2014 Cabinet directive on vetting of SOE officials: SAA & Transnet stalled, with Minister of State Security

Public Accounts (SCOPA)

07 December 2017
Chairperson: Mr T Godi (APC)
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Meeting Summary

Documents handed out: State Security Agency Presentation [awaited]

The Committee met with the State Security Agency in the presence of the Minister for a brief on progress made regarding the 2014 Cabinet directive to have officials in State organs vetted, especially in supply chain management departments and the circumstances that led to the stalling of the vetting process in SAA and Transnet.

The State Security Agency stated that it was in the process of coming up with a regulatory framework to guide comprehensive vetting of officials in State organs. Vetting processes are complex and the Agency was in the process of acquiring technologies to deal with it and ensure the process is not as lengthy and tedious as it currently was. Also, corruption was a huge challenge which vetting processes sought to deal with. Notably, the parliamentary Joint Standing Committee on Intelligence was engaging the Agency on how best to carry out the process comprehensively. Also, its mandate went beyond the vetting of officials within the procurement space; it encompasses the entirety of State organs.

Mindful of the need to fight corruption as an urgent necessity, the Agency had adopted an anti-corruption strategy which imbedded vetting within that framework. The first level of the strategy involved the verification of personal information; the second level being the investigation of individuals to verify their integrity. The third level involved polygraph examinations. However, the challenge has been that the Agency was not getting enough support from the relevant parties. Thus it had embarked on a process of drafting new vetting regulations which would be finalised in the interim. The regulations would attach sanctions to individuals and head of institutions who fail to cooperate or avail themselves for vetting processes. Vetting would become a mandatory process. Notably, individuals with qualification discrepancies and/or criminal records would be easily identified once it is digitized. Vetting units were also being deployed in State institutions to carry out first line investigations.

The Agency accepted that it had not done much and fell below expectation in as far as the cabinet directive of vetting officials in State organs was concerned. This was largely due to capacity constraints and the identified challenges.

Members noted that cabinet mandated the Agency to carry out vetting in all government departments and entities, not only in Transnet and South African Airways. The Committee was gravely concerned about the lack of progress in this regard. The reality was that individuals occupying positions involving huge responsibilities within organs of State were not being vetted. The situation was problematic. The vetting of officials in public entities was a public interest matter. The public wanted assurance that their funds were in trusted hands. In dealing with corrupt practices, it was in the Agency’s interest to vindicate itself- a laissez faire attitude makes the Agency complicit. The Committee was convinced that there was deep corruption in State agencies thus it would want to see full implementation of the cabinet directive.

The Chairperson said Members wanted to hear about how State agencies were assisting the Committee in carrying out its mandate. The Agency has a strategic role to play and what was important would be to fine-tune the rules of engagement between the two. The identified challenges stalling progress had to be expeditiously dealt with as curbing leakages from corrupt activities would actually reduce some of the budget pressures in the country.
 

Meeting report

Opening remarks
The Chairperson welcomed everyone and appreciated the Minister of State Security’s presence. The Committee was mindful that the State Security Agency has defined structures it reports to. However, the issue on the agenda was of importance to the Committee’s oversight mandate and concerted efforts to fight corruption. The indication was that most individuals within the procurement space had not subjected themselves to the vetting processes and that was worrying. The Committee would want to get a sense of the extent of the implementation of the cabinet directive to have officials in State organs vetted especially in supply chain management departments.

Mr Bongani Bongo, Minister of State Security, stated that the State Security Agency (SSA) reports most of its work to Parliament's Joint Standing Committee on Intelligence (JSCI). He begged the Committee’s indulgence in terms of the amount of information that could be shared. Not much information could be divulged given the nature of SSA’s work. He highlighted that the Agency was seized with coming up with a regulatory framework to guide comprehensive vetting of officials in State organs. Vetting processes are complex and the Agency was in the process of acquiring technologies to deal with it and ensure the process is not as lengthy and tedious as it currently was.

State Security Agency briefing
Mr Arthur Fraser, Director-General: State Security Agency, explained that part of the Agency’s mandate involved counter-intelligence. The Agency dealt with State risk management, and corruption was a huge challenge which vetting processes sought to deal with. Notably, JSCI was engaging the Agency on how best to carry out the process comprehensively. Also, the Agency’s mandate went beyond the vetting of officials within the procurement space; it encompasses the entirety of State organs.

He pointed out that, historically, the absence of proper vetting mechanisms was a legacy of the first five years of the new democratic dispensation. Consequently, a cabinet decision was taken and the President pronounced that the Agency had to give much attention to the supply chain management space. However, a number of challenges were stalling progress. This includes the fact that the Agency relies on information provided by heads of institutions to vet officials. Hence, there were many instances that documents go missing or are submitted with incomplete information. The other challenge is that vetting had been done manually meaning it was labour intensive. The Agency also found that labour movements were somewhat against vetting processes.

Mindful of the need to fight corruption as an urgent necessity, the Agency had adopted an anti-corruption strategy which imbedded vetting within that framework. He identified the different levels of vetting processes. The first level involved the verification of personal information; the second level being the investigation of individuals to verify their integrity. The third level involved polygraph examinations. However, the challenge has been that the Agency was not getting enough support from the relevant parties. Thus it had embarked on a process of drafting new vetting regulations which would be finalised in the interim. The regulations would attach sanctions to individuals and heads of institutions who fail to cooperate or avail themselves for vetting processes. Vetting would become a mandatory process. Notably, individuals with qualification discrepancies and/or criminal records would be easily identified once it is digitised. Vetting units were also being deployed in State institutions to carry out first line investigations.

Mr Fraser accepted that the Agency had not done much and fell below expectation in as far as the cabinet directive of vetting officials in State organs was concerned. This was largely due to capacity constraints and the identified challenges.

Discussion
Mr M Booi (ANC) commented that the reality is that individuals occupying positions involving huge responsibilities within organs of State were not being vetted. The situation was problematic. He asked for the Agency’s advice on what could be done to expeditiously deal with the anomaly. SCOPA was mindful of the fact that the Agency was accountable to the JSCI, but there had to be elements and mechanisms of engagement with SCOPA as well, particularly on the vetting processes. The vetting of officials in public entities was a public interest matter. The public wanted assurance that their funds were in trusted hands.

Mr E Kekana (ANC) said the Agency had not responded to the issue on the agenda in respect of the decision that was taken by cabinet. It cannot be that when cabinet takes a decision, departments go on to give explanations as to why such decisions could not be implemented. Cabinet decisions were mandatory. The explanations from the Agency were totally unacceptable and it smacked of a clear dereliction of duty. The Committee wanted to hear about progress in the implementation of the cabinet directive.

Mr M Hlengwa (IFP) said the issues articulated by the Agency were separate from what the Committee was seized with. The Committee was not dealing with the nitty-gritties and technicalities of how State security works. A cabinet decision was taken in 2014 yet there had not been any implementation three years later. Supply chain management was the “playground” of corruption and being told that the Agency had not done anything in as far as the cabinet directive was concerned was problematic. The nuances of how vetting would be done was not the Committee’s business. Members wanted to hear about implementation not the technical aspects. He pointed out that most state-owned entities (SOEs) had told the Committee that they had submitted names of individuals who needed to be vetted, and that had not been done. Clearly, the bottlenecks were in the Agency. The outlined plans sounded grand but what was important was implementation; seeing that corruption was escalating on a daily basis. Also, labour movements had to be engaged to zoom into why they were resisting vetting processes.

Mr D Ross (DA) noted that cabinet mandated the Agency to carry out vetting in all government departments and entities, not only in Transnet and South African Airways. The Committee was gravely concerned about the lack of progress in this regard. Corruption was the greatest risk in society especially within the supply chain management space. He asked the Agency to give an indication as to how it would address risks especially within this space. There was a need for credible people with clear ethics. A culture of non-compliance had to be done away with. He recommended that the Agency interact with the Office of the Chief Procurement Officer in an effort to deal with some of the risks.

Mr Kekana asked if the Agency had reported back to cabinet about the challenges and the complexities of carrying out the exercise as identified. Something had to be done as the directive was coming from cabinet itself and had to be fully implemented. The extent of corruption was horrendous and Members were being told that the Agency itself was stalling the vetting process.

Ms T Chiloane (ANC) asked why it was the case that individuals handling affairs of the State were not being vetted. Corruption was endemic and therefore it needed to be ensured that all people are vetted. Cases where executives in SOEs resign pending investigations and go on to join other government entities were cases in point. The Agency’s interventions need not be delayed as this was a public interest matter.

The Chairperson reiterated that a cabinet decision was taken in 2014. Three years down the line, what had been done in terms of implementation? An indication to that effect would have given the Committee a clearer picture. There was also a case whereby senior executives at SAA refused to be vetted. What role was the Agency playing to deal with this?

Minister Bongo replied that the Agency was also deeply worried by the scourge of corruption in the country. What was lacking in the main were specific sanctions against individuals who fail to subject themselves to the vetting process. As part of the implementation of the cabinet decision, the different levels of vetting as outlined had to be acknowledged and the Agency would prioritise implementation moving forward. Also, a functional committee had been constituted to look into the vetting of the security cluster. He welcomed the suggestion to define the rules of engagement between the Agency and SCOPA. The public had to have utmost confidence in State institutions.

Mr Fraser explained that the Agency was undertaking the vetting processes. He however acknowledged that the Agency might not be doing enough. The Agency had carried out a number of vetting processes within SAA but due to the nature of the information, not much light could be shed on same. The Agency was also engaging National Treasury’s Office of the Chief Procurement Officer for a more coordinated approach in implementing the directive. Also, integrated vetting regulations were important because they would impose sanctions and in the same vein exert the Agency’s authority.

Ms N Khunou (ANC) said the Committee needed to be provided with the names of the individuals declining to be vetted. A way had to be found such that such individuals would not be allowed to work in any other government department in future.

Mr Hlengwa commented that “somebody had to walk the plank in terms of accountability.” The Committee would also have to get a full report on the vetting of Transnet officials. The objective was to come up with a clear correlation between misappropriated transactions and individuals involved. He reiterated that the Committee was not interesting in being taken through the technicalities involved in vetting processes. That was the work of the JSCI and there was no need to duplicate parliamentary work. More so, it was in the Agency’s interest to vindicate itself- a laissez faire attitude makes the Agency complicit. The Committee was convinced that there was deep corruption in State agencies thus the Committee would want to see full implementation of the cabinet directive.

The Chairperson said Members wanted to hear about how State agencies were assisting the Committee in carrying out its mandate. The Agency has a strategic role to play and what was important would be to fine-tune the rules of engagement between the two. The identified challenges stalling progress had to be expeditiously dealt with as curbing leakages from corrupt activities would actually reduce some of the budget pressures in the country. This was the last Committee meeting for the year. He thanked everyone and appreciated efforts from all stakeholders.

The meeting was adjourned.

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