Statement by the Public Protector Adv. Busisiwe Mkhwebane during a media briefing at the Public Protector House in Pretoria on Monday, 19 June 2017
Programme Director and Spokesperson of the Public Protector, Ms. Cleopatra Mosana;
Chief Executive Officer of the Public Protector, Mr. Themba Dlamini;
Acting Chief of Staff, Ms Linda Molelekoa;
The Public Protector Team;
Members of the media;
Ladies and gentlemen;
Good morning and thank you for joining us this morning. Most importantly, thank you for helping me report back to the people of South Africa on what I have been busy with since the last time we engaged.
I have now been in office for a full eight months. Contrary to popular belief, it has been a busy period during which I laid the foundation for solid relations with stakeholders while also getting down to investigation work.
While on the road, as part of the nationwide stakeholder engagement that took place between February and May, I also managed to finalise and issue up to 11 investigation reports.
Some of these reports form part of the 10 787 out of 16 397 service and conduct failure matters that we have finalised during the year leading up to March 2017.
On service failure matters, I am certain the reports that we released will make a significant difference in the lives of the members of the public affected while ensuring that gaps identified in the system, which certainly gave rise to the problems as uncovered, are addressed to avoid future recurrences.
Regarding conduct failure, which is essentially matters of governance, it is my hope that those that have been caught on the wrong side of the law, policies, regulations and other legal standards will be dealt with as per my remedial action to send a strong message that wrongdoing will not be tolerated.
More importantly, I trust that our modest contribution in this regard will bring us a step closer to playing our part in the mandate we share with fellow Chapter 9 institutions to strengthen and support constitutional democracy.
The outcomes of three of the 11 reports I am referring to were already communicated to the public during my last press conference when I marked a 100 days in office. They follow thorough investigations involving the sufferings of regular persons and improper conduct concerning Members of the Executive.
Today, I am releasing a further three, taking the total number of reports issued in the last eight months to 14.
I must add that all of these reports result from the investigations that were pending at the time of my assumption of duty. In the circumstances, it was my duty as the incumbent Public Protector to pick up where my predecessor Adv. Madonsela left off and finalise those matters to ensure good governance in all state affairs.
Before I reveal my findings on the three new reports, let me say that the stakeholder engagement blitz that I have just concluded last month was worth every cent of the R1.5 million budgeted and spent on it.
You would know that I visited 18 towns across the country between February and May 2017. During the tour, I picked up more than 1000 service delivery and conduct failure complaints.
These included saddening stories from members of the public in areas such as Ratanda, Thohoyandou, Ermelo, Thaba Nchu, Madibogo, Ngilanyoni, Masiphumelele, Mqanduli and Ritchie.
These included the cases such as the plight of the community of Masiphumele in the City of Cape Town, where people live in squalor, right on the banks of a stinking drainage canal that not only poses a health hazard to residents but danger too as children playing nearby could fall and drown in the drainage.
That community also finds itself having to live with the indignity of a black of free-standing, individual toilets on the one side of their settlement. Some of these facilities are not working.
This case is among several across that we have identified for prioritisation in line with my vision of making an impactful contribution in the lives of the people at the grassroots.
Others include the plight of communities where traditional authorities and elected local government authorities are in disagreement over who has the power to allocate land for development purposes. We picked this up in the Free State and the North West.
There is also the thorny issue of the dilemma of farm dwellers who live in terror at the hands of oppressive farmers. This came up sharply in the Mpumalanga areas, among other provinces.
Let me turn now to eight of the 11 reports that I have released over the past eight months, copies of which are already on the website. I will not go into the contents thereof. They involve the following organs of state:
1. Transnet
2. Compensation Fund
3. Eastern Cape Department of Social Development
4. Tshwane South College (Minister taking it on judicial review)
5. Ngaka Modiri Molema District Municipality
6. Geoscience
7. Limpopo MEC Mapula Mokaba-Phokwana (parties taking it on judicial review)
I now turn to the main reports for today, which involve the following organs of state:
1. Department of Arts and Culture vs South African Roadies Association;
2. KwaZulu-Natal Provincial Government and SAPS
3. North West Provincial Government / Bapo Ba Mogale
4. South African Government / CIEX
Department of Arts and Culture v South African Roadies Association
I investigated alleged failure or undue delay by the Department of Arts and Culture (DAC) to implement a Settlement Agreement. The complaint was lodged with the Public Protector by South African Roadies Association (SARA) following the lack of implementation by DAC of the Settlement Agreement signed on 01 April 2014. The Complainant is SARA duly represented by its president, Mr Freddie Nyathela.
In the main, the complaint was that the DAC failed or unduly delayed to implement the Settlement Agreement signed between DAC and SARA in terms of section 7(4) (a) and (b) of the Public Protector Act 23 of 1994 on 01 April 2014.
Having considered the evidence uncovered during the investigation against the relevant regulatory framework, the Public Protector makes the following findings:
(a) Whether the Department improperly failed or unduly delayed in implementing the Settlement Agreement signed between SARA and DAC on 01 April 2014;
(aa) The allegation that the Department improperly failed or unduly delayed to
implement the settlement agreement is substantiated.
(bb) The Department of Arts and Culture failed to implement a Settlement Agreement entered into between SARA and it, dated 01 April 2014 which was facilitated by the Deputy Public Protector, Advocate KS Malunga.
(cc) DAC’s failure to implement the Settlement Agreement was in violation of Clause 4.1.9 of the Settlement Agreement which provides that DAC shall submit to the Public Protector a detailed implementation plan with regard to the intervention of the IDT and other bodies and its proposal regarding assisting with the removal of health, safety and security risks uncovered at SARA House by close of business on Tuesday 15 April 2014.
(dd) DAC’s failure in this regard constitutes improper conduct and maladministration as contemplated in Section 182(1)(a) of the Constitution of the Republic of South Africa and in section 6 (4) (a) (v) of the Public Protector Act 23 of 1994.
(b) Whether the Department improperly failed to fund or render financial assistance to SARA on the following issues despite SARA being fully compliant with DAC’s funding policies:
(i) Assistance to SARA by DAC to strengthen its international relations;
(aa) The allegation that the Department improperly failed to render its support to SARA of the international interactions is not substantiated.
(bb) Indications in terms of available evidence are that DAC has fulfilled its obligations and full support of international interactions proposals over a cycle of three years has been provided to SARA. According to SARA’S comprehensive financial statement for the year ending on 31 December 2015, an accumulated fund of R4, 686,487 is reflected. A contract has also been concluded and funds transferred in accordance with the contract.
(cc) The Public Protector accordingly could not find any improper conduct, undue delay or maladministration on the part of the Department in relation to the funding and assistance to SARA to strengthen its international relations.
(ii) SARA’s request to DAC for funding of its operational and administrative costs.
(aa) The allegation that the Department improperly failed to fund operational and administrative costs of SARA while other similar organisation were granted the same support is substantiated.
(bb) In terms of the DAC’s Implementation of an Agreement Settlement Report, dated 2016-10-14 to the Public Protector, DAC indicated that it would not grant funding in this regard given the prevailing rules and statutes in the Public Service. The Department has in fact acknowledged that there has been some inconsistency in the approach with regard to the funding provided to a number of stakeholders. There is no policy informing the funding model in this regard and as a result other organisations have been receiving this kind of funding (for operations) while others such as SARA have been excluded from this support. The absence of a policy document regulating this grant and the discretionary mandate derived from Culture Promotions Act of 1983 result in some inconsistencies in the approach to funding these type of costs.
(cc) The Public Protector accordingly finds that there is no proper alignment on this funding model and that the exercise of such discretion has been unfairly exercised in the case of SARA.
(dd) The Public Protector also could not find the evidence of the proper application of Section 2 of Broad Based Black Economic Empowerment of 2003 which provides for the promotion of economic transformation in order to enable meaningful participation of black people in the economy and achieving a substantial change in the racial composition of ownership and management structures and in the skilled occupations of existing and new enterprises in this regard.
(ee) The conduct of DAC in this regard was improper and constitutes maladministration as contemplated in section 182(1)(a) of the Constitution of the Republic of South Africa and in section 6(4)(a)(v) of the Public Protector Act 23 of 1994.
(c) Whether the Department unduly funded operational and administrative costs of the three (3) orchestras namely (Cape Town Philharmonic Orchestra, Cape Town Jazz Orchestra and KwaZulu Natal Philharmonic Orchestra) and unfairly discriminated against SARA.
(aa) The allegation that the Department improperly funded operational and administrative costs of three (3) orchestras while on the other side failing and denying SARA similar funding is substantiated.
(bb) In terms of the available evidence the funding of the three (3) designated orchestras is a legacy of decision taken after a White Paper on Arts, Culture and Heritage of 1996.The direct funding to orchestras was documented in the 2003 Estimates of National Expenditure published by National Treasury and approved by Parliament.
(cc) However, Public Protector finds that the White Paper on Arts, Culture and Heritage of 1996, unfairly discriminates against SARA in that it makes specific provision for funding of both operational and administrative costs to orchestras whilst SARA is only funded for administrative costs.
(dd) The Public Protector accordingly finds improper conduct and maladministration as contemplated in terms of section 182(1)(a) of the Constitution of the Republic of South Africa and in section 6 (4) (a) (v) of the Public Protector Act 23 of 1994 on the part of the Department in relation to funding of the three named orchestras, in as far as such provision makes specific arrangement to benefit certain institutions while excluding others who are still within the same set up of promotion of culture and social cohesion in South Africa.
(d) Whether the Department improperly failed to acknowledge receipt and respond to correspondences from SARA.
(aa) The allegation that the Department improperly failed to acknowledge receipt and respond to correspondences from SARA is not substantiated.
(bb) In terms of the available evidence, the Department has notably been more responsive to SARA’s voluminous communications. There is constant update and reports from DAC to SARA, Office of the Public Protector and to the Parliamentary Portfolio Committee on Arts and Culture about this case on a regular basis. The Office of the Public Protector has also been conveying regular feedback to SARA from DAC about this matter through emails, meetings and telephone calls.
(cc) The Public Protector accordingly could not find any improper conduct on the part of the Department in relation to acknowledging receipt and responding to correspondences from SARA.
(e) Whether the Complainant was prejudiced by the conduct of the Department in the circumstances.
(aa) Based on the above findings the Public Protector finds that the Complainant (SARA) was prejudiced by the conduct of the Department (DAC) with regard to Paragraph (a) of the above, which is renovate SARA House in terms of the Settlement Agreement. Had the Department acted properly, SARA would have been able to conduct its business of training the South African youth in Live Events and Technical Skills Production in an environment and in a building that is not exposed to safety, health, occupational and security risks.
(bb) The Public Protector also finds that SARA and its learners were prejudiced by the conduct of the Department (DAC) with regard to Paragraph (b) (ii) of the above, which is to deny SARA the funding for operational and administrative costs. Had the Department acted properly, SARA would have enabled SARA to set up satellite training centres in all nine provinces in the country, maintain its facilities, devices, equipment, components and to service other related operational resources required for its training needs.
(cc) The Public Protector further finds that SARA was prejudiced by the conduct of the Department (DAC) with regard to Paragraph (c) of the above by unfairly discriminating against SARA while orchestras are funded for both operational and administrative costs on an annual basis (by way of a ring fenced budget) through special arrangements as provided for in the White Paper on Arts, Culture and Heritage of 1996.
(j) The appropriate remedial actions that the Public Protector is taking in the light of the above evidence and findings as contemplated in section 182(1)(c) of the Constitution are the following:
(aa) The Settlement Agreement concluded between SARA and DAC, in accordance with section 6(4) (a) and (b) of the Public Protector Act, 1994 (Act No. 23 of 1994, constitutes remedial action of the Public Protector.
With Regard to the Renovation of SARA House:
(bb) The Director-General of Department of Arts and Culture (DAC)
a) DAC must provide funding for the renovation of SARA House in the amount of R15 000 000.00 (Fifteen million rand) as per Settlement Agreement.
b) The grant amount of R15 000 000.00, as allocated to SARA for renovation is a huge amount which cannot be transferred to a private entity, considering that SARA does not have capacity to implement the renovation of this magnitude.
c) In order to ensure that Public Funds are spent appropriately and for the purpose it is intended for, DAC must appoint Development Bank of Southern Africa (DBSA), as a Government infrastructure implementing agent, to implement and manage the renovation at SARA house.
d) The funding of R15 000 000.00 (Fifteen Million Rand) allocated by DAC for renovations of SARA House must paid directly to the Development Bank of Southern Africa (DBSA) within thirty (30) days of signing of the implementation agreement between DAC and DBSA.
e) Development Bank of Southern Africa must be paid 10% of the grant amount by DAC, being the management fees for management of the renovations at SARA House.
With regard to the funding of operational and administrative costs of SARA:
(cc) The Minister of Department of Arts and Culture (DAC)
a) The Minister must amend the White Paper on Arts, Culture and Heritage of 1996, within three (3) months of this report to ensure that SARA is not unfairly discriminated against when it comes to the allocation of operational and administrative costs.
b) DAC must further ensure that within three (3) months of receipt of this report, a written policy informing this type of funding is developed for future and put in place to align the criteria that should be followed in this funding model. The Public Protector issues this remedial action against the backdrop of inconsistencies in DAC’s approach towards funding of administrative and operational costs. This should help this funding model to be more coherent and consistent in its approach.
KwaZulu-Natal Provincial Government/ SAPS/ Glebelands
My office intervened in the carnage that has been taking place at Glebelands Hostel in Umlazi outside Durban in KwaZulu-Natal. The aim was to ensure accountability by relevant state organs for their roles in redressing the situation at the hostel.
The intervention followed a complaint lodged by Professor Mcquoid-Mason, the President of the Commonwealth Legal Education Association in which he complained about frequent and unabated killings that were taking place at the Glebelands Hostel in Umlazi, Durban and the unlawful eviction and displacement of hundreds of hostel residents from rooms that had been allocated to them. He stated that the murders and unlawful evictions were a flagrant violation of the right to life, the right to personal security and the right of access to housing as enshrined in the 1996 Constitution and Bill of Rights.
(i) Having considered the evidence uncovered during the course of the intervention against the relevant regulatory framework, the Public Protector makes the following findings:
(a) Whether the Ethekwini Municipality administered the Glebelands Hostel in accordance with the law and the applicable policies and prescripts and if not whether such failure amounted to maladministration, the finding is that:
(aa) The Ethekwini Municipality failed to promote a safe and healthy environment within the Glebelands Hostel as required by section 152(1)(d) of the Constitution and envisioned in its own Hostel Policy approved in 1998.
(bb) The Ethekwini Municipality failed to give members of the local community equitable access to the municipal services to which they are entitled as envisaged in section 4(2)(f) of the Local Government Municipal Systems Act.
(cc) The Ethekwini Municipality failed to provide services to the Glebelands Hostel community in a financially and environmentally sustainable manner as required by section 152(1)(b) of the Constitution and Section 4(2)(d) of the Local Government Municipal Systems Act.
(dd) The failure by the Ethekwini Municipality as outlined above constitutes improper conduct as envisaged in section 182(1)(a) of the Constitution and maladministration as envisaged in section 6 (4)(a)(i) of the Public Protector Act.
(b) Whether the handling of the security situation at the Glebelands Hostel by the Security Cluster accorded with the duties imposed on it by the Constitution and the law and if not whether such amounted to maladministration, the finding is that:
(aa) The South African Police Service (SAPS) failed to live up to the object to prevent, combat and investigate crime, to maintain public order, to protect and secure the residents of the Glebelands Hostel and their property and to uphold and enforce the law as required by section 205(3) of the Constitution.
(bb) The SAPS failed to uphold the rights of the Glebelands residents to be free from all forms of violence as enshrined in section 12(1)( c) of the Constitution.
(cc) The failure by the SAPS as outlined above constitutes improper conduct as envisaged in section 182(1)(a) of the Constitution and maladministration as envisaged in section 6 (4) (a) (i) of the Public Protector Act.
(dd) The Ethekwini Metropolitan Police Service failed in its role to prevent crime at the hostel as required by section 64E of the South African Police Service Act, 1995 and such failure constitutes improper conduct as envisaged in section 182(1)(a) of the Constitution and maladministration as envisaged in section 6(4)(a)(i) of the Public Protector Act.
(c) Whether the Department of Social Development fulfilled its mandate in relation to the victims and survivors of the Glebelands Hostel violence and if not, whether such failure amounted to maladministration, the finding is that:
(aa) The Department of Social Development (DSD) failed to fulfil its responsibility to the victims of the Glebelands Hostel violence as required by section 27(1)(c) of the Constitution and is contrary to its Policy on Social Relief of Distress.
(bb) The failure by the DSD as outlined above constitutes improper conduct as envisaged in section 182(1) of the Constitution and maladministration as envisaged in section 6(4)(a)(i) of the Public Protector Act.
(ii) The appropriate remedial action the Public Protector is taking in pursuit of section 182(1)(c) of the Constitution, with the view of placing the victims as close as possible to where they would have been had the improper conduct or maladministration not occurred, while addressing administrative deficiencies in the relevant organs of the state, is the following:
(a) The Municipal Manager of Ethekwini Municipality must take appropriate measures to promote a safe and healthy environment at the Glebelands Hostel and in this regard ensure that:
(aa) A database of the evicted and displaced people is compiled and that in the event that these people cannot be returned to their allocated rooms, that suitable alternative accommodation is provided to them;
(bb) Access control is implemented as provided for in the Hostel Policy; and
(cc) The regularisation of residency is implemented as provided for in the Hostel Policy.
(b) The Municipal Manager of Ethekwini Municipality is to ensure that the community of the Glebelands Hostel is allowed equitable access to the municipal services to which it is entitled and in this regard must ensure:
(aa) That refuse is collected and removed at regular intervals;
(bb) That damaged infrastructure, like water and sewage pipes, is repaired timeously and, where necessary, replaced;
(cc) That the hostel grounds are adequately maintained with grass verges and fields are trimmed on a regular basis; and
(dd) That lighting both inside and outside the blocks is improved.
(c) The Municipal Manager of Ethekwini Municipality is to ensure that services to the hostel are provided in a financially and environmentally sustainable manner and in this regard ensure that:
(aa) The collection of rental is implemented as provided for in the Hostel Policy; and
(bb) Trading within the hostel premises is controlled as per Hostel Policy.
(d) The Provincial Commissioner of the South African Police Service is to ensure that the SAPS meet its object to prevent, combat and investigate crime, to maintain public order, to protect and secure the residents of the Glebelands Hostel and their property and in this regard must:
(aa) Consider the establishment of a satellite police station within the hostel premises;
(bb) Ensure that sufficient numbers of police officers are deployed to do static duties inside the hostel whenever the threat of violence is reported;
(cc) Ensure that all reported incidents of police brutality that were reported some of which are outlined in this report are referred to the Independent Police Investigative Directorate (IPID) and all other cases of police misconduct are thoroughly investigated.
(dd) Ensure that all serious crimes like murder and illegal evictions are investigated by police detectives from outside the Umlazi Police Station in order to address perceptions of partiality.
(e) The SAPS must take all necessary measures to uphold the rights of the Glebelands community to be free from all forms of violence and in that regard:
(aa) Ensure that perpetrators of violence are arrested and brought to book.
(bb) Take all measures necessary to improve the relationship between the local police station and the residents of the hostel.
(f) The Member of the Executive Council (MEC) responsible for Social Development in KwaZulu-Natal is to ensure that:
(aa) The Department implements the action plan referred to in paragraphs 1.5.18.3 and 4.4.8.2.4 of this report and indicates how it intends to assist the victims, survivors and their families that may have relocated outside the Province of KwaZulu-Natal.
(bb) That the MEC establishes the reasons why the Department failed to act timeously and come to the assistance of the victims of the Glebelands Hostel and take appropriate action against the officials found to have been responsible for the inaction.
(g) The Provincial Head of the IPID must note that the Public Protector will monitor the investigation of the allegations of police torture and killing of Glebelands Hostel residents and in that regard should provide the Public Protector with a copy of the IPID’s final report.
North West Provincial Government / Bapo Ba Mogale
I investigated allegations of improper prejudice suffered by the Bapo Ba Mogale Community as a result of maladministration by the former Bapo Ba Mogale Administration and the Department of Local Government and Traditional Affairs in the management of the so-called Bapo Ba Mogale D-Account.
The complaint was lodged on 26 March 2012 by Mr Freddy Mogale and Ms Itumeleng Moerane, who are Members of the Royal Six, and Mr A Mafatane, who is a member of the community.
In the main, the complainants alleged that the former Bapo Ba Mogale Administration and the then North West Department of Local Government and Traditional Affairs improperly caused Bapo Ba Mogale Community to suffer prejudice as a result of maladministration in the management of Bapo Ba Mogale D-Account.
I have made the following findings:
The allegation that the HOD for the Department of Local Government and Traditional Affairs in North West and Bapo Administration failed in the management of Bapo Ba Mogale is substantiated.
The process of the procurement in the construction of the palace was done without going out on tender or calling for quotations. Accordingly it was irregular to have proceeded with the construction without going on tender because the Bapo Administration would have received and considered other competitive bidders who would have provided value for money.
The total construction work of the palace complex amounted to over R115m (R115.088 916.57), which was well above the budgeted amount of R29.8m. There was gross misuse of funds by the Department to have exceeded the budget by approximately R85m and no reasons were advanced for such a huge increase.
There were no municipal-approved building plans at the commencement of the construction of the palace complex. Despite the negative report or remedial work to be done on the palace, no action was taken against the main contractor, Nhluvuko Civil Works. It was improper for the Department to have allowed the construction of the palace without having obtained the relevant approvals.
Administrators are expected to perform their functions and responsibilities in terms of statutory law and the Constitution which include diligent administration, advancing the well-being of the members of the traditional community, proper administration of finances, act in efficient and effective manner and conducive to good governance and administration. It is evident in the circumstances that the Bapo Administration and the Department failed in the abovementioned fiduciary duties and obligation in terms of sections 9 and 10 of the North West Traditional Leadership and Governance Act.
Further, the Traditional Councils are expected to perform their functions in good faith, diligently, efficiently, honestly and in a transparent manner. The performance of the functions were not adhered to in terms of paragraph 2 of the schedule to the Act.
The Bapo Administration and the Department had an obligation to exercise a high level of professionalism and ethics including accountability in the performance of their duties. These principles are enshrined in section 195 of the Constitution.
Failure by Department and Bapo Administration to ensure that the Multi-purpose Centre, Wonderkop Community Hall and are Segwaelane Community Centre utilised for the purpose for which it was built constituted fruitless and wasteful expenditure contrary to the provisions of section 38 of PFMA and the community has benefitted nothing out of the project.
The HoD should have ensured that the Bapo Administration develop a sound policy or framework governing the awarding of bursaries and a detailed register of beneficiaries to obviate and lack of controls and systems. Such policy would have guided them in the allocation of bursaries to deserving students and be accountable to the community at large. If such controls and systems were in place the issue relating to overspending by R6 million by the Administrator could have been avoided.
The Administrators were paid exorbitant amounts by Bapo Administration and the Department and such payments should be investigated further to determine whether such payments were justified or not. It was improper, in one instance, for Mr Moloto to have approved his own invoice amounting to R719, 534.00. Such payment should have been done by the next Senior Authority and not the Administrator himself.
The payments for professional and legal fees were exorbitant because of instability within the royal family and parties were suing one another. The Bapo Administration should have kept records of parties who lost and ordered to pay costs. It is not clear whether such costs ever recovered, if any, or whether the Bapo Administration was responsible to pay such costs. If the Administration paid such costs for losing parties they should be recovered from the relevant such parties.
The payment of personnel costs increased by seventy three percent and the Bapo Administration and the Department have to explain and provide justification of such huge increases. Proper records should have been kept safely by the then Bapo Administration.
There was payment of allowances to the value of R12.7 million where there is no policy governing the payment of allowances. Mr R Mabale was paid an allowance of R297 290.00 for participating in the land claim committee. The Bapo Administration and the Department must explain such huge increases and payments to Mr Mabale. Proper payment records should have been kept safely by the then Bapo Administration.
The investigation into the Poverty Alleviation programme revealed that the financial controls around this project were appalling because there are allegations that staff was carrying hard cash in the range of more than a million rands in their cars to pay members of the community. There was also lack of controls in monitoring the budget as evidenced by the expenditure of about R38 million in the 2011/2012 financial year during Mr Lerefolo’s tenure. The investigation revealed that the professional fees increased over the years and there were no controls in place. The Department represented by various Administrators failed to put controls and systems in place that would have guided them in the allocation and management of budgets and be accountable to the community at large. If such controls and systems were in place the issue relating to overspending and lack of accountability by the Administrator could have been avoided.
The security costs increased sharply in 2011/2012 to about R3.2 million and went as high as R8.9 million in the 2013/2014 financial year. Adequate justification was not provided for such huge increases.
The investigation revealed that cemeteries, halls and Multi-Purpose Centres have been vandalised and grass and bushes are growing on the paved roads due to lack of maintenance. It was incumbent upon Department to maintain the facilities at the cemeteries and failure to do so may lead to having to incur unnecessary costs to replace vandalised property. This falls short of the Batho Pele principles.
The Department failed to safeguard the funds held in the Bapo ba Mogale D-Account and for that reason, certain amounts cannot be accounted for as and in some instances there is over expenditure as well as fruitless and wasteful expenditure contrary to the applicable legislative prescripts.
The Department failed to submit the Bapo Administration books and accounts for auditing by the Auditor General who would have provided opinions and guidelines on how the funds in the Bapo ba Mogale D-Account should have been managed and made certain findings and recommendations.
The Administrators appointed by the Department either did not understand their mandate or they just used the funds of Bapo Administration without taking into account the interests of the community at large, did not perform their duties in good faith, diligently, honestly, efficiently and did not comply in most cases with applicable legislative prescripts under which they were appointed.
In respect of Trunk Roads, the matter requires further investigation to ascertain the maladministration that was committed in the circumstances.
The conduct of the Department and the Bapo ba Mogale Administration in the circumstances constitutes maladministration in terms of section 6(4)(a) of the Public Protector Act and improper conduct as envisaged in terms of section 182(1) of the Constitution.
The allegation that failure by the Department and Bapo Administration to properly manage the D-Account led to the Community suffering prejudice is substantiated.
As a result of the failure by the Department to properly manage the D-Account millions of rand cannot be accounted for.
Furthermore, the conduct of the Department deprived, the community of the financial resources which would have been used for the community’s benefit with regards to additional decent housing, proper health care facilities, food, water and social security, employment opportunities, more bursaries to deserving students, infrastructure, employment projects; poverty alleviation; etc.
As a result of poor workmanship and vandalism on the multi-purpose Centre and other halls the community is unable to use them for meetings and recreational purposes.
The actions of the Department and the Bapo Administration is contrary to the ethos laid out in the Batho Pele principles.
In the circumstances the conduct of the Department and the Bapo Administration amounts to maladministration and improper conduct as envisaged in section 182(a) of the Constitution and section 6(4) of the Public Protector Act.
In the light of the above findings the Public Protector is directing the following remedial action as contemplated in section 182(1)(c) of the Constitution:
1. The Premier of the North West Province to:
1.1.1. Approach the SIU with a view in terms of section 2 of the Special Investigating Units and Special Tribunals Act No. 74 of 1996 to:
1.1.1.1.Initiate a process to ascertain the irregular amounts paid as listed hereunder and determine which amounts may be recovered through a civil process and further provide the Public Protector with a report on steps taken in that regard within a period of sixty (60) days from the date of the issuing of the final report:-
a. The irregular payment of an amount of R 78 863 670.73 million paid to Nhluvuko Civil Works on the construction of the Palace complex;
b. The payment of an amount of R 21 570 011.99 million paid to Ndzalama Interiors on the construction of the Palace complex;
c. The payment of an amount of R 8 705 233.85 million paid to ProjexConsult on the construction of the Palace complex;
d. The payment of an amount of R 20 243 146.85 million paid to Nkambule and Associates on the construction of the construction of trunk roads in Wonderkop and Greater Bapong areas;
e. The payments of an amount of R8 123 949.08 million and R4 125 670.38 to Mr Abel Dlamini and Junius Moloto respectively during their tenure as Administrators, as well as Mr Moloto’s payment to himself of an amount of R719 534;
f. The payments of an amount of R3.7 million from Madisa and Associates CC who were contracted to provide marketing and communication services. Included in these services was the drafting of strategies and plans, design and lay-out of the annual report. No proof of such work was produced;
g. The payments of an amount of R5.1 million from Mosiamise Business Consulting for its consulting work which included among others the review of mining activities and consultants. No tangible out put on these services could be provided;
h. The payments of an amount of R36.3 million from Matlapa Construction Consulting (Pty) when it was evident there was no value for money in running the project;
i. The payments of an amount of R 4 052 328.72 million paid to Dire Accounting Practice CC for failing to deliver on the implementation of the Enterprise Resource Planning System;
j. The payments of an amount of R8 098 313-81 million from Thaba Consulting who were Project Managers for the construction of the Multipurpose Centre for poor workmanship;
k. The payments of an amount of R13 million from Queens Building Construction CC who were Project Managers for the construction of the Multipurpose Centre for poor workmanship;
l. The payments of an amount of R5.2 million from Thaba Consulting Engineers (Pty) who was the consultant during the construction of the Multipurpose Centre which the investigation revealed to be of poor workmanship;
m. The payments of an amount of R7 180 409.69 million from Kgatelopele Consulting Engineers who was the consultant during the construction of the Segwaelane Community Centre which the investigation revealed to be of poor workmanship;
n. The payments of an amount of R7 863 052.52 million from Kgatelopele Consulting Engineers who were appointed to constructed Segwaelane Community Centre for poor workmanship;
o. The payments of an amount of R7 014 990.59 million from Kgatelopele Consulting Engineers who was the consultant during the construction of the Wonderkop Community Hall Centre which the investigation revealed to be of poor workmanship; and
p. The payments of an amount of R8 098 313.81 million from the Service Provider who constructed Wonderkop Community Hall for poor workmanship.
1.1.1.2. The Premier must approach the SIU with a view in terms of section 2 of the Special Investigating Units and Special Tribunals Act No. 74 of 1996 to conduct a forensic investigation on the following:
a. Serious maladministration, unlawful appropriation and expenditure of public money by the Administrators and Directors of companies (service providers) who were awarded tenders with the view of the recovery of losses suffered by the State and institute criminal charges in terms of Section 86 of the Public Finance Management Act;
b. The role played by the then Administrator, Mr Abel Dlamini, in the appointment of Nhluvuko Civil Works (Pty) Ltd, to build the palace without going out on tender or calling for quotations;
c. Administrators who might have benefitted improperly in their capacities as Bapo Administrators and to recover monies lost by Bapo Administration during their tenure;
d. The circumstances leading to the establishment of BBMI and to investigate but not limited to the following:
(aa) To establish whether before the establishment of BBMI there was a Community/Tribal resolution taken at a community meeting for its establishment and to determine whether other legal prescripts and were followed;
(bb) To investigate who are the owners of BBMI, equity deal between BBMI and Lonmin shareholding agreements, share certificates and the processes followed in the appointment of Directors and members of the Executive Committee;
(cc) To investigate whether or not board members, Executive members, Royal members, Traditional Committee members have a financial relationship and whether they benefit financially from BBMI and whether there is a conflict of interest in their dealings with BBMI; and
e. Serious maladministration in connection with all the D- Accounts in the Republic of South Africa to ascertain whether all mines entrusted with payment of royalties, in North West and other Provinces, are indeed paying royalties to the correct recipients, including management of royalty payments to communities
1.2. The Director General of the Province to:
1.2.1.The Director-General must ensure that the Bapo Administration must within a period of 60 days from the issuing of the report provide the necessary maintenance and security to guard the cemeteries, halls and Multi-Purpose Centres; they must also make sure that the necessary repairs are effected so that these facilities are used for the benefit of the community at large.
1.2.2. The Director-General must ensure that the Bapo Administration must within a period of 60 days from the issuing of the report develop, adopt and implement Policies relating to effective, efficient, economic and transparent system of financial risk and internal control, financial controls, allowances and bursaries, appropriate procurement and provisioning system which is fair, equitable, transparent, competitive and cost effective; They must also develop systems that would curb and prevent unauthorised, irregular, fruitless and wasteful expenditure;
1.2.3. The Director-General must within a period of 60 days from the issuing of the report follow up on cases that were opened at Brits Police Station relating to allegations of enrichment by certain individuals who were involved in the Poverty Alleviation project;
1.2.4. The Director-General must further conduct an investigation to establish whether the conduct of Mr Lerefolo, the then Administrator, who is still in the employment of the North West Provincial Department of CATA contravened the Public Service Act and the Regulations thereof.
1.2.5.The Director-General must refer aspects of legal costs incurred by the Bapo Administration to the Law Society of South Africa to assess and verify the fairness of the legal costs incurred.
1.3. The Public Protector refers the matter to the Auditor General in terms of section 6(4)(c)(ii) to audit the D-Account of the Bapo Ba Mogale Administration.
1.4 The Public Protector, in terms of section 6(4)(c)(i) of the Public Protector Act, brings to the notice of the National Prosecuting Authority and the DPCI those matters identified in this report where it appears crimes have been committed.
CIEX
I investigated allegations that CIEX Ltd (hereto referred to as CIEX), a covert UK based asset recovery agency headed by Mr Michael Oatley was contracted by the South African Government to assist in investigating and recovering misappropriated public funds and assets allegedly committed during the apartheid regime.
The Complainant, Adv. Paul Hoffmann, alleged that a memorandum of agreement was signed by Mr Billy Masetlha on behalf of Government of the Republic of South Africa and Mr Michael Oatley on behalf of CIEX on 06 October 1997 allowing CIEX to investigate and recover public funds on behalf of Government.
He also alleged that what is of concern is part of the CIEX report that deals with the “lifeboat’’ allegedly afforded by way of an illegal gift, by the South African Reserve Bank (herein called the SARB) to Bankrop Limited, now ABSA Bank, during the apartheid regime.
The Complainant alleges that, the Government of the Republic of South Africa and the SARB failed to implement the CIEX report and to recover misappropriated money from Bankorp Limited without providing any reasons to that effect.
Having considered the evidence uncovered during the investigation against the relevant regulatory framework, the Public Protector makes the following findings:
1. Whether the South African Government improperly failed to implement the CIEX report, dealing with alleged stolen state funds, after commissioning and duly paying for same:
(a) The allegation whether the South African Government improperly failed to implement the CIEX report, dealing with alleged stolen state funds, after commissioning and duly paying for same is substantiated;
(b) CIEX Ltd. was paid 600 000 British Pounds for services which were never used by the South African Government. No evidence could be found that any action was taken specifically in pursuit of the CIEX report;
(c) Failure by the South African Government was inconsistent with duties imposed by section 195 of the Constitution requiring a high standard of professional ethics;
(d) The failure was also inconsistent with section 231 of the Constitution that requires that all Constitutional obligations must be performed diligently and without delay;
(e) In addition the conduct was contrary to the Batho Pele Principles in that there was no value for money; and
(f) The failure by the South African Government and constitutes improper conduct as envisaged in section 182(1) of the Constitution and maladministration as envisaged in section 6 of the Public Protector Act.
2. Whether the South African Government and the South African Reserve Bank improperly failed to recover from Bankorp Limited/ABSA Bank an amount of R3.2 billion, cited in the CIEX report, owed as a result of an illegal gift given to Bankorp Limited/ABSA Bank:
(a) The allegation whether the South African Government and the South African Reserve Bank improperly failed to recover from Bankorp Limited/ABSA Bank an amount of R3.2 billion cited in the CIEX report, owed as a result of an illegal gift given to Bankorp Limited/ABSA Bank between 1986 and 1995 is substantiated;
(b) The correct amount of the illegal gift granted to Bankorp Limited/ABSA Bank is in the amount of R1.125 billion;
(c) Two investigations into the matter established that the financial aid given to Bankorp Limited/ABSA Bank was irregular;
(d) The South African Reserve Bank in granting the financial aid failed to comply with section 10(1)(f) and (s) of the South African Reserve Bank Act No. 90 of 1989. The Ministry of Finance had a duty as obliged by section 37 of the South African Reserve Act of 1989 to ensure compliance of the Act by the South African Reserve Bank. The Ministry failed to comply with the obligation;
(e) The South African Government failed to adhere to section 195 of the Constitution by failing to promote efficient and effective public administration; and
(f) In the circumstances the conduct of the South African Government and the South African Reserve Bank constitutes improper conduct as envisaged in section 182(1) of the Constitution and maladministration as envisaged in section 6 of the Public Protector Act.
3. Whether the South African public was prejudiced by the conduct of the Government of South Africa and the South African Reserve Bank and if so, what would it take to ensure justice:
(a) The allegations whether the South African public was prejudiced by the conduct of the Government of South Africa and the South African Reserve Bank is substantiated;
(b) The South African Government wasted an amount of 600 000 British Pounds on services which were never used;
(c) The amount given to Bankorp Limited/ABSA Bank belonged to the people of South Africa. Failure to recover the “gift” resulted in prejudice to the people of South Africa as the public funds could have benefitted the broader society instead of a handful of shareholders of Bankorp Limited/ABSA Bank;
(d) The conduct of the South African Government and the South African Reserve Bank goes against the ethos laid in the preamble of the Constitution and section 195 of the Constitution in respect of redressing social injustices and promoting efficiency;
(e) The conduct further is contrary to the Batho Pele Principles that requires redress and the view held in the Khumalo case requires a public functionary to arrest reported irregularities; and
(f) The conduct of the South African Government and the South African Reserve Bank constitutes improper conduct as envisaged in section 182(1) of the Constitution and maladministration as envisaged in section 6 of the Public Protector Act.
(i) The appropriate remedial action that the Public Protector is taking in terms of section 182(1) (c) of the Constitution is the following:
(1) The Special Investigating Unit:
(a) The Public Protector refers the matter to the Special Investigating Unit in terms of section 6(4)(c)(ii) of the Public Protector Act to approach the President in terms of section 2 of the Special Investigating Units and Special Tribunals Act No. 74 of 1996, to:
(aa) Re-open and amend Proclamation R47 of 1998 published in the Government Gazette dated 7 May 1998 in order to recover misappropriated public funds unlawfully given to ABSA Bank in the amount of R1.125 billion; and
(bb) Re-open and amend Proclamation R47 of 1998 published in the Government Gazette dated 7 May 1998 in order to investigate alleged misappropriated public funds given to various institutions as mentioned in the CIEX report.
(b) The South African Reserve Bank must cooperate fully with the Special Investigating Unit and also assist the Special Investigating Unit in the recovery of misappropriated public funds mentioned in (aa) and (bb).
(2) The Portfolio Committee on Justice and Correctional Services:
(a) The Chairperson of the Portfolio Committee on Justice and Correctional Services must initiate a process that will result in the amendment of section 224 of the Constitution, in pursuit of improving socio-economic conditions of the citizens of the Republic, by introducing a motion in terms of section 73(2) of the Constitution in the National Assembly and thereafter deal with matter in terms of section 74(5) and (6) of the Constitution.
Section 224 of the Constitution should thus read:
224. (1) The primary object of the South African Reserve Bank is to promote balanced and sustainable economic growth in the Republic, while ensuring that the socio-economic well-being of the citizens are protected.
(2) The South African Reserve Bank, in pursuit of its primary object, must perform its functions independently and without fear, favour or prejudice, while ensuring that there must be regular consultation between the Bank and Parliament to achieve meaningful socio-economic transformation.
These reports will be uploaded on the Public Protector website by close of business today after all the affected parties have been favoured with copies.
Thank you.
Issued by the Office of the Public Protector, 19 June 2017
