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Ok. Got itIndependent political analyst JP Landman provides an update on the civil action that has already taken place and explains why this plays an important role in fighting corruption.
This Political Research Note was prepared by JP Landman in his personal capacity. JP is an independent political and economic analyst and the opinions expressed in this article are his own and do not reflect the views of the Nedbank Group. |
By JP Landman
16 August 2021
After a week during which both Jacob Zuma’s and suspended ANC Secretary-general Ace Magashule’s criminal trials were postponed again, many South Africans are wondering when they will see people in orange overalls. That is fair. But while the wheels of criminal justice turn slowly, it does not mean there are no consequences for wrongdoing. Civil proceedings have already had quite an impact.
The distinction between criminal proceedings and civil proceedings is important. Criminal cases must be proven ‘beyond all reasonable doubt’. That is a much more stringent standard than the one that applies in civil cases, which must be proven on a ‘balance of probabilities’. As the veteran prosecutor Gerrie Nel once put it, ‘Knowing something has happened is a long way from being able to prove it in court.’ South Africans have a good idea of what has happened thanks to the evidence before the Zondo Commission and some good investigative journalists. Proving it beyond all reasonable doubt is a very different story.
The National Prosecuting Authority (NPA) and Hawks made the point in a recent joint submission to parliament that civil cases ‘are administrative in nature and the burden of proof is merely on a balance of probabilities’ (my emphasis). The NPA/Hawks undertake criminal prosecutions, where the bar is higher. Their submission pointed out that in some cases audit reports fill 75 lever arch files, which must be studied and compared to witness statements and documents in the criminal file. In an understatement to parliament, they testified that it ‘is time-consuming’. One can almost feel their frustration.
Civil actions are easier. The main instrument of civil action in South Africa is the Special Investigative Unit (SIU), created in 1996. Its purpose is to investigate ‘serious malpractices or maladministration in connection with the administration of state institutions, state assets and public money as well as any conduct which may seriously harm the interests of the public’. It does not have to prove a crime.
The case of the former Gauteng Health MEC Bandile Masuku illustrates the difference between criminal and civil proceedings. The SIU investigated the irregular awarding of tenders by the Gauteng Health Department while Masuku was MEC. The SIU found that he had been derelict in his duties as political head of Gauteng Health and suggested the premier act against him. The premier fired Masuku, who took the SIU report on review to the High Court. The High Court found that ‘… the very purpose of the SIU is to investigate and reach conclusions which may found accusations of wrongdoing or impropriety – this role is purely investigative and not determinative’. The SIU did not have to prove that Masuku was involved in corruption, just that there was a rational reason to conclude that he neglected his duties. The High Court dismissed Masuku’s review with costs. If the SIU had to prove criminal intent, the outcome could have been very different.
After his forced resignation, Zweli Mkhize thundered that he would take the SIU’s Digital Vibes report on review. He may very well come up against the Masuku ruling, but let us wait and see.
Court rolls in South Africa are notoriously overloaded, with cases taking years to resolve. In 2019 President Cyril Ramaphosa established a special tribunal specifically to hear cases from the SIU outside the normal court rolls. Eight High Court judges in Gqeberha, Cape Town, Durban and Gauteng were appointed to it.
President Ramaphosa has also sped up the work of the SIU considerably. In the three and a half years since he became president, he has gazetted 45 cases for the SIU to investigate, compared with the 116 cases gazetted in the 17 years before he became president. I will say it again: 45 cases in three and a half years, compared with 116 in 17 years. President Ramaphosa has doubled the annual number of SIU investigations.
Some argue that he is not driving criminal prosecutions hard enough. He shouldn’t. It will be a sad day in South Africa if the president gets involved in the prosecution of citizens. We have been there – why repeat it?
Criminal prosecution is and should be the exclusive job of the NPA. The president has created a new unit in the NPA, the Investigate Directorate, headed by Hermione Cronje. It focuses specifically on state capture prosecutions. He has changed the regulations to make evidence and personnel of the Zondo Commission more easily accessible for the NPA. The ball is now in their court, and the president should stay out of it.
The SIU and the Special Tribunal have taken several high-profile scalps, like that of Zweli Mkhize, once touted by some as a future president, and Health MECs Bandile Masuku in Gauteng and Sindiswa Gomba in the Eastern Cape. Gomba, of the ambulance scooters, was also arrested for criminal prosecution along with her personal assistant.
Two months after he became president, Ramaphosa gazetted an SIU investigation into Eskom. By December 2019 there had been 59 dismissals for fraud and corruption; to date more than 1 049 disciplinary enquiries have taken place; scores of employees resigned; the SIU is now investigating 40 employees after 366 lifestyle audits were conducted; and summonses were issued to recover R3,8 billion from 12 well-known defendants like the Guptas. Eric Wood of Trillian fame is fighting a personal sequestration order granted as part of efforts to recover R300 million from him. Civil actions do have bite.
The SIU and law firm Bowmans found a slush fund used by Eskom executives to pay millions to themselves for chicken farms and other passions. The SIU is investigating five private sector companies for overpayment by Eskom to the tune of R1 billion. Much, much more is still to come from Eskom. It will probably carry on for years, but a clean-up is on the go.
In 2018 President Ramaphosa also ordered an SIU investigation into Transnet. In one of the very first Special Tribunal cases, former Transnet Capital Projects executive Herbert Msagala was ordered to forfeit 35 vehicles, several properties, and a farm. (An appeal by Msagala and his trusts was dismissed.) Scores of Transnet executives have left, and a new management team is in place.
Eskom and Transnet are the big names and had the big pots of money. But the SIU’s work is also claiming scalps in the provinces and in lesser-known government entities. In our database on corruption we have scores of entries on scalps claimed from the biggest entities to the smallest municipalities in the country. Below are just a few examples.
In the North West Province the head of education resigned after having been fingered in an SIU report. At the JB Marks Municipality (also in the North West) the SIU froze the pension of a senior manager, and he was dismissed. The Chief Financial Officer (CFO) at the National Department of Agriculture lost his job and his pension to the SIU. At the Council for Medical Schemes the CFO, the Chief Information Officer and five general managers were all fired after an SIU investigation.
Currently, there are more than 90 ongoing SIU investigations.
Covid-19-related corruption fired South Africans up in 2020. In July 2020 the president ordered an investigation into all Covid-19-related procurement in all state institutions. Total Covid-19 expenditure for the last year was R126,7 billion, of which the SIU is investigating R14,3 billion (11,3%). Applications to cancel the underlying contracts and recover the money for R614,3 million (excluding Digital Vibes’ R159 million) have already been made to the Special Tribunal. In June 2021, by value, 40% of the contracts have been investigated, 54% are currently being assessed, and 6% have yet to commence.
In other civil action former minister Bathabile Dlamini lost her ministerial pension after a civil claim for fruitless expenditure while she was a minister. No orange overall, but certainly financial pain and discomfort. The seven VBS accused have been arrested and are awaiting their criminal trial. In the meantime, they have all been declared insolvent because of civil action brought by the VBS executors.
This is a political research note and was prepared by JP Landman in his personal capacity. Landman is an independent political and economic analyst and the opinions expressed in this article are his own and do not reflect the views of the Nedbank Group. Nedbank Private Wealth, an authorised financial services provider through Nedgroup Private Wealth Pty Ltd Reg No 1997/009637/07 (FSP828), registered credit provider through Nedbank Ltd Reg No 1951/000009/06 (NCRCP16), and member of JSE Ltd through Nedgroup Private Wealth Stockbrokers Pty Ltd Reg No 1996/015589/07 (NCRCP59). |