TRENDS RELATING TO CORRUPTION IN THE PUBLIC

SERVICEPortfolio Committee on Public

Service and Administration

7 November 2012

CONTENTS OF THIS PRESENTATION

Key message

Historical perspective on ethics in the South African public service

The current situation

A closer look at Financial Disclosures, the National Anti-Corruption Hotline

Reporting on Financial Misconduct and the management of discipline

Major challenges

Concluding remarks and recommendations

2

KEY MESSAGES Ensuring ethical professional conduct in the post-

apartheid Public Service is a major challenge. Because the Black population was historically

prevented from accumulating wealth legitimately, many people (especially aspirant entrepreneurs) now rely on the State for access.

Our material conditions (intense poverty, unemployment and systemic, structural inequality) exacerbate the current challenges.

Mechanisms to improve ethics are in place but these urgently need deepening and strengthening through rigorous implementation.

3

ETHICS IN THE SA PUBLIC SERVICE: AN HISTORICAL

PERSPECTIVE As a result of our history of

racist subjugation and dispossession, the Black and particularly African population was excluded from access to markets and condemned to lives of poverty.

In the post-apartheid context, there is a great reliance on the State, not only for welfare but also for contracts and patronage.

4

ETHICS IN THE SA PUBLIC SERVICE: AN HISTORICAL

PERSPECTIVE The post-apartheid public service

was constructed out of the various apartheid administrations

Apartheid’s bureaucratic authoritarian state was fundamentally immoral; explicitly organised around the delivery of a repugnant social project and shrouded in secrecy.

Changing this institutional culture is a long term endeavour, still only partly addressed.

5

ETHICS IN THE SA PUBLIC SERVICE: AN HISTORICAL

PERSPECTIVE

One of the consequences of our troubled history is the growth in comprador, parasitic forms of accumulation that currently plague the procurement of goods and services by the State.

As a result, supply chain management (for example) has become a very strategic and sensitive area of public administration.

6

THE CURRENT SITUATION Government has developed a broad suite of integrity-promoting

instruments and processes. The mechanisms used to promote professional ethics include the following: • A number of progressive laws and policies (including the

PFMA; PAIA; PAJA; PDA; PRECCA)• A Code of Conduct • A Financial Disclosures Framework • Dedicated anti-corruption agencies (including the PSC, the PP

and others) and inter-agency cooperation• Requirements that Departments have anti-corruption

strategies, forums, capacity, data-bases and investigative capacity

• Whistle blowers protection • National Anti-Corruption Hotline

7

In order to assess the extent to which the Public Service implements the various integrity promoting instruments, the PSC undertakes on-going research in provinces, looking at their performance against certain indicators.

Aspects of the findings from five studies done on the “state of professional ethics” in the following provinces is presented below:• Free-State (2006)• KwaZulu-Natal (2007)• Limpopo (2008)• Western Cape (2009)• North-West (2010)

8

THE CURRENT SITUATION

PSC research indicates that: • Development of anti-corruption strategies is

uneven in departments.

• Some provinces only have draft anti-corruption strategies.

• Very few departments have standardized investigative procedures in place or received training in the area of investigation.

• Promotion of the Code of Conduct for the Public Service is inconsistent.

• Many officials do not possess a copy of the Code either.

• The consequences for non-performance in terms of the various mechanisms are inadequate.

9

THE CURRENT SITUATION

The same PSC research also shows that: • Systematic monitoring of corruption is poor:

only 50% of departments have data-bases on corruption.

• Most departments have not signed protocols with specialist agencies to assist with complex syndicated crime.

• Few departments comply with 100% filing of financial disclosures to the PSC by the due date of 31 May each year.

• Minimum Anti-corruption capabilities are not put in place and there is insufficient resourcing at a personnel and budgetary level.

10

THE CURRENT SITUATION

A CLOSER LOOK: FINANCIAL DISCLOSURES

The PSC’s analysis indicates that doing business with the State is a key strategic area for consideration so we closely monitor adherence to the Financial Disclosures framework.

11

Need to manage potential conflicts that the senior managers may have between their private business interests and their official responsibilities.

FINANCIAL DISCLOSURES COMPLIANCE RATE

National/ Province 2010/11 2011/12National Departments 62% 67%Eastern Cape 67% 74%Free State 43% 64%Gauteng 89% 99%Kwazulu-Natal 74% 89%Limpopo 89% 96%Mpumalanga 87% 96%Northern Cape 75% 100%North West 28% 27%Western Cape 100% 100%COUNTRY TOTAL 68% 74%

12

DepartmentNo of SMS members

% of potential conflicts of

interest

Correlation between official responsibilities and private company

SMS members with many Companies

COGTA 157 31% 24% 20%Health 97 24% 14% 11%Human Settlements 75 32% 28% 8%

Public Works 142 32% 29% 17%Transport 111 34% 28% 19%

13

Scrutiny of financial disclosures for the 2010/11 financial year in selected departments:

Public servants, particularly SMS members and officials in SCM, should be prohibited from doing business with Government.

A CLOSER LOOK: FINANCIAL DISCLOSURES

A CLOSER LOOK: NATIONAL ANTI-CORRUPTION

HOTLINE The National Anti-Corruption Hotline (0800 701 701) was

established in September 2004 for reporting corruption in the Public Service and is managed by the PSC.

14

NACH FEEDBACK AND CLOSED CASES

15

NATIONAL/ PROVINCE

CASES REFERRED% Feedback

received% cases closed

National 4841 44% 34%Eastern Cape 530 40% 18%Free State 252 37% 18%Gauteng 1421 53% 37%KwaZulu-Natal 530 46% 20%Limpopo 381 47% 25%Mpumalanga 947 76% 56%North West 369 44% 28%Northern Cape 97 42% 31%Western Cape 361 42% 11%Others 649 77% 78%TOTAL 10378 50% 36%

REPORTING ON FINANCIAL MISCONDUCT

16

Financial misconduct is under-reported, and there has been a decline in the number of cases, while the cost of financial misconduct has increased.

The PFMA, read with the Treasury Regulations, require national and provincial departments to report on finalized financial misconduct cases to the PSC.

It is worrying that over the years there has been a steady increase in the number of SMS members charged with financial misconduct

17

REPORTING ON FINANCIAL MISCONDUCT

Departments have consistently failed to demonstrate commitment by instituting criminal charges where appropriate (2010/11).

18

REPORTING ON FINANCIAL MISCONDUCT

MANAGEMENT OF DISCIPLINE Discipline is not managed effectively, due to inadequate capacity to

chair disciplinary hearings and represent departments. This results in long periods of precautionary suspension.

In the 2010/11 financial year, a total of 77 national and provincial departments reported on cases of precautionary suspensions. Of these departments, only 26% of departments maintained an average of 60 days and below for employees to be on precautionary suspension.

19

MAJOR CHALLENGES 1:

Building leadership that is: Exemplary Oriented towards the public

interest Inspirational Authoritative Innovative

20

MAJOR CHALLENGES 2: While black South Africans continue to

encounter such severe barriers to entry into the economy, it will remain rational to make use of the few entry points available to them, key amongst which at this point remains the state.

Restructuring of the South African economy and the creation of multiple legitimate opportunities for decent work and economic advancement is a priority for ethical and practical reasons... The state must intervene because market forces on their own cannot solve these challenges

21

MAJOR CHALLENGES 3

Ensuring professional ethics in the public service is an ongoing priority but requires dedicated capacity… and so resources are needed.

In a context of acute inequality and severe poverty, and the need to develop comprehensive government programmes to address these, making a persuasive claim for such resources is challenging.

22

CONCLUDING REMARKS The public service has developed a range of mechanisms,

processes and practices that address the causes and opportunities for corruption.

Evidence collected by the PSC does not emphatically and undeniably prove that corruption (neither its incidence or the value of what is lost) has increased.

Implementation of these mechanisms, processes and practices are a key challenge and raise fundamental questions about the approach taken by the state to its governance and administration, which is highly decentralised and perhaps inappropriately regulated.

The need for rigorous and empirical research into corruption is the only clear conclusion: greater clarity on the incidence of corruption and the practices through which it is committed is needed.

What is clear is that the perpetrators of corruption are increasingly at a more senior level and this highlights the need for better, more ethical leadership.

23

PSC RECOMMENDATIONS Within the constraints of the current public administration approach,

specific areas for strengthening are:• Promotion of the Code of Conduct• Risk assessments and the development of tailor-made anti-

corruption strategies• Development and implementation of internal policies on

whistleblowing and access to information• Commitment to address valid complaints and promotion of a

culture of reporting• Ensuring sufficient investigative capacity is in place• Resolution of allegations of corruption emanating from the

NACH and feedback provided to the PSC• Charge transgressing HoDs and SMS members with misconduct

for failing to disclose conflicts of interest• Conducting life-style audits of key staff and audits into the

indebtedness of employees24

PSC Website: PSC Website: www.psc.gov.zawww.psc.gov.za

National Anti-Corruption Hotline for the Public Service: 0800 701 701National Anti-Corruption Hotline for the Public Service: 0800 701 701