10. FINDINGS OF THE PUBLIC PROTECTOR I make the following findings: 10.1. Was there any legal authority for the installation and implementation of security measures and the construction of buildings and other items at the President’s private residence and was such authority violated or exceeded? 10.1.1. The authority for implementing security measures at the private residence of the President is primarily conferred by the Cabinet Policy of 2003. In view of the Declaration of the residence as a National Key Point during the implementation of the security measures, the National Key Points Act, constitutes part of the legal framework conferring authority to upgrade security at a private residence. However, the implementation of the security measures failed to comply with the parameters set out in the laws in question for the proper exercise of such authority. 10.1.2. The key violation in this regard is the failure to follow the processes outlined in the Cabinet Policy and the deviation from the 16 security measures that were recommended in the Second Security Evaluation by SAPS. This constitutes improper conduct and maladministration. 10.1.3. With the National Key Points Act having been inexplicably dragged in halfway through the implementation of the Nkandla Project, its provisions had to be complied with. This did not happen. Neither was there compliance with the contents of the declaration of the Nkandla Residence as a National Key Point, as signed by the Minister of Police on 08 April 2010. 10.1.4. In relation to installations at the request of the Surgeon General on behalf of the DOD and SAMHS, there appears to be no instrument specifically authorizing the construction of brick and mortar installations at or for a private household. The installations were justified on generic military doctrines aimed at installations built in pursuit of public services and the general power given to the SAMHS to provide health services to the President Deputy President, Minister and Deputy Minister of Defence and, at the request of the Minister of International relations, foreign dignitaries. 10.2. Was the conduct of relevant authorities in respect of the procurement of goods services relating to the Nkandla Project improper and in violation of relevant prescripts? 10.2.1. The organs of state involved in the Nkandla Project failed dismally to follow Supply Chain Management prescripts, such as section 217 of the Constitution, PFMA, Treasury Regulations the DPW Supply Chain Management policy, key omissions including: the absence of demand management; improper delegations; failure to procure services and goods costing above R500 000 through a competitive tender process; failure to conduct due diligence leading to the engagement of service providers such as the Principal Agent without the necessary qualifications or capacity for security measures; failure to ensure security clearance for service providers, and allowing “scope creep” leading to exponential scope and cost escalations. 10.2.2. In addition, the DPW failed to comply with the provisions of GIAMA, which specifically require a proper asset management plan in respect of the immovable assets of the state. 10.2.3. The conduct of all organs of state involved in managing the Nkandla Project, particularly officials from the DPW, who unduly failed to comply with Supply Chain Management prescripts was unlawful and constitutes improper conduct and maladministration. The DOD and SAPS officials failed to comply with Treasury Regulation 16A.3.2 imposing the responsibility for demand management on client departments, which include ensuring cost effective measures and budgeting, appropriately for such. 10.3. Did the measures taken by the DPW at the President’s private residence, go beyond what was required for his security? 10.3.1. A number of the measures, including buildings and other items constructed and installed by the DPW at the President’s private residence went beyond what was reasonably required for his security. Some of these measures can be legitimately classified as unlawful and the acts involved constitute improper conduct and maladministration. 10.3.2. Measures that should never have been implemented as they are neither provided for in the regulatory instruments, particularly the Cabinet Policy of 2003, the Minimum Physical Security Standards and the SAPS Security Evaluation Reports, nor reasonable, as the most cost effective to meet incidental security needs, include the construction inside the President’s residence of Visitors’ Centre, an expensive cattle kraal with a culvert and chicken run, a swimming pool, an amphitheatre, marquee area, some of the extensive paving and the relocation of neighbours who used to form part of the original homestead, at an enormous cost to the state. The relocation was unlawful as it did not comply with section 237 of the Constitution. The implementation of these installations involved unlawful action and constitutes improper conduct and maladministration. 10.3.3. Measures that are not expressly provided for, but could have been discretionally implemented in a manner that benefits the broader community, include helipads and a private clinic, whose role could have been fulfilled by a mobile clinic and/or beefed up capacity at the local medical facilities. The measures also include the construction, within the state occupied land, of permanent, expensive but one roomed SAPS staff quarters, which could have been located at a centralized police station. The failure to explore more economic and community inclusive options to accommodate the discretional security related needs, constitutes improper conduct and maladministration. 10.4. Was the expenditure incurred by the state in this regard excessive or amount to opulence at a grand scale, as alleged? 10.4.1. The expenditure incurred by the state in respect of the measures taken, including buildings and other items constructed or installed by the DPW at the request of the SAPS and DOD, many of which went beyond what was reasonably required for the President’s security, was unconscionable, excessive, and caused a misappropriation of public funds. The failure to spend state funds prudently is a contravention of section 195 (1)(b) of the Constitution and section of the Public Finance Management Act. The acts and omissions involved are, accordingly, unlawful and constitute improper conduct and maladministration. 10.4.2. The first Complainant’s allegation that the expenditure constitutes opulence at a grand scale is substantiated. The acts and omissions that allowed the excessive expenditure due to non-security items and failure to arrest the wild cost escalation, especially after the story broke in the media in December 2009, constitute improper conduct and maladministration. 10.5. Did the President’s family and/or relatives improperly benefit from installations implemented by the state at his private residence? 10.5.1. The allegation that President Zuma’s brother improperly benefitted from the measures implemented is not substantiated. I could find no evidence supporting the allegations that the President’s brothers benefitted from the procurement of electrical items for the implementation of the Nkandla Project. 10.5.2. The allegation that the excessive expenditure added substantial value to the President’s private property at the expense of the state is substantiated. The excessive and improper manner in which the Nkandla Project was implemented resulted in substantial value being unduly added to the President’s private property. The acts and omissions that allowed this to happen constitute unlawful and conduct improper conduct and maladministration. 10.5.3. The original allegation that President Zuma’s immediate family members also improperly benefitted from the measures implemented is substantiated. President Zuma improperly benefited from the measures implemented in the name of security which include non-security comforts such as the Visitors’ Centre, such as the swimming pool, amphitheatre, cattle kraal with culvert and chicken run. The private medical clinic at the family’s doorstep will also benefit the family forever. The acts and omissions that allowed this to happen constitute unlawful and improper conduct and maladministration. 10.5.4. I do not find the relocation of the tuck shop as a benefit as the business was moved at the instance of the state to a building that might even be inconvenient to the owner. 10.5.5. The conduct of the DPW leading to the failure to resolve the issue of items earmarked for the owner’s cost transparently, including the failure to report back on the swimming pool question after the 11 May 2011 meeting and the disappearance of the letter proposing an apportionment of costs, constitutes improper conduct and maladministration 10.6. Was there any maladministration by public office bearers, officials and other actors involved in the project? 10.6.1. Public Office Bearers: 10.6.1.1 All the Ministers of Public Works provided incorrect information on the legal authority for and the extent of the works at the President’s private residence. 10.6.1.2 The Minister of Police failed to properly apply his mind when signing the Declaration of President Zuma’s private residence as a National Key Point directing the President to implement security measures at own cost or to properly modify the Declaration. This failure constitutes improper conduct and maladministration. 10.6.1.3 The former Minister of Public Works, Mr G Doidge and the Minister of Police could have provided better executive leadership, especially with regard to speedily accessing the extent and cost of the Nkandla Project, particularly when the media broke the story in 2009 and taking decisive measures to curb excessive expenditure. Their failure in this regard constitutes improper conduct and maladministration 10.6.2. Officials of the DPW: 10.6.2.1 The DPW officials failed to acquaint themselves with the authorizing instruments relating to the implementation of the Nkandla Project. They failed to apply their minds and adhere to the supply chain management policy framework in respect of the procurement of goods and services for the Nkandla Project. These failures constitute improper conduct and maladministration. 10.6.2.2 Messrs Malebye and Vukela, the Acting Directors-General of the DPW failed as the accounting officers of the Department at the material times to comply with and/or ensure compliance with the provisions of sections 195(1)(b) and 217 of the Constitution, the PFMA, Treasury Regulations and prescripts and the DPW Supply Chain Management Policy in respect of the Nkandla Project was improper and constitutes maladministration. 10.6.2.3 Ms G Pasely, the Chief Quantity Surveyor showed exemplary conduct by raising her concerns about the excessive escalation in the cost of the Project. It is unfortunate that her concerns in this regard were not taken seriously. 10.6.3. Officials of the SAPS: 10.6.3.1 The SAPS officials failed to acquaint themselves with the authorizing instruments relating to the implementation of the Nkandla Project. They failed to apply their minds and adhere to the supply chain management policy framework in respect of the procurement of goods and services for the Nkandla Project. These failures constitute improper conduct and maladministration. 10.6.3.2 Brigadier Adendorff, the Head of Security Advisory Service failed to comply with and or ensure compliance with the provisions of sections 195(1)(b) and 217 of the Constitution, the PFMA, Treasury Regulations and prescripts in respect of the area of her responsibility relating to the Nkandla Project was improper and constitutes maladministration 10.6.4. Officials of the DOD 10.6.4.1 The DOD officials failed to acquaint themselves with the authorizing instruments relating to the implementation of the Nkandla Project. They failed to apply their minds and adhere to the supply chain management policy framework in respect of the procurement of goods and services for the Nkandla Project. These failures constitute improper conduct and maladministration. 10.6.4.2 Lt Gen Ramlakan, the former Surgeon-General, failed to comply with and or ensure compliance with the provisions of sections 195(1)(b) and 217 of the Constitution, the PFMA, Treasury Regulations and prescripts in respect of his area of responsibility relating to the Nkandla Project was improper and constitutes maladministration. 10.6.5. The Contractors 10.6.5.1 Mr Makhanya’s assumption of multiple and conflicting roles as Principal Agent, the President’s architect and procurer of some of the subcontractors which placed him in a position where the advice he gave was tainted by conflict of interest and not in the public interest, which led to uncontrolled scope creep, cost escalation and poor performance by some of the contractors. 10.7. Was there any political interference in the implementation of this project? 10.7.1.1 The former Minister of Public Works, Mr G Doidge, and Deputy Minister Bogopane-Zulu were at some stage involved in the implementation of the Nkandla Project. Their involvement, albeit for a short period of time, appears to have created an atmosphere that was perceived as political interference or pressure, although the evidence does not show any such intent on their part. 10.7.1.2 The Task Team Report also indicated that officials were uneasy with the operational involvement of politicians in the Nkandla Project. 10.7.1.3 Their involvement at trench level, including the Deputy Minister making suggestions on how to meet perceived security need, was ill advised although well intended in the light of failures in meeting the project timelines. While I would discourage such acts in similar future circumstances, I am unable to find their attempts at problem solving as constituting improper conduct or maladministration. 10.8. Were funds transferred from other much needed DPW projects to fund this project? 10.8.1.1 Funds were reallocated from the Inner City Regeneration and the Dolomite Risk Management Programmes of the DPW. Due to a lack of proper demand management and planning service delivery programmes of the DPW were negatively affected. This was in violation of section 237 of the Constitution and the Batho Pele White Paper and accordingly constitutes improper conduct and maladministration. 10.9. Is the President liable for some of the cost incurred? 10.9.1.1 If a strict legal approach were to be adopted and the National Key Points Act was complied with, President Zuma would be held to the provisions of the Declaration of the Minister of Police issued on 08 April 2010, which informs him of the decision to declare his private Nkandla residence a National Key Points and directs him to secure the National Key Point at his own cost. 10.9.1.2 However, that approach would not meet the dictates of fairness as the Presidents, Deputy Presidents, former Presidents and former Deputy Presidents are entitled, under the Cabinet Policy of 2003, to reasonable security upgrades, at their request or that of their office at state expense under the. Even on the understanding that some of the measures were unauthorized and transcended security measures as envisaged in the regulatory instruments and security evaluation findings, the questionable measures implemented exceed the financial means of an ordinary person. It is further clear from all communication by President Zuma that he was never familiarized with the provisions of the National Key Points Act and, specifically, the import of the declaration. The declaration itself was apparently delivered to his office in April 2011, a year after it was made and more than two years after the security installations had commenced. 10.9.1.3 The DPW mismanaged the process initiated with a view to determining the cost to be paid by President Zuma in respect of security measures installed at and in support of his private residence at Nkandla and which was initially estimated at more than R10 million, leading to a situation where to date, there is no clarity on that matter. This constitutes improper conduct and maladministration. 10.9.1.4 It is my considered view that as the President tacitly accepted the implementation of all measures at his residence and has unduly benefited from the enormous capital investment from the non-security installations at his private residence, a reasonable part of the expenditure towards the installations that were not identified as security measures in the list compiled by security experts in pursuit of the security evaluation, should be borne by him and his family. 10.9.1.5 It is also my considered view that the amount in question should be based on the cost of the installation of some or all the items that can’t be conscionably accepted as security measures. These include the Visitors’ Centre, cattle kraal and chicken run, swimming pool and amphitheatre. The President and his legal advisers, did not dispute this in their response to the Provisional Report. The President did not dispute during the investigation that he told me on 11 August 2013 that he requested the building of a larger kraal, and that he was willing to reimburse the state for the cost thereof. 10.10. Were there ethical violations on the part of the President in respect of the project? 10.10.1.1 President Zuma told Parliament that his family had built its own houses and the state had not built any for it or benefited them. This was not true. It is common cause that in the name of security, government built for the President and his family at his private residence a Visitors’ Centre, cattle kraal and chicken run, swimming pool and amphitheatre among others. The President and his family clearly benefitted from this. 10.10.1.2 I have accepted the evidence that he addressed Parliament in good faith and was not thinking about the Visitors’ Centre, but his family dwellings when he made the statement. While his conduct could accordingly be legitimately construed as misleading Parliament, it appears to have been a bona fide mistake and I am accordingly unable to find that his conduct was in violation of paragraph 2 of the Executive Ethics Code. His statement is also consistent with those made by the Ministers of Public Works throughout the public outcry over the Nkandla expenditure. I am accordingly unable to find that his conduct was in violation of paragraph 2 of the Executive Ethics Code. 10.10.1.3 Regarding President Zuma’s conduct in respect of the use of state funds in the Nkandla Project, on the only evidence currently available, the President failed to apply his mind to the contents of the Declaration of his private residence as a National Key Points and specifically failed to implement security measures at own cost as directed by it or to approach the Minister of Police for a variation of the Declaration. 10.10.1.4 It is my considered view that the President, as the head of South Africa Incorporated, was wearing two hats, that of the ultimate guardian of the resources of the people of South Africa and that of being a beneficiary of public privileges of some of the guardians of public power and state resources, but failed to discharge his responsibilities in terms of the latter. I believe the President should have ideally asked questions regarding the scale, cost and affordability of the Nkandla Project. He may have also benchmarked with some of his colleagues. He also may have asked whose idea were some of these measures and viewed them with circumspection, given Mr Makhanya’s non-security background and the potential of misguided belief that his main role was to please the President as his client and benefactor. 10.10.1.5 It is also not unreasonable to expect that when news broke in December 2009 of alleged exorbitant amounts, at the time R65 million on questioned security installations at his private residence, the dictates of sections 96 and 237 of the Constitution and the Executive Ethics Code required of President Zuma to take reasonable steps to order an immediate inquiry into the situation and immediate correction of any irregularities and excesses. 10.10.1.6 His failure to act in protection of state resources constitutes a violation of paragraph 2 of the Executive Ethics Code and accordingly, amounts to conduct that is inconsistent with his office as a member of Cabinet, as contemplated by section 96 of the Constitution. 10.10.1.7 Regarding the allegation that the President may have misled Parliament and accordingly violated the Executive Ethics Code when he announced that the renovations at his private residence were financed through a bank mortgage bond, I am unable to make a finding. Although having established through the Register of Financial Interests that the President has declared a mortgage bond in respect of his private residence at Nkandla since 2009, I am not able to establish if costs relating to his private renovations were separated from those of the state in the light of using the same contractors around the same time and the evidence of one invoice that had conflated the costs although with no proof of payment. 10.11. Other Findings of Maladministration 10.11.1.1 The occupation by the state of the land adjacent to that occupied by the President, and where security and other measures were constructed and installed by the DPW is unlawful and improper as it violates the provisions and requirements of the KwaZulu-Natal Ingonyama Trust Act, 1994 that requires a proper lease agreement. It also constitutes maladministration. 10.11.1.2 The conduct of some of the role players unduly delayed the investigation. 10.12. Systemic Deficiencies Observed During the Investigation 10.12.1.1 The anomalies in the Nkandla Project point to the existence of systemic policy gaps and administrative deficiencies in the regulatory framework used as authority for implementing security measures at the private residences of ones of Presidents, Deputy Presidents, former Presidents and former Deputy Presidents, key among these being the absence of a cap and an integrated instrument such as the Ministerial Handbook, where all permissible measures can be found. 10.12.1.2 In view of the fact that the Cabinet Policy of 2003 applies equally to all Presidents, Deputy Presidents, former Presidents and former Deputy Presidents, there is real risk of a repeat of the Nkandla excesses in respect of any of the four covered categories of public office bearers in the future. As the policy applies to all residences of incumbents in any of the four categories, the risk of unbridled expenditure in the future is very real and needs immediate curbing. 10.12.1.3 DOD deficiencies, including no instruments for according and regulating the exercise of discretion and concentration of power on a single individual with no accountability arrangements, emphasized the need for a proper policy regime regulating security measures at the private residences of the President, Deputy President, Minister and Deputy Minister of Defence. 10.12.1.4 Need for a clear demarcation of the roles of the SAPS, DPW and DOD in respect of such projects. 10.13. The Impact of the Nkandla Project 10.13.1.1 A number of the items installed by the DPW, such as the safe haven, swimming pool, paved roads and walkways as well as water and electricity supply, will require lifetime maintenance at cost to the state. Some maintenance costs may transcend the President’s lifetime. 10.13.1.2 The military clinic also requires maintenance, supplies and permanent human resources as long as it exists, which may be beyond the President’s lifetime. 10.13.1.3 The future of the buildings constructed at the request of the SAPS also need to be determined. 11. REMEDIAL ACTION Remedial action to be taken in terms of section 182(1)(c) of the constitution is the following: 11.1. The President is to: 11.1.1. Take steps, with the assistance of the National Treasury and the SAPS, to determine the reasonable cost of the measures implemented by the DPW at his private residence that do not relate to security, and which include Visitors’ Centre, the amphitheatre, the cattle kraal and chicken run, the swimming pool. 11.1.2. Pay a reasonable percentage of the cost of the measures as determined with the assistance of National Treasury, also considering the DPW apportionment document. 11.1.3. Reprimand the Ministers involved for the appalling manner in which the Nkandla Project was handled and state funds were abused. 11.1.4. Report to the National Assembly on his comments and actions on this report within 14 days. 11.2. The Secretary to the Cabinet to take urgent steps to: 11.2.1. Update the Cabinet Policy of 2003 to provide for a more detailed regime; 11.2.2. Assist Cabinet to set clear standards on the security measures that can be taken, the reasonable cost that can be incurred by the state and the conditions subject to which current and former Presidents and Deputy Presidents would qualify for such measures; 11.2.3. Take periodic measures to familiarize all members of the Cabinet with the parameters for enjoying executive benefits and the responsibilities they have to ensure that officials do not give them benefits transcending what they are entitled to under the law or policies; and 11.2.4. The Department of Defence creates Standard Operating Procedures regulating the implementation of the benefits extended to Presidents, Deputy Presidents, the Minister and Deputy Minister of Defence and foreign dignitaries (at the request of the Minister of International Relations), which is aligned with the principles of equality, proportionality, reasonableness and justifiability, within 6 months from the issuing of this report. 11.3. The Minister of Police to: 11.3.1. Take urgent steps to expedite the review of the National Key Points Act to clarify its applicability to presidential security privileges and align it with the Constitution and post-apartheid developments; and 11.3.2. Ensure that no further security measures are installed at the President’s private residence at Nkandla, except those determined to be absolutely necessary for the functionality of already installed measures. 11.3.3. The Nkandla Project does not set a precedent for measures implemented in respect of any future President, Former President, Deputy President and Former Deputy President 11.4. The National Commissioner of the SAPS to: 11.4.1. Identify officials that were and may still be involved in the Nkandla Project and implement measures to identify why prescripts were not complied with and on the basis thereof decide if disciplinary action should be taken; and 11.4.2. Assist the Minister of Police in familiarizing himself with the contents of and his responsibilities under the National Key Points Act and the Cabinet Policy of 2003 and ensure that in future officials assisting Ministers to take action under any law include, in each relevant submission, a copy of the legal instrument in question and an outline of all steps required of the Minister. 11.5. The Director-General of the DPW to take urgent steps to: 11.5.1. Identify officials that were and may still be involved in the Nkandla Project and implement measures to identify why prescripts were not complied with and on the basis thereof decide if disciplinary action should be taken; 11.5.2. With the assistance of the National Treasury, obtain advice from an independent and reputable security consultant on the security measures that were necessary for the protection of the President and estimated legitimate costs thereof. On the basis of this information, the DPW to determine the extent of the over expenditure on the Nkandla project and to obtain legal advice on the recovery thereof; 11.5.3. With the assistance of the National Treasury, determine the extent to which the SAPS and the DOD should be held liable for the expenditure incurred in the implementation of the Nkandla Project and to recover the amounts accordingly; 11.5.4. Take urgent steps to enter into a lease agreement with the KwaZulu-Natal Ingonyama Trust Board in respect of the property occupied by the state adjacent to the President’s private residence; 11.5.5. Take urgent steps to relocate the park homes to another organ of state that requires temporary accommodation; 11.5.6. Review the delegation of authority to Regional Offices of the Department; 11.5.7. Ensure that all DPW staff involved in supply chain management is properly trained on deviations from the normal prescribed procurement processes; 11.5.8. Ensure that all DPW staff involved in the implementation and execution of projects are properly trained and capacitated to manage projects assigned to them; 11.5.9. Comply with the provisions of GIAMA in respect of the assets acquired as a result of the Nkandla Project; and 11.5.10. Develop a policy for the implementation of security measures at the private residences of the President, Deputy President and former Presidents and Deputy Presidents. 11.6. The Secretary for Defence, to take urgent steps to: 11.6.1. Consolidate prescripts relating to the medical, transport and evacuation of Presidents, Deputy Presidents, former Presidents and former Deputy Presidents; 11.6.2. Determine the role played by DOD Officials, and in particular the SAMHS, in the Nkandla Project to ascertain if it was in line with their remit and if legal authority boundaries and procedures were complied with; and 11.6.3. Ensure certainty and accountability in respect of the future implementation of measures relating to 11.6.1 above. 12. MONITORING 12.1. In order to monitor and ensure the implementation of my recommendations indicated above, the following steps must be taken: 12.2. When the President submits this report and his intentions regarding the findings and remedial action, within 14 days of its receipt, the Director General in the Presidency should notify my office and Cabinet. 12.3. Accounting Officers of all organs of state required to take remedial action, are to provide implementation plans to my office not later than 01 May 2014. 12.4. Status reports on implementation to be submitted by the affected accounting officers within three months and final reports on action taken to be submitted within 6 months of the issuing of this report. 12.5. Public Office bearers in affected organs of state are to ensure compliance. Let it never be said by future generations that indifference, cynicism or selfishness made us fail to live up to the ideals of humanism which the Nobel Peace Prize encapsulates. President of South Africa, Nelson Rholihlahla Mandela ADV. T N. MADONSELA PUBLIC PROTECTOR REPUBLIC OF SOUTH AFRICA 19 March 2014 Assisted by the Branch: Good Governance and Integrity, Public Protector
Posted on: Wed, 19 Mar 2014 17:05:57 +0000
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