Topic: Anti-Corruption Collective Action and Integrity in Business
Ladies and gentlemen.
Introduction
I am pleased by the invitation to address this gathering of the United Nations Global Compact Network to share with you various strategies for how business leaders can engage effectively with government in the area of combating corruption. I have been requested to amongst other things; share my insights on how government can work more closely with business to fight the surge of corruption. You are also interested in some of the lessons that government is deriving from its institutionalised anti-corruption efforts, as well as how government holds its employees accountable especially those involved in public procurement processes.
Let me state from the onset that this African National Congress led government is committed to fight corruption wherever it occurs and in all its manifestations. However, this is not a task we will be able to achieve on our own. To defeat corruption in all its forms we need united action! We need joint strategies between business, government and society in general.
Many present here this evening will be familiar with the widespread outrage at the exposure of collusion by South Africa’s largest construction companies during the building of the stadiums for the 2010 soccer world cup. The cost of building our stadiums escalated well beyond the initial projections, with analysts blaming corruption for this. Both government officials and business leaders were painted with the same brush!
South Africa, however, has a sound anti-corruption and ethics infrastructure, inclusive of collectively strong legislative and policy frameworks, which encourages public sector corruption to be widely reported, due to our highly transparent structural mechanisms like the Anti-Corruption hotline, as well as the Presidential Hotline.
The Public Service Commission categorises public service corruption into four common forms, namely; 1) fraud and bribery 2) mismanagement of public funds 3) procurement irregularities and 4) appointment irregularities.
As a result Corruption Watch reported 5 485 corruptions related cases inclusive of government institutions and parastatals for the 2013-14 financial year. This can be misleading - if not decomposed in terms of the Public Service Commission’s corruption categories, as it includes any perceived corruption even in employment practices which is covered by a separate labour relations regime and may not necessarily fall within the broad category or definition of corruption. Notably, Public servants when disgruntled with a less than favourable outcome to an employment dispute, have a tendency to report their complaints as corrupt practices.
What is our Public Service Anti-Corruption Strategy
For this reason the National Development Plan (NDP) responds by identifying four focus areas in which policies should be implemented to move towards an accountable state and zero-tolerance to corruption in the public service:
- Building a resilient anti-corruption system
- Strengthening accountability and responsibility of public servants
- Creating an open, responsive and accountable public service; AND
- Strengthening judicial governance and the rule of law.
The Public Service Anti-Corruption Strategy which was approved by Cabinet in 2002 has been a key driver of all anti-corruption initiatives in the public service. The Strategy advocates that the fight against corruption be conducted in an integrated and coherent manner. It recognises the importance of solid management practices to prevent, detect, and combat corruption. The lessons learnt is that there is a nexus between good management practices and controls through checks and balances, which prevent any opportunity for corrupt practices.
It is also worthy to note that where a Head of a Department – who is the accounting officer of that department, knows and understands their administrative decision making powers, fewer incidents of indiscretions occur within such environments.
Legislative Framework for fighting corruption in the Public Service
In South Africa, several laws exist which support government’s efforts in the fight against corruption and promotion of integrity within the public service. Chapter three of the Public Service Act provides the Minister for Public Service and Administration with the responsibility to establish norms and standards in respect of integrity, ethics, conduct and anti-corruption in the public service (Chapter 3 of the Public Service Act, 1994).
As part of our broad the anti-corruption strategy, the Public Service Integrity Management Framework was developed to strengthen measures regulating ethical conduct in the Public Service. It provides for, amongst other things, that:
- The financial disclosure system is extended to all public servants;
- The process for Financial disclosures are made electronically;
- Restrictions are applied to public servants doing business with government;
- Public servants are prohibited from accepting gifts, hospitality or private benefits of any value in their official capacity from any private entity in return for a service provided or not provided;
- A process be introduced to manage remunerative work performed outside of the public service stricter.
- Ethics structures are put in place to address unethical conduct in the Public Service. Ethics structures include the ethics committee and ethics office, which are necessary for effective management of ethics.
Towards this end, the Public Service Charter was endorsed by all public sector unions and embraces the Public Service Code of Conduct which is incorporated in Chapter 2 of the Public Service Regulations. In addition it serves as a guide to public service employees in terms of ethical conduct, both in terms of their individual conduct and their relationship with other stakeholders.
To strengthen the fight against corruption it is necessary to focus on limiting the scope for conflicts of interest by public servants and hence in terms of the Financial Disclosure Framework (Chapter 3 of the Public Service Regulations), senior managers within the public service are required to disclose their financial interests on an annual basis. The public service recently started implementing an electronic system for financial disclosures, with a full roll-out thereof anticipated for the next disclosure period. All senior managers are compelled to be Security Vetted as well to ensure only ethical persons are employed within the public service.
It must be noted that differing levels of strategic procurement decision making within the public sector is decentralised to approximately 140 000 service points. Hence a recent research report by the Public Administration Research Institute (PARI), argues that the complexity of competent and cogent decision making in the procurement of goods and services is structural in nature due to the architecture of the state. When government departments are outsourcing a large chunk of their operational budgets for the procurement for goods and services to third party providers, competition to access these opportunities by local vendors may lead to a proliferation of compromised relationships between public servant procurement officials and local business people.
They argue that uniform centrally determined norms by National Treasury and co-ordination thereof within the procurement space, when applied within a local context, are different things to different local economic needs and responses in the endeavour to stimulate and support local economic development. Although the The Public Finance Management Act (No. 1 of 1999) promotes the objective of good financial management in order to maximise service delivery through the efficient and effective use of resources and lays the basis for a more effective corporate governance framework for the public sector, the key objectives of the Act are about modernising the system of financial management; enabling public sector managers to manage by decentralised decision making and a delegations framework, but at the same time be more accountable; ensuring provision of timely information; and eliminating waste and corruption in the use of public assets.
Government has also introduced a Chief Procurement Officer based in the National Treasury who role it is amongst other things to ensure norms and standards; co-ordination systems and processes to manage the government consumption with respect to goods and services.
Institutional capacity to prevent and combat corruption
Government departments and organisational components have established the requisite capacity to prevent and combat corruption in their spheres of operation in terms of the Minimum Anti-Corruption Capacity (MACC) requirements which was prescribed to compel government departments to establish systems and processes to prevent corruption, encourage whistle-blowing, investigate and resolve cases of corruption. Training and awareness programmes have been institutionalised and ethics officers designated to build and strengthen competencies around preventing, detecting, investigating, and eradicating corruption in the public service. Any whistle-blower reporting cases to designated ethics officers are protected by the Protected Disclosures Act (No. 26 of 2000) as employees are encouraged to disclose information about unlawful and irregular behaviour in the workplace, without being subjected to some form of victimisation by employers.
Institutions supporting Good Governance in the Public Service
We have also put in place various institutions which can work with The National Prosecuting Authority (NPA) and the South African Police Service in fulfilling their constitutional mandate to investigate criminal activities including corruption and instituting criminal proceedings on behalf of the state without fear, favour or prejudice.
The Public Service Commission provides oversight of the public service of South Africa through the powers and functions it exercises through the investigation, monitoring and evaluation of public administration. The Commission is also the custodian of the National Anti-Corruption Hotline.
The Auditor-General has a constitutional mandate and, as the Supreme Audit Institution of South Africa, it exists to strengthen our democracy by enabling oversight, accountability and governance in the public sector, thereby building public confidence. The Public Protector Act, 1994 (Act no 23 of 1994) empowers the Public Protector to investigate any alleged improper or dishonest act, or omission or corruption with respect to public money. The Public Protector may investigate, on the basis of a complaint or on its own initiative, any level of government (i.e. national, provincial and local government), any public office bearer, public entities and any statutory council. The Public Protector is independent of government and political parties and reports directly to Parliament.
The Special Investigating Unit (SIU) also investigates serious malpractice or maladministration cases in connection with the administration of state institutions, state assets and public money, as well as any conduct which may harm the interest of the public.
Coordinating Structures for Anti-Corruption
The Anti-Corruption Task Team (ACTT) was established to operationalise Government’s anti-corruption agenda and consists of various government departments including the National Prosecuting Authority. The role and functioning of this body was concretised and expanded through the permanent establishment of an Anti-Corruption Component within the Directorate for Priority Crime Investigation (DPCI). This Task Team reports to the Anti-Corruption Inter-Ministerial Committee (ACIMC) which was established by President Zuma in July 2014, to coordinate and oversee the work of State organs aimed at combating corruption in the public and private sectors. The Inter Ministerial Committee comprises the Ministers of: Justice and Correctional Services, State Security, Police, Cooperative Governance and Traditional Affairs, Public Service and Administration, Finance, Home Affairs and Social Development, and the Ministry for Planning, Monitoring and Evaluation in the Presidency. It is convened and chaired by the Minister in the Presidency.
Partnership with Stakeholders
The Department for Public Service and Administration has undertaken several activities in partnership with Business Unity South Africa (BUSA), to implement programmes aimed at raising awareness on anti-corruption measures.
I am confident that the Global Compact Network South Africa and the National Business Initiative can join the National Anti-corruption Forum (NACF) which comprises of representatives from government, civil society and the business sector in our collaborative effort to effectively deal with corruption.
In conclusion, as Corruption is a broad societal problem, in both the public and private sector and flourishes when it is allowed to, we would be pleased as the Public Service to work collaboratively with the National Business Initiative and the United Nations Global Compact Network South Africa to find lasting solutions to address corrupt practices in our country. We jointly have to influence what is acceptable conduct and practices if we are to remove this scourge. I am confident that we will not allow corruption to get a foothold and thereby undermine state functions, the rule of law and our democracy. Together we must fight corruption wherever it occurs!
I thank you.
