Professional Ethics and Anti-Corruption

1. Professional Ethics and Anti-Corruption Presentation by the Public Service Commission to the Portfolio Committee on Public Service and Administration Cape Town 15 May 2002

2. Presentation on Professional Ethics and Risk Management reports: RESEARCH AND EVALUATION REPORTS • Requirements for Blacklisting • Evaluation of Hotlines • Risk Management- Provincial Overview • Review of South Africa’s National Anti-Corruption Agencies • National Ethics Survey PROMOTIONAL MATERIALS • Explanatory Manual on Code of Conduct • Whistle-blowing Guidelines

3. Blacklisting Aims • To identify existing legislation that supports blacklisting • To establish the gaps in existing legislation, • To consider the creation of an accessible computerized national data basis of blacklisted companies, and • To establish where such a data basis could be appropriately based

4. Blacklisting: Research Methodology • Comparative study of foreign countries, international trends and best practices • Consultation with institutions implementing it. • Determining the institutional, financial, procedural and legal requirements for the creation of a computerized national database • Propose efficient and effective mechanisms and structures to detect companies involved in corrupt activities; and • Assess risks underlying blacklisting

5. Blacklisting findings Key findings: • State Tender Board Act provides for a form of blacklisting-restriction of persons/ tenderers • State Tender Board compiles a list of restricted suppliers; updated and circulated to all departments. Distribution of and electronic Access to list is problematic • Provincial Tender Boards tend to follow procedures as set out by State Tender Board

6. Blacklisting findings continued… • PFMA and Treasury Regulations create basis for system that can be equated with the Register of Employees Dismissed used by the Banking Council of South Africa • Some form of black listing occurs in national and provincial departments- process is not uniform or coordinated • Systematic programme of blacklisting is very ambitious, initial implementation may be very litigious

7. Blacklisting findings continued… Risks underlying blacklisting: • False, misleading or incorrect information • Outdated information • Information unlawfully obtained • More information collated than necessary for intended purpose • Collation of information infringes on rights to privacy and not in line with the constitution limitations and justification of “reasonable and justifiable in an open and democratic society based on human dignity, equality and freedom”

8. Blacklisting findings continued… Short to medium term measures to address corrupt and unethical conduct by companies • Anti-Corruption pacts • Supplier/Procurement codes • Public Information programmes • Whistle Blowing mechanism • Administrative processes prior to blacklisting

9. Blacklisting findings continued… Options for housing of blacklisting facility: • National Treasury • Office of the Public Service Commission • Department of Public Service and Administration

10. Evaluation of Hotlines Purpose of the report: • To assess the current situation in South Africa regarding existence, operation and management of hotlines covering public sector corruption • To draw from comparative experience and assess how hotlines can be made more effective • To make recommendations on the feasibility of establishing a national anti-corruption hotline

11. Hotlines Findings EXISTENCE AND FUNCTIONING OF HOTLINES Only eight National Departments have established hotlines • Trade and Industry • Public Works • Water Affairs and Forestry • Home Affairs • Correctional Services • Justice and Constitutional Development • South African Police Service • South African Revenue Services

12. Hotlines Findings continued… • Three provinces have not established hotlines: • Eastern Cape • North West • Free State Province • Provinces with the most efficient hotlines are those that are well resourced • Only one department (Trade and Industry) has established International Best Practice on Hotlines

13. Management of information and cases • In Gauteng, reported cases are captured and compiled on a monthly basis. An estimated 54% of the reported cases coming through hotlines were solved. • In Northern Cape reported cases are captured and callers allowed to remain anonymous. Calls are not recorded • In Mpumalanga, 3600 calls were received in 2001. Twelve criminal charges were laid against individuals • In Western Cape Province there were a total of 83 recorded calls, resulting in 27 successful disciplinary/criminal being prosecuted

14. Hotlines Recommendations • There is a need for the establishment of a national hotline either in the Public Service Commission or Office of the Auditor-General • A data management system should be established for the national hotline to provide a coherent recording of disclosures

15. Hotlines Recommendations continued… • Training courses are needed to support the specialized staff working on hotlines • A Standard Investigating Procedure should be developed for the hotline investigation unit • There is a need for the implementation of International Best Practice • Responsibility for day to day operations of the hotline system must be at the appropriate management level to ensure buy in of senior managers and staff in the organization

16. Risk Management: Provincial Perspective • First report on risk management practices in the public service • Provides overview of the status of integrated risk management in the public service • Emanates from consultative workshops held in seven of the nine provinces in 2001. Workshops were done in partnership with the KZN Provincial Treasury • 224 senior and middle managers attended

17. Risk Management: Workshop Aims • Provided officials with a theoretical framework of risk management • Provided understanding on the roles, responsibilities and relationships in the application of risk management • Provided them with an overview of the risk management experience in other provinces. • Provided an opportunity to discuss relevant provincial barriers

18. Risk management findings • Awareness is high at the level of accounting officers and internal audit components due to legal imperatives of PFMA • Formal Commitment to risk management processes exists at highest levels • Limited integration into strategic management processes is taking place • Most fraud prevention plans are not based on risk assessments • Departments lack capacity and resources to ensure effective learning, provision of background information, knowledge, skills and tools to implement risk management

19. Risk management: Findings • Consultants drive risk management processes. Contents of reports not cascaded to lower level staff • Officials at operations level (9-12) not empowered to implement risk management practices • Treasury Regulations and private sector good practice do not provide adequate framework for the public service • 5 provinces have not repealed the Exchequer Act. Some arrangements are in conflict with PFMA and it leads to confusion

20. Risk management findings • Pockets of excellence exist in some provinces • Comprehensive PFMA compliance monitoring system was developed by the Eastern Cape. • Best practice was developed and implemented in KZN and Western Cape • Accountability framework • Role clarification • Implementation principles and approaches • Excel programs were developed to manage and monitor risk

21. Compliance by provincial departments : April 2001

22. Audit of National Anti-corruption agencies Purpose: • To conduct an audit of agencies, entrusted with aspects of the anti-corruption mandate • To establish the possibility of rationalizing agencies with similar functions • To contribute towards the development of a national anti-corruption strategy for the public service

23. Aspects of the assessment: Aspects that were investigated: • Mandates • Structural arrangements • Legislative reform • Resource constraints • Public perceptions • Case Loads • Performance • Coordination

24. Mandates of Agencies • Some organizations audited have very specific mandates, e.g. Recovery of public funds and assets (Asset Forfeiture Unit and SIU) • In other cases, mandates are broad and overlap • Public Service Commission, AG and Public Protector investigate maladministration • SIU and SAPS anti-Corruption Unit are the only institutions focusing solely on corruption

25. Resources of agencies • Few bodies believe they have sufficient resources • ICD only able to fill 100 of 500 desired posts while the Public Protector could only fill half • Training is seen as a top priority by all agencies • Levels of interaction with the public vary across agencies. This area requires attention. • More needs to be done to determine client satisfaction • Forum shopping occurs as a consequence of the multiplicity of agencies

26. Case Loads • Difficult to obtain information on cases • Only certain agencies have readily available figures (Independent Complaints Directorate, SIU and SAPS Commercial Crime Branch) • Significant backlogs that need to be dealt with urgently. AG is busy with a project in this regard • Cases land up at agency not best placed to deal with e.g. Public Protector, PSC, ICD and Directorate Special Operations

27. Performance and cooperation • Performance can be improved through better use of shared resources • Interaction does take place between agencies- specifically prosecuting authorities • No formal agreement regarding coordination of case related information • Need for formal co-operation exists

28. Single agency • A Single agency will not be appropriate at this stage • Real concerns exists about the location, funding and mandate • Not merely encouraged because existing mechanisms are not functioning optimally • Priority to obtain current agencies with some rationalisation and formalising coordination arrangements • Complimented by an audit on the capacity of anti-corruption units in the various national and provincial departments in 2002

29. National Ethics Survey 2001 • Undertaken in partnership with KPMG, Transparency South Africa • First ever survey of its kind • Purpose: to assess the ethical infrastructure in place in public and private institutions • Provides snapshot of current ethics practices • A total of 166 respondents participated: 30 public service, 76 private sector, 60 civil society respondents

30. Ethics Survey: Focus areas • Ethics documents • Ethics related evaluations • Responsibility for the ethics function • Resolution of ethics problems • Reporting mechanisms • Ethics training • Performance evaluation • Risk assessment • Future ethics management

31. Ethics Survey findings • Flaws in basic ethics infrastructure- many organisations have not integrated ethics management practices into other management processes • Few organisations train new employees on the code of conduct • Many organisations do not assign ethics management to a senior manager

32. Ethics Survey findings continued… Findings continued: • 54% of respondents had access to confidential reporting mechanisms • 84% of organisations surveyed have written documents outlining organisational values and principles • Most organisations have codes of conduct and whistle blowing mechanisms

33. Explanatory Manual On The Code Of Conduct • Serves as guide to employees to understand and resolve ethical dilemmas in their daily work • Five focus areas: • serving government • serving the public • professionalism and integrity • conflict of interest • working in the service • Produced 1 million pocket-sized booklets to be distributed to all public servants

34. Promotion and implementation of Whistle Blowing mechanisms • Guidelines have been produced in easy to use, booklet format to serve as reference framework • Participatory and learning orientated workshops (in conjunction with Open Democracy Centre) are being conducted in the provinces • to familiarize public servants with the Protected Disclosures Act • to implement best management practice on whistle blowing mechanisms