Social Grants Crisis: DA calls for Ad Hoc committee

16 March 2017

Today we are faced with a crisis, manufactured by the Minister of Social Development, Bathabile Dlamini, which has put the livelihoods of 17 million South Africans at risk.

We know that in 2012, Cash Paymaster Services (CPS) won the South African Social Security Agency (SASSA) tender to distribute social grant payments. In April 2014, the Constitutional Court declared the contract invalid based on two grounds:

- First, was that SASSA failed to ensure that the BEE credentials claimed by CPS were objectively confirmed; and

- Second, was that the second bidder's notice did not specify with sufficient clarity what was required of bidders regarding biometric verification, which resulted in only one bidder, CPS, being considered in the second stage of the bidding process, which rendered the process uncompetitive and made any comparative consideration of cost effectiveness impossible.

In November 2015, SASSA reported to the Constitutional Court that it would be ready to take over the distribution of social grants from 1 April 2017.

Indeed, in her budget vote speech on 5 May 2016, Dlamini reaffirmed that SASSA would take over the payment process of social grants.

The DA has written to the Public Protector asking her to conduct an urgent inquiry into an alleged breach of the Executive Ethics code for wilfully misleading parliament.

It has become clear that the Minister has done everything in her power to ensure that CPS would continue to distribute social grants and we must get to the bottom of who will benefit from this.

That is why we have also requested that the Public Protector launch an investigation into the relationship between Dlamini and CPS, as there must be a reason why Dlamini has been so hell-bent on ensuring that CPS would continue to distribute grants.

On 12 March, SASSA CEO, Thokozani Magwaza, claimed that Minister Dlamini blocked all his efforts to report back to the Constitutional Court about the payment of social grants and that she personally interfered when he tried to find a solution to the crisis.

Dlamini also wilfully ignored three separate legal opinions which all recommended that SASSA proactively approaches the Constitutional court, as it was clear, a full year ago in April 2016, that they would not be ready to take over the distribution.

The DA can today reveal all three legal opinions, the golden thread running through each is that SASSA should proactively approach the Constitutional Court to seek directions on how to proceed as it is clear that they would not be ready to take over, despite the Ministers assurances.

In May 2016, SASSA was advised by Advocates Nazeer Cassim and Mias Mostert to approach the Constitutional Court to proactively to seek guidance as to whether the Court wished to resume its supervisory jurisdiction and to inform the Court regarding the delays in the institutionalisation of grant payments and inform them of the new time frames. Tellingly, this opinion stated that “our concern is that the impression may be created that SASSA has, all along, been pulling the wool over the Court’s eyes.”

In October 2016, Adv. Trengrove found that “The Constitutional Court has already held that the original procurement was unlawful and invalid…[and] We conclude that SASSA’s proposed interim agreement with CPS will not be lawful.”

Adv Trengrove essentially stated that SASSA should contract with CPS only for the bare minimum time to allow them to enter into a lawful contract following a tender process. Further, the interim contract with CPS must be on “the same or similar” terms. It cannot be more preferential than the original, unlawful conduct or they would fly in the face of their financial obligations. Adv Trengrove also stated that the failure to enter a legal contract “is due instead to SASSA’s own failure to get its ducks in a row in time” Finally, SASSA were once again advised to proactively approach the court with this information, which they did not do.

In November 2016, SASSA and the Minister received counsel from Adv Sikhakhane. He advised that SASSA reports to the Constitutional Court on its chosen option or solution for the payment of social grants and that SASSA should make every possible attempt to be in a position to perform the services itself.

Advocate Sikhakhane stated that “Any attempt to extend the contract with CPS without leave of the Court, may be viewed as perpetuating an illegality”.

“SASSA may approach the Constitutional Court to seek to extend the suspension of the declaration of invalidity in order to allow SASSA more time to procure the ancillary services from a service provider”.

According to Sikhakhane’s advice, SASSA had enough time to find an adequate alternative service provider. Thus, based on this counsel, it can be deduced that SASSA sought to change the circumstances by doing absolutely nothing, hoping that the court would be misled. This crisis is indeed self-made.

Dlamini, refused, with typical ANC arrogance, all of the advice presented to her. The DA will send all three legal opinions to the Public Protector to supplement investigation into whether the Minister wilfully mislead parliament.

Not only did the Minister manufacture this crisis, she also avoided every opportunity at accountability.

With only two weeks to go until the contract expires – and no alternate plan to ensure grants will be paid, this is an unbelievable example of recklessness and Dlamini’s inability to prioritise the livelihoods of millions of South Africans above her own Interests.

The DA has therefore submitted a draft resolution to the Speaker of the National Assembly, Baleka Mbete, to request that Parliament establishes an Ad Hoc Committee to launch a full parliamentary inquiry into the social grants crisis.

An ad hoc committee into this crisis will play an important role in ensuring that all the guilty parties are held to account.

This ad hoc committee must investigate:

- the circumstances surrounding the crisis, including the role of the Minister

- the nature of the relationship between CPS, the current and former ministers of Social Development and the current and former Chief Executive Officers of SASSA;

- Serge Belamant’s role in this crisis; and

- the various legal opinions which were sought regarding the issue over time, including that of the Special Advisor to the President, Michael Hulley.

17 million South Africans receive social grants every month. These grants barely cover the cost of the bare essentials and now these grants, which in some cases are the only source of survival for the poor, is in danger because Dlamini saw it fit to play political games, most likely as she will benefit in some way or another.

It is now blatantly clear that Dlamini has done all in her power to avoid having to produce any contract for the Constitutional Court’s scrutiny and that the minister is desperate to ensure that CPS keeps this lucrative contract at all costs.

Issued by Bridget Masango, DA Shadow Minister of Social Development, 16 March 2017