Why Business Should Care About the SAPS Amendment Bill
On Monday 23 April, South Africa’s Parliament will begin the process of developing a new law that has the potential to enhance SA’s ability to counter corruption. However, the SAPS Amendment Bill falls far short of the requirements for an independent anticorruption agency
Chandré
Gould, Senior Researcher, Crime and Justice Programme, ISS Pretoria
On Monday 23 April, South Africa’s Parliament will begin the process of
developing a new law that has the potential to enhance SA’s ability to counter
corruption.
From next week, the portfolio committee on police will hear submissions
on the South African Police Service (SAPS) Amendment Bill, which was introduced
to Parliament by the minister of police earlier this year.
The bill is intended to replace the existing SAPS Amendment Act that
established the Directorate for Priority Crime Investigations, more commonly
known as the Hawks.
This followed the disbanding of the Scorpions (Directorate of Special
Operations) in October 2008 as a result of a resolution taken by the African
National Congress at its 2007 policy conference.
In a landmark ruling in March last year, the Constitutional Court found
that the Hawks were insufficiently protected from political influence or interference
to meet the requirements of SA’s constitution for an independent agency
responsible for investigating and countering corruption. The court further
ruled that the legislation that created the Hawks did not comply with SA’s
international obligations. Parliament was given 18 months to amend the a ct.
Parliament thus has until September to finalise alternative legislation.
The SAPS Amendment Bill to be scrutinised by the parliamentary committee
falls far short of the Constitutional Court’s requirement of an independent
anticorruption agency. It proposes, among other things, that the Hawks remain a
directorate of the SAPS, with the head of the unit subordinate to the national
commissioner of police. It gives the commissioner the authority to determine the
budget of the directorate. It also allows the minister of police to appoint the
head of the unit, and some discretion in the dismissal of that person. This is
insufficient to protect against the threat of political interference in a unit
expected to conduct investigations into corruption at the highest levels of the
state.
So why should this be of interest and concern to the South African
business community, or to foreign investors with current or planned economic
interests in SA?
First, anyone doing business in SA has an interest in any process that
seeks to entrench the rule of law institutionally. It is important to protect
criminal justice processes, including investigations into corruption, from
political influence. This means that if a company pays a politically connected
individual to secure a tender, to the exclusion of other legitimate bidders
that may provide the service at a better quality and more cheaply, such a
transgression can be investigated and may be prosecuted.
In the absence of an independent anticorruption agency, the losers are
not just those receiving the service but also businesses honestly seeking to
build a market share on the basis of providing a good service and a competitive
product. SA is potentially a very attractive investment destination, with large
companies from all over the world interested in bidding in a fair and
transparent way to provide the billions of rands worth of infrastructure the
government has pledged.
It would be naive to assume that all businesses have an entirely honest
approach to winning foreign tenders. But increasingly they are obliged by their
own shareholders and governments to do more than pay lip service to honest
business abroad, and must comply with stringent international and national
legislation.
These are the kinds of companies we want to attract as investors. But
unless we can guarantee the integrity and transparency of government
procurement, and a reliable system that rewards economically competitive
delivery, many of these international firms may simply not bother, or they will
regard the risk of doing business in SA as too high. This will cost SA not just
much-needed foreign investment and delivery of the best services and
infrastructure, but also skills and job creation, and its reputation.
A fair playing field creates an incentive to investment. Without it, we
are likely to attract only those organisations and individuals that are willing
to engage in corrupt dealings with corrupt officials.
In the end, not having the ability to identify and investigate
corruption in the allocation of state resources severely affects the state’s
ability to provide quality services to citizens. This in turn raises the
spectre of increased political instability, which is not good for business.
Business has already been affected by the economic and political disruptions
known as "service delivery protests", which cost the economy in lost
working days, damage to infrastructure and a decline in investor confidence.
There are no states in the world that are entirely free of corruption and very
few that score close to 10 points on the Transparency International corruption
perceptions index.
Ten points indicates the absence of perceptions of corruption, while
zero means that the country is entirely corrupt. On this scale, New Zealand
scored closest to 10 last year, with a score of 9,5, while Somalia was rated as
the most corrupt country in the world, with a score of one.
It would be idealistic and unrealistic to believe that there can be a
complete separation of political and economic power anywhere in the world.
However, we have been moving in the wrong direction.
Over the past four years, SA’s score has dropped on the Transparency
International corruption perceptions index to a post-1995 low of 4,1 points
last year, from our highest rating of 5,1 in 2007. We have dropped from 54th in
2010 to 64th on the world ranking of 182 countries this year.
Coupled with the downgrading of SA’s credit ratings over the past four
months by Standard & Poor’s, Fitch and Moody’s, this decline in the
rankings does not bode very well for investor confidence.
One of the government’s objectives is to improve investor confidence by
reducing corruption. The measurable target is to convict 100 people who
corruptly obtained assets of at least R5m by 2014.
This target is considered too ambitious by the former head of the
Special Investigating Unit, Willie Hofmeyr, who pointed out that only a handful
of such people had been convicted in the past decade.
As only 26 people have appeared in court on charges of corruption
involving more than R5m, the challenge remains to identify cases of corruption,
successfully investigate them and secure a conviction. Those who get away with
corrupt practices are likely to do it again, perhaps for higher stakes.
It is therefore incumbent on South Africans, including the business
sector, to ensure that Parliament drafts a law that not only meets the
requirements of the Constitutional Court for an independent anticorruption
agency, but goes further and provides for the best possible kind of independent
statutory body that can gain the confidence of citizens and business.
There is little time left to achieve this, with just five months to go
before the September deadline set by the Constitutional Court. It will require
strong lobbying and practical solutions to be offered to Parliament if we wish
to protect South Africans from the plundering of state resources for personal
gain; and to protect business against an increasingly unfair competitive
environment in which who you know is more important than what you can offer the
market.
This article was also published in the
Business Day of 20 April 2012
