was required was terms of the Legal Aid Act. Additional community engagement involved participation in all structures pertaining to the criminal justice system, with the aim to improve efficiency and accountability.
Legal Aid had received their 16th consecutive unqualified clean audit from the office of the Auditor General (AG). Zero findings had been made in the management report. The AG had already briefed the Committee on this finding. Financial expenditure was currently on track, despite the budget cuts. 99% of the total budget of around R1.7 billion had been spent. This was within the expenditure projections that had been catered for, but in some instances it had been necessary to spend beyond expenditure projections. This was primarily due to capital expenditure.
People development indicated a number of achievements. Legal SA had been given top employer accreditation for the eighth year running. The organisation was, however, the second most favourable public sector employer in terms of that accreditation. High recruitment levels were maintained at 96%, with a low employee turnover rate of approximately 5%, which was inclusive of candidate attorneys. That figure did, however, exclude contract staff. Regardless, the 5% turnover rate was a positive figure given the industry norm was approximately 10%. Training targets for the year had also been achieved.
Brand perception had increased. The Annual Brand Survey of 2016 showed a 3% increase of Legal Aid brand awareness. The information technology (IT) platform continued to remain stable and the electronic Legal Aid administrative system continued to operate effectively. Additional software packages had been implemented to assist with service delivery.
Internal auditing systems continue to function effectively to ensure internal governance targets were met. Random lifestyle audits had additionally assisted in giving positive assurances on the ethical standards of employees.
Report on Criminal Matters
Adv Brian Nair, National Operations Executive: LASA, said the key performance benchmark for Legal Aid was to ensure effective and adequate representation at all courts nationally. His presentation focused primarily on Legal Aid representation in criminal matters. The key benchmark was to ensure adequate national coverage so that all accused qualifying for legal aid were provided with proper legal assistance.
Coverage targets for the various courts were as follows: district courts at 83%, regional courts at 93% and high courts for all legal aid matters. All those targets had been achieved and in some instances exceeded. A total coverage of 87% for district courts and 97% for regional courts, inclusive of coverage of all legal aid matters in the High Court, had been achieved.
Approximately 385 972 new criminal matters had taken up Legal Aid. This was approximately 87% of all new matters taken up during the year. The majority of those cases were heard in magistrate’s courts using internal practitioners. 84% had been heard in the district courts, 15% in the regional courts and 1% in the high courts.18 appeals had been taken to the Supreme Court of Appeal. 50% of those appeals had been successful.
Most targets for the finalisation of matters had been achieved. The district and high court targets had been achieved. The district court target was to ensure that no more than 20% of matters took more than six months to complete, and the High Court target was to ensure matters took no more than 30% of matters exceeded 12 months. Both of those targets had been achieved.
Slide 15 of the presentation gave more in-depth detail regarding the different offences for which LASA had represented clients in during the past financial year across all court types. Aggressive offences continued to make up the majority of cases, at approximately 39%. This was followed by economic offences at 29% and narcotic offences at 16% respectively. Sexual offences constituted 6% as a total percentage of all matters, but constituted approximately 25% of offences taken up in the regional courts.
The presentation then dealt with pending matters. There were a total of 161 370 pending matters. Approximately 50% of those matters were in the district court. All of the targets for reducing pending matters had been fulfilled across all court types.
The next aspect of the presentation dealt with the national footprint. There were currently 64 justice centres and satellite offices. The number of satellite offices and justice centres had not been increased during the past year. 2 751 staff had been recruited in the past year and just under 80% of that recruitment figure constituted legal staff, inclusive of paralegals. In addition, there were currently 1 176 judicare practitioners, 10 co-operation partners and five agency agreements with private law firms. The co-operation partners included university law clinics. The current structure of LASA therefore followed a mixed model delivery system. In total, most matters were handled by the justice centres, at 95%, whilst judicare practitioners handled 4% of matters, with private law firms and co-operation partners handling approximately 1% of new matters.
Thus far the mixed model delivery system had been proven effective. This ensured LASA could provide assistance in approximately 444 962 new matters, which was an increase of 1% from the previous financial year. Assistance had also been provided in 322 694 advice matters, which was a 4.6% total increase from the previous year. A total of 445 625 matters had been fully finalised during the 2016/17 financial year, which was a positive clearance rate of 1%.
Over the past three years, the intake of new criminal matters had remained more or less the same. There had been a slight drop, however, in the past two years. This could be attributed to two primary reasons -- first, the improved screening of cases at court and secondly because of the National Prosecuting Authority (NPA) finalising an increasing number of matters through informal mediation and restorative justice mechanisms. There had been a slight increase in civil matters in the last year, of approximately 3 000 new matters.
Legal assistance was provided through the various delivery streams in accordance with the mixed delivery model. Justice centres continued to perform the majority of legal aid work, followed by judicare. The reason that justice centres provided the majority of assistance was because they dealt solely with criminal matters, whilst judicare and the other delivery steams dealt almost exclusively with civil matters.
Six programmes had been implemented to ensure quality control of legal services. This included the monitoring of supervisory ratios at justice centres, establishing support programmes for Legal Aid staff, such as mentoring and coaching, and differentiating quality monitoring programmes according to the needs of each individual practitioner.
Various initiatives had been implemented to ensure the efficient functioning of the justice system as a whole. An active role had been taken to highlight inefficiencies to improve access to justice across the board. Legal Aid strived to be pro-active in this regard by playing a leading role in identifying and addressing concerns arising at all courts throughout the country.
Report on Civil Matters
Mr Patrick Hundermark, Chief Legal Executive: LASA, gave the presentation on civil matters. The provision of civil legal aid formed part of the mandate of LASA. This was part of fulfilling the constitutional right of access to courts.
The demand for civil legal aid had increased. A total of 58 990 new civil matters had been taken on.
This was a 12.7% increase from the previous financial year. Justice centres dealt with approximately 52 000 of those matters, a figure which was 9.8% higher than the target set. 4.3% of those new matters had been allocated to judicare practitioners, whilst 1.2% had been allocated to various co-operation partners. This allocation was in line with the mixed delivery system and the current budget allocation. The reasons for the increased intake of civil matters were the increased demand for civil legal assistance, increased funding which had been allocated to co-operation partners, and increased recruitment of legal aid practitioners. The increased recruitment had resulted in improved legal capacity, which in turn had allowed a greater number of civil cases to be taken on.
Representation of vulnerable groups such as children, women, mental health users and people subject to eviction orders or other land-related claims, had increased overall. A 93% success rate had been achieved in high impact litigation, as illustrated by the recent judgment in Frail Care Crisis Collective v MEC Eastern Cape. This was where the Member of the Executive Committee (MEC) had attempted to close various frail care health facilities in the Eastern Cape. Legal Aid had also recently become involved in the Esidimeni arbitration. 22% of civil matters had exceeded the 18-month turn around target. This was still within the overall target of 30%, however. The new matters target had been exceeded by 9.8%, which had resulted in a waiting period being allocated to approximately 1 600 clients in non-priority matters.
HotDocs software had been implemented to increase efficiency in civil units. HotDocs implementation had had a greater impact on the organisation as a whole. It used the data captured on IT systems which could then be continuously utilised throughout the litigation process. This saved costs and improved efficiency, as data then had to be captured only once.
Outreach services had been provided. This was because Legal Aid does not provide services only at its satellite offices but also creates links with local community advice centres. Currently 144 advice offices maintained relationships with the entity to ensure litigation services were available to all clients. 1 458 visits to advice centres had been conducted, with approximately 7 000 new clients consulted and 1 111 new cases opened. General advice services had been available at 330 community outreach sites and 18 231 clients were assisted at various legal aid clinics. In many cases, clients could not reach LASA offices. Pension pay points and courts had been identified, particularly in rural areas, where clinics had been established to address this problem. Stakeholder linkages with organisations working with vulnerable groups, such as those living with HIV/AIDs, had been strengthened by 12% in order to ensure access to civil legal services across the board.
The majority of civil matters were related to family law issues, which comprised around 45%, followed by child matters at 18% and land matters at 14%. Child matters included the administration of estates, such as when children were orphaned. Legal Aid provided services in this regard to secure and protect the interests of the child in those matters. Any money secured in child administration of estates matters were then paid to the Guardians Fund and approximately R42 million had been paid into those funds in the past financial year. Land matters also included evictions. Most matters were heard in the magistrate’s courts, at 89%, with high courts comprising the remaining 11%.
Legal aid had been provided to children in approximately 18 000 matters. 63% of that figure dealt with children facing criminal charges, and 37% dealt with civil matters. There had been a 5% decrease in child matters dealing with criminal law. Where children were remanded in custody, their cases were closely tracked to ensure speedy resolution of their matters. As of March 2017, there were approximately 78 children awaiting trial in custody for a period of greater than one month.
A comparison of child matters over the past three financial years showed that since the 2014/15 financial year, there had been a gradual decrease in child matters dealing with criminal law matters, but an increase in civil matters. In the 2016/17 financial year, a total of 11 378 criminal matters had been taken on, with 6 647 civil matters. This represents a total decrease of approximately 7% for criminal matters and an increase of approximately 8% for civil matters in the past three years.
General legal advice had been provided at all offices. Advice work was primarily performed by paralegals. If a matter required legal representation, the case was referred to a legal practitioner to provide additional assistance. Advice had been provided to 322 694 clients at all offices and through the LASA advice line to remand detainees. This represented an increase of 4.5% from the previous financial year. The reason for the variance was because advice services were demand-based and Legal Aid had adopted a policy of not turning any clients away in those matters.
Justice centres and satellite offices provided advice in 253 681 matters. 27 236 remand detainees had been provided with advice at correctional services, whilst paralegals had provided advice at 330 community outreach sites. Paralegals were dispatched to identified correctional services to provide advice to awaiting trial and convicted persons who did not have access to legal representation. Paralegals then either give legal advice or attempted to persuade suitable detainees to apply for legal representation. Advice line calls constituted 41 777 of overall consultations. A memorandum of understanding (MoU) had been concluded with the South African National AIDS Council (SANAC) and Hospice Palliative Care South Africa, to ensure that the advice line was available to vulnerable clients who utilised the services of those organisations. Self-help modules had also been made available on the LASA website, and 36 such modules had been created thus far. Those modules dealt with various topics inclusive of applications for school fee exemptions, small claims court procedures and matters relating to divorce. Templates had also been made available on HotDocs to improve efficiency by providing pro forma templates for pleadings, documents and notices.
Impact litigation aimed to give effect to constitutional rights, inclusive of socio-economic rights, and to develop court jurisprudence on social justice matters, through specific and focused litigation. 15 such matters had been taken on during the past year and 13 had been finalised, with a total success rate of 93%. A thorough vetting process was adopted for high impact matters. This was because such matters required a high amount of resources and proper vetting had to be done to ensure that there was a probability of success before proceeding to litigate the cases. The vetting process also helped explain the high success rate when such matters were litigated by LASA. A high impact litigation booklet had been published by the entity for the sixth consecutive year, with further detailed discussion of the high impact matters dealt with during the year.
Report on Finance and Stability
Mr Jerry Makokoane, Chief Operations Officer: LASA, said a key objective had been to improve financial reporting in order to effectively manage the funds which Legal Aid had been allocated. A core aspect of the Strategic Plan was effective utilisation of finances, given the current economic climate.
Financial management indicated effective cash flow management despite a decrease in the budget allocation of approximately R92 million. Despite the funding reduction, Legal Aid had managed to remain within the budget allocation of R1.7 billion, which was the primary source of funding accruing from government grants. The current spending was on track in accordance with the industry standard. Sound financial management had ensured that 99% of the budget had been spent and allocated. This was attested to by the AG’s report, which affirmed the sound financial management of the entity. During the financial year, Treasury had implemented numerous budget re-allocation directives, particularly in relation to supply chain management (SCM) processes. Legal Aid had managed to give effect to Treasury budget re-allocations by re-aligning their budget in accordance with Treasury directives. The Committee responsible for SCM had remained effective by managing central suppliers through integration with the National Treasury SCM database. Creditors continued to be paid timeously. 90% of judicare and trade creditors had been paid within the 30-day invoice date period.
LASA had received its 16th unqualified audit from the AG, with zero negative findings made. The AG report had noted that all preventative and detective controls were adequately in place to address outcomes inclusive of leadership, financial statements, performance reporting and governance. Legal Aid strived to continue sound financial management and provide efficient adjustments and/or recourse wherever areas of potential financial concern were identified.
Approximately 99% of the allocated budget had been spent in accordance with financial planning and targets related thereto. The budget had been utilised to such an extent that the entity could continue to effectively retain its operational requirements, given the reduced budget allocation for the current financial year. Sound spending was particularly important to ensure that private judicare practitioners could continue to be retained when their services needed to be called upon. The reduced budget allocation had, however, had a negative effect on the total reserves of the organisation. This had required utilising cash reserves in certain instances to meet required expenditure costs. This was primarily due to the reduction in the government grant allocation which, as raised above, was the primary revenue source for the entity. The utilisation of cash reserves had reduced the total reserves from approximately R373 million in the last financial year to approximately R245 million in the current financial year.
The annual financial statements for the 2016/17 financial year indicated a balanced budget had been maintained. Revenue of approximately R1.6 billion had been received, with actual expenditure at approximately R1.7 billion. As already noted, the reduction in the government grant had required running a deficit in certain instances to maintain operational requirements. Despite budget cuts, utilisation of cash reserves had ensured that spending remained within the budget requirements.
Sound financial management remained a priority. Sound corporate governance was essential to maintain the financial health of Legal Aid. A strong commitment had been made by the Board to ensure compliance with best governance practices in terms of the Public Finance Management Act (PFMA), the Legal Aid Act and the King Code, and with all statutory requirements. Monthly statutory compliance reports had been implemented to ensure oversight with the aim of achieving those targets. A target of 100% compliance with all statutory requirements had been set.
The entity had ensured compliance with the 94 pieces of applicable legislation, but was only materially compliant with certain provisions of the Legal Aid Act, the PFMA and the Preferential Procurement Policy Framework (PPPFA). Irregular expenditure amounted to R2.1 million, and 57 incidents of non-compliance with the PFMA and PPPFA had been identified, of which 47 incidents of non-compliance had been classified as financial misconduct. Instances of non-compliance had been identified as relating primarily to the conduct of individual employees and suppliers to LASA. In many instances, non-compliance related to a failure to properly ensure compliance with certain tax obligations in respect of leased property, and non-compliance with SCM policies. Where lease contracts were concluded with non-tax compliant landlords, Legal Aid could not cancel those lease contracts if the defect was discovered only after the conclusion of the contract. This then resulted in the irregular expenditure of R2.1 million.
Internal auditing had been implemented to effectively manage financial risk. An internal audit committee had been established to ensure continuous oversight of financial statements. More than 95% of the targets in terms of the audit coverage plan had been met. 167 audit reports had been timeously completed per the audit plan, with an additional 21 projects covered. This had resulted in a positive 113% overall achievement for the current financial year. This performance was due primarily to sound planning and improved turnaround times which had been implemented because of the AG’s request for pieces of financial information throughout the financial year.
The forensic unit of the Internal Audit Department (IAD) had conducted fraud awareness at 19 justice centres across four provinces. The IAD had also been tasked with ensuring independent and objective quality assessments of legal practitioners, as well as judicare practitioners in both civil and criminal matters. 99% of the assessments in this regard for the current financial year had been completed. This was an improvement of approximately 3% from the 2015/16 financial year.
Legal Aid continued to strive to mature as an organisation. Risk management had been integrated into the strategic planning process to ensure sound financial management and continuous evaluation. The Board and the financial executive continued to work as a collective, which had resulted in sound financial management and continuous improvement.
A key target had been to expand and capacitate LASA’s national footprint to increase access to legal services, especially in remote and rural areas. To achieve this goal, a commitment had been made to ensure that staff were appropriately qualified at all service delivery points. The measures taken to achieve that commitment included reviewing and developing staffing plans, to ensure that operational requirements for legal and support positions were properly met. The target for the current financial year was to ensure that the organisation was staffed at 94% capacity. A 96.1% result was achieved in relation to recruitment goals. The positive variance of 2.1% was attributed mainly to the entity’s Employee Value Proposition (EVP) strength. The turnover rate for candidate attorneys was reported at 5.54%.
A central commitment was to ensure that staff were properly trained and capacitated. This was central to ensuring delivery of quality outcomes. Annual training had been implemented. The ultimate goal was to implement an annual training report to achieve that outcome. An annual training report was provided to the Safety and Security Sector Education and Training Authority (SASSETA) in accordance with the requirements of the Skills Development Act. The workplace skills plan requirements had also been complied with. Employment equity requirement compliance reports were also regularly provided to Legal Aid’s board.
Despite reductions in funding, LASA was of the view that it could still achieve its employment equity targets. A breakdown of the current employment equity statistics of the organisation was presented. Continued skills development remained a priority, especially at management level. This was to foster and maintain a culture of high performance within the organisation. This had borne positive results. Legal Aid was seen as a top public sector employer and had received top employer accreditation for the eighth consecutive year as a result of those initiatives.
The IT platform continued to remain stable. Initiatives had been implemented to increase Legal Aid’s footprint even further through the increased use of IT platforms. A new software platform was currently being developed for this exact purpose. The IT platform had shown a number of improvements overall. An independent assessment had shown a maturity growth of IT services from 1% in 2011, to approximately 2.5% in 2016.
Advertising and marketing continued to be reviewed to ensure increased access and awareness of the organisation. Social media, outdoor advertising, radio and television were increasingly being utilised as advertising platforms. All the advertising targets had been met in accordance with the five-year strategic plan.
Stakeholder engagement with all relevant partners in the justice cluster continued to show improvement. 204 media networking sessions had been held with members of the press, editors, producers and reporters, which had produced favourable overall results. Stakeholder engagement was particularly important to set appropriate targets by determining what the public required from LASA at ground level. 487 roundtable discussions had been conducted with stakeholders, which had been particularly valuable in strengthening relationships with government and various non-governmental organisations (NGOs). 269 partnership events had been conducted to strengthen stakeholder relations and improve service delivery to clients. Engagement also ensured that both Legal Aid and relevant stakeholders could remain abreast of current legal developments.
Board Performance Report
The LASA Board had achieved successes in various areas. Legal Aid operated within a strong government framework, as guided by industry standards and corporate governance best practices. The Board had been fully constituted by the end of the previous financial year. Board committees had been properly established and continue to function effectively.
Oversight responsibilities were functional, and were continuously and effectively executed. The obligation to disclose and report on performance to the Executive authority had been discharged. Four Board meetings and 16 Board committee meetings had been held. All meetings had a sufficient quorum. A Board maturity scale had been launched to ensure targets were met. Priority targets had also been set for the 2017/18 financial year.
Adv Kameshni Pillay, Board member, LASA, gave the concluding remarks of Legal Aid’s presentation around Board performance. In accordance with the recommendations of the Portfolio Committee on Justice, the Justice Department and Department of Rural Development and Land Reform had been engaged to ensure the transfer of funds, for allocation to legal advice and litigation purposes to finalise land claim matters. Engagements had occurred with the Chief Land Claims Commissioner to determine how Legal Aid could play a greater role in land claim matters. The Portfolio Committee on Justice had recommended that Legal Aid be allocated additional funds of approximately R45 million to address its budget shortfall and prevent further staff retrenchment. Additional funding would also enable LASA to expand its footprint and take on more civil matters. Unfortunately, LASA had been unable to secure that additional funding due to various budget cuts. Whilst additional funding had not been forthcoming, Legal Aid had been able to provide the same level of legal services as previous years, and therefore the reduction in funding had not resulted in less legal services being provided than in previous years. The number of legal matters taken up by Legal Aid had decreased. This was not due to a decrease in the provision of services, but because legal services were demand-based. Reductions in funding for the new financial year may, however, have a detrimental impact on the amount of services Legal Aid could be provided.
Ms Pillay covered the challenges currently facing the organisation. Financial stability was a major challenge going into the new financial year. This was illustrated by the projected budget shortfall of R59 million for the new financial year. A commitment had been made to meet that shortfall through measures other than staff retrenchment and salary reduction. As their core service was provided by inhouse legal practitioners, any salary reductions or staff retrenchment would have a severe impact on their ability to provide legal services as a whole. In the current financial year, budget cuts had been mitigated largely through utilising cash reserves, but going forward a reduction in financial resources would become a more pertinent issue. This could result in a reduction in targets, especially in relation to civil matters and coverage of courts. This could be addressed by analysing demands for various courts and focusing LASA’s provision of service at courts where there was a higher demand. An additional measure would be to engage more with courts, to ensure that all legal aid matters were heard on particular days to ensure that practitioners could appear in more matters on a single day, which in turn would save costs and improve efficiency.
In conclusion, Legal Aid would continue to focus on high impact priority matters for the new financial year. Initiatives to maintain financial stability because of budget cuts would continue to be implemented and revised. Financial stability initiatives were inclusive of potentially implementing a cap on employee remuneration. The maturity of the organisation and increased monitoring of backlogs, especially relating to criminal matters in the regional courts, would continue to be maintained. Increased technology usage would continue to be implemented to ensure greater efficiency. Succession planning measures would be implemented to manage employee turnover.
The Chairperson said he had noted the participation of LASA in the Land Forum conference which had been organised by the Foundation for Human Rights. Its inputs had been very useful at both conferences held at the University of Pretoria and the University of the North. He hoped that Legal Aid continued to participate in those initiatives and their work in that regard was to be commended.
Ms M Mothapo (ANC) commended LASA on their performance, especially their 16th consecutive unqualified audit opinion. The reduction in liabilities in the past financial year was also to be commended. Additional information was requested on the fruitless and wasteful expenditure of R2.1 million. She also asked about the number of resignations Legal Aid had received in the past year, as the presentation had revealed that around 264 candidate attorneys had resigned from the organisation after completing their articles. This was a cause for concern in relation to capacity, as it was detrimental to the organisation for candidate attorneys to be fulfilling the capacity requirements of the organisation only to leave once they had completed their articles.
Employment equity showed positive results, especially at board level. Clustering of services to high demand areas to address budget cuts could become a cause for concern. Would this not deny access to justice for people who lived in areas where there was a lower demand for legal services, if high demand areas were prioritised? In relation to the increased utilisation of computer services, it was noted that there was an initial contractor, and that contact had been terminated. A second contract had subsequently been concluded. Did this have a negative financial impact on the organisation?
The CEO of Legal Aid had recently been appointed as the project leader for the transformation of state legal services. Additional information was requested in that regard. The transformation of legal services was a priority issue which the Committee had engaged with in the past. Marketing and outreach appeared to have decreased in the past few years. Legal Aid used to be widely advertised through measures such as highway billboards, but this seemed to have been drastically reduced in recent years. This should be taken into consideration, as marketing and outreach were vital to ensure Legal Aid maintained a high profile to provide legal services to those who needed their services.
The Public Protector had entered into a MOU with the Department of Co-operative Governance and Traditional Affairs (COGTA) to make increased use of traditional council offices. Had Legal Aid considered expanding co-operation with COGTA to increase their footprint in traditional rural areas? Legal Aid should also be commended for their initiatives in expanding legal services to land claim matters.
The Chairperson agreed with the comments of Ms Mothapo. Traditional councils should be engaged with by Legal Aid, especially in relation issues such as female leadership. The CEO should also be commended for his appointment as the project leader for the transformation of state jegal services.
Mr W Horn (DA) congratulated Legal Aid on their 16th unqualified audit opinion which was a commendable achievement, and also requested additional information regarding the R2.1 million of irregular expenditure. A contributor to that irregular expenditure was that certain leased buildings did not have proper tax clearance certificates. Whilst the entity had achieved a number of successes, the issue of ensuring that proper tax certificates were scrutinised before entering into those leases could have been avoided. What measures would be implemented to prevent that occurring in the future?
He asked LASA to provide a position paper, if possible, as to how irregular and wasteful expenditure in the procurement of state legal services as a whole could be managed and avoided. This was especially pertinent, given that the CEO had recently been appointed as the project leader for the transformation of state legal services. It was a commendable achievement that Legal Aid had implemented consequence management and taken steps to recover irregular and wasteful expenditure. He requested that Legal Aid provide a briefing paper or document in respect of their consequence management measures which could be of assistance to other entities facing similar issues.
How did Legal Aid determine which issues to take up in terms of high impact litigation? There was a dire need to realise socio-economic rights within the country. There did, however, appear to be a regression in respect of the enforcement of first generation rights. The Human Rights Commission (HRC) had informed the Committee the previous day that a lack of resources had prevented it from embarking on litigation to enforce and protect many of the rights which they were empowered and mandated to litigate on. For example, the Commission had made adverse findings in respect of the provision of water in many municipalities as long as three years ago. Despite those findings, a lack of resources had prevented them from litigating to enforce compliance with their recommendations arising as a result of those negative findings. What relationship did Legal Aid have with the HRC in respect of assisting with litigation? Additional information was requested regarding the high impact litigation matters Legal Aid had been involved with. Which generation of rights did those matters relate to? It had been reported that in 25% of matters involving sexual offences, a lack of legal representation had contributed to postponements. What measures had been introduced to prevent postponements in those cases? Delays in these matters could contribute towards a delay of justice being obtained for victims. The negative impact was amplified more so when minors were involved.
Mr M Maila (ANC) said that despite the overall positive performance of the entity, it was imperative to ensure that consequence management was properly implemented. The quality of LASA staff appeared to be of a very high calibre, but additional information was needed regarding consequence management measures in respect of staff responsible for fruitless and wasteful expenditure. Were there organised labour formations such as unions in the organisation? If such formations existed, what was the relationship between those formations and management? Many entities had faced issues relating to dissatisfaction in their workforce. If this had affected LASA, how had they dealt with those problems? What was the progress regarding the transfer of funds from COGTA to enable land claims?
Mr L Mpumlwana (ANC) said that in numerous cases, magistrates had permitted defendants to represent themselves. In many cases, such defendants were wary of having Legal Aid lawyers appointed to represent them, as they did not want people who they perceived to be government lawyers providing their legal defence. What was the role of Legal Aid in such a situation? The Chief Justice had recently made English the sole language for conduct of court proceedings. In some areas, people spoke only traditional African languages. In the Member’s view, this could have a negative impact on promoting access to justice for three reasons. Firstly, it was because the arresting officer’s statements could often be decisive in various cases. In many cases, officers were not fluent in English. When the matter finally reached court, the statement may be distorted or misinterpreted. Secondly, there were often no interpreters to assist defendants who were unable to speak English. African languages could have a number of different meanings which often do not translate well into English. What was the opinion of Legal Aid on those two issues? Thirdly, lay people often did not have any knowledge of court procedures or processes.
In traditional African society, where a person wronged another person, restorative justice was usually employed to resolve the dispute as opposed to being removed from society. This was different to what occurred in the usual criminal justice process. When those people appeared before court, that process was often foreign to their conception of criminal justice. Was it not time for courts to explore implementing African conceptions of criminal justice?
Language was also a serious issue. It did not make sense, in his view, to make English the sole language for all courts. In different areas, people spoke different languages and to force such people to attend court proceedings in English made them a foreigner in their own country. In addition, what contribution did LASA make to reducing crime generally? It was worrying that many cases were continually postponed, and accused were then remanded in custody for extended periods of time. What was the contribution of Legal Aid to preventing excessive postponements?
Mr N Matiase (EFF) asked if additional sources of revenue had been explored, in addition to government revenue. Had consideration ever been given to utilising law graduates to assist with their work? Why was there a differentiation in LASA’s employment equity figures between black and African? Finally, around 7 000 land claim matters had been handled by Legal Aid, which was around 40% of the total land claim litigation matters. The land issue was vitally important for the country. Had the Department of Justice been engaged to ensure greater co-operation to sufficiently capacitate Legal Aid to resolve land claim issues?
Ms M Pilane-Majake (ANC) asked what follow-up process had been implemented where areas of concern had been identified? Hiring patterns were slightly disappointing. Hiring of premises in the past had been disappointing and not cost effective. Legal Aid should be commended for taking the initiative to purchase property, but had consideration been given to renting government property at reduced rates?
Criminal matters, especially in relation to aggressive and violent offences, continued to occupy the majority of cases which Legal Aid took on. Did they play any role in tackling the causes of aggressive offences within society, beyond legal representation in criminal matters? The issue of internships had been raised in previous meetings. Whilst internships should be provided, there was an element of caution in conducting internship programmes. This was because in many cases, young university graduates occupied candidate attorney positions but left after they had completed their articles. This was generally due to the low remuneration associated with legal practitioners. This should be explored in order to avoid negative consequences as low remuneration had a direct impact on staff retention rates.
The Chairperson said an aspect which stood out for him personally was the need for Legal Aid to ensure a wide geographical footprint across the country to ensure access to justice for those qualifying for legal aid services. The issue of language in courts was particularly important, to promote transformation of the legal system as a whole. Due to time constraints it was requested that any questions which Legal Aid was unable to fully address be followed up in writing.
Judge Makume responded to two questions. Societal aggression was an issue which worried the legal profession, society and the judiciary as a whole. This was not an issue which could be resolved by legal aid, but required the cooperation of several stakeholders. Drugs and alcohol were fundamental causes of aggressive offences. The government should tighten access to liquor and drugs which were too easily available. In many cases, people were convicted and sentenced for drug offences, but when released committed the same offences. The government would have to play a leading role in this regard by restricting access to liquor and ensuring efficient and effective policing.
Language was an issue which had been facing the legal fraternity for some time. As noted by Mr Mpumlwana, the issue of language arose from the moment that a person was arrested or when a complainant laid charges, and not only when an accused was brought before court. In many cases, he had personally asked arresting officers why they had not written statements in their home language when it was clear that they were not fluent in English. People were fully within their rights to write statements in a language of their choosing, and police officers should inform people of that right. It did not make sense for a person to write a statement in English when they were not fluent in that language. If a person writes a statement in a language which they were fluent in, that statement could always be properly translated at a later stage. The Chief Justice’s directions did not prevent people from using their home language in court, or their legal proceedings being conducted in a language which they understand. Those directions only made English the language of record. If a person did not understand English, they had a constitutional right to speak their home language and have the proceedings conducted in a language they understood. It was a different matter where a judge or magistrate did not speak that language, but interpreters were provided in those cases. It was, however, an issue that many translators were not always fluent in various languages and that judicial officers could not always speak African languages. One of the reasons for the Chief Justice’s directives was that in many courts, especially in Pretoria, proceedings and judgments were often delivered in Afrikaans. This could create issues where the matter had to go on review or appeal, where the judges at the appeal court were not always fluent in Afrikaans. As English was widely spoken in the country, the directive of the Chief Justice in that regard was intended to mitigate those kinds of issues arising in the future.
Ms Pillay said that the remaining questions would be addressed in writing. Regarding the higher number of criminal matters dealt with by LASA in comparison to civil matters, this was due to a policy choice by government. This was primarily because all accused had a constitutional right to legal representation at state expense in criminal matters unless substantial injustice would result. Legal Aid was also limited in the extent of legal services which they could provide due to budgetary constraints. Any increase in civil representation would require additional funding which would most likely be unlikely, given the recent budget cuts. The constitutional right to legal representation in criminal matters also prevented Legal Aid from reducing their coverage in criminal matters. An expansion to more civil matters would require a change in government policy.
The R1.7 billion budget was quite small in comparison to other entities, which made it difficult for Legal Aid to play a greater role in addressing the underlying societal causes of violent offences. This was an unfortunate reality, due to the resource constraints which they faced. Additional funding to increase efficiency in policing would play a greater role in reducing those underlying causes of violent offences.
The Chairperson commended Judge Makume for his concerns relating to language and restricting access to alcohol and narcotics. It was important to address the underlying causes of crimes and not only the symptoms, such as legal representation when a person finally appeared in court. The Committee should explore how to restrict access to dangerous substances, especially for young people. A partnership should also be explored to promote transformation within the legal sector. Legal Aid was to be commended for their work and recommendations, and for their consistently good presentation before the Committee.
Special Investigating Unit (SIU): Annual Report
Adv Andy Mothibi, Head: SIU, formally introduced Ms Caroline Mampuru as the new Deputy Head of the SIU. She had previously worked in the AG’s office and the National Prosecuting Authority (NPA) and it was stressed she had a wealth of invaluable experience which would be a great asset to SIU going forward.
The presentation focused on the following key aspects:
Annual financial performance.
Pending litigation matters.
Matters pertaining to governance.
An update on the organisational review of the entity.
Adv Mothibi said the SIU had recognised that various improvements to their organisational framework were required. This included strengthening the stability of the operational environment, robust accountability, attaining growth and maintaining high standards of operational excellence, and demonstrating the continued importance of SIU in the changing political and economic climate of the country.
The organisational review had been embarked upon to achieve those outcomes. Areas of concern had been identified, and concrete steps had been implemented to address areas of concern where there was room for improvement. He provided an in-depth table of the challenges which had been identified and the steps taken to address those challenges. The review aimed to improve the operation of the SIU as a whole. This was inclusive of aligning their remuneration structure and implementing policy to ensure adequate job design and career paths, all of which was underpinned by a clear strategy designed to strengthen SIU’s mandate in fighting corruption in both the public and private sector.
The SIU had received a clean, unqualified audit for the 2016/17 financial year. This was the first time that it had received such an audit since its inception. No significant findings had been made by the AG. A strong commitment had been made to maintain that clean audit outcome in the future. SIU had made significant progress in relation to audits. An action plan had been implemented to clear the findings the AG had made in his opinion.
The SIU had submitted six final reports to the Presidency and had recovered R126 million for the state. The actual value of money recovered was R43.5 million. As a result of SIU interventions, R106 million in unlawful payments had not been made. R4 million worth of unlawful administrative action and contractual agreements had also been set aside because of SIU investigations. 137 referrals for disciplinary, executive and administrative action had been made, whilst 108 cases had been referred to the NPA and the Asset Forfeiture Unit (AFU) for further investigation and forfeiture orders.
Annual performance targets showed that eight out of ten indicators had been achieved. The two indicators not achieved pertained to the value of money and assets potentially recovered and the actual value of those assets recovered. The SIU had briefed the Committee earlier in the year on the reasons why those targets had not been met. This was partly due to the way in which quarterly targets were configured, which was being addressed to ensure achievable targets were set.
Seven indicators in relation to national expenditure had been set, but only two had been achieved. Measures had been implemented to ensure significant improvement in areas of poor performance.
The target for investigations being closed out was 800. The total number achieved was 1186, thus exceeding that target. As indicated in previous presentations, a number of proclamations were often issued in relation to the same investigation. The achievement figure referred to all proclamations and investigations which had been closed out in that regard. Detailed information regarding the proclamation number and the implicated state institutions was presented. (See presentation slide 10).
A total of six reports had been finalised and sent to the Presidency. At the time the report was finalised and sent to the President, a number of outcomes had been made. Those outcomes varied from referrals to the NPA or AFU, referrals to disciplinary hearings and civil litigation matters, or referrals to other state institutions such as the SA Revenue Service (SARS). By the time the President actually received the report, a number of steps had often already been taken. At this point, it then became important to do continuous follow-ups to ensure state institutions carried out the recommendations made by the SIU to investigate and recover state funds.
The value of money and assets which were potentially recoverable referred to money or assets potentially recoverable for the state from third parties. The target set was R240 million, and the actual recovery was R126.9 million. A root cause analysis had been conducted to identify the underlying cause of that variance. Various issues had arisen regarding referrals to the AFU. The NPA had also informed the SIU that appeals had been lodged against forfeiture orders, but the appeals had subsequently gone in favour of the NPA and AFU. Those matters had subsequently been referred back to the court of first instance and judgment in those matters would affect the amount of money recovered under this outcome.
Communication with the judge presidents had been strengthened to ensure the fast tracking of civil litigation under SIU referrals. This had borne positive outcomes according to the civil litigation department. A number of high profile matters had been referred, inclusive of the recent South African Social Service Agency (SASSA) investigation. Outcomes would be reviewed within the next year to ensure they aligned with SMART principles.
The actual value of assets recovered was R43.5 million, which was short of the target of R140 million. The root cause of this variance was similar to the underlying reasons for variance in terms of the potential amount of money recovered for the state, as dealt with above regarding AFU and NPA referrals.
A target of R18 million of total loss averted during the financial year had been set. This target had been achieved and exceeded substantially, as R106.5 million of loss had been averted. Due to time constraints, this figure was not presented on fully, but a detailed breakdown did appear on slide 23 of the presentation.
A target of R600 million had been set for the setting aside of unlawful contractual agreements and administrative action. This target was achieved and substantially exceeded, as a total of R4 billion of unlawful contracts and administrative action had been set aside as a result of SIU interventions. This included various instances of administrative action and/or contractual agreements set aside involving irregular contractual awards. This included the Department of Communications, the State Information Technology Agency (SITA) and the Department of Transport. The matter involving the Department of Transport involved a lengthy process of litigation which had eventually ended up in the Constitutional Court, but where the SIU had eventually been successful. Amahlati Local Municipality had also been involved in the award of an irregular tender. SIU interventions had resulted in saving approximately R107 million for the state in that matter. The municipality had been advised to terminate the agreement, but litigation involving that cancellation was still currently being litigated in the High Court.
The target set for asset recovery in civil proceedings had been set at R1.2 billion. This target was also substantially exceeded, as R3.8 billion had been recovered through civil litigation.
Several NPA referrals had been made. The SIU had adopted a policy of continuously following up on its referrals to ensure that matters were properly investigated and prosecuted. Engagements had occurred with the NPA due to concerns regarding the slow pace of prosecuting referred matters. A MOU had been concluded with the NPA on 28 August 2017 to establish a working methodology to ensure proper monitoring of referrals to the NPA. The MOU had resulted in an undertaking between the two organisations that there was a need to ensure that matters referred to the NPA were timeously prosecuted through measures such as prioritising SIU referrals for prosecution.
As with issues pertaining to the NPA referrals, a number of disciplinary recommendations and referrals had been made, but state institutions did not always promptly execute SIU recommendations. If state bodies declined to implement disciplinary recommendations, then reasons should be provided for that refusal. Approximately 138 referrals had been made, which was a significant amount. Investigation teams had contacted the state institutions concerned to monitor their progress. As with the NPA, steps had been taken to ensure monitoring of those referrals to ensure proper consequence management when referrals were made. Several MOU’s had been entered into with the Department of Justice and the Presidency, to establish a monitoring committee in terms of that MOU. That committee scrutinises every referral for disciplinary hearings and contacts state institutions to ensure that SIU recommendations are properly implemented. He stressed that it was not enough to simply refer a matter for disciplinary action to a state institution alone, but that continuous monitoring and follow-ups must be conducted to ensure that consequence management was complied with and implemented.
Adv Mothibi said that as part of SIU operations, they were permitted to second resources to state institutions to assist with investigations and law enforcement. The SIU had embarked on a policy of continuously reviewing and monitoring the impact that SIU employees provided when seconded to state departments. It had made various recommendations relating the recovery of lost funds and referrals for criminal and disciplinary actions in the Department of Public Works. A joint operation had also been conducted with the Department of Basic Education.
Investigations were divided into three categories: national government, provincial government and local government. This was not described in detail due to time constraints, but it was stressed that the SIU had embarked on a process to finalise ongoing investigations as efficiently and speedily as possible. Where possible, ongoing matters had been valued in terms of asset recovery. Outcomes were achieved even while investigations were ongoing to ensure continuous monitoring of the status of those investigations.
Regarding state entities, the SIU had engaged with the Department of Public Enterprises to educate officials regarding the SIU’s mandate and functions. This was important in order for state entities to have faith that SIU could provide services of the same high calibre as that provided by private sector entities. Stakeholder engagements had been conducted in various provinces to also educate the public as a whole, and not only state-owned entities. Thus far those engagements had borne favourable results. They had increased public awareness of SIU, and some referrals had even resulted from those initiatives.
Action proceedings had been instituted by the Department of Public Works to recover R155 million to recover costs from the principal agent responsible for overseeing the security upgrades conducted at Nkandla. Pleadings had closed in the matter and the SIU had served its discovery affidavit which amounted to some 92 000 pages. The next step would be to attend a pre-trial conference before the matter proceeded to trial. The lawyers of the other party had subsequently withdrawn, which had unfortunately delayed the finalisation of the litigation process.
Governance and Human Resource Management
The risk management committee had been approved, was currently operational and was chaired by an independent chairperson. Regular meetings were conducted and the risk management framework had been put in place to manage risk throughout the organisation and ensure proper controls were put in place. The audit plans of the internal auditors had also implemented risk management to ensure proper risk management and controls. Risks were monitored on an ongoing basis to ensure that controls put in place were effective.
The audit committee had been established and sat regularly. The clean audit of SIU had been noted by the audit committee, and various audits for the financial year had been completed.
The total staff complement as of 31 March 2017 was currently 523, of whom 404 were operations staff and 119 were support staff. A detailed breakdown of those figures by race and gender was provided.
Mr Andre Gernandt, Chief Financial Officer, SIU, reiterated the contents of the AG’s audit, which had made no material findings. The AG’s report had noted proper and adequate compliance with performance information, compliance with legislation and internal control deficiencies.
The statement of financial performance showed an increase of grant income in the 2016/17 year, from R304 million to R316 million. Project income also showed a 4% increase, from R174 million to R181.7 million. A decrease in debt impairment of 12% had occurred, from R62.9 million to R55.3 million. General expenses had increased from approximately R81 million to R101 million. This resulted in a total surplus of approximately R40 million, down from R50 million in the previous year.
Overall assets were healthy with a total of R449 million. There were no long-term liabilities, but only current liabilities consisting mainly of the payment of creditors. The SIU currently had a 6:1 ratio of assets to liabilities, which was a positive figure. The net cash flow from operating activities was healthy at R65 million, but had decreased from the previous year. This was mainly due to debtor payments which have not yet been recovered.
The filling of vacancies had been temporarily put on holding pending the finalisation of the performance review. Only critical vacancies had been filled, resulting in a positive variance of R66.6 million in terms of employee related costs. Debt impairment had not previously been budgeted for, but would be budgeted for in the future.
Whilst a clean audit had been obtained, a small amount of irregular expenditure had been incurred because of contracts which had been concluded in previous years. Irregular expenditure had been dropping consistently in recent years, from R2.5 million in the 2015/16 financial year to R1.8 million in the 2016/17 financial year. Investigations of irregular contracts had taken place. A process had been embarked upon to regularise all of those contracts through proper tender procedures.
The AG had identified a small amount of fruitless and wasteful expenditure. In the 2016/17 year traffic fines had been identified which had since been recovered from individual employees. The main financial issue related to resolving various debtor money owed to the SIU. The outstanding gross trade debtor was approximately R418 million. 53 state institutions which owed the SIU money had been contracted to realise those debts, as well as various historical payments. The net trade debtor figure was approximately R129 million. Around R66.2 million had been recovered, which was around 50% of the net debt owed by trade debtors.
The SIU had embarked on an intensive exercise to realise outstanding debts. National Treasury had also been engaged to assist in recovering those outstanding debts. In terms of s5 of the SIU Act, individual institutions could apply for exemptions for outstanding payments which was currently being scrutinised by Treasury.
Adv Mothibi made a few points on the debt recovery strategy. While various debtor departments had been engaged, the SIU still had more work to do in this regard. It was important for the affected departments to be properly appraised of the outcomes of their various investigations. The Presidency had been engaged to improve efficiency in this regard. It was also important that the final report was also circulated amongst affected state departments to ensure that proper remedial action had been implemented. This would assist in creating an environment where state institutions saw the proper value of the SIU and created a culture where state Departments settled their various debts timeously. The SIU had taken a pro-active stance in realising outstanding debts.
The organisational review was geared towards enhancing measures to improve efficiency, people practices and staff development. A fundamental target of the review was ensuring the strategic goals of the organisation were properly defined and areas of concerns were pro-actively identified and remedied.
Three focus areas for the organisational review had been identified. These were:
Strategy and organisational design;
Job design and evaluation/remuneration and incentives; and
Culture, change and engagement.
The current operating model was not adequately defined, and the new operating model was envisaged to address this issue to ensure that the proper competence of the SIU was well defined. SIU staff had been briefed on the operation and content of the new operating model. A particular area of importance was improving on turnaround times, especially in relation to NPA referrals and realising historical debts from state institutions.
Ms Mothapo commended the SIU on their clean unqualified audit. Contingent liabilities in respect of labour disputes were a concern, as they had risen from R2.8 to R3.1 million in the current financial year. Additional details were requested regarding the increase and the number of employees involved in those disputes. It was a concern that it did not employ any people living with disabilities.
Mr Horn said that past presentations had provided a detailed breakdown of the various matters the SIU had referred to the NPA. In many cases, the NPA had insisted on further investigation and the compilation of various documents. Had this continued to be the case in the current financial year? Had the special SIU tribunal been established? It had been stated that the AFU target had not been fulfilled by the SIU, but the Department of Justice had briefed the Committee to the effect that the AFU had achieved all of their targets. It would be beneficial for the AFU to further brief the Committee on the discrepancy between the Department of Justice’s briefing in this regard, and the SIU presentation.
Regarding “state capture,” Adv Mothibi had placed it on record that the SIU was ready to proceed with any investigation falling under its mandate. No presidential proclamation in this regard had been forthcoming at the time that statement had been made. Was it still the case that no proclamation had been published authorising SIU investigations into allegations of state capture, especially in relation to Eskom? In the past, the SIU had informed the Committee that they were dependent on presidential proclamations in order to institute investigations, but did have a process whereby they could consult with the Presidency when such proclamations were drafted. Had this issue been discussed with the office of the Presidency? Some adverse media reports had circulated to the effect that there were staff grievances regarding the restructuring process. Had those grievances been successfully addressed?
Mr S Swart (ACDP) said that the annual performance information presented a mixed bag as far as achievements were concerned. Whilst commendable targets had been achieved, there had been a drop in the total amount of actual assets recovered. Of the R240 million identified in the previous financial year, only R127 million had been recovered. Whilst it was commendable that the SIU had prevented various unlawful contracts from being implemented, the corresponding reduction of 169% in recovery was a cause for concern. This painted the unfortunate picture that the SIU, and other institutions of state as a whole, were not winning the fight against corruption and irregular and wasteful expenditure. As raised by Mr Horn, in relation to the state capture of Eskom enquiry, Mr Brian Molefe had made a public statement to the effect that the SIU would investigate irregular and potentially corrupt activity at Eskom. However, the SIU was fundamentally constrained in its effectiveness because, as illustrated by the SABC matter, it was dependent on a presidential proclamation authorising it to investigate.
It had been a number of months since state capture allegations entered the public domain, and little to no action had been taken. This was a fundamental concern, as vast sums of money were being illegally transferred outside of the country. Whilst this was not necessarily the fault of the SIU, this was an issue of national importance which must be speedily and decisively resolved. Law enforcement agencies gave assurances they were investigating, but no concrete results had been forthcoming. A mechanism must be explored to ensure that proclamations were published far more quickly.
Mr Swart commended the SIU’s engagement with state-owned entities, but had they expanded those investigations to other state owned entities besides Eskom, such as the Passenger Rail Authority of South Africa (PRASA) and Denel, for example? Had steps been taken to secure proclamations to investigate those entities as well? How would the investigation of other entities differ from the current investigations which were being conducted into Eskom? The Public Protector’s report on State Capture had already established prima facie evidence of state capture and criminal activity. Would the SIU cooperate with the Public Protector in her investigations to strengthen the fight against state capture? State capture had had a severely detrimental on economic growth, which had affected all state institutions, including the SIU, in respect of their resources and budget, in turn hampering their ability to fight crime and corruption successfully.
If State Departments owed the SIU money, why should they be absolved of those obligations? The Committee should assist the SIU to properly recover those debts. The SIU was reliant on proclamations, which in turn could raise allegations that the SIU was politically captured.
The Chairperson interrupted Mr Swart, and asked whether it was fair to refer to SIU officials as “politically captured?”
Mr Swart withdrew his allegation that the SIU was politically captured. The perception was that SIU was dependent on political exigencies to fulfil their work, which was potentially a flaw in the legislation governing the SIU. If the President himself was an implicated party, that rendered the SIU fundamentally hampered in the work it could perform. What progress, in the SIU’s opinion, was being made in the fight against state capture?
Mr Matiase agreed with Mr Swart that the lack of the SIU’s independence from the executive branches of state weakened their ability to properly fight crime. The structural design of the SIU fundamentally hampered their investigative ability and effectiveness, even though the leadership of the SIU had indicated a willingness to combat corruption. This was because of two primary reasons. Firstly, the unit was not sufficiently insulated against political interference. Secondly, a lack of sufficient structural and operational autonomy meant the SIU was dependent on presidential proclamations to authorise any investigations. The funding model was also problematic, as it did not guarantee sufficient financial autonomy for the Unit.
Transparency International had recently ranked South Africa in position 47 in their corruption perception index. This was because what appeared on paper was a commitment to fighting corruption, but what occurred on the ground was a lack of sufficient political will to fight corruption. There was a culture of corruptibility on the part of the public service which was worsened by the fact that there was a lack of consequence management. The SIU’s empowering legislation was problematic because it did not sufficiently empower the SIU to operate as a unit able to effectively combat crime and corruption and recover stolen taxpayers’ money. What recommendations could the SIU offer from a legislative point of view to enhance their ability to fight corruption and ensure sufficient operational and financial autonomy? If those problems were addressed, it would do much to enhance the SIU’s public image and enhance their ability to effectively fight crime. He requested the SIU to provide legislative recommendations to that effect when they next appeared before the Committee.
Ms Pilane-Majake commended the SIU for their third consecutive unqualified audit, and said a clean audit should be strived for during the next financial year. The SIU should explore leasing or utilising old government buildings, as opposed to leasing to save resources. It was positive that the SIU had reduced its reliance on private consultants. In previous years it had utilised private consultants who were privately funded. The Committee had insisted that it reduce its reliance on private consultants, and it was a positive development that the Committee’s insistence had been adhered to.
Mechanisms should be put into place to ensure that money owed to the SIU was paid timeously. This would assist the SIU in utilising those funds to ensure that their office continued to operate. The restructuring process appeared to have placed the SIU leadership into a degree of disrepute. In her experience, it was common for negative allegations about management to be made during a restructuring process. It was important, however, that the restructuring process ensured a performance management system was put in place. This would enhance the outputs of the office and improve results in achieving targets. Did the PFMA permit the SIU to pay traffic fines from their budget? To what extent did they provide assistance to the office of the Public Protector? In many instances, the Public Protector had been overwhelmed with investigations into public institutions. How did the SIU assist her office in that regard?
Adv Mothibi replied to the concerns raised by Mr Horn and Ms Majake regarding the SIU’s public reputation. The SIU took their reputation very seriously and would not allow corruption or irregularity to occur under their watch. The articles referred to by Mr Horn were published in the Sunday Independent, and had contained various allegations. In a subsequent article, they had named the whistle-blower who was giving them information. That information was coming from a person inside the organisation. The SIU had responded to all of those allegations meticously. In his opinion, all of the allegations were spurious, incorrect and factually incorrect. To date, there had been no substantiation of any of those allegations. The SIU had issued a statement clarifying the matter. It had been communicated to the journalist in question that the information supplied to him was from various members in the organisation who felt their job security was at risk because of the restructuring. All staff had been told they were welcome to report any issues related to the restructuring or allegations of corruption. They were also welcome to report allegations of corruption to other law enforcement agencies.
The press ombudsman had been contacted in relation to the articles. The journalist in question had subsequently been contacted, and the SIU had provided their version of events in respect of every allegation in those articles. After that meeting, the journalist appeared to agree that the SIU’s assertions that the allegations were spurious. The journalist had indicated he would give the SIU an opportunity to publish their version in the newspaper. The SIU had later had their version published to set the record straight. The “so-called” whistle-blower was an SIU employee located in Durban. He had made various allegations against Adv Mothibi, which were broad and unsubstantiated. The person in question had made those allegations simply because he had various grievances with the organisation, and these had occurred years ago. Disciplinary proceedings had been implemented against him. He stressed that the SIU had put various mechanisms in place to deal with allegations of corruption or otherwise unlawful and illegal behaviour.
Ms Pilane-Majake commented that the Protected Disclosures Act now made false disclosures a criminal offence.
Adv Mothibi referred to fruitless and wasteful expenditure, and said that when their observation and research had been conducted, the irregular expenditure dated back to when the SIU had been using consultants. Most of those consultants had been brought in without following proper processes. The SIU had been faced with the legacy of those irregular contracts. It had committed itself to regularising this issue and would strive towards a zero figure of fruitless and wasteful expenditure.
The vacancy rate had been occasioned because of initiatives included in the restructuring process. Because of the undefined regional structures, the SIU had been unable to determine properly how inspectors must be placed in each office. This was partly because of the way that it had been previously been constituted to deal with area-specific matters. This issue was being addressed at the moment, but no holds had been placed on filling critical positions. Staff at all offices and trade unions had been consulted and participated in the various workstreams. Those organisations had also been consulted at their national forums, and various consultations with executives would be conducted later in the week. It was envisaged that once the restructuring process was completed, the remaining vacancies could be filled through a proper recruitment process.
Mr Swart wanted to make a final point about “state capture,” given that it was a matter of vital national importance. He strongly and categorically objected to Mr Mpumlwana laughing when the issue of state capture had been raised. State capture was an issue of national importance and while some ANC members thought it was a laughable issue, he personally did not.
The Chairperson commented that the Committee had agreed that state capture was a broad issue which was indeed of national importance. The Presidency had committed to establishing a commission of inquiry into state capture. It was unfair to expect SIU to respond to an issue as complex and broad as state capture in the current setting.
Mr Swart replied that his immediate concerns related to the SIU’s role in fighting state capture, and not the commission of inquiry as such. He appreciated the fact that the SIU could not properly respond to his concerns orally, due to time constraints. He requested that it respond in writing specifically in relation to their progress regarding the Eskom investigation.
Adv Mothibi said the SIU would respond to the remaining questions raised in writing.
Magistrates Commission on suspension of certain magistrates: Briefing
The Chairperson said that all the Committee required was a progress report regarding the suspensions. He asked the Magistrates Commission to keep their answers as concise as possible, and for the presentation to be confined to their progress reports and recommendations.
Mr Hans Meijer, Magistrate: Magistrates Commission, introduced Adv Cassim Moosa, Chairperson: Ethics Commission, Magistrates Commission, who would give the progress report and recommendations of the Commission.
Adv Moosa stated that eight reports were before the Committee for consideration. Five of the reports were progress reports in terms of s13(3)(f) of the Magistrates Act. There were five magistrates in question: Mr Mpho Morake, Ms Judith van Schalkwyk. Ms RM Madesela, Mr Johannes Kgomo and Ms Seka Monoledi. As noted at previous briefings, the five magistrates in question had been suspended for various allegations of misconduct. The suspensions had arisen as a result of the disciplinary action which had been instituted against them.
Mr Morake was found guilty on 1 August 2017 on five charges of misconduct inclusive of fraud, theft and intimidation. The matter was postponed to 18 September 2017 for sanction. On that date the presiding officer was not available to impose sanction. Mr Morake had also unilaterally decided to withdraw from the proceedings. As a result, they were currently waiting for a further date to be set for the purposes of sentence.
Ms Van Schalkwyk had challenged the validity of the Code of Conduct and its regulations by taking the Magistrates Commission to the High Court. The Gauteng Division had ruled against her in respect of those challenges. She had subsequently filed an application requesting leave to appeal to the Supreme of Appeal. They were currently waiting for a date to be allocated by the presiding officers for that appeal application to be heard.
Ms Madesela had challenged the Commission’s decision to charge her with misconduct. She had also challenged the process that preceded the charge sheet being served upon her. The matter was heard in the High Court on 3 May 2017 and on that date the legal representative of the magistrate withdrew. She insisted on proceeding with the matter, but the court awarded costs against her instead, requiring her to obtain different legal counsel. Since that date she had taken no further steps and the state attorney had been instructed to request the matter be set down for a final hearing in the High Court.
Mr Kgomo’s matter had been heard on 26 July 2017, when the merits of his case were heard before the presiding officer. The matter was postponed to 3 October 2017 for judgment.
Ms Monoledi’s matter had proceeded to a disciplinary enquiry. On two dates when the hearing was supposed to occur, the magistrate had failed to present herself. The matter had since been postponed to proceed between 4-6 December 2017, which would include the pre-trial and hearing.
Adv Moosa asked whether the Committee wished to raise any questions or comments on what had been canvassed thus far. The Chairperson requested that the recommendations in respect of each magistrate first be heard. He noted that the Committee was simply performing an oversight function and did not have the authority to legally review the disciplinary decisions which the Magistrates Commission had taken.
Adv Moosa replied that his presentation was focused primarily on updating the Committee on the progress and measures of taken in respect of each suspended magistrate. Adv Moosa dealt with the next three matters.
Mr Pumelele Hole had been found guilty of ten counts of misconduct inclusive of abuse of his official position as a magistrate, insubordination, humiliating the regional court president in court, sending out insulting emails relating to the regional court president, abusing official court hours by not sitting the pre-requisite required time in court and performing work during an official day other than his official duties, making false and incorrect statements in an application for transfer and been vindictive to the extent that he had subpoenaed the regional court president to appear in court in a frivolous manner. The presiding officer had presented his decision to the Commission which had deliberated on the decision. The recommendation of the Commission was that the magistrate be removed from office.
The Chairperson recommended the Committee reply to the recommendations raised in respect of each magistrate as they were dealt with in the presentation. The Committee had received a request by Mr Hole to appear before the Committee. This had not been allowed, because the Committee was not an appeal board with the authority to hear appeals from the decision of the Magistrates Commission. The request had specifically asked the Committee to determine whether the Committee agreed with the findings. This had not been entertained for the above reasons.
Mr Mpumlwana said that he was of the view that the Committee should give its views on each matter.
The Chairperson replied that the Committee should give their views on each matter. He was specifically stating that the Committee was not an appeal body, and therefore could not entertain the magistrate’s request to determine the correctness of the Magistrates Commission recommendations.
Mr Mpumlwana asked if this meant the Committee was then simply a rubber stamp for the Magistrates Commission’s decisions. The Committee should properly apply its mind to each matter.
The Chairperson reiterated that the Committee was not an appeal body in the sense that people could appear before them to give representations to determine the correctness of the recommendations made.
Mr Mpumlwana replied that the Committee still must properly apply its mind to the material placed before them. The magistrate had requested placing relevant information before the Committee. This was not a question of an appeal. Instead it was a question of fairly allowing all sides to give their side of the story. Every person had a right to appear freely before Parliament. If a person wished to appear before Parliament for their side to be heard, that request should be granted.
Ms Mothapo questioned whether she had the relevant documents before her. She appeared not to have Mr Hole’s documentation before her. The allegations against Mr Hole were very serious. Legislation was in place which had created functionaries such as the Magistrates Commission to deal with magistrates’ misconduct. The Judicial Services Commission (JSC) similarly dealt with matters of misconduct by judges. She agreed with the comments of the Chairperson that the Committee was not an appeal body. Perhaps the Chairperson had articulated his position in that regard too strongly, which was where Mr Mpumlwana’s issue lay. The Committee still had a role to play with regard to oversight of the various statutory bodies when they exercised their disciplinary functions. Regardless, however, she had no real objection to not hearing the representations of the magistrate and agreed with the comments and decision taken by the Chairperson.
Ms Pilane-Majake said the Chairperson should correct his statement that the Committee was not an appeal body and therefore should not hear the representations of the magistrate. The Committee still performed an oversight function and must properly apply its mind to the recommendations which the Magistrates Commission makes. The Committee did, however, support the recommendations which the Magistrates Commission makes in relation to disciplinary conduct.
Mr Horn agreed with Ms Mothapo and Ms Pilane-Majake. The role of the Committee was stipulated by legislation and it would it highly improper to allow parties to disciplinary hearings to appear before them. Their role was to consider the report and to ensure that fair process had been adhered to. They were also limited to determining whether the sanction was proper and proportional in relation to the offence of which they were found guilty. A second challenge was that in terms of the documents circulated, it appeared that not all of those documents had been finalised, as one of the reports appeared to be of an interim nature, and had not recommended the removal of Mr Hole. The only report which the Committee had previously dealt with concerned the withholding of remuneration.
The Chairperson replied that the true position was that given by Adv Moosa.
Adv Moosa stated there were two matters the Committee must consider in relation to Mr Hole. First was his removal from office, which was contained in one of the reports circulated among the Committee. Second was the matter of his remuneration. The disciplinary process had begun with a fully ventilated disciplinary enquiry. Mr Hole had personally decided not to participate in that process. The findings of the presiding officer had then been made. Those findings were then presented to the Magistrates Commission, along with his recommendations. At that point, Mr Hole -- or any magistrate -- was then given the opportunity to make representations regarding the findings and recommendations of the presiding officer. The Commission then fully examines all of these issues before making a final decision. The Magistrates Commission decision was not arbitrary, but had been fully considered and made considering all representations and findings of the presiding officer. The Commission had recommended that the magistrate be removed from office and that remuneration be withheld.
Mr Meijer said that the recommendation of withholding the remuneration had been made in terms of a separate enquiry conducted through a process which had been followed by the Magistrates Commission. That decision had been made on 1 September 2017, and now simply required confirmation by Parliament.
Mr Swart asked whether the separate question of whether the magistrate should be returned to office was a determination to be made by the Minister of Justice. No determination by the Minister in that regard was before him.
Mr John Jeffrey, Deputy Minister, Department of Justice and Correctional Services, replied that the Minister played no role at this point in the process. The Minister first received a report from the Magistrates Commission, which was then later sent to Parliament. The Minister was simply a conduit to relay those findings to Parliament and did not necessarily apply his mind to the actual content of the report. The scrutiny of the content of the report would occur only later before Parliament. The report does call for the removal of the magistrate. In terms of the Act, the Minister was required to either remove the magistrate in question or restore him to office. Once a final decision was made, the Minister simply acted on Parliament’s determination and did not exercise a discretion as to whether to implement Parliament’s final decision in that regard or not. Mr Hole’s salary had been stopped in December 2016. Parliament now had to make a decision on whether to finalise that decision of the Magistrates Commission.
Mr Swart stated that the wording in the letter by Judge Legodi, Chairperson of the Magistrates Commission needed to be changed through a resolution of the Committee. This was because the wording in that letter, at paragraph 25, appeared to state that Parliament had to consider various reports, when in fact Parliament had to consider only one report. The Minister’s report of 30 November and the report of the Magistrates Commission appeared to conflict.
Mr Jeffrey replied that the issues around Mr Hole had been ongoing for some time. There was now effectively only one report which was presently before the Committee. There was a second report from the Minister, but that was from 8 June 2017. This was most likely just an issue with documentation.
Ms Pilane-Majake said the Committee had agreed in principle with the findings and recommendations of the Magistrates Commission. She requested that the correct documentation be circulated to the Committee. It would then be necessary for the Magistrates Commission to appear again before the Committee on this same issue, provided they had the correct documentation before them.
Mr Horn agreed in principle with Ms Pilane-Majake. His one issue was that the Committee had previously been informed verbally of the specific charges against Mr Hole upon which a finding of guilty had been entered. After having studied the documentation before him, it appeared those specific charges had not been properly set out in the report. If the Committee sent that final report to the National Assembly without having included the specific charges against the magistrate, that could create issues later, especially given the fact that Mr Legodi had deemed his conduct sufficiently serious to warrant dismissal.
Mr Meijer replied that the decision to remove Mr Hole from office had been dealt with by the committee. The other issue of remuneration constituted a separate report. The Magistrates Commission was simply presenting a progress report in respect of Mr Hole. Both of those reports, which contained all the information pertaining to sanction and the charges, had been tabled by the Minister in the National Assembly on 30 November 2016. Those documents would be circulated amongst the Committee.
The Chairperson asked whether Mr Meijer was stating that the report currently before the Committee must be read in conjunction with the reports that had been tabled by the Minister in the National Assembly in November 2016?
Mr Meijer replied that that was the case.
Ms Pilane-Majake said that all documentation should be compiled into a single document to prevent cross-referencing and to ensure that there were no conflicting reports. If this was done, it would not be necessary for the Magistrates Commission to appear before the Committee in person again. Next week, the report could then be adopted or not by the Committee.
Mr Jeffrey suggested that Adv Moosa and Mr Meijer circulated a brief description of the charges against Mr Hole and what he had been convicted for. He had not been acquitted on any of the charges.
Adv Moosa said that going forward, the Commission would present their reports in a more crisp and concise manner, with all criticism heard thus far being taken into consideration.
Mr Horn said that excluding the Magistrates Commission from when the Committee made the final determination of whether to adopt the report, would require the Committee potentially adopting a resolution stating that, in principle, they were in favour of the removal of the magistrate from office. It would be undesirable for the Committee to later find itself in a position where they disagreed with the Commission’s findings, but where they were not present to submit their side of their story. If the Committee was later to second guess the decision of the Magistrates Commission, then they should be present to also make representations before the Committee in that regard.
Mr Mpumlwana had a question of principle. If a person was found guilty of certain allegations, they should be permitted to make representations before an adverse decision was made against them. Was the Committee saying that Parliament could not hear such representations, even if they were in writing?
The Chairperson responded that as raised by Ms Mothapo, the powers of the Committee were governed by legislation. The Committee was not an appeal body.
Mr Mpumlwana responded that there was no law which prevented the Committee from hearing the representations of the magistrate. He was not saying that he would agree with the representations of Mr Hole, but as a principle of fairness, he should be provided with an opportunity to make those representations regardless.
Mr Swart said he was reluctant to agree with Mr Mpumlwana. For the Committee to now re-open the decision and act as an appeal body would set a dangerous precedent. There had already been a full process which had been concluded, where Mr Hole had been afforded an opportunity to make representations in his favour. A determination had already been heard by the High Court. To entertain his representations would create an expectation for the magistrate that the Committee would reconsider the initial decision on the merits. The Committee was not an appeal or judicial body, and to permit such a course of action would be highly irregular.
Ms Pilane-Majake stated that the concerns of Mr Mpumlwana should be noted and then a legal opinion addressing his concerns could potentially be obtained.
Mr Meijer said he had personally read Mr Hole’s representations sent to the Minister and to the Committee, and had responded to them. If his representations were circulated, they should be read in conjunction with the responses and replies from the Magistrates Commission.
Mr Horn wanted to know whether his recommendation that the Committee agree in principle to endorse the report was accepted by the Committee. If that was not the case, then the Commission must appear personally appear at a later date to ensure that their views were properly heard and taken into consideration.
Ms Pilane-Majake said the Committee had agreed in principle to endorse the findings of the report.
Adv Moosa the dealt with the next matter was in relation to Magistrate Xoliswa Stuurman. Ms Stuurman had been found guilty of 17 counts of misconduct. This was inclusive of various instances of insulting clerks and conducting herself in an unsatisfactory manner in the workplace. On 12 December 2016, she was found guilty on all counts. On 6 January 2017, she was invited to place mitigating factors before the presiding officer, but had refused to do so. On 12 January 2017, the presiding officer recommended, with due regard to the seriousness of the offences, that she be removed from office. The same process had been followed as in Mr Hole’s matter. The Magistrates Commissions deliberations concluded that the only appropriate course of action was her removal from office.
Mr Swart said this matter had been going on for some time, having originated in 2013. In principle, he agreed that the magistrate should be removed, but his challenge was that all of the relevant annexures were attached to the report.
Ms Pilane-Majake stated that the relevant documentation had been sent to the Department of Justice. In future, when the Magistrates Commission submitted such documentation to the Department, it would be advisable for all that documentation, regardless of how bulky it was, to be circulated amongst the Committee to avoid these problems arising in the future.
Mr Mpumlwana said that it was not fair for the Committee to reach final deliberations on these issues without all of the proper evidence before them. He requested that the matter stand down for the Committee to receive all the relevant documentation and evidence, to properly apply their mind. To allow anything less would amount to a rubber stamping the Magistrates Commission’s decision. He was not saying the Magistrates Commission had reached an incorrect decision, but the Committee must be given all the relevant documentation to properly fulfil their oversight function.
Ms Pilane-Majake said she understood Mr Mpumlwana’s frustration. A large amount of the information was, however, common cause before the Members of the Committee as historical information. In future, that information should be complied into a single document for ease of reference.
The Chairperson commented that it could not be said that the Committee was making decisions without all the relevant information which was either before them, or had been before them in the past. What was the recommendation of the Committee in relation to magistrate Stuurman?
Mr Horn said that the information in the report before them contained information of the charges against her. He understood the views of Mr Mpumlwana, but the detailed annexures attached to the report mitigated against this problem. For the sake of consistency, this was should be the case for all reports. The information before them was sufficient to make a final determination, and he made a motion that the Committee agree, in principle, for Ms Stuurman’s removal, as recommended by the Magistrates Commission.
The Chairperson asked whether the Committee agreed with Mr Horn’s suggestion that the report and its recommendations be adopted in principle.
Mr Mpumlwana said he disagreed with that proposal. He reiterated his point that he wanted further information before a decision should be made. Why was there such a rush to finalise this matter and not allow for further evidence and annexures to be presented? Anything less would amount to a rubberstamping of the decision.
The Chairperson noted that Mr Mpumlwana had stated his position.
Mr Swart said he supported the decision in principle. If later information was discovered in the annexures would which change that decision, then that decision to agree in principle should be reversed.
Ms Mothapo said she agreed in principle to adopting the report.
The Chairperson agreed that if later information was discovered with a material effect on the final decision, then the decision to agree in principle could be reversed. This was to avoid creating undue prejudice to any party. The decision to adopt the recommendations that magistrate Stuurman be removed from office, in principle, as recommended by the Magistrates Commission, was adopted.
Adv Moosa then dealt with the final matter of Magistrate Veeti Khalea. The magistrate had been found guilty of two counts of misconduct -- the submission of false travel claims and the submitting of false statements. The Commission had recommended her removal of office. This was not the first instance where the magistrate in question had been found guilty of this type of misconduct. She had previously been disciplined for these offences, which indicated a propensity on her part to engage in such conduct. The presiding officer had recommended removal which, after due deliberation by the Magistrates Commission, had been endorsed.
The Chairperson said that when dealing with issues of misconduct pertaining to magistrates or the judiciary, the Committee should keep in mind that the integrity of the judiciary, inclusive of the magistracy, was integral to the rule of law and the legal system. To permit judicial officers who do not exhibit utmost integrity to occupy office, threatened the system as a whole.
Mr Mpumlwana again reiterated his previous points regarding documentation and the right to a fair hearing. This was noted by the Chairperson.
Mr Horn agreed with the recommendations but, as raised earlier, requested that the specific charges on which the magistrate had been found guilty, be attached as annexures. He suggested an agreement that the removal be adopted in principle, but that those further annexures and documentation be provided to the Committee by the Magistrates Commission.
The suggestion to adopt the report in principle appeared to have been endorsed by the Committee, although there was no express motion to this effect.
Mr Jeffrey suggested that the judgment on guilt and sentence be submitted, as well as any further representations.
Ms Pilane-Majake asked what measures the Magistrates Commission had put in place to promote transformation, particularly as it pertained to women magistrates. The Magistrates Commission did not have to answer this question now and a written reply at a later date would be sufficient.
International Arbitration Bill: Deliberations
The Chairperson said that Professor David Butler, international arbitration expert, had availed himself to brief the Committee free of charge on certain provisions of the Bill. This was to be commended and more South Africans should follow his example. It would be preferable not to consider the entire Bill, but rather to isolate contentious areas of the Bill due to time constraints.
Mr Jeffrey said that two documents had been submitted to the Committee. The first document contained all the public submissions and the responses to the Department. There had been a late submission by Cliffe Dekker Hofmeyr (CDH), which had been attached. The second document dealt with proposed amendments, the majority of which were of a technical nature. International arbitration attorneys had made submissions to him to finalise the Bill as quickly as possible.
Mr Lawrence Bassett, Chief Director: Legislative Development, DoJ, said there were three matters for consideration.
Firstly, the Maritime Law Association had pointed out possible unintended consequences, such as potentially overriding s3 of the Carriage of Goods by Sea Act (COGSA). That Act protected local interests by allowing people to receive goods from overseas through shipping. If a dispute arose, the Act permitted parties to approach local courts. A potentially unintended consequence could then be to require people to engage in international arbitration without recourse to local courts. The Maritime Law Association had suggested that clause 7 be amended to address that issue. The Chairperson had invited further submissions following the public hearings, which had been helpful. Adv Lindi Nkosi-Thomas had engaged in further deliberations with the Maritime Law Association in that regard. The proposal to remedy that issue did appear in the proposal document. A consequential amendment had been suggested to s3 of COGSA to remedy that problem. All relevant parties were in accordance that that proposal should be implemented.
Secondly, an amendment had been proposed to clause 5 of the Bill. CDH had recommended that because the Bill was intended only to regulate international commercial arbitrations, the words “international arbitration” should be included in clause 5. The suggested wording of “international arbitration,” as proposed by CDH, appeared on page 4 of the summary of Written Representations Document circulated amongst the Committee. That suggestion had been agreed to by the Department of Justice. This would address the issue of the Bill applying to all arbitrations, and not only international arbitrations, per the purpose of the Bill.
Clause 9 dealt with the immunity of arbitrators in arbitration proceedings. The Permanent Court of Arbitration had suggested this be extended to include persons who had been appointed by the arbitration tribunal.
The above constituted the main amendments made. The rest of the amendments were mainly of a technical nature. It was suggested that the definition of “article” in clause 1 be written in lower and not upper case, as it appeared in the rest of the Bill, for the sake of consistency. The use of the word “or” was inserted into clause 17 and the word “and” removed. The Model Law in Schedule 1 had a few technical amendments in relation to article 12 of the UN Model Law on International Arbitration, by adding the word “arbitration tribunal” to that article. In Article 13, the wording from the Model Law had been copied verbatim. The Act had been brought into line with the international conciliation rules. Amendments had been proposed to schedule 3 to include the word “or” and not “of.” Article 10 had been amended to read “necessary for constitutional reasons” and not “necessary for constitutional reasons”. Professor Butler was thanked for his assistance in drafting the Bill before it came before Parliament.
Mr Swart asked whether the summary of written submissions was a consensus document. He noted with appreciation the consequential amendments made to s3 of COGSA. In his view, this was the most logical course to follow as opposed to amending the Bill. Were there any other outstanding issues which other stakeholders had raised?
Mr Bassett noted he had received additional comments yesterday from a CDH member. He requested Professor Butler to deal with that submission.
Prof Butler said that clause 7 of the Bill dealt with which matters were capable of arbitration, and which matters were reserved for adjudication in the courts. The clause stated that any matter which the parties could dispose of by agreement was capable of being arbitrated, subject to two reservations -- firstly, if a dispute in terms of a statute was not capable of arbitration, it would be excluded, and secondly, if the arbitration agreement itself was contrary to the public policy of the Republic. For example, if there was a dispute regarding American anti-trust laws being heard by arbitration in South Africa, that dispute would have nothing to do with the law of the Republic. This was because the Competition Act gave the Competition Commission exclusive jurisdiction where the Competition Act applied. The purpose of clause 7 was then to prevent people from escaping the jurisdiction of South African courts by having their arbitrations in a foreign jurisdiction when South African law was applicable. CHD’s submission had been that that exception should be replaced with a single exception, to the effect that any matter would be capable of arbitration unless it was contrary to public policy to do so. Reference to international law principles on the issue of arbitrability was referenced in that submission.
The New York Convention on Arbitration mentioned two grounds on which a court could refuse to enforce an arbitration award -- firstly, where the matter was not capable of arbitration under the laws of that country, and secondly where the recognition or enforcement of the award would be contrary to the public policy of that country. International law thus permitted states to refuse to enforce international arbitration awards on those two separate grounds. Non-arbitrability meant that certain matters must be reserved for the state courts. Public policy referred to when an award was contrary to the public morals of that state. For example, if an arbitration award awarded triple damages based on American law, that would be contrary to our public policy, as our law did not recognise an award for triple damages. The submission was primarily concerned with public policy, and was not concerned with the issue of arbitrability at all. The Department of Justice had thus opposed that additional submission and recommended that clause 7 be retained as it was.
Mr Bassett said that another issue raised by the Victoria Mxenge Group of Advocates had suggested defining “public policy” in s1 of the Bill. It was not clear whether this would be a good route to follow -- it had also been submitted by Adv Nkosi-Thomas. The Department had agreed that it would not be advisable to define public policy. In response to Mr Swart, it was stated that the Department had necessarily agreed with all of the submissions which had been made to them.
Ms Theresa Ross, Specialist State Law Adviser: DoJ, said the Department of Justice did not support the submission made by Professor Jan Nels, which could be found on page 18 of the summary of written submissions. His submission was that the short title of the Bill should be amended to read “International Commercial Arbitration Bill” and not just “International Arbitration Bill”. The Department had not supported that submission because the long title and objects of the Bill indicated the adoption of the UN Model Law was applicable to international commercial arbitration disputes, but this was only one object of the Bill. The commercial nature of the Bill was accounted for in Chapter 2 of the Bill, which speaks to international commercial arbitration. It was thus viewed unnecessary to amend that short title as submitted.
The Chairperson thanked the presenters and in particular Professor Butler for making himself available. Were there any proposals to adopt the Bill?
Mr Swart stated he would need additional reports on the Bill, but agreed to its adoption in principle.
Mr Jeffrey suggested that all documentation first be prepared and that the Committee secretary then place the matter back on the agenda for voting next week. It would be positive if an agreement was made in principle to adopt the Bill.
The Chairperson agreed with this suggestion.
The meeting was adjourned.
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