Zondo and the case for an independent anti-corruption agency in South Africa

There is a live discussion in South Africa over the role for any new agency after widespread and well-publicised corruption challenges in the country brought into question whether current law enforcement agencies are able to effectively tackle the problem.

The issue was recognised by the Zondo Commission in its inquiry into alleged ‘state capture’, but its extensive recommendations concerning the establishment of an independent anti-corruption agency merit some further thought.

What has Zondo recommended?

In his report, Justice Raymond Zondo highlighted that for many years there has been an almost complete absence of corruption prosecutions by the National Prosecuting Authority (NPA). He specifically pointed out that under the Prevention and Combating of Corrupt Activities Act, the South African law reports show only one case having been brought under the Act since 2004. He made similar observations in respect of civil recovery of funds that have been misappropriated due to corruption, though some recent cases have been initiated by the Special Investigating Unit (SIU).

In diagnosing the potential contributing factors, Zondo identified certain systemic issues, particularly in relation to the public sector. The issues identified include:

• Fragmented oversight responsibilities, particularly in respect of public procurement;
• The poor track record of current oversight bodies – Zondo has asked “how” and “why” all of the oversight bodies have failed;
• The constraints on the powers of certain oversight bodies such as National Treasury and the auditor general – both of whom consistently flagged issues with little to not action being taken by other oversight bodies empowered to act;
• An apparent absence of constructive engagement by government with the private sector to benefit from the skills available in the private sector;
• Insufficient transparency, particularly in respect of public sector procurement.

Zondo has described 20 years of frustration and concluded with the following powerful statement: “Corruption has strengthened its hold and extended its hold on public procurement over a very long period of time. Clearly, a new approach is required; it cannot be the same mixture as before.”

Whilst Zondo has included a “mixture” of recommended reforms, he has concluded that the “starting point” of meaningful reform is the establishment of “… a single, multi-functional properly resourced and independent anti-corruption authority with a mandate to confront the abuses inherent in the present system”. In simple terms, Zondo has recommended that the government of South Africa establish an new independent anti-corruption agency called the Anti-Corruption Authority or Agency of South Africa (ACASA).

Zondo has not simply recommended the establishment of the ACASA, he has also given detailed guidance on how it should be established, structured and funded, as well as what the mandate of the ACASA should be. Core features of Zondo’s recommendations include:

• The ACASA should be established through the introduction of new legislation;
• To ensure the ACASA is properly funded, it should have funds allocated by parliament and receive fees payable by all tenders who seek to tender for public sector contracts. Other funding options should be considered too;
• The ACASA should comprise of a Council, Inspectorate, Litigation Unit, Tribunal and Court;
• To ensure independence, the Council should be chaired by a senior legal practitioner, include four members who possess skills in accounting, finance, economics and public procurement, and be selected by a panel comprising of the chief hustice – currently Zondo himself, the auditor-general and the minister of finance following a public process;
• The Inspectorate should have both a proactive and reactive role – whilst Zondo has provided extensive details of the function of the Inspectorate, the most notable functions are to monitor public procurement activity, receive whistleblowing reports and investigate fraud and corruption – specifically in relation to tenders and contracts;
• It is apparent that the contemplated role of the Litigation Unit is to act as the legal arm of the ACASA – most notably, it would be responsible for applying for subpoenas to facilitate investigations by the Inspectorate, negotiating Deferred Prosecution Agreements (DPA) and instituting civil recovery proceedings before the Court.
• The actual decision-making roles of the ACASA would be split between the Tribunal and the Court – for example, Zondo has recommended that the Tribunal should be responsible for granting or refusing applications for subpoenas, approving or rejecting DPAs and deciding whether to debar an entity or individual from public procure, and he has recommended that the Court should be responsible for deciding civil cases initiated by the Litigation Unit and determine appeals against decisions of the Tribunal.

What is the history of enforcement agencies in South Africa?

The idea of a single dedicated agency that comprises of multi-skilled resources dedicated to the investigation and enforcement against serious crimes is not new to South Africa.

Between 2001 and 2009, the NPA had a specialised unit called the Directorate of Special Operations, commonly known as the Scorpions. It was tasked with investigating and prosecuting priority crimes including organised crime and corruption. The Scorpions were an extremely effective enforcement agency and were at the centre of almost every high-profile fraud and corruption case in South Africa in the 2000s. By February 2004, the Scorpions were reported to have completed 380 prosecutions with 93.1% of these resulting in convictions. Between 2005 and 2007, the Scorpions were reported to have completed 264 prosecutions with 85% of these resulting in convictions.

The success of the Scorpions brought with it significant political opposition, especially given the frequency of investigations that targeted high-profile politicians and political parties, including the African National Conference (ANC).

To address complaints made against the Scorpions, former president Thabo Mbeki initiated the Khampepe Commission led by judge Sisi Khampepe. Whilst the report of that Commission was not initially released, the South African cabinet released a statement in June 2006 confirming that it accepted and endorsed the recommendations of the Khampepe Commission. Whilst the Khampepe Commission recommended certain changes to the governance of the Scorpions to address concerns raised, it notably recommended that the Scorpions should retain its fundamental position as an independent unit within the NPA.

However, the position changed at the end of 2007. The 52^nd National Conference of the ANC, under the leadership of former president Jacob Zuma resolved to “dissolve” the Scorpions. This decision was implemented through legislative amendments drafted and passed in 2008, which were signed into law early in 2009.

As a result of the amendments, prosecutors from the Scorpions were absorbed into other parts of the NPA whilst the investigators were moved into the newly established Directorate for Priority Crime Investigation, also known as the Hawks, which falls under the South African Police Service (SAPS). This meant South Africa was left without a single dedicated agency and there has been an almost complete absence of corruption prosecutions, as observed by Zondo, since.

An enforcement agency that has displayed some degree of success during this period is the SIU. Features of the nature and function of the SIU worth noting include:

• The SIU does not have an open-ended mandate to investigate corruption or any other issues – the SIU is only empowered to conduct investigations into specific issues when it is mandated to do so by the president of South Africa;
• In light of the above, the effectiveness of the SIU in deterring corruption is entirely dependent on what it is mandated to investigate by the president, which is of course subject to a systemic weakness if the president does not want to mandate the SIU to investigate corruption that he or she may be part of;
• The role of the SIU is limited to investigating matters within the framework of presidential proclamations and pursuing civil recoveries – the SIU is not legally empowered to prosecute crimes;
• Further, the SIU’s role is limited to referring evidence of a crime to the NPA, which retains the full mandate and authority in respect of deciding whether to initiate any prosecutions.

Should the South African government create the ACASA?

Zondo has put his finger on the crux of the current problem in South Africa, which is the lack of criminal or civil action against the perpetrators of corruption for more than a decade. Whilst Zondo does not draw the comparison in his report, the track-record of the Scorpions pre-2009 can be compared with the track‑record of the NPA and Hawks since then. We agree with Zondo’s conclusion that something has to change and that a new approach is necessary.

South Africa’s current enforcement structures have proven to be ineffectual in combating corruption. Whilst the reasons for this could be debated at length, there is obvious merit in creating a single independent well-resourced agency that is focussed on investigating and dealing with corruption.

The history of the Scorpions highlights the need for a truly independent anti-corruption agency. Without proper resourcing it would be impossible for such an agency to be effective. An effective agency needs to be well-funded and put in position where it can employ highly-skilled and competent persons who are able to effectively investigate corruption. Corruption matters are inherently complex and quite different from the types of crime that the members of the SAPS typically deal with. For this reason, specialised skills and infrastructure are needed to deal with corruption effectively.

There can be no doubt that the ACASA should be created and that this would represent a critical step in turning the tide against corruption. Whether or not Zondo’s recommendations on the structure, funding and mandate of the ACASA are the most optimal positions is, however, open to debate. There are many important questions that should be considered. These include:

• Will the selection of the Council by the chief justice, auditor-general and minister of finance, all of whom are appointed by the president, ensure that the ACASA is truly independent?
• Should the ACASA be focussed on the public sector only or have the authority to investigate private sector corruption?
• Should the Tribunal and Court be limited to instituting and determining civil issues or should these bodies be empowered to deal with criminal prosecutions?
• In addition to corruption, should the ACASA also be empowered to deal with other related white-collar crimes such as fraud and money-laundering?

If the South African government follows the recommendation to create the ACASA the anti-corruption landscape will fundamentally change for the better. We do, however, hope that the opportunity is not lost to create an effective and enduring force against corruption, and that core issues, including those we have identified above. are carefully considered by government in the process.