Corruption, Human Rights and Development – the case of the PSAM in South Africa

1. Corruption, Human Rights and Development – the case of the PSAM in South Africa United Nations Conference on Anti-Corruption Measures, Good Governance and Human Rights Warsaw, Poland, 8/9 November 2006

2. The Context of the Eastern Cape • PSAM dedicated to promoting the effective use of public resources and the realisation of socio-economic rights in South Africa, particularly in its Eastern Cape province • South African constitution contains commitment to progressively realise socio-economic rights within available resources, has excellent enabling legislation to ensure effective use of resources and to combat corruption

3. Excellent legislative framework – but weak implementation • Lack of separation between implementation and oversight arms of government – the executive and legislature • Tendency to rely on ex-struggle loyalties and to treat accountability as personal favour • Failure by CSOs to use constitutional & legislative provisions to participate in governance processes • Tendency to concentrate on macro/policy level and to neglect practical issues at site of service delivery Resulted in widespread acts of corruption, conflicts of interest and instances of failed service delivery (particularly in provinces)

4. Realisation of Socio-Economic Rights – Eastern Cape • Since 1994 there has been an increase in access to basic services (water, electricity, housing etc) for majority of population BUT many socio-economic challenges remain • 72% of EC population continue to live in poverty [HSRC 2004] • 42 % of EC citizens are illiterate [EC Treasury 2005] • Infant mortality rate has increased from 61 deaths per 1000 live births in 1998 to 72 deaths per 1000 births in 2002 (highest rate in South Africa) [HST 2002]

5. Why focus on sub-national expenditure? Provinces are the site of service delivery and administer the bulk of public expenditure in South Africa: • Available expenditure (2006/07) - R 396 billion • Provincial govt. - R229.3 billion (57.9%). • National govt. - R146.8 billion (37.1%). • Local govt. – R 19.7 billion (5%).

6. PSAM expands rights-based approach to include right to social accountability • Social accountability defined as the right to obtain justifications and explanations for the use of public resources from those entrusted with their management (whether government officials or private service providers). • Those responsible for public resources have an obligation to explain/justify how decisions/actions have contributed to the progressive realisation of citizens (socio-economic) rights – and to take steps to correct ineffective use/abuse of resources • Corruption (defined as misuse of public power and resources for private benefit) breaches the accountability obligation and results in the violation of socio-economic rights

7. PSAM Initial Focus - Monitoring of Corruption Survey of Officials’ Experiences and Perceptions of corruption in 2001 • 48% of officials believed it was understandable to accept gifts in response for doing their jobs Monitored Eastern Cape government between 1999 and 2005: • Tracked a total of 691 cases of misconduct, corruption, maladministration and conflicts of interest. Only 72 (10%) resolved • Total amount involved for all cases = R6.9 billion Amount recovered / properly accounted for = R325 million (5%)

8. Shift of focus - monitoring accountability systems

9. Methodology for monitoring social accountability systems

10. PSAM Monitoring Results Conducted detailed monitoring of the performance and realisation of rights by Eastern Cape Departments of Health, Education, Welfare and Housing between 2000 and 2006. Evaluation of following 5 accountability systems: • Planning and resource allocation system • Expenditure management system • Performance management system • Integrity system • Oversight system Will provide snapshot of findings

11. System 1. Planning & Resource Allocation None of the 4 departments strategic plans or budget documents: • Included an accurate analysis of citizens’ needs (including epidemiological trends, number of people without housing, access to clinics, schools, nutrition, social grants etc) • Included accurate information on the departments’ own organisational challenges and operational capacity • Examples • The Dept of Health failed to produce business plans for almost 40% of its HIV/AIDS budget between 2000-2004. • The Dept of Housing failed to identify the number and location of citizens requiring housing between 1996 and 2006 • The Dept of Education failed to plan for the salaries of its excess staff (of an average of 11 000, mostly teachers) between 2000-2005

12. System 2. Expenditure Management • The lack of effective planning resulted in the inability of the 4 Depts to report effectively against plans. As a result their managers, the Treasury and oversight bodies were unable to monitor their spending effectively • This resulted in over/under-spending Examples • The Dept of Health failed to account for 73% of its (provincial) HIV/AIDS budget between 2000 – 2003 (R90.2 m), 26% of budget was unspent (R33 m). • The Dept of Housing failed to spend R928 million or 29% of its housing budget between 2000 – 2004 • The Dept of Education overspent its budget by R1.1 billion between 2000 - 2004

13. System 3. Performance management All 4 Departments: • Failed to maintain proper risk management and internal audit systems Example • The EC Dept of Housing has consistently failed to monitor quality of new houses built – the AG found in 2002/2003 that 90% of houses he inspected did not conform to national norms and standards System 4. Integrity system All 4 Departments: • Lacked effective systems to monitor and enforce disciplinary proceedings – including adequately staffed disciplinary units, the appointment of presiding officers and proper maintenance of disciplinary databases

14. System 5. Oversight All 4 Departments displayed an inability and/or unwillingness to address problems raised by the Auditor-General (AG) • Each year since 1996 the AG has raised the same issues relating to poor financial controls • In 2002 the AG pointed out that not a single Public Accounts Committee resolution had been implemented between 1995 – 2002 • AG issued ‘disclaimer’ audit opinion for 77% of the total EC budget between 1996 – 2006 • ‘Disclaimer’ issued when there is a lack of accurate financial records and failure to properly record all financial transactions. • Whilst this does not mean these amounts were lost/stolen the province could not properly accountfor the use of R174 billion out of R225 billion. • In this context it is impossible to establish whether these funds resulted in effective service delivery.

15. System 5.Oversight (Cont) Auditor-General’s Audit Opinions on EC budget between 1996 – 2006

16. PSAM Impact Sustained advocacy has contributed to: • Increased public & oversight committee awareness of importance of accurate financial reporting by government departments in EC – especially around audit disclaimers • Establishment of a declarations of interest register for the EC executive and Legislature in 2004 • Creation of disciplinary databases in key EC service delivery departments in 2005 – Health, Education • Improved civil society participation in EC governance processes – eg established a Human Rights Working Group (which meets quarterly) • Strengthened parliamentary oversight committees – briefings (with findings & recommendations) to committee members

17. Lesson –need multiple approaches to rights-based monitoring & corresponding advocacy strategies • Macro level - Policy Monitoring & Analysis (national/international)- focus on development of constitutional provisions, legislation & policies eg finance regulations, trade policies, macro-budget allocations Advocacy strategy – lobbying policy-makers • Meso level - Accountability Systems Monitoring (sub-national) – focus on implementation of accountability & service delivery systems at site of oversight of delivery Advocacy strategy – high profile (critical) engagement on system implementation • Micro level - Social auditing (local) – focus on verifying project implementation eg building of health centre or school in village Advocacy strategy – engagement with officials and service providers

18. Recommendations • Balance support for supply and demand aspects of accountability. Strengthen capacity of duty-bearers to produce requisite information, explanations & justifications and strengthen power of rights-holders to demand, access & analyse this information • Provide support for dissemination of evidence-based monitoring tools to ensure practical policy implementation • Provide more support for meso-level monitoring of accountability systems in LDCs

19. Recommendations (Cont) • Expand rights-based approach by recognising social accountability as a fundamental right to obtain explanations and justifications for the use of public resources • Entrench an ethic of justification by elaborating clear criteria to ‘justify’ decisions relating to use of public resources – long term goal to build a society in which the right to social accountability justiciable • Examples of criteria Decision-makers should consider all serious objections/alternatives to decisions taken and have plausible answers to objections and reasons for discarding alternatives Decision-makers should be able to demonstrate a rational connection between the argument, evidence and information informing their decisions and the decision taken