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Who will save us when governance decays?

28 March 2019

The previous year was riddled with scandals such as the looting of VBS Mutual Bank, as outlined in the report on behalf of the South African Reserve Bank, by Advocate Terry Motau, entitled The Great Bank Heist.
This is but one of the many issues of rampant corruption and a deterioration in governance and accountability in both private and public sectors, in recent times.

The VBS Mutual Bank saga has, for instance, caused the near fiscal collapse of some municipalities in the North West and Limpopo provinces.
Municipalities were identified as having unlawfully invested municipal funds earmarked for infrastructure development which are allocated through the Municipal Infrastructure Grant (MIG).

The MIG is designed to reduce municipal infrastructure backlogs in poor communities to ensure the provision of basic services such as water, sanitation, roads and community lighting.
These grants are managed by the Department of Cooperative Governance and Traditional Affairs (CoGTA).
Unethical corporate behaviour also took a pristine position in the country raising serious concerns of complicity and gaps in oversight.
Government employees lost approximately R12 billion of their pension investment due to the Steinhoff accounting irregularities which had been invested through their contributions to the Government Employees Pension Fund.
In May 2018, it was reported that the top 10 defaulting municipalities owed Eskom R9.73 billion. Similarly, in November 2018, Cooperative Governance Minister Zweli Mkhize told Parliament’s Standing Committee on Public Accounts (Scopa) that municipalities owed Eskom approximately R17 billion – an increase from R14 billion in unpaid bulk electricity supply.
Consequently, services are disrupted due to non-payment.
This is a worrying situation as consumers are then disenfranchised from essential services such as electricity.
This issue requires urgent and collective attention by all relevant stakeholders.
While the VBS and Steinhoff scandals have surely been a concern to many, the state capture allegations and the subsequent inquiry and its revelations have left questions yet to be answered about the state of South Africa’s governance and accountability architecture.
The state capture allegations have raised concerns about the effectiveness and implementation of our anti-corruption laws and the effects of corruption on the realisation of human rights, especially socio-economic rights.
As aptly noted by Ngcobo CJ in his minority judgment in Glenister II:
“Corruption has become a scourge in our country and it poses a real danger to our developing democracy. It undermines the ability of the government to meet its commitment to fight poverty and to deliver on other social and economic rights guaranteed in our Bill of Rights” (Glenister v President of the Republic of South Africa and Others [2011] ZACC 6; 2011 (3) SA 347 (CC); 2011 (7) BCLR 651 (CC) (Glenister II) at para 57)
Prudent management of public finances has also been a challenge.
For example, the Auditor-General (AG) informed Parliament’s joint meeting between the Scopa and the standing committee on appropriations that “[out of the] 434 government departments and state-owned enterprises audited, only 25% received clean audits compared to last year when 34% received clean audits. Irregular expenditure continued to rise and had reached R51 billion. Fruitless and wasteful expenditure had increased from approximately R1 billion to R2.5 billion”.
From a global perspective, Goal 16 of the Sustainable Development Goals (SDG) seeks to reduce corruption, bribery and by 2030, significantly reduce illicit financial and arms flows, strengthen the recovery and return of stolen assets and combat all forms of organised crime.
It calls on states to substantially reduce corruption and bribery in all their forms and for the development of effective, accountable and transparent institutions.
The questions remain whether this will be a reality in South Africa and the continent.
Indeed, 2018 was a year of parliamentary probes and commissions of inquiry, designed to investigate different issues but mainly those related to governance and corruption.
Many of these investigations continue into 2019.
One could argue that the mushrooming of commissions of inquiry focusing on issues related to corruption in South Africa is as a result of a deficit in accountability mechanisms and that for a country with challenges in the realisation of socio-economic rights, they come at an exorbitant cost to the taxpayers.
Not only are some of these Commissions expensive, but they have not brought any utility or accountability.
Regionally, it is worth noting that the African Union marked 2018 as the African anti-corruption year, with the theme of “Winning the Fight against Corruption: A Sustainable Path to Africa’s Transformation”.
Similarly, Aspiration 3 of the AU’s Agenda 2063 aspires for an Africa of good governance, democracy, and respect for human rights, justice and the rule of law.
Perhaps, it is wise for us to take stock and review whether we have made any strides.
South Africa has a sound constitutional framework which has enabled the creation of oversight institutions.
While these institutions serve as a good model especially in Southern Africa, recent events may be symptomatic of inadequate enforcement of anti-corruption laws in both public and private spheres.
Equally, the effects of the recent events may be a call for ensuring that strong and independent oversight institutions are nurtured and continuously supported.
It is also critical to note that corruption in both public and private spheres has human rights consequences such as the reduction in the state’s ability to respect, protect and fulfil its human rights obligations.
Everyone should be concerned about issues of corruption and a deficit in governance and the collapse of accountability institutions as well as the negative impact that corruption has on the development of the people of South Africa and the region as a whole.
Fundamentally, the Public Audit Amendment Act is welcomed.
These amendments will enable the AG to issue a directive to recover any money that is lost as a result of the irregularities and to refer material irregularities to law enforcement agencies and appropriate authorities for investigation.
This will include any non-compliance with legislation, fraud or theft, or a breach of fiduciary duties that causes or could potentially cause a material financial loss, the misuse or loss of a material public resource.
The AG will also have the authority to issue a certificate of debt against the accounting authority.
While the AG will without doubt be empowered to keep public officials accountable, concerns remain on how private sector governance issues will be addressed.
Some of the governance issues in the private sector have unfortunately contributed to the risk of further unemployment, poverty and inequality.
With the national elections coming, we all have to recommit ourselves to the ideals of good governance and the humanisation of public service.
This is especially critical for municipalities as they are at the forefront of service delivery and the face of institutions of government.

Nissen is a commissioner at the South African Human Rights Commission

Source: City Press

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