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Addressing State of Capture Report Recommendations

This document discusses recommendations from the Public Protector’s State of Capture Report, focusing on ethics, conflicts of interest, and whistleblower protection in the government. It examines breaches of the Executive Ethics Code and proposes actions to enhance integrity and transparency.

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Addressing State of Capture Report Recommendations

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  1. ADDRESSING THE REMEDIAL ACTION CONTAINED IN RECOMMENDATION 8.9 OF THE PUBLIC PROTECTOR’S STATE OF CAPTURE REPORT NO. 6 OF 2016-17 5 September 2017

  2. ADDRESSING THE REMEDIAL ACTION CONTAINED IN RECOMMENDATION 8.9 OF THE PUBLIC PROTECTOR’S STATE OF CAPTURE REPORT NO. 6 OF 2016-17 • Introduction The ‘State of Capture’ report requires: “Parliament to review, within 180 days, the Executive Members’ Ethics Act to provide better guidance regarding integrity, including avoidance and management of conflict of interest. This should clearly define responsibilities of those in authority regarding a proper response to whistleblowing and whistle-blowers. Consideration should also be given to a transversal code of conduct for all employees of the State”.

  3. ADDRESSING THE REMEDIAL ACTION CONTAINED IN RECOMMENDATION 8.9 OF THE PUBLIC PROTECTOR’S STATE OF CAPTURE REPORT NO. 6 OF 2016-17 2. Context • Broadly, the Report relates to the Public Protector’s investigation of complaints about alleged improper and unethical conduct by the President and other State functionaries. • Specifically, it relates to alleged improper relationships, and the involvement of the Gupta family in the removal and appointment of Ministers and Directors of State Owned Entities (SOEs), resulting in improper and possibly corrupt award of state contracts and benefits to the Gupta family’s businesses.

  4. ADDRESSING THE REMEDIAL ACTION CONTAINED IN RECOMMENDATION 8.9 OF THE PUBLIC PROTECTOR’S STATE OF CAPTURE REPORT NO. 6 OF 2016-17 • Context The allegations concerning: • President Zuma’s breach of conduct that involved the potential violation of the Executive Ethics Code were investigated primarily under section 3(1) of the Executive Ethics Code (Conflict of interest), read with section 6 of the Public Protector Act. • The allegations concerning an offer of a ministerial position by the Gupta family to Ms. Mentor and Deputy Minister Jonas, in return for favours, invoked the Prevention and Combatting of Corrupt Activities Act, 200, while the Protected Disclosures Act, 2000 (whistleblowers) was also taken into account.

  5. ADDRESSING THE REMEDIAL ACTION CONTAINED IN RECOMMENDATION 8.9 OF THE PUBLIC PROTECTOR’S STATE OF CAPTURE REPORT NO. 6 OF 2016-17 • Context The Report observed with regard to the alleged breaches of the Executive Ethics Code that: • It was worrying that the Gupta family was/may have been aware that Minister Nene was removed 6 weeks after Deputy Minister Jonas advised him that the Gupta family had offered him a job in exchange for extending favours to their family business. This may have been a breach of sections 2(3)(c) and (e) of the Code. • There was no evidence that Mr Jonas’ allegations had been investigated, possibly infringing section 2(3)(c) of the Code.

  6. ADDRESSING THE REMEDIAL ACTION CONTAINED IN RECOMMENDATION 8.9 OF THE PUBLIC PROTECTOR’S STATE OF CAPTURE REPORT NO. 6 OF 2016-17 3. Overview: Executive Members Ethics Act & Code The Executive Members Ethics Act, 1998 (EMEA): • Gives effect to section 96 of the Constitution. • Provides for a code of ethics to regulate the conduct of members of the national and provincial executive. • Applies to the President, Ministers, Deputy Ministers, Premiersand MECs

  7. ADDRESSING THE REMEDIAL ACTION CONTAINED IN RECOMMENDATION 8.9 OF THE PUBLIC PROTECTOR’S STATE OF CAPTURE REPORT NO. 6 OF 2016-17 3. Overview: Executive Members Ethics Act & Code The Executive Members Ethics Act, 1998 (EMEA) provides for: • Section 2: Promulgation of a Code of Ethics by the President after consulting Parliament to regulate the conduct of members of the national and provincial executive. • Section 2(c): A disclosure mechanism • Section 3: Empowers the Public Protector to investigate a complaint Section 3: Provides a reportback mechanism: • The Public Protector must submit the report to the President/Premier within 30 days. • The President/Premier must submit the PP’s report and report on action taken to Parliament within 14 days.

  8. ADDRESSING THE REMEDIAL ACTION CONTAINED IN RECOMMENDATION 8.9 OF THE PUBLIC PROTECTOR’S STATE OF CAPTURE REPORT NO. 6 OF 2016-17 3. Overview: Executive Members Ethics Act, 1998 The Executive Members Ethics Act, 1998 (EMEA) provides for: • Section 2: Promulgation of a Code of Ethics by the President after consulting Parliament. • Section 2(c): A disclosure mechanism. • Section 3: Empowers the Public Protector to investigate a complaint and provides a reportbackmechanism: • The Public Protector must submit the report to the President/Premier within 30 days. • The President/Premier must submit the PP’s report and report on action taken to Parliament within 14 days.

  9. ADDRESSING THE REMEDIAL ACTION CONTAINED IN RECOMMENDATION 8.9 OF THE PUBLIC PROTECTOR’S STATE OF CAPTURE REPORT NO. 6 OF 2016-17 4. Overview: Executive Ethics Code, 2000 • Spells out the ethical standards applicable to Executive members. • Sets out general standards of conduct for Executive members. • Provides guidelines for handling conflicts of interest, disclosure of financial interests and receipt of gifts.

  10. ADDRESSING THE REMEDIAL ACTION CONTAINED IN RECOMMENDATION 8.9 OF THE PUBLIC PROTECTOR’S STATE OF CAPTURE REPORT NO. 6 OF 2016-17 4.1. General standards (section 2) • Conduct must be to the general satisfaction of President/Premier, who must take into account the promotion of an open, democratic and accountable government. • Executive members must – • Perform their duties and exercise their powers diligently and honestly. • Fulfil all obligations imposed on them by the Constitution and law. • Act in good faith and in the best interest of good governance • Act in all respects in a manner that is consistent with the integrity of their office or the government.

  11. ADDRESSING THE REMEDIAL ACTION CONTAINED IN RECOMMENDATION 8.9 OF THE PUBLIC PROTECTOR’S STATE OF CAPTURE REPORT NO. 6 OF 2016-17 4.1. General standards (section 2) cont. Executive members may not: • Willfully mislead the legislature to which they are accountable or the President/Premier. • Act in a way that is inconsistent with their position. • Use their position or any information entrusted to them to enrich themselves or improperly benefit any other person. • Use information received in confidence in the course of their duties other than in connection with their duties. • Expose themselves to any situation involving the risk of conflict between their official responsibilities and their private interests. • Receive remuneration for any other work/service. • Make improper use of any allowance/payment properly paid to them or disregard the administrative rules that apply.

  12. ADDRESSING THE REMEDIAL ACTION CONTAINED IN RECOMMENDATION 8.9 OF THE PUBLIC PROTECTOR’S STATE OF CAPTURE REPORT NO. 6 OF 2016-17 4.2. Declaration of conflict of interest (section 3) Executive members must: • Declare any financial or business interest, whether personal or private, in a matter: • Before Cabinet/Executive Council or a Cabinet committee/Executive council on which the member serves. • In relation to which the member must take a decision as an Executive member. • Withdraw from the Committee or Executive Council proceedings, unless the President/Premier decides that the interest is trivial or not relevant.

  13. ADDRESSING THE REMEDIAL ACTION CONTAINED IN RECOMMENDATION 8.9 OF THE PUBLIC PROTECTOR’S STATE OF CAPTURE REPORT NO. 6 OF 2016-17 4.2. Declaration of conflict of interest (section 3) cont. Executive members may not • Adjudicate in a matter in which he/she has an interest, unless he/she has declared that interest and the President/Premier has given permission to do so. • Make representations to another Executive member in a matter in which he/she has an interest, unless he/she declares the interest.

  14. ADDRESSING THE REMEDIAL ACTION CONTAINED IN RECOMMENDATION 8.9 OF THE PUBLIC PROTECTOR’S STATE OF CAPTURE REPORT NO. 6 OF 2016-17 4.2. Declaration of conflict of interest (section 3) cont. • Members are required to dispose of or place under the administration of a professional or independent person any interest in a company or corporate entity or profit-making enterprise that may give rise to a conflict of interest within 2 month of assuming office or within 2 months of acquiring the interest. • The professional costs of placing an interest under the control of another can be recovered from the State.

  15. ADDRESSING THE REMEDIAL ACTION CONTAINED IN RECOMMENDATION 8.9 OF THE PUBLIC PROTECTOR’S STATE OF CAPTURE REPORT NO. 6 OF 2016-17 4.2. Declaration of conflict of interest (section 3) cont. • Members are required to dispose of or place under the administration of a professional or independent person any interest in a company or corporate entity or profit-making enterprise that may give rise to a conflict of interest within 2 month of assuming office or within 2 months of acquiring the interest. • The professional costs of placing an interest under the control of another can be recovered from the State.

  16. ADDRESSING THE REMEDIAL ACTION CONTAINED IN RECOMMENDATION 8.9 OF THE PUBLIC PROTECTOR’S STATE OF CAPTURE REPORT NO. 6 OF 2016-17 4.3. Gifts (Section 4) • A Member may not solicit or accept gifts or benefits, which: • Is in return for any benefit received from a Member in his or her official capacity • Constitutes an improper influence on the Member. • Is an attempt to influence the member in performing his/her duties. • A Member can seek the President/Premier’s permission to retain/accept a gift valued more than R1000 but must disclose it.

  17. ADDRESSING THE REMEDIAL ACTION CONTAINED IN RECOMMENDATION 8.9 OF THE PUBLIC PROTECTOR’S STATE OF CAPTURE REPORT NO. 6 OF 2016-17 4.4. Disclosure (Sections 5 and 6) • Cabinet members and Deputy Ministers must disclose their financial interests to the Secretary of Cabinet (DG: Minister in the Presidency). • MECs must disclose to the Secretary of the Executive Council (in the Office of the Premier). • Financial interests include shares and other financial interests in companies and other corporate entities; sponsorships; gifts and hospitality >R350; benefits; foreign travel; immoveable propertyland; and pensions.

  18. ADDRESSING THE REMEDIAL ACTION CONTAINED IN RECOMMENDATION 8.9 OF THE PUBLIC PROTECTOR’S STATE OF CAPTURE REPORT NO. 6 OF 2016-17 4.5. Register, confidentiality and access (section 7) • The Secretary must keep a Register of all financial interests disclosed. • The Register has both a public and confidential part. • The interests recorded in the confidential part are: • The value of interests in a “corporate entity other [sic] or public company”. • “The details of foreign visits when the nature of these details to be confidential “[sic]. • “The details, including the address, of any private” [sic] • The value of any pension. • Details of the financial interests of a member’s spouse, permanent companion or dependent child. • The member’s liabilities.

  19. ADDRESSING THE REMEDIAL ACTION CONTAINED IN RECOMMENDATION 8.9 OF THE PUBLIC PROTECTOR’S STATE OF CAPTURE REPORT NO. 6 OF 2016-17 4.5. Register, confidentiality and access (section 7) cont. • Any person has access to the public part during office working hours. • Only the President/Premier, the Public Protector; the Secretary concerned and designated staff have access to the confidential part. 4.6. General (Section 8) • A Member must be instruct a staff member to assist and monitor compliance with the Code.

  20. ADDRESSING THE REMEDIAL ACTION CONTAINED IN RECOMMENDATION 8.9 OF THE PUBLIC PROTECTOR’S STATE OF CAPTURE REPORT NO. 6 OF 2016-17 5. PP’s previous remedial action re the EMEA & Code • The PP has reported previously on the need to: • Address anomalies and uncertainties in the EMEA and Code. • Upgrade the administrative capacity responsible for managing the Register. • The Public Protector also observed that both Cabinet and Parliament had failed to act on the recommendations.

  21. ADDRESSING THE REMEDIAL ACTION CONTAINED IN RECOMMENDATION 8.9 OF THE PUBLIC PROTECTOR’S STATE OF CAPTURE REPORT NO. 6 OF 2016-17 5. PP’s previous remedial action re the EMEA & Code cont. Specific observations/findings/recommendations include: • The need to clarify the office or the person that the President should approach for guidance/advice and permission about the acceptance of gifts and in the case of a possible conflict of interest. • The need to resolve the office or person to whom the PP should submit a report concerning the President. • The need to provide for sanctions or consequences if the Code is violated. • The need to address shortcomings in the Register’s management. • The need to improve the capacity of officials to provide quality support to Members.

  22. ADDRESSING THE REMEDIAL ACTION CONTAINED IN RECOMMENDATION 8.9 OF THE PUBLIC PROTECTOR’S STATE OF CAPTURE REPORT NO. 6 OF 2016-17 5. Response to PP’s previous recommendations • Following the PP’ s Report 1 of 2010/2011, Cabinet agreed to sanctions (a capped fine and reduction of salary or allowances) as an interim measure, pending a review of the Act and Code. • The Justice Department published a draft Bill for public comment, which proposed that the PP submit to the Speaker any report on an alleged breach of the Act/Code by the President. (This is because the NA elects the President and can remove him or her. The PP also reports to the NA.)

  23. ADDRESSING THE REMEDIAL ACTION CONTAINED IN RECOMMENDATION 8.9 OF THE PUBLIC PROTECTOR’S STATE OF CAPTURE REPORT NO. 6 OF 2016-17 5. Response to PP’s previous recommendations • Following the PP’ s Report 1 of 2010/2011, Cabinet agreed to sanctions (a capped fine and reduction of salary or allowances) as an interim measure, pending a review of the Act and Code. • The Justice Department published a draft Bill for public comment, which proposed that the PP submit to the Speaker any report on an alleged breach of the Act/Code by the President. (This is because the NA elects the President and can remove him or her. The PP also reports to the NA.) • The Executive has acknowledged a need to comprehensively review the Act and Code.

  24. ADDRESSING THE REMEDIAL ACTION CONTAINED IN RECOMMENDATION 8.9 OF THE PUBLIC PROTECTOR’S STATE OF CAPTURE REPORT NO. 6 OF 2016-17 6. Possible shortcomings in the EMEA and Code 6.1. General • The EMEA provides a framework, while details are contained in the Code. • The Code has technical errors. • The EMEA was drafted by an ad hoc Joint Committee. • In terms of the Act, Parliament’s role in developing/reviewing the Code is merely consultative (after consultation).

  25. ADDRESSING THE REMEDIAL ACTION CONTAINED IN RECOMMENDATION 8.9 OF THE PUBLIC PROTECTOR’S STATE OF CAPTURE REPORT NO. 6 OF 2016-17 6. 1. General cont. • Consideration could be given to: • Amending the EMEA by inserting substantive aspects presently found in the Code in the EMEA (for example, the general standards, acceptance of gifts; establishment of a Register, etc.) • Replacing the Code with regulations that only address the declaration of registerable interests. • Amending the EMEA to strengthen Parliament’s role in developing the Code. • Amending the EMEA to provide that the Secretary must compile and submit periodic reports regarding compliance to the President and Parliament.

  26. ADDRESSING THE REMEDIAL ACTION CONTAINED IN RECOMMENDATION 8.9 OF THE PUBLIC PROTECTOR’S STATE OF CAPTURE REPORT NO. 6 OF 2016-17 6.2. Applying the Act and Code to President • The Act and Code apply to the President. • But the President is also required to oversee, evaluate and adjudicate the conduct of members and has specific powers and duties in this regard. • The Act requires that the President be both “referee and player”, which gives rise to a number of anomalies.

  27. ADDRESSING THE REMEDIAL ACTION CONTAINED IN RECOMMENDATION 8.9 OF THE PUBLIC PROTECTOR’S STATE OF CAPTURE REPORT NO. 6 OF 2016-17 6.2. Applying the Act and Code to President • Clarification is required regarding : • Who does the President approach regarding the acceptance of gifts? • What should happen in the case of a conflict of interest? • How are the general standards to apply in the case of the President? • To whom or what office should the PP submit a report concerning an alleged breach of the Code by the President? • Consideration could be given to developing a process applicable specifically to the President.

  28. ADDRESSING THE REMEDIAL ACTION CONTAINED IN RECOMMENDATION 8.9 OF THE PUBLIC PROTECTOR’S STATE OF CAPTURE REPORT NO. 6 OF 2016-17 6.3. Family Members • The Code defines ‘family member’ in relation to a member, as meaning the member’s parent, spouse, companion or dependent child. • Consideration could be given to expanding the definition to include, for example, siblings, children (not only dependents); persons living in the same household and any other familial relationship that could create the appearance of a conflict)? The Regulations applicable to Judges refers to “immediate family”. Other legislation may also be useful?

  29. ADDRESSING THE REMEDIAL ACTION CONTAINED IN RECOMMENDATION 8.9 OF THE PUBLIC PROTECTOR’S STATE OF CAPTURE REPORT NO. 6 OF 2016-17 • 6.4. Disclosure • The EMEA does not list the financial interests to be disclose. • It merely requires that these must at least include the information that applies to members of the National Assembly. •  The PP observed that the format of the Register caused some confusion. • Consideration could be given to: • Amending the EMEA to list the interests that Executive members must disclose. • Regulating the format of the Register and the related disclosure form. (See, for example, the 2014 Regulations applicable to Judges, which appends both the Disclosure form and sets out the Format).

  30. ADDRESSING THE REMEDIAL ACTION CONTAINED IN RECOMMENDATION 8.9 OF THE PUBLIC PROTECTOR’S STATE OF CAPTURE REPORT NO. 6 OF 2016-17 6.5. Public access • At present, the public part of the Register is only accessible to the public during the Secretary’s office hours and requires a personal visit to the Office of the Presidency/Premier. • The EMEA simply provides that, at a minimum, public access to the public part of the Register be under the same conditions that apply to members of the National Assembly. • There does is no requirement or practice that the Secretary report annually on the Code’s implementation • Consideration could be given to: • Making the Register more accessible, for example, by requiring that the public part be published on the website. • Requiring an annual report on compliance..

  31. ADDRESSING THE REMEDIAL ACTION CONTAINED IN RECOMMENDATION 8.9 OF THE PUBLIC PROTECTOR’S STATE OF CAPTURE REPORT NO. 6 OF 2016-17 6.6. Confidential part • The Code lists the interests that must be placed in the confidential part. • Access to the confidential part is limited to the President/Premier; Secretary and Public Protector. • Consideration could be given to reviewing the interests that are placed under the confidential part. For example, in the case of Judges, ‘Directorships, business interests in any business enterprise or any legal entity’ are kept in the public part.

  32. ADDRESSING THE REMEDIAL ACTION CONTAINED IN RECOMMENDATION 8.9 OF THE PUBLIC PROTECTOR’S STATE OF CAPTURE REPORT NO. 6 OF 2016-17 6.7. Sanctions or consequences • The Act does not provide for sanctions in the event that a breach of the Act occurs.   • Consideration could be given to amending the Act to provide for sanctions.

  33. ADDRESSING THE REMEDIAL ACTION CONTAINED IN RECOMMENDATION 8.9 OF THE PUBLIC PROTECTOR’S STATE OF CAPTURE REPORT NO. 6 OF 2016-17 6.8. Administration of the Register • Consideration could be given to obtaining briefing from the Secretary to Cabinet regarding the operations of the Registry, including any challenges. • Is an official the correct person to whom Executive Members should disclose? Independence? • Consideration could be given to amending the EMEA to clarify the powers and functions of Register. • Need for regular monitoring/auditing/reporting mechanism?

  34. ADDRESSING THE REMEDIAL ACTION CONTAINED IN RECOMMENDATION 8.9 OF THE PUBLIC PROTECTOR’S STATE OF CAPTURE REPORT NO. 6 OF 2016-17 7. Whistleblowing • The PP was concerned that there had been no investigation by the Executive of Mr Jonas’ and Ms Mentors’ allegations, and was concerned about the protection afforded to whistleblowers. • How can the EMEA better define responsibilities for a better response? • The Committee could request a legal opinion on whether the recently amended PDA adequately addresses the concerns raised? • Note other legislation contains a duty to report possible corruption (PFMA; PRESCA and FICA)

  35. ADDRESSING THE REMEDIAL ACTION CONTAINED IN RECOMMENDATION 8.9 OF THE PUBLIC PROTECTOR’S STATE OF CAPTURE REPORT NO. 6 OF 2016-17 • Tranversal Code • Section 195(1) (Principles of public service) and section 237 (requires that constitutional obligations be performed diligently and without delay) of the Constitution provide the constitutional architecture on the ethical standards expected of public office bearer . • The PP’s ‘Secure in Comfort’ Report made reference: • To the Code of Ethics for US Government Service, which constitutes a transversal Code of Ethics for all public office bearers and employees in USA when referring to international benchmarks. US Congress approved on 27 June 1980.

  36. ADDRESSING THE REMEDIAL ACTION CONTAINED IN RECOMMENDATION 8.9 OF THE PUBLIC PROTECTOR’S STATE OF CAPTURE REPORT NO. 6 OF 2016-17 • Tranversal Code • To a Workshop on Ethics, hosted by the Joint chairpersons of the Parliamentary Joint Committee on Ethics and Members Interests in June 2013. • At the workshop there was agreement about the need to develop a universal code of ethics for all entrusted with public power and control over public resources for the entire public sector and that gaps in the relevant Ethic Codes should also be addressed.

  37. ADDRESSING THE REMEDIAL ACTION CONTAINED IN RECOMMENDATION 8.9 OF THE PUBLIC PROTECTOR’S STATE OF CAPTURE REPORT NO. 6 OF 2016-17 • Tranversal Code • New Public Administration Management Act 11 of 2014: • Applies to public administration – all spheres of government and employees. BUT NOT public office bearers. • Objects include the promotion of a high standard of professional ethics in the public administration. • Contains basic values and principles governing the public administration. • Makes it an offence for employees to conduct business with the State or being a director in a public/private company conducting business with the State (Fine and/or imprisonment). • Requires financial disclosure. Failure to do so is misconduct.

  38. ADDRESSING THE REMEDIAL ACTION CONTAINED IN RECOMMENDATION 8.9 OF THE PUBLIC PROTECTOR’S STATE OF CAPTURE REPORT NO. 6 OF 2016-17 • Tranversal Code • New Public Administration Management Act 11 of 2014: • Establishes a Public Administration Ethics, Integrity and Disciplinary Tribunal Assistance Unit. • Requires an institution to report an act of corruption to the police for investigation • Minister may prescribe norms and standards including about integrity, ethics and discipline and the disclosure of financial interests.

  39. ADDRESSING THE REMEDIAL ACTION CONTAINED IN RECOMMENDATION 8.9 OF THE PUBLIC PROTECTOR’S STATE OF CAPTURE REPORT NO. 6 OF 2016-17 • Cont …Tranversal Code • The Public Service Regulations, 2016 : • Regulates decision-making in cases of conflict in interest. • Sets out a Code of Conduct. • Regulates financial disclosure. • Deals with anti-corruption and ethics management. • Deals with the SMS, in particular ethics and conduct.

  40. ADDRESSING THE REMEDIAL ACTION CONTAINED IN RECOMMENDATION 8.9 OF THE PUBLIC PROTECTOR’S STATE OF CAPTURE REPORT NO. 6 OF 2016-17 • Possible way forward – Noting that Parliament is required to review the EMEA, the Committee can: • Request briefings from: • Presidency regarding the implementation of the Act and Code, including any challenges. • Parliament and from JSC regarding the mechanism applicable to MPs and Judges respectively. • DPSA and PSC on legislation and regulations applicable to public servants. • Public Protector. • Investigate international benchmarks? • Call for written submissions and conduct public hearings. • Develop a report with recommendations on the way forward. • Committee Bill?

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