Can financial disclosure regulations promote ethics in public life?

Lessons from the latest ISS research on financial disclosure at local government level was among the issues discussed at this seminar.

Date: 2014-09-30

Time: 10:00 to 13:00

Venue: 6 Spin Street , Cape Town

Despite regulations and practices that seek to make the distinction between public and private interests, corruption in South Africa has become systemic. Entry into public office is too frequently viewed as a licence to profit from the public purse. The framework to limit such behaviour seems to be largely ineffective. Evidence suggests that greater emphasis should be placed on regulating conflicts of interest at the local government level.

This seminar discussed financial disclosure regulations and ethics in the public sector. Key issues for debate were the new disclosure regulations, including the newly revised code of conduct that will soon prohibit members of Parliament from doing business with the state. The latest ISS research on the topic was presented, focusing on challenges and lessons learned about the implementation of financial disclosure for councillors at local government level.

The seminar was chaired by Judith February, senior researcher in the Governance, Crime and Justice division of the ISS. The speakers were Dr Collette Schulz Herzenberg, an independent consultant; Fazela Mohamed, registrar of members interests at the National Parliament; and Lawson Naidoo, executive secretary of the Council for the Advancement of the South African Constitution (CASAC).

The discussion highlighted that conflicts of interest pose a salient threat to effective public service delivery and the country’s development prospects. Herzenberg noted that conflicts of interest are context sensitive and that patronage is one of the main sources of the problem. She stressed that South Africa’s economic transformation policies are essential but have unintended consequences and provide a vacuum for conflicts of interest. Herzenburg cautioned that conflicts of interest should not be equated with corruption, given that the former does not constitute an action but rather a situation. The litmus test is whether officials are able to remove themselves from a situation that could result in malfeasant conduct or actions.

Mohamed provided a comprehensive overview of the new code of ethics adopted by Parliament in March 2014, and pointed out some of the most important amendments. The new code contains standards of ethics, which ensures that members act within the public interest at all times and forbids them from participating in private business activities among others. Mohammed reminded participants that the code should not be viewed as a mechanism to entrap parliamentarians, but is rather a tool to assist members to disclose their interests and help to entrench a culture of transparency and accountability in public life.

Naidoo noted that South Africa has a sound legislative framework to tackle incidents involving conflicts of interest and associated corruption, but stressed that poor enforcement of existing legislation drives perceptions of impropriety in the public sector.

There was general agreement among panellists that the slightest appearance of a conflict of interest is sufficient to test the credibility of Parliament, members and public institutions more generally. Without political will and effective enforcement of the rules, legislative mechanisms can do little to enhance ethics in public life.

Recommendations included: strengthening institutional capacity to enforce compliance, especially at the lowest level of government; standardised disclosure forms for municipalities that apply to all officials; promoting awareness on what aspects require disclosure; and promoting public access to information concerning the interests of officials. The introduction of an electronic submission system to overcome the challenges associated with handwritten disclosure forms should be considered.