Tag Archive | state tendering

Business Interests Bill to control corruption

Bill exposes level of state corruption…..

Lindiwe MazibukoA Private Member’s Bill has been tabled in Parliament in an attempt to control state tendering corruption by Lindiwe Mazibuko, leader of the opposition, entitled the Business Interests of Government Employees Bill; a private members bill being an unusual procedure but perfectly acceptable in terms of the Constitution. The Bill gives as its background the seedy position in a number of government departments regarding government tendering processes.

The Bill, emanating from an MP and not the minister of a particular department as is usual, will have public parliamentary hearings in the course of public procedure but no departmental call for comment, although in this case the Bill is very much in the sphere of Lindiwe Sisulu, the public service and administration minister.

Going for the kernel

The Bill is hard hitting both in its language and its intentions and does not disguise the fact that it is specifically aimed at corruption and cronyism in the public service. In fact, it is so lacking in subtlety of wording one wonders if Lindiwe Mazibuko took it upon herself, in conjunction with the Speaker of the House (who has to be consulted before any private member’s Bill is accepted) to do something that the minister could not do without a palace revolution in her own department.

The minister, Lindiwe Sisulu, has been saying for some time that legislation might be one of the courses of action to be undertaken to fight corruption in public administration.

Lighting a fuse

The truth of the degree to which co-operation has been employed in the tabling of this Bill will no doubt come out in the portfolio committee debates during the passage of the Bill when the level of opposition can be measured, added to which there maybe, who knows, some submission from government departments in the hearings and from submissions, which have been called for since 13 June.

However, nobody will be able to disagree that something like this Bill is badly needed to stop the slippery slope of corruption that has become embedded in the South African public service. To stand against this Bill would be a difficult posture to adopt.

Govt employees only 5% interest

Basically the Bill demands a prohibition on any public servant or member of his or her family to hold more than a 5% interest in any entity that does business with the administration. Unfortunately, the Bill cannot be applied in retrogression as these are grounds found unacceptable constitutionally but public service employees around the country could be obliged to sign affidavits disclosing the extent that any members that they or their families have in an entity that conducts business with government, such affidavits having to be signed at prescribed intervals.

Similarly, those wishing to do business with government will have to sign a similar affidavit disclosing any interest that a government employee, a member of their family, may have in the entity tendering. Failure to comply will result in cancellation and a claim for damages and discipline against the family member concerned in public service.

Who is “family”?

The objects of the Bill state that the purpose is to stop the undermining of the quality service from government by public servants who are “inappropriately benefiting from government tenders”. In the definitions portion of Bill, which is no longer a draft as described in the media,  a “family” goes no further than siblings but all forms of marriages and unions are described.

Unusual listings

The background to Bill is most revealing and puts the facts up front for any debate on the Bill:-

*50% of Free State government contracts had been awarded to government employees or their immediate families, with 191 government employees benefiting from contracts worth R133m.

*In 2010, it is estimated that R624m of state money went to persons with direct links to public servants, to public servants families or persons with links to a spouse.

*R45m has been lost by the Easter Cape Health department due to irregular contracts with public servant family members.*A Special Investing Unit probe has revealed that close on 9,000 department of health officials are directors of a company and 1,000 of these openly to do business with the department, the report showing that R42.8 m had been paid to 235 employees.

*Over 3,314 employees of the department of education had engaged in business with the department in the past two financial years earning a combined R152m. Of these employees, 2,438 were teachers.

Only the brave…

The litany of horror continues and consequently, to object to the Bill would be to deny the facts. However, the implementation of such a Bill and to ensure its application at all levels will be the test and no doubt this is where the Bill may flounder.

The minister, it is proposed, may waive the 5% limit after considering an application by an employee. Consideration will also be given to the nature of the goods, adverse effects to the state if the tender or contract refused and possible adverse effects to the employee under certain conditions, but again such decisions must be taken by the minister.

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Treasury says it has plans to cut down on tender fraud

Finance Minister, Pravin Gordhan, in replying to a parliamentary written question on what government was doing about malpractice in state tenders and overpricing of goods and services supplied on government tenders, has replied that National Treasury is developing  a “national pricing system” to be adopted by departments in such instances where government is paying outside providers.

The written reply did not give any indication of the levels of government to which such new plans might apply.

Such measures, the minister replied, would improve government’s ability to monitor transactions and help detect fraud at an earlier stage. Also there were plans to introduce more transparency in the procurement process itself, including the necessity to declare and provide reasons for awarding a particular contract.

More centralised control was to be sought when high-value goods were purchased, the minister wrote, and penalties such as double the contract value were envisaged.

In a separate platform before Parliament closed, Pravin Gordhan drew the attention of parliamentarians to the fact that a higher level of integrity was also called from the private sector when dealing with state officials, in particular in the way that they tendered for government business and the prices that were charged.

He also drew attention to the fact that taxpayers themselves were getting wary of the misuse of public funds by government, pointing to the fact that the auditor general had recently summated in their published annual reports of the previous financial year that the public sector had fruitless and wasteful expenditure of R30bn.

In a separate media briefing later, minister Gordhan shared the platform with minister Collins Chabane, when the South African Auditor General  Terence Nombembe presented in annual report on government departmental audits to Parliament, which amplified on the issue of “fruitless and wasteful expenditure” by government officials and also underlined the inadequacies of municipalities throughout South Africa insofar as financial management, procurement and tendering processes were concerned.

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