The famous words of Lord Denning: "fraud unravels everything" may be applicable to the situation which has arisen as a consequence of the investigation of the South African Police Services (SAPS) headquarters leases in Pretoria and Durban by the Office of the Public Protector.
According to press reports, the Minister of Public Works has received a letter of demand from the putative landlord, Roux Shabangu, who in turn is facing demands from Nedbank, the financier of the two invalid and unlawful deals in terms of which the SAPS headquarters were to be moved to buildings acquired by Shabangu's company Roux Property Fund (RPF).
As both deals were for procurement on behalf of the state, it was incumbent upon the parties involved to ensure that the procurement was effected in accordance with a system that is fair, equitable, transparent, competitive and cost effective. This is a constitutional requirement that is reinforced by the provisions of the Public Finance Management Act.
Nedbank and Shabangu should be aware of the legal and constitutional environment in which they do business. The consequence of conduct inconsistent with the Constitution is that such conduct (the conclusion of the two leases in this case) is invalid. The invalidity of the leases leaves both Shabangu and Nedbank without any legal recourse against the Minister or any other organ of state.
This is as it should be: the flouting of the requirements for proper tendering can not be rewarded with claims for damages, irrespective of the greed for profit of those involved. It is impossible to found a good cause of action in a moral swamp, or as AP Herbert put it: "a dirty dog gets no dinner from the courts". The mere invalidity of the leases, as determined by the OPP, excuses the taxpayer from having to compensate either the bank or the property developer involved in the negotiations outside the framework of the law and the criteria of the Constitution.
The "elephant in the room" in the SAPS HQ case is the astronomical rentals agreed in the putative leases. The willingness of the state to pay more than three times the going rate in rental for the two buildings in question has not been explained by any of the parties involved. The Public Protector herself, rather charitably, speculates that this could be due to incompetence, negligence, or even recklessness. It could also be due to fraud and corruption. No one knows because, in an ongoing display of lack of accountability, none of the players involved in the deals has explained their conduct or justified the decision to pay rental out of all proportion to the market value of the premises chosen. In the case of the Durban lease there is also the question of the dilapidated state of the building in question, and the obligation of the state to pay for its renovation to render it fit for habitation by SAPS personnel deployed at head office level.
It is reported that Nedbank is demanding to be repaid its loans to RPF. Shabangu's response has been to start legal proceedings to recoup R 1 billion from the Minister. She is blamed for reinstating the leases upon taking office, despite two opinions from senior counsel to the effect that they were unlawfully concluded. This purported act of reinstatement is legally ineffective. If the leases could not pass constitutional muster because they were not fair, equitable, transparently negotiated, competitively priced and cost effectively concluded; their alleged reinstatement can not magically render them valid. They are and remain invalid for want of compliance with the requirements of section 217 of the Constitution, as the OPP has found, thereby confirming the opinions of the two senior counsel whose advice was sought.
The officials in Nedbank who agreed to lend the necessary finance to Shabangu owe their management, and Nedbank's shareholders, an explanation for getting involved in the deal. It is the equivalent of paying R1250 for a tank of petrol at a particular pump when all other pumps are supplying petrol at R400 per tank. It reeks of impropriety.
Taxpayers can feel lucky that Shabangu rejected a settlement offer of R50 million which he says was made last year by the Department of Public Works. That offer was worth R50 million more than he is entitled to, and should not be repeated.
The Minister may have many problems around the conclusion of the leases and her own role in purporting to re-instate them, but a successful claim for damages is not one of them.
Paul Hoffman SC
27th July, 2011
Showing posts with label Institute for Accountability in Southern Africa. Show all posts
Showing posts with label Institute for Accountability in Southern Africa. Show all posts
Monday, February 27, 2012
Wednesday, February 22, 2012
Access to Information unpacked
Foundational to the new democratic order in South Africa are the values of accountability, responsiveness and openness as enshrined in the first section of the founding provisions of our state of the art Constitution, according to which we now all aspire to live.
Accountability means that those in positions of power or authority must be able to justify the decisions they take and explain their actions reasonably. To do so properly and to the satisfaction of the persons seeking accountability, it is often necessary to afford access to materials and information in them that back up the justifications and explanations that officialdom furnishes.
Responsiveness has been widely interpreted to mean acting in a way that is conducive to the promotion of fulfilling the needs of ordinary people. The state is obliged to respect, protect, promote and fulfil the rights guaranteed to all in the Bill of Rights which is Chapter Two of the Constitution. These rights to dignity, the achievement of equality and the enjoyment of the various freedoms set out reflect the aspiration of the new order to transcend the injustices of the past and to transform our society into one in which healing occurs and the divisions of the past are replaced by unity in diversity with peace, progress and prosperity.
Openness can be equated with transparency. This requires that the affairs of state should not generally be opaquely conducted behind closed doors and out of the public gaze. Government is exhorted to show what it is doing and tell the public why policy choices are made in any particular way. This is participatory democracy, limitable only in reasonable and justifiable ways.
Among the rights guaranteed to all are the rights to access to information and freedom of expression. These are inter-related.
In the 21st century there are oceans of data available containing seas of information that, when properly analysed provide waves of knowledge of the issues of the day. From the knowledge gleaned from the information available pearls of wisdom can be found to exercise rights responsibly, make choices wisely and exercise opportunities advantageously; all in ways that respect the humane and compassionate ethos of the new order.
To facilitate the implementing of the values highlighted and the exercise of the rights to freedom of expression and access to information, the Promotion of Access to Information Act has been passed, so that those who are stingy or shy with the information in their possession can be compelled to share it with interested parties for the greater good of the nation. Using this Act is a great accountability tool available to all for the cost of a letter.
Paul Hoffman SC
22 February, 2012.
Accountability means that those in positions of power or authority must be able to justify the decisions they take and explain their actions reasonably. To do so properly and to the satisfaction of the persons seeking accountability, it is often necessary to afford access to materials and information in them that back up the justifications and explanations that officialdom furnishes.
Responsiveness has been widely interpreted to mean acting in a way that is conducive to the promotion of fulfilling the needs of ordinary people. The state is obliged to respect, protect, promote and fulfil the rights guaranteed to all in the Bill of Rights which is Chapter Two of the Constitution. These rights to dignity, the achievement of equality and the enjoyment of the various freedoms set out reflect the aspiration of the new order to transcend the injustices of the past and to transform our society into one in which healing occurs and the divisions of the past are replaced by unity in diversity with peace, progress and prosperity.
Openness can be equated with transparency. This requires that the affairs of state should not generally be opaquely conducted behind closed doors and out of the public gaze. Government is exhorted to show what it is doing and tell the public why policy choices are made in any particular way. This is participatory democracy, limitable only in reasonable and justifiable ways.
Among the rights guaranteed to all are the rights to access to information and freedom of expression. These are inter-related.
In the 21st century there are oceans of data available containing seas of information that, when properly analysed provide waves of knowledge of the issues of the day. From the knowledge gleaned from the information available pearls of wisdom can be found to exercise rights responsibly, make choices wisely and exercise opportunities advantageously; all in ways that respect the humane and compassionate ethos of the new order.
To facilitate the implementing of the values highlighted and the exercise of the rights to freedom of expression and access to information, the Promotion of Access to Information Act has been passed, so that those who are stingy or shy with the information in their possession can be compelled to share it with interested parties for the greater good of the nation. Using this Act is a great accountability tool available to all for the cost of a letter.
Paul Hoffman SC
22 February, 2012.
Wednesday, July 28, 2010
Has Enver Daniels met Jeff Radebe lately?
Paul Hoffman from the Institute for Accountability wonders whether government talks to government when it sets about messing with the free flow of information. It is hard to believe that the Minister of Justice, Jeff Radebe, and the Chief State Law Advisor, Enver Daniels, are part of the same administration working together toward the realization of the founding values of the country.
Ensuring “accountability, openness and responsiveness”, as section 1(d) of the Constitution puts it, is at the core of their mission.
The Minister, addressing the SANEF meeting last weekend, put it well when he said: “As government we will not treat you the same way as the apartheid regime treated Nat Nakasa?we will not enact laws detrimental to your cause, including the current legislation being debated?I will ensure that any law that comes into being must be in conformity with our Constitution.” Quite so.
Now contrast the contribution by Daniels this week to the debate on the contentious Protection of Information Bill in which he, unusually so, personally participated. He dismissed critics of the bill as “emotional and hysterical” before delivering himself of this gem: “While they [the critics] raise valid points, we don’t agree with them.” He disagrees with “valid points” at his peril if, as seems likely, the disputed provisions of the bill are held up for constitutional scrutiny in Court.
Among the valid points raised are those complaining that the bill does nothing to ensure that which the state is bound to ensure, namely, compliance with the principles of accountability, openness and responsiveness. Widely framed definitions, especially that of “the national interest” (which can cover a multitude of sins and has no place in the bill), and the discretion given to officials to be judges in their own classificatory cause ought to be giving cause for pause, not an unseemly rush to finalize the bill by September, meanwhile rubbishing carefully considered submissions made to parliament by highly qualified and very learned critics.
In an open democracy protection of information can not be allowed to trump access to information, the latter being guaranteed to all in the Bill of Rights. Reasonable and justifiable limitations on access to state information in the interests of national security and in accordance with the constitutional governing principles set out in section 198 ought to be kept to a minimum in the quest for transparency.
Daniels ought to know that the entire public administration is constitutionally enjoined to foster transparency by “providing the public with timely, accessible and accurate information” [section 195]. He is hardly encouraging the public to participate in policy making (another principle governing him) by attacking the critics of the bill rather than dealing properly with the “valid points” he concedes they make. He does his high office and the Minister a disservice by playing the man instead of the ball/bill.
Paul Hoffman SC
Director, Institute for Accountability in Southern Africa
Ensuring “accountability, openness and responsiveness”, as section 1(d) of the Constitution puts it, is at the core of their mission.
The Minister, addressing the SANEF meeting last weekend, put it well when he said: “As government we will not treat you the same way as the apartheid regime treated Nat Nakasa?we will not enact laws detrimental to your cause, including the current legislation being debated?I will ensure that any law that comes into being must be in conformity with our Constitution.” Quite so.
Now contrast the contribution by Daniels this week to the debate on the contentious Protection of Information Bill in which he, unusually so, personally participated. He dismissed critics of the bill as “emotional and hysterical” before delivering himself of this gem: “While they [the critics] raise valid points, we don’t agree with them.” He disagrees with “valid points” at his peril if, as seems likely, the disputed provisions of the bill are held up for constitutional scrutiny in Court.
Among the valid points raised are those complaining that the bill does nothing to ensure that which the state is bound to ensure, namely, compliance with the principles of accountability, openness and responsiveness. Widely framed definitions, especially that of “the national interest” (which can cover a multitude of sins and has no place in the bill), and the discretion given to officials to be judges in their own classificatory cause ought to be giving cause for pause, not an unseemly rush to finalize the bill by September, meanwhile rubbishing carefully considered submissions made to parliament by highly qualified and very learned critics.
In an open democracy protection of information can not be allowed to trump access to information, the latter being guaranteed to all in the Bill of Rights. Reasonable and justifiable limitations on access to state information in the interests of national security and in accordance with the constitutional governing principles set out in section 198 ought to be kept to a minimum in the quest for transparency.
Daniels ought to know that the entire public administration is constitutionally enjoined to foster transparency by “providing the public with timely, accessible and accurate information” [section 195]. He is hardly encouraging the public to participate in policy making (another principle governing him) by attacking the critics of the bill rather than dealing properly with the “valid points” he concedes they make. He does his high office and the Minister a disservice by playing the man instead of the ball/bill.
Paul Hoffman SC
Director, Institute for Accountability in Southern Africa
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