State capture: Ramaphosa announces appointment of independent anti-corruption agency

President Cyril Ramaphosa has announced the establishment of a permanent independent Public Procurement Anti-Corruption Agency to combat corruption, fraud and maladministration.

This body will have oversight over parliament and the executive, and is one of the Zondo commission’s recommendations for a redesign and review of the country’s anti-corruption architecture.

On Sunday, Ramaphosa announced actions the government was taking to effect the state capture inquiry’s recommendations.

He said the most recommendations were directed to the law enforcement agencies for investigation and possible prosecution, as well as the recovery of misappropriated funds, combating corruption, fraud and maladministration.

“Since the start of the commission, significant resources have been made available to build and rebuild the capacity and capability of law enforcement agencies to respond effectively to the findings and recommendations.

“As a result, the Investigating Directorate that we established within the National Prosecuting Authority has to date enrolled 26 cases, declared 89 investigations and 165 accused have appeared in court for alleged state capture-related offences,” said Ramaphosa.

He revealed there has been progress via law enforcement agencies in recovering and being granted freezing or preservation orders of up to R12.9bn.

“R2.9bn has been recovered and returned to the affected entities and Sars has collected R4.8bn in unpaid taxes from the work of the commission,” he said.

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Ramaphosa added that consideration is being given to claims for civil damages against companies implicated in state capture and to ban them from doing business with the state.

Meanwhile, people and companies named in the commission’s report, analysed by the Financial Intelligence Centre, have identified a further 595 individuals and 1,044 entities that may be implicated in the flow of funds from state capture.

Ramaphosa said: “Relevant information has been compiled into reports to various law enforcement agencies, other bodies like the State Security Agency, SA Reserve Bank, public protector, Independent Police Investigative Directorate and the Financial Sector Conduct Authority, and a number of law enforcement agencies in other countries.”

In addition to recommending actions against the perpetrators of state capture, the commission made 95 recommendations that require constitutional, legislative, regulatory or operational changes. It also made recommendations on the establishment of new institutions.

The Zondo commission found that the abuse of the procurement system was one of the main ways taxpayer funds were illicitly diverted to private interests instead of providing value to the public. In response, Ramaphosa said the Public Procurement Bill, which is expected to be finalised and submitted to parliament by March 2023, will address many of the commission’s recommendations.

“These recommendations include the introduction of a Code of Conduct that sets out the ethical standards for procurement; protecting accounting officers from criminal or civil liability for acting in good faith; harmonisation of public procurement legislation; making procurement more transparent; and establishing a professional body for public procurement officials.

“As recommended by the commission, lifestyle audits for the president, deputy president, ministers and deputy ministers is being managed by the director-general in the presidency and undertaken by an independent external service provider,” the president explained.

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On Saturday, Ramaphosa submitted to parliament, cabinet’s response to the findings and recommendations of the Zondo commission.

Below is a summary of the key reforms:

• A comprehensive proposal on an effective and integrated anti-corruption institutional framework will be produced for public consultation, finalisation and implementation.
• Legislative amendments will introduce greater transparency and consultation in the selection and appointment of the national director of public prosecutions.
• A code of conduct setting out the rules for procurement and the establishment of a professional body for public procurement officials.
• Ramaphosa said the appointment of board members to SOEs enabled the capture of these companies, so the government accepted the commission’s recommendation for a process for the appointment of boards that is not open to manipulation.
• No board member will be allowed to be part of procurement processes.
• Ministers will be prohibited from playing any role in procurement.
• Zondo recommended a commission of inquiry into the Passenger Rail Agency of SA. But Ramaphosa said there were probes by the Hawks and the Special Investigating Unit entities under way. The result of those will be awaited before a decision is made on instituting a Prasa inquiry.
• To address some of the abuses by private companies, amendments will be made to laws now under review to, among other things, criminalise donations to political parties in expectation of state contracts, to bar suppliers who have engaged in dishonest or corrupt behaviour, and to make failure to prevent bribery an offence.
• A new General Intelligence Laws Amendment Bill will implement many of the commission’s recommendations, including the establishment of separate domestic and foreign intelligence services, improving oversight of intelligence agencies and giving practical effect to the principle that no member of the executive responsible for intelligence may be involved in the operational matters of the SSA.
• Ramaphosa said whistle-blowing was vital in exposing many of the activities that were part of state capture. Whistle-blowers need to be encouraged and protected from victimisation. The department of justice is reviewing relevant laws to protect whistle-blowers and offer immunity from honest disclosures.
• Ramaphosa said Zondo also recommended far-reaching reforms to the country’s electoral system, meant to address weakness in the ability of parliament and its elected officials to provide oversight in the prevention of state capture. People who occupy positions in government must be people with integrity, he said.

• These reforms include the direct election of the president and the adoption of a constituency-based — but still proportionally representative — electoral system. These proposals are meant to address weaknesses in the ability of parliament and its elected officials to provide sufficient oversight to prevent state capture. 

• The president said he was attending to the commission’s recommendations regarding individuals against whom adverse findings were made.
• Deputy president David Mabuza will interact with parliament’s presiding officers to oversee the implementation of some of the recommendations. Mabuza will also interact with parliament’s presiding officers on the commission’s recommendations on the interface between parliament and the executive.
• The National Treasury will engage with parliament on the commission’s recommendations on the funding of parliament.
• Progress will be closely monitored.

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