Monday, May 30, 2011

New eThekwini mayor pledges change

James Nxumalo was announed mayor of eThekwini municipality yesterday. It will not be business as usual in the eThekwini municipality and the days of councillors flouting the law by doing business with the very council they have been elected to serve are over. This was the promise from James Nxumalo, who was named the new eThekwini mayor at a press briefing at the ANC’s provincial offices in Durban on Sunday.

The ANC also announced the first citizens of 10 other KwaZulu-Natal municipalities. However, the names of other political office-bearers who will take up prominent positions, such as the deputy mayors and speakers, at ANC-controlled municipalities in KZN were not revealed. Outgoing mayor Obed Mlaba, who has been at the helm of eThekwini for 15 years, will officially hand over the R2.3 million mayoral chain to Nxumalo next week. He will take the reins as mayor just two months after Co-operative Governance MEC Nomusa Dube announced an unprecedented forensic investigation into the city’s financial affairs. Dube said she would receive preliminary feedback from the forensic audit firm Manase and Associates, which was tasked with investigating allegations of fraud, maladministration and corruption in the city. “I’m not expecting a final report anytime this month, but it will just be to look at the progress and to see whether there are any other issues that may have arisen from the investigation,” she said.

Nxumalo said it would be premature for him to make statements regarding the investigation, as processes were under way. “But I must say that we are going to be very strict this time. It cannot be business as usual, and we will make sure that we implement the code of conduct governing councillors, because councillors are not allowed to do business with the municipalities. We will be very strict in terms of the Municipal Finance Management Act,” he said. Nxumalo said councillors would be trained to understand that the law did not allow them to do business with the council. He said those who owned companies should resign from those companies “as a matter of urgency and declare their business interests”.

The ANC on Sunday announced that it was still engaged in talks with the NFP, aimed at forging a coalition, after both failed to secure governing majorities in 19 councils in the province. The ANC on Sunday announced Ester Qwabe as its Zululand mayoral candidate, but the party said this could change depending on the outcome of talks with the NFP.

ANC provincial secretary Sihle Zikalala said the outcome of talks with the NFP would determine the candidates for other key positions at eThekwini and other municipalities. “We have taken an approach that we will announce other positions after that engagement. That also goes for Zululand. We have announced our mayoral candidate in Zululand, but if talks and negotiations compel us to take a deputy mayoral position, we will determine that when we discuss with the NFP,” he said. Zikalala said the ANC would announce the progress of the talks today.

NFP leader Zanele kaMagwaza-Msibi laughed off suggestions that she or any other member of her party would be appointed mayor of Msunduzi municipality, but said her party was open to talks with both the ANC and IFP. Makhosi Khoza, a front-runner for the eThekwini mayoral post, said on Sunday she would remain the party’s spokeswoman and MPL. – The Mercury

Friday, May 13, 2011

A Rustenburg municipal councillor was killed within days of reporting a dodgy contract.

A Rustenburg municipal councillor was killed within days of reporting a dodgy contract. On the eve of the local government elections secret internal ANC and municipal documents obtained by the Mail & Guardian have opened a window on corruption in a major municipality—Rustenburg in North West.

The documents also show desperate attempts by local ANC structures to blow the whistle to the party and how these attempts may have cost Rustenburg councillor Moss Phakoe his life. Phakoe was gunned down in March 2009, two days after meeting Cooperative Governance Minister Sicelo Shiceka and handing over a dossier of allegations against office bearers and officials in the Bojanala District Municipality, which includes Rustenburg and Brits. One document, marked “secret”, is addressed to the Bojanala regional task team, which was part of a special provincial task group set up by the ANC’s national executive committee to deal with internal conflict and service delivery problems in the North West.

The document, understood to have been drafted in 2009 by ANC intelligence operatives deployed to the province, is a devastating assessment of the state of governance in the Rustenburg council. It notes: “Various law enforcement agencies . have been inundated with reports and complaints of rampant acts of corruption within the Rustenburg local municipality. The complaints relate to the inappropriate handling of tender processes, shabby and undeclared interests in such by council officials and or councillors . “The nature of the complaints illustrates that organised crime is prevalent . Criminals [and] corrupters have access and an upper hand over administrative procurement procedures and officials and are able to influence decisions on the basis of blackmail, bribes and extortion. “They are able to switch their operations, benefiting from small and major contracts in directorates where officials are easily corrupted, blackmailed or issued with unlawful instructions by their respective political or criminal principals to award tenders in favour of their principals’ preferred bidders.”

The document appears to have been drafted before Phakoe’s murder, but reflects many of his concerns. It reveals that the police were investigating a number of cases, including alleged corruption in relation to the outsourcing of the Rustenburg Kloof Holiday Resort and Conference Centre. The Rustenburg Kloof deal was one of the major concerns raised by Phakoe in his meeting with Shiceka, according to information obtained by the M&G from concerned local ANC members, who asked not to be identified. They said the contract was one of the key issues that had fanned the bitter rivalry between councillors in the municipality and the executive mayor at the time, Matthew Wolmarans. It seems that Phakoe drafted a report suggesting that Wolmarans, who chaired the committee responsible for recommending the successful bidder, had interests in the deal. It was this report that Phakoe handed to Shiceka—and it may have played a role in the ANC.s eventual removal of Wolmarans as mayor in February last year.

Wolmarans has denied having any interest in the Rustenburg Kloof bid, which was awarded to a company called Omaramba. But one of the key players in Omaramba, North West businessman Oupa Mphomane, told the M&G that they were friends who had grown up together, although he denied they had a business relationship. “The councillors fighting with Wolmarans are behind these claims. I have always supported Wolmarans through funding for his political campaigns. As a businessman and an active member of the ANC I support the organisation ... I funded the provincial conference and about 3 000 people, including the MEC and ministers, came, ate and drank for free at the Kloof at the afterparty celebration,” Mphomane said. At the ANC provincial conference earlier this year Wolmarans made a political comeback, returning as a provincial executive committee member.

Phakoe’s Kloof report, which the M&G has seen, describes how an independent company appointed to evaluate the bids recommended another company, but says this advice was overturned by the committee chaired by Wolmarans, which recommended Omaramba despite its lower score. According to the Phakoe report, one of the shareholders in Omaramba was Silvia Moeng, Wolmarans’s sister-in-law, although this shareholding was later distributed among other shareholders.

Mphomane told the M&G: “I had a disagreement with my business partner because he proposed to hold a percentage of shares for his employee, Moeng, who never came to board meetings. We discussed it and agreed to share the stake among ourselves.” Wolmarans said this week that he knew about the allegations but that they had never been presented to him formally. “I have only heard rumours of people asking me about tenders and my relationship with Mphomane. It is not true that I had interest in any of the tenders and I had already moved from the committee to do special projects when the Rustenburg Kloof deal was finalised. Those allegations were made by disgruntled councillors.”

He confirmed that Moeng was his sister-in-law but denied that he had any knowledge of her involvement in Omaramba. “I didn't know that she was a shareholder. I know that Mphomane is a co-owner of the business. I know Mphomane, but I don.t have any business relationship with him.” However, company records show that Wolmarans is a director of a shelf company with Mphomane. The company, Mega Works Trading Enterprise 171, was registered last year.

Local ANC members hostile to Wolmarans are understood to have sent a document to senior provincial and national ANC leaders arguing that Phakoe’s corruption allegations should be considered a motive for his murder. It appears that the police have taken this claim seriously. The M&G has confirmed that investigators obtained surveillance tapes from a garage where Mphomane and Wolmarans had a meeting a week before the murder. Mphomane dismissed suggestions of his involvement, saying they were part of a “whispering campaign” against him. He confirmed that the police had questioned him about his meeting with Wolmarans at the garage as well as about Phakoe’s murder. He explained that the two were on their way to another meeting and had met at the garage to share a vehicle.

Responding to questions about the videotapes showing that he was armed, Mphomane was forthright: “I'm a businessman; I always have my guns for protection.”

Source: Mail & Guardian

Wednesday, May 11, 2011

More allegations against accountant

Durban North chartered accountant Antony Marais, who has been charged with fraud and theft, could be charged with more offences. Marais, who has since closed his offices in Ennisdale Drive, appeared in the Commercial Crime Court yesterday. He was arrested in March after allegations were made by two of his clients that he had misappropriated their money.

Yesterday, prosecutor Musa Mzelemu said six more complainants had come forward with allegations against Marais. “The complaints have only come to light now because they were initially laid with the independent regulatory board of accountants,” he said.

Mzelemu said the allegations were being investigated by Brigadier Keith Flack, a senior officer from the commercial crime branch. Marais has also had a final sequestration order made against him in the Durban High Court. After the provisional sequestration order was granted, Marais initially said he would oppose the application, but he did not. In the sequestration application, former client Norman Baggaley accused Marais of misappropriating funds. Baggaley claimed in his affidavit that Marais admitted that he had used the money for something else, that he was in financial difficulty and could not pay him. And in an affidavit attached to the application, an attorney acting for a 96-year-old pensioner said his client was owed more than R800 000. Documents before the court reflect that pensioner Artur Pimenter obtained default judgment against Marais for R810 000, being the capital sum (plus interest) he had given him to invest with Investec Bank in March 2009. But, in spite of demands for its release, the money was never paid over to him. Pimenter’s attorney, Alan Cohen, said his investigations had revealed that “the funds have been misappropriated”.

Marais is out on bail of R15 000 and the case was adjourned to July.

Source: IoL

Due consultation is crucial

South Africa is expected to start the process of appointing a new chief justice soon. Exactly what does the process entail? The chief justice of South Africa, like the speaker of the legislature and the president, is an important head of one of the three authorities of government. His or her appointment must thus rightly engage the interest and attention of all South Africans.

The process of appointing the incumbent should reflect the constitutional values of a democratic, open and transparent society, based on human dignity, equality and accountability. It must imbue the office with the legitimacy that justifies the exercise of an authority so critical on behalf of all of us.

Our constitution provides that the chief justice and the deputy chief justice be appointed by the president, as head of the national executive, after consultation with the Judicial Service Commission (JSC) and leaders of political parties represented in the National Assembly (section 174(3)).

What is consultation?

It is important to bear in mind the legal framework and requirements of consultation before one looks at each of the forms of consultation prescribed. Consultation has to be real, not formalistic. The principles according to law that govern consultation are:

* It entails the involvement of more than one person, namely the consultant, in this instance the executive (the president) and the consulted, who confer in the sense of applying their minds to consider the pros and cons of a matter;
* It may be formal or informal; oral or in writing (the form does not matter);
* The essence is the communication of ideas on a reciprocal basis;
* It must allow a reasonable opportunity to both sides to communicate effectively and achieve the purpose for which consultation is prescribed;
* It must be seen as an opportunity for the consulted to make real and effective representation;
* For this to happen, consultation must be accommodated at the formative stages of a proposal before the mind of the executive has become unduly fixed;
* The invitation to consult must be communicated and thereafter there must be adequate time for the consulted to advise and adequate time for the consultant (executive) to consider the advice given by the consulted; and
* The mind of the executive must be open and receptive when consultation is sought and received. If the mind is already fixed, then consultation is not genuine.
* The chief justice and the deputy chief justice are the only judicial officers for whose appointment the representatives of the legislature are consulted outside the JSC. The president is required to consult not only with the leader of the party with the majority in parliament, but also with the leader of all parties represented in parliament. The consultation must be as inclusive as possible.

The objective is clear: the whole country, not just a section, is taken along.

In appointing the chief justice (and the deputy chief justice) and, indeed, in exercising any of the authority that is vested in him by the constitution, the president exercises not a personal power but a public and constitutional one. It is public power that he exercises on behalf of the people of SA. He acts as president only when he acts in accordance with the constitution and the law.

In consulting with him, the various opposition leaders also carry forward the wishes and aspirations of those that they represent. Consultation with leaders of political parties ensures that the legislative authority of the republic is heard on the appointment of their chief justice.

Consultation with the JSC is an important constitutional requirement which ensures that the body that advises the president on all judicial appointments is heard on this highest of all judicial appointments.

Consultation with the JSC is not consultation with its leader or some of its members, but with all of its members. The JSC is itself a constitutional body separate from its members. It acts when it is properly constituted and in accordance with its rules and procedures. When any of its members, or indeed all of them, act other than according to the rules and procedures of the JSC, then those actions may be set aside on the basis that the law was not followed.

In order to consult on a candidate, the JSC must make up its mind on the suitability of a candidate and then communicate its opinion to its consultant, the president. Unless it has made up its mind, it will not be possible for the JSC to advise.

How does the JSC make up its mind on the suitability of a candidate for a particular judicial appointment? The JSC has over the years, since its inception in 1994, developed well-established rules and procedures on how it makes up its mind on the suitability of candidates for judicial appointments.

The rules and procedures are as important as the JSC itself, for unless it follows its own rules and procedures, the JSC does not act as the JSC.

In brief, the following are the rules and procedures:

* The JSC announces the available judicial vacancy and invites the public to submit nominations;

* Then any person may nominate a candidate for judicial appointment. The empowering of any person to make a nomination ensures that every South African is given the right to participate in the process at this early stage. The people of SA are brought into the process. No one is disqualified;

* Once the candidates have been nominated, a committee of the JSC short-lists the candidates on behalf of the whole JSC. Any member of the full JSC may insist on a nominated candidate being short-listed. This is yet another rule that ensures inclusivity;

* The names of short-listed candidates are published in the Government Gazette and national newspapers. The public are invited to comment on the short-listed candidates. Again, literally any person may submit a comment to the JSC about any short-listed candidate, yet another important window for continued public participation;

* Thereafter, and after expiry of the period of public comments, the candidates are interviewed in a hearing which is open to the media and the public; and

* Only once all these steps have been traversed does the JSC deliberate and decide on the suitability of a candidate.

Each and every one of the steps is important in the process of the JSC making up its mind. The decision-making power of a juristic body is dependent on the proper procedure being followed for that purpose. This procedure allows for an open and fairly transparent process which is among the best in the world.

Public participation and transparency are evident at every level. When it comes to the appointment of the chief justice, the steps listed above for the JSC are important not only for legality, but also, more importantly, for the legitimacy of the process. The fact of the matter is that when consultation is not genuine, then it is not legal.

In the last appointment of the chief justice, the JSC did not announce the vacancy and invite nominations. Steps (a) and (b) in the JSC procedures did not take place. The public did not nominate candidates. They were not afforded an opportunity to do so. The decision-making process of the JSC was robbed of an important element of legitimacy, that is, public participation at its initial stages. Consequently, the process was, I submit, critically impoverished.

There was understandably public outrage when the process was opened by a presidential nomination. The public rightly felt excluded from participation at inception. The process was so unsatisfactory that "nomination" was confused and conflated with "appointment" not only in the public mind, but also in the vocabulary used by public representatives or spokesmen.

It so happened that the candidate appointed was a worthy and deserving candidate. It was unfortunate that failure to follow procedure created an outcry around his appointment.

South Africa must not allow the process of appointing our highest judicial officer to again be tainted by a lack of proper consultation. We cannot afford the risk of a lack of public support in this field where legitimacy and public accountability are crucial.

Source: Times Live: Phineas M Mojapelo

Tuesday, May 10, 2011

Piracy costs you money

As the shipping industry continues to count the human and material costs associated with piracy in the Gulf of Aden, an increasing number of shipowners and charters are going on the offensive and placing armed security guards on their vessels.

Shipowners and charterers navigating the Gulf of Aden have seen insurance premiums for kidnap and ransom increase tenfold as piracy escalates. According to Lloyd’ s List, Economic Cost of Maritime Piracy Report, the estimated excess cost of insurance due to Somali Piracy is between $460m and $3.2 bn per year.

War Risk cover has risen dramatically, and shipowners seeking to lower costs and protect their assets, are pushing for as much as 25% discount on war risk policies, by employing armed security guards on board their vessels. As consumers of goods imported into South Africa, we pay a portion of these added expenses in the form of increased costs for these goods. We have an interest in any steps which limit the financial impact of piracy.

While the benefits of such an approach may be self evident, the bureaucratic and administrative complications for a vessel, which calls at multiple ports in numerous different countries, and therefore enters many different legal jurisdictions whilst carrying armed personnel and ammunition, are daunting. Increasingly shipowners and charterers seek advice on the laws applicable in these many jurisdictions, since they have no wish to fall foul of any of the myriad of applicable local laws. It is axiomatic that breaches of the law have potentially dramatic consequences for the individuals involved, but these contraventions also impede the business of international commerce and shipping, introducing avoidable delays and thereby escalating costs.

The relevant provisions of South African law are to be found in the Firearms Control Act (60 of 2000) and in particular section 73, which states, “no person may carry in transit through South Africa any firearms or ammunition without an in-transit permit issued in terms of the Act.” A firearm on board a vessel which calls at a South African port is in transit, even where that weapon remains inside a secure safe on board the vessel throughout her passage through South African waters.

Ordinarily shipowners or charterers appoint independent security companies to provide the guards and their firearms, because such companies have the expertise and experience required to face the pirates in circumstance which often approximate wartime confrontations. These security companies are responsible for obtaining the necessary permits well in advance of the arrival of the weapons in South African waters.

An issue that has arisen recently, which is of great concern to shipowners and the seafarers they employ, concerns the question of whether people other than the security guards, such as the Captain of a vessel, can be held responsible where firearms are brought on board for use by the security guards, but where no permits have been issued. In a recent incident, police boarded a vessel immediately after firearms had been delivered to that vessel, in an apparent sting operation, and it was then discovered that the requisite permits had not been issued. The Master was faced with the possibility of arrest even though he was ignorant of our laws relating to permits, and was completely unaware of the fact that no permits had been obtained in advance. The Master was accused of responsibility for this contravention of the Act by virtue of his position as Captain, being the person in charge of the vessel where the firearms were found at the time. It was only due to the fact that the Master’s evidence may prove useful in future criminal proceedings against the South African company which provided the illegal weapons that the Master avoided being detained and charged under the Act.

It is clear, from this and other similar incidents, that the South African Police have focused their attention on potential violations of firearm laws on board vessels calling at our ports. In circumstances where the proper permits have not been obtained, otherwise innocent parties can be drawn into police operations, resulting in personal hardship, delays and additional costs, all of which ultimately impact on the consumer, already burdened by the costs of piracy.

ENS - Edward Nathan Sonnenbergs

Janine Lee

South Africa

Source: Lexology