That accounts for the parlous state of affairs in most of them

22 February 2021 – 17:16 https://spkt.io/e/1587179

The process known as state capture lasted longer than the Zuma era and is ongoing, if “covid-preneurism” is a yardstick for measuring the corruption involved. During the process as much as R1.5-trillion has been implicated, much of it in the form of loot extracted from vulnerable departments of state and state-owned enterprises (SOEs).

It was accordingly encouraging to hear during the state of the nation debate that public enterprises minister Pravin Gordhan has plans, however belated, to recover the loot. His speech in parliament can be summarised as a clear statement of intent to recover the assets misappropriated during state capture.

Gordhan said SOEs need to be restructured and reformed following the effects of state capture, that their “architecture” will be changed, efforts are being made to address Eskom’s financial and operational health, the business rescue process of SAA is due for completion, and state arms manufacturer Denel will have a new business model in the next two to three months.

However, Denel has not paid its staff since last August, so its new business model is bound to be more expensive than closing it down. The boards of most SOEs as well as senior management are littered with unsuitable cadre deployments, which accounts for the parlous state of affairs in most of them.

The change in architecture envisaged by the minister should involve demolition of many SOEs that are no longer fit for purpose, and the appointment of staff and boards on merit rather than as a product of the work of the cadre deployment committees of Luthuli House.

Despite the recent rise in ANC membership these committees have a tiny pool of cadres to draw on and deploy. There are 60-million people or more in the country and only 1.4-million ANC cadres. It is irrational to imagine that all the best talent for running SOEs is to be found only among cadres. The DA seeks to abolish cadre deployment via legislation.

The deployment of cadres rather than the use of sound human resource management practices has been found by the courts to be illegal and unconstitutional in the public administration and SOEs. It is only in political positions that a political party may use cadre deployment as the model for identifying MPs at national and provincial levels, municipal councillors and members of political executives in all sphere of government.

There is, however a less than felicitous approach apparent in the speech by the minister. He seems to think criminal proceedings are his first order of business. On the contrary, civil proceedings aimed at tracking, tracing, freezing and recovering loot are preferable to proceedings of a criminal kind against looters. The onus of proof in civil cases is easier to discharge and the recovery of the loot amounts to a more effective, efficient and economical use of state resources than a criminal trial.

The case against Jacob Zuma and Thales is an illustration of the inefficiency of the criminal justice administration. The crimes alleged in that saga occurred in a previous century. Zuma’s financial adviser, Schabir Shaik, was sentenced to 15 years in jail in 2005 for corruption, yet the trial against Zuma and Thales has yet to begin in the sense of evidence being heard.

My response to the minister’s speech (“Criminal action cannot be first option to recover stolen SOE loot”, February 18) elicited a rapid response from John Brand (” Independent specialists needed to recover SA’s stolen SOE loot”, February 18).

The points made by Brand are well taken. It is to be hoped that the minister and those in decision-making positions in the SOEs give serious consideration to creating the special purpose vehicle envisaged and to engaging the services of the best qualified legal and forensic talent available to them to do what is necessary to recover the loot of state capture via the processes of the civil law both in SA and internationally.

The fundamental problem has been that there has been a lack of political will and institutional competence to take on the looters. The solutions proposed in the two letters to the editor referred to above should be given serious consideration.

Paul Hoffman, SC
Director of Accountability Now