COMMITTEE ON PRIVATE MEMBERS’ LEGISLATIVE PROPOSALS AND SPECIAL PETITIONS – CONSIDERATION OF LEGISLATIVE PROPOSAL TO REGULATE BUSINESS INTERESTS OF STATE EMPLOYEES (HON IO DAVIDSON) – 8 JUNE 2011
NARRATIVE OF INPUT BY REPRESENTATIVE OF DEPARTMENT OF PUBLIC SERVICE AND ADMINISTRATION, Adv E van Schoor, Chief Director: Legal Services
1.	Legislative Programme for 2011 includes a Public Service Amendment Bill. The aims of the draft Bill are also to strengthen the legal framework with respect to governance and anti-corruption measures.
2.	The Minister for the Public Service and Administration’s budget speech of 26 May 2011 refers to policy work pertaining to anti-corruption measures and ethics, namely the Public Sector Integrity Framework. The draft Framework is to be submitted to the Cabinet for approval. If it is approved, it would require the promotion of new legislation or changes to existing legislation, including subordinate legislation such as regulations.
3.	The scope of the current Public Service Act, 1994, is limited to administration in national and provincial government. The draft Public Sector Integrity Framework contains proposals applicable to administration in national, provincial and local government. Public entities are not covered by this draft Framework. Most public entities have their own founding legislation which may have measures in this regard. The Public Finance Management Act, 1999, contains measures regarding financial administration of public entities which are generally applicable.
4.	Existing national measures for administration in national and provincial government are as follows:
4.1	Prescripts of National Treasury regarding supply chain (procurement) which requires that bidders declare their relationships with officials in the relevant national or provincial department.
4.2	On 31 May 2011 National Treasury issued a treasury instruction applicable to national and provincial departments and specified public entities requiring that a bidder must furnish details of directors/trustees/shareholders for the accounting officer/authority to check against the institution’s staff and, if applicable, to check if the necessary approval exists for the staff member to undertake other remuneration work.
4.3	The Public Service Code of Conduct in Chapter 2 of the Public Service Regulations, 2001, requires employees to recuse themselves from processes (e.g. procurement) in which they have an interest.
4.4	The Financial Disclosure Framework in Chapter 3 of the Public Service Regulations requires that senior managers in national and provincial departments must declare interests regarding the previous financial year before the end of April every year.
5.	With respect to administration in national and provincial government, the main proposals in the Procurement (Business Interests of Employees) Bill (clauses 2 and 3), are covered to some extent by the measures indicated in paragraph 4.
6.	With respect to administration in national and provincial government, the following aspects of the main proposals in the Procurement (Business Interests of Employees) Bill (clauses 2 and 3), are not covered by existing national legislation:
6.1	A declaration by an entity of interests of family members of employees of an institution in that entity before they enter into a contract with that institution.
6.2	A declaration by an employee of interests and those of family members in entities doing business with the State. Though senior managers must declare their business interests currently, there is no requirement that it must indicate whether the business in question is rendering services to the State.
6.3	Prohibition on an employee to own or control 5% of the shares, stock, membership or other interest alone or together with family member/s and/or business partner/s and/or other employee/s in an entity doing business with the State.
7.	The underlying aims of the proposed measures mentioned in paragraph 6, are under consideration by the national government in proposals to strengthen anti-corruption measures in the administration in national, provincial and local government (namely the draft Public Sector Integrity Framework.
8.	In the case of public entities, an analysis of their founding legislation, and legal instruments issued in terms thereof, will indicate if and to what extent the proposed legislative changes in the Procurement (Business Interests of Employees) Bill (clauses 2 and 3) are catered for.