Financial Disclosure Framework Compliance and Whistle-Blower Protection in Public Service

1. COMPLIANCE WITH THE FINANCIAL DISCLOSURE FRAMEWORK FOR THE 2014/2015 FINANCIAL YEAR AND THE NATURE AND EXTENT OF THE PROTECTION OF WHISTLE-BLOWERS AND INVESTIGATORS IN THE PUBLIC SERVICE 25 May 2016

2. COMPLIANCE WITH THE FINANCIAL DISCLOSURE FRAMEWORK FOR THE 2014/2015 FINANCIAL YEAR

3. INTRODUCTION • All members of the Senior Management Service (SMS) are, in terms of Chapter 3, C.1 of the Public Service Regulations (PSR), required to disclose to their respective Executive Authorities (EAs), particulars of all their registrable interests (e.g. companies and properties) not later than 30 April each year, in respect of the period 1 April of the previous year to 31 March of the current year. • The PSR further require of the EAs to submit copies of the forms on which the designated employees disclosed their financial interests, to the Public Service Commission (PSC) by not later than 31 May of each year. • The PSC monitors compliance with the submission of financial disclosures and scrutinises them in order to determine the prevalence of conflicts of interest in the Public Service. • The preliminary statistics were presented during September 2015. • The final statistics after validation, are presented and include updates as at 31 March 2016.

4. SUBMISSION OF FINANCIAL DISCLOSURE FORMS FOR THE 2014/2015FINANCIAL YEAR • Trends analysis on the submission of financial disclosure forms by national and provincial departments by the due date for the past five years.

5. SUBMISSION OF FINANCIAL DISCLOSURE FORMS FOR THE 2014/2015FINANCIAL YEAR (2) • The number of forms received and outstanding from after validation with departments for the 2014/2015 financial year

6. SUBMISSION OF FINANCIAL DISCLOSURE FORMS FOR THE 2014/2015FINANCIAL YEAR (3) • National departments recorded 74% compliance, whereas the total compliance rate in respect of provincial departments was 95% by the due date. • The Northern Cape and Western Cape are the only Provinces that achieved a 100% compliance rate by the due date. • There are some departments, both at national and provincial level that did not submit a single financial disclosure form to the PSC by the due date of 31 May 2015. This contributed to the poor submission rate that was recorded nationally. • 11 National Departments did not submit financial disclosure forms by the due date for the 2014/2015 financial year:

7. SUBMISSION OF FINANCIAL DISCLOSURE FORMS FOR THE 2014/2015FINANCIAL YEAR (4) • 7 Provincial Departments did not submit financial disclosure forms by the due date for the 2014/2015 financial year:

8. SUBMISSION OF FINANCIAL DISCLOSURE FORMS FOR THE 2014/2015FINANCIAL YEAR (5) • There are departments that are regarded as repeat offenders, as they failed to submit their financial disclosure forms by the due date of 31 May for two (2) consecutive financial years (2013/2014 and 2014/2015)

9. SUBMISSION OF FINANCIAL DISCLOSURE FORMS FOR THE 2014/2015FINANCIAL YEAR: NATIONAL DEPARTMENTS • Eight (8) departments submitted their financial disclosure forms by the due date but did not achieve 100% compliance rate.

10. SUBMISSION OF FINANCIAL DISCLOSURE FORMS FOR THE 2014/2015FINANCIAL YEAR: NATIONAL DEPARTMENTS (2) • Employees within departments submitted their financial disclosure forms timeously to their respective EAs, but some were not received by the PSC by the due date.

11. UPDATE ON THE SUBMISSION OF FINANCIAL DISCLOSURE FORMS BY DEPARTMENTS THAT DID NOT SUBMIT 100 % BY THE DUE DATE FOR THE 2014/2015 FINANCIAL YEAR • There are departments that still did not submit 100% as at the end of the 2014/15 financial year (31 March 2016).

12. SUBMISSION OF FINANCIAL DISCLOSURE FORMS FOR THE 2014/2015 FINANCIAL YEARBY DIRECTORS-GENERAL • Out of 35 of the 44 Directors-General of the national departments submitted their financial disclosure forms by the due of 30 April 2015. • Two (2) Directors-General submitted their financial disclosure forms to their Executive Authorities after due date of 30 April 2015 i.e. the Director-General of Military Veterans (submitted on 01 June 2015) and the Director-General of Public Enterprises (submitted on 08 May 2015). • Seven (7) Directors-General did not submit their financial disclosures forms by the due date:

13. SUBMISSION OF FINANCIAL DISCLOSURE FORMS FOR THE 2014/2015 FINANCIAL YEARBY PROVINCIAL DEPARTMENTS • Comparison of the submission rate by provincial departments as at the due date in respect of the 2010/2011, 2011/2012, 2012/2013, 2013/2014 and 2014/2015 financial years

14. SUBMISSION OF FINANCIAL DISCLOSURE FORMS FOR THE 2014/2015 FINANCIAL YEARBY PROVINCIAL DEPARTMENTS (2) • The Northern Cape recorded 100% compliance rate by the due date for the past four (4) years and Western Cape recorded 100% compliance rate by the due date for the past five (5) years. • 3377 SMS members submitted their financial disclosures via e-Disclosure whereas 572 SMS members submitted manually. This shows the state of readiness to utilise eDisclosure and how well it has been well received and embraced by SMS members. • Out of 4159 provincial SMS members, total number of 3949 financial disclosure forms were received by PSC by the due date. • 210 financial disclosure forms were outstanding. • This is a cause of concern. Parliament and Provincial Legislatures must hold the Executive Authorities of the poorly performing departments to account as 100% compliance rate is required by the due date.

15. SUBMISSION OF FINANCIAL DISCLOSURE FORMS FOR THE 2014/2015 FINANCIAL YEARBY PROVINCIAL DEPARTMENTS (3) • Updated statistics on the submission of financial disclosure forms by provinces for the 2014/2015 financial year as at 31 March 2016.

16. SCRUTINY OF FINANCIAL DISCLOSURE FORMS • Upon receipt of the financial disclosure forms the PSC validated with the respective departments the total number of SMS members against the records held by the PSC. • The PSC scrutinized 100% of the financial disclosure forms for the second consecutive year. This can be attributed to increased capacity and decentralisation of the activities relating to the management of conflicts of interest to provincial offices. • The disclosure forms were scrutinized in terms of Chapter 3 G of the Public Service Regulations, to assess both compliance and whether the involvement of officials in any activities of the companies that could lead to potential and/or actual conflicts of interest. • The financial interests of SMS members who did not submit their financial disclosure forms were also scrutinized to assess their involvement in any activities of the companies that could lead to potential and/or actual conflicts of interest.

17. SCRUTINY OF FINANCIAL DISCLOSURE FORMS (2) • Where applicable, consultations were conducted in terms of Chapter 3 G.1 of the Public Service Regulations, with SMS members who were found to be involved in activities that could construed as posing conflicts of interest. • The purpose of the consultations were to verify the information at the PSC’s disposal in order to substantiate the PSC’s findings and recommendations. • The individual departmental reports were submitted to the respective Executive Authorities. • The PSC will publish a consolidated report on the scrutiny conducted (Report on the Overview of the Financial Disclosure Framework for the 2014/15 Financial Year).

18. SCRUTINY OF FINANCIAL DISCLOSURE FORMS (3) • Some department were not consulted due to the following reasons: • Department of Water and Sanitation submitted a report on actions taken on the previous financial disclosures. The report contained the information required to finalise the scrutiny. • The Office of the Premier in the Eastern Cape informed the PSC that it will conduct the consultations with all the departments and submit the reports to the PSC. • The National Prosecuting Authority as no potential conflicts of interests were identified during the reporting period. • SMS members at the State Security Agency did not submit their financial disclosures and the PSC could not access their details as they are not on the PERSAL system. • The SMS members in North West Department of Education & Sports Development were not available for consultation. • SMS members at the Office of the Public Service Commission responded to the Chairperson about their financial interests during the 2013/14 reporting period. The circumstances are still the same in the current reporting period (2014/2015 financial year).

19. CONCLUSION • The PSC is concerned that there are still instances where designated officials submit their financial disclosure forms on time to their respective EAs, but the EAs delay in submitting the forms to the PSC. • The obligation to submit the disclosure forms to the PSC rests with the EAs. • EAs are under an obligation to report on actions that have been taken against transgressors, and where no action has been taken, to provide reasons to the PSC.

20. THE NATURE AND EXTENT OF THE PROTECTION OF WHISTLE-BLOWERS AND INVESTIGATORS IN THE PUBLIC SERVICE

21. INTRODUCTION • The PSC was mandated by Cabinet to manage the National Anti-Corruption Hotline (Cabinet Memorandum No 45 of 2003 dated 14 August 2003). • Whistleblowers report acts of corruption and maladministration through the NACH. • The Cabinet Memorandum provides that the PSC will from time to time evaluate the efficiency of the hotline system and recommend improvements where necessary. • Furthermore, reference is made to Section 196 (4) (f)(i) of the Constitution that provides that PSC may evaluate the application of public administration practices, investigate certain categories of calls that would be received on the hotline and report to Executive Authorities and Legislatures. • In pursuance of the above, the PSC in 2011 conducted research on “Measuring the Effectiveness of the NACH”. • In this research, it was found that often employees who blow the whistle on corruption are victimized and intimidated by senior management and have had little recourse.

22. INTRODUCTION (2) Similarly, the PSC received numerous complaints from investigators about threats from senior management while conducting investigations. It is, therefore, evident that those who are affected by the investigations turn against the whistleblowers and the investigators. Whistle-blowers and investigators need to be protected in order for them to report any case of alleged corruption without fear and favour. Therefore, the PSC conducted a research study on “The nature and extent of the protection of whistle-blowers and investigators in the Public Service” and came up with feasible recommendations so as to contribute towards the protection of the whistleblowers and investigators

23. THE OBJECTIVES • The objectives of the research study were : • To analyse the available literature on the nature and extent of the protection of whistle-blowers when reporting cases of alleged corruption in the Public Service; • To establish the views of the whistleblowers on the current framework with regard to the protection of whistleblowers when reporting cases of alleged corruption in the Public Service; • To establish the views of the investigators on the current framework with regard to the protection of investigators when conducting investigations of cases of alleged corruption in the Public Service; and • To establish views on the appropriate body that will effectively deal with the protection of whistleblowers and investigators.

24. KEY FINDINGS (1) • The nature and extent of the protection of whistle-blowers when reporting cases of alleged corruption in the Public Service • The number of people who blows the whistle against corruption has declined. • Many people do not have faith in the current framework as it is ineffective in the protection of the whistleblowers and investigators. • The Business Ethics Survey of 2013 in South Africa found that 65% of employees with knowledge of wrongdoing in their organizations prefer to remain silent for fear of reprisal and victimization. • This finding is consistent with that of the PricewaterhouseCoopers (PWC) Global Economic Crime Survey for South Africa of 2013, which points to a downward whistleblowing trend. In 2007, 16% of the wrongdoing was discovered through whistleblowing. • This figure dropped to 6% in 2013. In 2007 the number of those who blew the whistle was at 25,3 percent and came down to 18,4% in 2011.

25. KEY FINDINGS (2) • However, the PSC’s analysis of the number of calls that came through the NACH indicates that there is an increase in the utilization of the NACH, which has received 229 576 calls from the whistleblowers since September 2004 to 28 February 2015. The NACH has since its inception in 2004 and as at 28 February 2015 received 229 576 calls. • Out of the 229 576 calls, a total of 22 000 case reports of alleged corruption were generated between the period 01 September 2004 to 28 February 2015. Twenty thousand (20 000) caseswere reported to the NACH by anonymous whistleblowers and 2 000 were reported by identified whistleblowers.

26. KEY FINDINGS (3) • The views of the whistleblowers are that the current framework with regard to the protection of whistleblowers when reporting cases of alleged corruption in the Public Service is weak • Case studies were obtained from six (6) whistleblowers. These were whistleblowers who were severely affected because of them blowing the whistle and coming out in the open. • The majority of them listed the following issues: • Their families went through a painful experience, fearing for their safety. Some even developed medical conditions such as high blood pressure because of constant harassment meted out at them. They were labelled ‘traitors’, who are resistant to change, and impimpis. • Their friends deserted them as they too characterized them as traitors, troublemakers who are unemployed because they could not just mind their own businesses. Some lost their properties. • They faced a heavy financial burden because of the loss of their jobs or bearing of legal costs especially when the whistleblowing is unsuccessful.

27. KEY FINDINGS (4) • The views of the investigators are that there is no current framework with regard to the protection of investigators when conducting investigations of cases of alleged corruption in the Public Service • Whistleblowing legislation does not make any provision for the protection of investigators. • It is, therefore, proposed that a provision should be made in the whistleblowing legislation that protects the investigators against occupational detriment in much the same way it protects the whistleblowers. • The legislation should make it a serious offence for anybody who interferes with the investigation of impropriety. • Interference in the legislation should be broadly defined to include any act that deliberately seeks to obstruct investigations into any impropriety

28. KEY FINDINGS (5) • There should be an appropriate body that will effectively deal with the protection of whistle-blowers and investigators • The current framework states that the disclosure could be made to the Public Protector, the Auditor-General or any person or body as envisaged in section 8 of the PDA. • Currently the PSC has been mandated by Cabinet to manage the NACH. As such the PSC received cases of alleged corruption reported by whistleblowers. Therefore, the PSC should be one of the bodies that the disclosure could be made.

29. RECOMMENDATIONS • The protection of whistle-blowers when reporting cases of alleged corruption in the Public Service should be enhanced • Action should be taken against employers who victimize whistleblowers: No previous liability was considered for employers who unfairly victimized whistleblowers. Criminal liability of the employer where detriment was suffered by the employee/worker is therefore, recommended. • The PDA should have a clause that provides for confidentiality of whistle-blowers. The history of whistleblowers in this country is replete with examples of victimization, in both the public and private sectors. The PSC is of the opinion that if the Act is to become an effective tool against corruption and maladministration, then the Act needs to be revised to include an obligation, on the part of the employer, to keep the identity of whistleblowers confidential. It requires departments, therefore, to take the necessary steps to ensure such confidentiality. Protection of whistleblowers should, therefore, be enhanced and guaranteed.

30. RECOMMENDATIONS (2) • The PDA should provide for a Public Servant Disclosure Protection Tribunal: The PDA should be amended to include a Public Servant Disclosure Protection Tribunal that may put sanctions for any reprisal against employee or occupational detriment. The Public Servant Disclosure Protection Tribunal should be empowered to make verdicts on the cases which could lead to reinstatement of an employee if he or she was suspended, compensation to the loss; rescinding of any disciplinary measure; reimbursing financial losses incurred; awarding compensation for pain and suffering. Anybody who is found to have subjected whistleblowers to occupational detriment should be imprisoned (the magistrate should determine the maximum number of years in prison based on the outcome of the court case).

31. RECOMMENDATIONS (3) Consequential amendments to the PDA: When amending or strengthening the PDA, there should be consequential amendments. As one of the consequential amendments, the PDA should provide that employers should have appropriate internal procedures in place for receiving and dealing with information about improprieties. This goes hand in hand with the duty, on the part of the employer, to investigate. Employees who make protected disclosures may experience difficulties where they, in the absence of an obligation to give feedback or to be notified, are not notified of a decision not to investigate the disclosure or of a decision to refer the matter to another body to investigate, or of the outcome of the investigation. A duty should be imposed upon the employer to investigate a disclosure. However, in cases where an employee made a false disclosure, such employee should be guilty of an offence

32. RECOMMENDATIONS (4) • The current framework with regard to the protection of whistleblowers when reporting cases of alleged corruption in the Public Service should be strengthened • The Witness Protection Act should provide for the physical security for whistleblowers: A whistleblower may take on serious risk to his/her financial position, reputation and personal safety when disclosing wrongdoing in the public interest. • After making a disclosure, a whistleblower may be subjected to threats and reprisal from fellow employees or another person as a result of that disclosure. • Currently, the PDA does not have provisions for physical security measures to protect threatened whistleblowers and investigators such as: • No provision for 24 hour armed protection when raided by people who are involved in corruption • No provision for safe housing with advanced security measures to protect the threatened whistleblower from any harm • No provision for new identity to hide the name of the whistleblower who is threatened from alleged perpetrators.

33. RECOMMENDATIONS (5) • A framework with regard to the protection of investigators when investigating cases of alleged corruption in the Public Service should be put in place • Any action where an investigator is victimized or intimidated should be punishable by law: After a wrongdoing is reported it needs to be investigated in order to establish the relevant facts. The study found that investigators are intimidated and victimized during the course of investigations of cases of alleged corruption reported to the NACH. Especially when cases of impropriety investigated implicate high ranked officials in the departments investigators are met with hostile reactions intended to ensure that the investigations fail. • The PDA should be amended to include the provision that any action where an investigator is intimidated or victimized or information from her/him is withheld during the conducting of an investigation, is an offence punishable by imprisonment for a period not less than three years but not exceeding five years.

34. RECOMMENDATIONS (6) • The Witness Protection Act should provide for the physical security of investigators: Currently, the PDA does not have provisions for physical security measures to protect threatened investigators such as: • No provision for 24 hour armed protection when raided by people who are involved in corruption • No provision for safe housing with advanced security measures to protect the threatened whistleblower from any harm • No provision for new identity to hide the name of the whistleblower who is threatened from alleged perpetrators • No provision for relocation to other countries if the state feels that the life of the whistleblower is gravely in danger • No provision for job placement for fear of reprisals and to protect the identity of the threatened whistleblower • The Protection Act needs to be amended to include the physical security of investigators.

35. RECOMMENDATIONS (7) • There should be an establishment of an appropriate body that will effectively deal with the protection of whistleblowers and investigators • The South African Law Reform Commission argued that there are a number of other “state institutions supporting constitutional democracy” to whom it would be equally if not more appropriate to make disclosures. The South African Law Reform Commission recommended the list of institutions to which disclosures may be made. • The National Development Plan also talks about the multiple agency when it comes to dealing with the issue of reporting corruption. It includes: • the Public Protector • the Auditor-General • the Human Rights Commission • A disclosure should also be to the PSC as it manages the NACH on behalf of Government. Whistleblowers report any suspected cases of alleged corruption to the PSC anonymously without providing their details.

36. CONCLUSION • Corruption destroys societies and the institutions established to deliver quality services. It holds development at ransom. Various attempts are made to counteract corruption. • The challenge has always been to develop effective whistleblowing protection legislation. Countries all over the world have always grappled with the challenge of developing effective whistleblowing protection legislation and the protection of the investigators thereof. • In terms of the security for whistleblowers and investigators, the PSC deemed it necessary that there should be an amendment to the Witnesses Protection Act to include the security measures for the whistleblowers and investigators.

37. THANK YOU!