Audit finds irregularities in Malawi grain sales
“An audit of maize sales from Malawi’s state grain reserves has found some sales were unauthorised and not paid for, while other sales blocked by bureaucracy cost the impoverished country millions of dollars. The Southern African country sold its entire strategic grain reserve (SGR) in 2000 and 2001, prompting an outcry last year when the United Nations World Food Programme said over three million of Malawi’s 11 million people faced food shortages. The audit also said the NFRA’s failure to secure government authorisation to sell grain stocks ahead of the latest harvest had cost the government some $5.5 million in the past two months alone as prices plunged with the harvest coming onto the market.”
For more details see Reuters: www.reuters.com
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In this issue we look at the Office of the Auditor General
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All back issues of Umqol'Uphandle will in future be posted on the ISS website.
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Oil slick approaches our shores?
It’s the question, which continues to perplex some of our neighbours along the West African coastline. Why are the vast majority of citizens of a country rich in oil reserves plagued by poverty?
Angola is a case in point, its alleged that a vast amount of the revenue from their booming oil fields is pumped directly into the pockets of a corrupt elite – a pipeline which is all too willingly greased by Northern Multi-National Corporations who in turn cream off big benefits (Also see article in Umqol’Uphandle 003). Nigeria too suffered in a similar manner under the brutal regime of Abacha and some of his predecessors. Amongst extractive industries the oil business is notoriously corrupt, perhaps even as bad as the arms industry and, of course - oil matters – it’s a commodity which our economy has come to depend upon and over which wars are waged. Given all of this it’s encouraging to see that a recent meeting of African ministers and oil executives ended with a pledge to reform the industry (See research and reform section). It couldn’t come at a better time for South Africa as there is talk of local ports acting as service centres for West African oil fields – which if it should happen must be based on rules of fair trade and not the greasing of palms.
Closer to home the Mail and Guardian (see Industries section ) has raised questions regarding what appears to have been a dubious deal between a US company registered in the Cayman Islands and the Nigerian government. The big question is how did the office of the South African President and senior members of cabinet come to be duped into endorsing this apparent private transaction, with no apparent benefit for the South African treasury. President Mbeki points out (see National Admin. Section) in such matters we “need facts not groundless allegations”. Although as he point out racism is still prevalent throughout our society, including the media, our reluctance to tackle these big questions can only damage the process of transformation. The lesson from elsewhere in the world is that inaction when allegations of corruption emerge is not likely to leave the poor any richer. We need to start cleaning-up the oil-slick before it reaches our shores.
PUBLIC SERVICE
National Administration: Mbeki believes SA “needs facts, not groundless allegations”
President Thabo Mbeki in his ‘Letter from the President’ in the ANC today addressed what he refers to as a public perception created by the media that the government in South Africa is corrupt following renewed allegations of corruption in the Arms Deal “…we should not, and will not abandon the offensive to defeat the insulting campaigns further to entrench a stereotype that has, for centuries, sought to portray Africans as a people that is corrupt, given to telling lies, prone to theft and self-enrichment by immoral means, a people that is otherwise contemptible in the eyes of the ‘civilized’.” The letter goes on to refute some of the substantive allegations made against specific procurement arms deal consortia as well as what is termed a ‘campaign against the AG.’ He concludes by stating, “what our country needs is substance and not shadows, facts instead of allegations, and the eradication of racism.”
Full article in ANC Today: www.anc.org.za...
National Administration: Minister of Defence faces disciplinary hearing and probe
The public protector’s Mr. Lawrence Mushwana has announced that he is launching a probe into the undeclared business interests of Min. Lekota. This follows the announcement of an ANC internal disciplinary inquiry, which in turn closely follows the parliamentary ethics committee’s finding that Lekota failed to declare his wine and fuel businesses. The ethics committee sanctioned Lekota last week after the Mail & Guardian revealed (See Umqo’uphandlle 003) the ANC chairperson’s undisclosed business interests in Landzicht winery and BZL Petroleum.”
Full article in AllAfrica.com: allafrica.com...
Provincial Administration: Senior Gauteng Education Human Resource Manager fired
A senior human resources manager in the Gauteng education department has been dismissed for corruption involving the violation of procurement procedures relating to the awarding of tenders, and found guilty on several charges of mismanagement. The department of education urged the public to use the 0800-600-933 toll free number to report any suspicion of corruption.
Full article in the Star: www.thestar.co.za...
Provincial Administration Mpumalanga’s Health MEC under investigation
The South African elite investigative unit the ‘Scorpions’ are investigating Mpumalanga’s health MEC, Sibongile Manana, for violating tender procedures, financial controls and treasury instructions by secretly appointing a close corporation company, TAL Investigations & Security, to probe medicine theft in the province. According to the Mail & Guardian... “Manana personally signed an open-ended contract with the small Centurion-based close corporation TAL Investigations and Security, giving the company free rein and an apparently unlimited budget that has so far cost taxpayers R13, 5-million for 12 months of work. Scorpions special prosecutor advocate Cornell Tshavhunga says Manana did not have the legal authority to sign contracts. Investigators want to know why the lucrative contract was not put out to tender, why normal government rates and guidelines were ignored, and why TAL was allowed to draft its own terms of service.”
Full article in the Mail & Guardian: www.mg.co.za...
Local Government: Eastern Cape Town Manager and six others arrested for corruption
The town manager of Ngqushwa near Grahamstown, three of its managers in the departments of human resources, public works and statistics, and another three administrators in the department of social welfare were arrested by the provincial anti-corruption task team on charges of fraud and corruption according to SAPS Superintendent Mike Mkizi. The accumulative arrest number since the task team&Mac226;s operations began in December 2002 amounts to 128 arrests for corruption and fraud.
SAPA report not available online ...
INDUSTRIES
Oil Scandal rocks SA
The Mail & Guardian reports…. “ how in 1999 a lucrative Nigerian oil contract intended for ‘the Republic of South Africa’ and secured with the aid of President Thabo Mbeki was diverted to an offshore company – with no benefit to the South African state or public. Instead, the company’s local incarnation features figures linked to African National Congress interests. Almost four years later, the contract is still running and the South African government has not acted to end what appears to be a fraud on the South African and Nigerian public. Mbeki and other government officials lobbied the Nigerian government for the award of the Nigerian ‘term contract’ for oil sales, which duly went to an entity called the South African Oil Company. The contract was portrayed as a government-to-government deal with the South African state as the beneficiary. Little wonder: the possibility of the oil deal was raised by Mbeki himself in a letter to newly elected Nigerian President Olusegun Obasanjo. The letter was hand-delivered by Minister of Trade and Industry Alec Erwin. The Nigerian state oil company confirmed the award to the ‘Republic of South Africa, c/o South African High Commission’. Phumzile Mlambo-Ngcuka, the Minerals and Energy Minister, even boasted publicly of South Africa winning a Nigerian oil Allocation. But, in fact, the South African Oil Company was an offshore entity registered in the Cayman Islands, which, by its own account, never transferred a cent of benefit – estimated at up to R30-million a year – to the South African state or public. Nevertheless, in 2000 a senior official of the Department of Minerals and Energy reportedly lobbied for the contract to be increased in value…”.
Full article in the Mail & Guardian: www.mg.co.za...
See also: Government rejects oil deal report www.mg.co.za...
See also: US oil firm denies corruption charge www.mg.co.za...
SOCIAL JUSTICE
Department of Social Welfare: Public funds mismanaged by former MEC
“Former Western Cape MEC Freda Adams blew the whistle on ‘corruption and maladministration’ in the Western Cape’s social welfare department, which she said she discovered after she took over former MEC Peter Marais’s portfolio in February 2000. Testifying in a defamation suit against Marais and former premier Gerald Morkel, Adams told the Cape High Court that she was handed responsibility for the Poverty Alleviation desk in February 2000 and conducted a random study of the allocation of funds for several projects by the provincial social welfare department. After taking responsibility for the entire department she decided to investigate what had happened to the ‘millions’ of rands which had been allocated to poverty alleviation projects during Marais’s reign…”
Full article at the Independent online: www.iol.co.za...
For more see the SABC: www.sabcnews.co.za...
Education: Police called into Robben Island graft investigation
The embattled Robben Island Museum Council has called in the police to probe corruption at the icon of the anti-apartheid struggle. On Tuesday a PricewaterhouseCoopers (PWC) forensic audit report recommended police probe how millions of rand of unknown source passed through the account of a senior former employee. They should also investigate kickback. The company in its final report also recommended the strengthening of administrative structures and systems in the running of the Robben Island.”
Full article in the Cape Times: www.capetimes.co.za...
CRIME AND JUSTICE
Popcru accuses Jali Commission of mistreating its members
The Police and Prison Civil Rights Union (Popcru) has announced that it would not give oral evidence to the Jali Commission into corruption in prisons in future. The commission was appointed last year by President Thabo Mbeki to investigate corruption in the country’s prisons. It has already held public hearings in Durban, Port Elizabeth, Cape Town and Bloemfortein. Popcru claims its members are being treated unfairly during cross-examination. The union said it did not approve of the way commission evidence leader advocate Vas Soni cross-examined its members. Popcru said it was still keen to provide information to the commission and it would do so by way of written memoranda.
See the full article at allafrica.com: allafrica.com...
Umtata policemen in court for corruption
“Three policemen attached to the Umtata police’s motor vehicle theft unit appeared in the Libode District Court on Wednesday on charges of corruption. Inspector Juliet Mafojela, 46, Inspector Xolani Tekule, 33, and Inspector Teboho Matiya, 51, allegedly issued a clearance certificate for a vehicle hijacked in Pinetown, Kwazulu-Natal earlier this year.”
SAPA report not available online ...
Office of the Premier Allocates R1, 9 Million to fight Corruption
The Office of the Premier in the Eastern Cape, Makhenkesi Stofile, has allocated R1.9 million to fight fraud and corruption in government departments in the province over the next three years. The office has set aside R400 000 for the establishment of anti fraud committees within all 12 provincial departments. R500 000 has been earmarked for the ‘professional’ investigation of fraud and corruption cases. R1 million has been allocated to establish an independent ‘ethics line committee’ by the end of June this year. According to the Office, this would ‘increase the number of reports of suspected ethical offences and improve work ethic.
Full article at Allafrica.com: allafrica.com...
African oil meeting ends with pledges to reform
“African ministers and industry executives ended a four-day oil and gas conference in the Angolan capital Luanda with pledges to tackle corruption and improve management of oil revenues. The industry officials discussed concerns that poor management and lack of democracy in some countries meant that social indicators were declining at a time when oil production was quick rising. Leading African producers Nigeria and Angola are usually at the epicentre of criticism of producers on the continent for allowing their citizens to remain in abject poverty even as oil revenues soar.”
Full article in Forbes: www.forbes.com...
Office of the Auditor General
The office of the Auditor-General has a constitutional mandate to audit and report on the accounts, financial statements and financial management of all public sector agencies. These include all national and provincial state departments and administrations, all municipalities, any other institution or accounting entity required by national or provincial legislation to be audited by the Auditor-General. The current Auditor-General (AG) Mr. Shaukit Fakie was appointed in 1999/2000 for a non-renewable period of seven years. The AG is guided by provisions in the Constitution (1996) the Auditor-General Act (1995) and the Public Finance Management Act (PFMA) (1999).
The independence of the office of the Auditor-General is guaranteed by the Constitution and the AG reports to parliament through the Standing Committee on Public Accounts (SCOPA) and is therefore key to ensuring that parliament can function effectively as an oversight body of executive action. Although the office of the AG is not an anti-corruption agency the AG “believes that the Office has to play an important role in getting economic crime under control in South Africa.” In particular the forensic auditing division interacts with other agencies in a supportive role into the investigations of alleged corruption. One such example is the Joint Investigation Report into the Strategic Defence Procurement Package (arms deal), which was produced in November 2001 by the Office of the Public Protector, National Prosecuting Authority and the Auditor-General. The report, which is available on the AG’s website has once again made recent headlines.
For more detailed information on the function and operation of Auditor-General consult the official website: www.agasa.co.za...
New international anti-corruption information portal launched
Transparency International has launched the Corruption Online Research and Information System (CORISweb), a portal which provides all those with an interest in anti-corruption and governance issues with easy access to high quality, processed information. CORISweb holds over 12 000 resources including a reports, books, periodicals, legal texts, web links, research studies and a media archive.
To access Corisweb: www.corisweb.org...
The ISS Organised Crime and Corruption programme is finalising the soon to be launched online SADC Corruption Resource Centre. This free to use service will provide anti-corruption material, legal documents and good practice material from the SADC region and will be the first of its kind in Southern Africa. It is targeted at researchers, policy-makers, the media, academia and anti-corruption practitioners and is set to be launched in mid-July 2003.
More details will follow in Umqol’uphandle.
The Institute for Security Studies (ISS) is an applied policy non-profit research organisation with a focus on human security issues on the African continent.
This e-briefing is produced by the SA Anti-Corruption Strategies component which is located within the ISS Organised Crime and Corruption programme in Cape Town and funded by the Danish Development Agency (DANIDA) through the Embassy of Denmark.
Editorial Team:
Hennie van Vuuren (Senior Researcher: Anti-Corruption Strategies)
hvanvuuren@iss.org.za
Paul Arendse (Research Intern)
Pilisa Gaushe (Manager: ISS Corruption Resource Centre)
For more about ISS please visit our website at: www.issafrica.org...
To contact us, or if you should have any comments, please email: umqoled@iss.org.za
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