Statement by Public Protector Adv. Thuli Madonsela during a media briefing on Thursday, December 18, 2014 at the Public Protector House in Pretoria. Programme director Members of the media and other honoured guests, Public Protector Senior Management Team Investigation staff Ladies and gentlemen Good afternoon! Welcome to our last media briefing for the year 2014. As you know, we are releasing four investigation reports today; three on service failure and one on conduct failure. As I reflected on the last 11 and half months, I thought of the words of English writer Charles Dickens when he said: “It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of light, it was the season of darkness, it was the spring of hope, it was the winter of despair.” In the past year we have experienced the best of moments and the worst of moments yet all in all it was a superb year. We got unprecedented positive feedback nationally and internationally both helped us grow as the Public Protector Team. The turbulence rooted us while the positive feedback energised us. Thank you to all of you regardless of which side of the coin you may have occupied. The important lessons we have drawn from some of the events that occurred this year have certainly helped us grow as an organisation. As a result, we continued to be a resource to both the people of South Africa and the government, a resource the midwives of this democracy envisioned us to be. We continued to facilitate dialogue between the state and its people, serving as a buffer between the two. A few months ago, we informed Parliament that we had dealt with a total of 39 000 cases during the year ending March 2014, finalising 24 000 in the process. While still on the numbers, we have noticed that we have been undercounting. For example, a scrutiny of a report we released on Monday will indicate that the matter involved six complaints, unrelated to each other and involving six different organs of state. This was captured as one complaint. An overwhelming majority of the cases we dealt with involved service failure, which predominately affects ordinary people of South Africa. A small pocket of the caseload was made up of conduct failure matters, even though we have seen a tremendous increase on this front, particularly those relating to procurement. One of the low points was when we saw some of our Senior Managers leaving us for greener pastures. You might be aware that our former CEO Mr Themba Mthethwa has since been appointed Community Housing Ombudsman while our former CFO has gone back to the property industry. The former head of my office in the Western Cape, Adv. Ruthven Janse van Rensburg has joined the Western Cape provincial government as a forensic investigator while the head of the Gauteng office has just resigned last week after also being made an offer she could not refuse. We wish them all the best. We have moved with speed to fill some of those vacancies, especially the Accounting Officer and CFO ones, which are very critical. We just interviewed candidates for the CEO position this week. Resources are still a big problem for us. This continues to hamper our ability to make the impact we want to make. We call on complaints and affected parties alike to bear with us. Often it looks like the cases have taken too long to complete. You will see that in some of the investigations, this is not the case. You will note that some of the cases are investigated and closed because provinces have the power to close files. When the person is not satisfied with the outcome, the case is then reviewed and reinvestigated. While we continue to engage with the relevant authorities, including Parliament and the National Treasury, we have also explored alternative avenues to alleviate this problem. You will recall that we recently met with Development Partners as a follow up to a meeting we held with them three years ago, asking them to assist our cause in relation to the African Ombudsman Research Centre in Durban. This time we also added our own plight as the Public Protector South Africa, in particular for non-core programmes, particularly in the area of training. We have indicated that we will hold further meetings with individual Development Partners in future within the existing government-to-government agreements, roping in the National Treasury and the Department of International Relations and Cooperation. Should assistance involve money, all transactions will be done through Treasury. Then there was a landmark court judgement, which I must say has not really affected our work more than it has affected the organs of state. However, as you know, we are appealing those parts of the judgement that we do not agree with. This is not an offensive against the judiciary; we are just exercising our rights. Our respect for the judiciary remains intact. Until a higher court makes a different finding, how government deals with these reports we are issuing today will be informed by that ruling. Despite all the challenges, we have managed to make inroads in pursuit of our constitutional mandate and this has not gone unnoticed. As the Public Protector South Africa Team, we are humbled by the many awards we received –some international and others domestic. We wish to assure the public that more than anything; the awards have caused us redouble our efforts, taking into account the high standards we are expected to live up to as a result of the accolades. As I speak to you, my team and I are engaged in an ongoing process of refocusing our strategy to move with the changing landscape. We believe that the challenges should not deter us from reaching our goals; hence we are exploring other effective ways of reaching our destination while working within our means. Coming back to the main reason for today’s briefing, we are realising four investigation reports titled Cost of Broken Promises, Five Years and Counting, Fish Farming Paralysis and A Matter of Interpretation. Before I get into these, I need you to note that over the last few days we released four reports; those are Unsettled Business, Saved by Notice, Out of the Blue and Law and Justice. Two of these have to do with administrative injustice involving individuals while the other two dealt with improper conduct relating to employment irregularities. I will not discuss the details of the cases as I believe you have already seen them. In fact, some of you have written extensively on them. Those of you who have not had sight of the reports, kindly visit our website to access them. For the first time we are not directing that disciplinary steps be taken against anybody on service failure complaints. This does not apply to conduct failure matters. All we are asking authorities to do is to look at our findings, ask themselves if the circumstances that led to what happened could have been avoided and then to indicate what they will do to ensure that there is no recurrence in the future. I will start with a report titled Six Years and Counting, which communicates my findings and appropriate remedial action I am taking in terms of section 182(1)(c) of the Constitution, pursuant to an investigation into the alleged maladministration by the Gauteng Department of Infrastructure Development (the Department) relating to the Department’s administration of the Suikerbosrand Project involving the upgrading of the water supply to the nature reserve in the area at the cost of R8, 657,745.63 (the Project). The complaint was lodged by Mr Nathaniel Letlape (the Complainant) on 26 October 2011 on behalf of Shatsane Systems Solutions (Pty) Ltd, a Leondale based black small contractor specializing in civil and building works, alleging that: The main contractor, Moteko Construction Cost Consultants JV (Moteko), which was contracted to upgrade the water supply to the Suikerbosrand Nature Reserve, was improperly appointed in contravention of a fair, transparent and cost effective procurement process. However, the Complainant subsequently withdrew the allegation on the basis that he did not have any evidence to back such, and that in making the allegation he had relied on the feedback received from the investigator who indicated to him that the Chief Director, Mr Richard Makhumisani had said in a meeting with him that he knew of no tender process being undertaken in respect of this Project. The Department failed in its duty of overseeing the smooth running of the Project, thus causing delay in the completion of the Project; During the Project, there was mismanagement of state funds and disregard for procurement policies, Treasury Regulations and the Public Finance Management Act No 1 of 1999 (the PFMA); The Complainant was not paid for services rendered on the Project and; (e) The Complainant incurred penalties due to delays to the Project, which delays were not caused by the Complainant. (iii) The investigation process included correspondence, interviews and the sourcing and analysis of documents. Applicable legislation, regulations and policies were also considered and applied. Upon completion of the investigation, a notice in pursuit of section 7(9) of the Public Protector Act and a discretionary notice were issued on 15 September 2014 to the Head of Department (HOD) of the Department of Infrastructure Development (the Department) and the Complainant respectively, indicating my provisional findings and envisaged remedial action. The Head of Department responded to the section 7(9) notice with a written letter dated 3 October 2014. Worth noting is that my office’s jurisdiction and powers, including remedial powers under section 182(1)(c) of the Constitution, were not challenged. I was not surprised because on 14 August 2014, the Premier, Speaker and other top leaders in the Government of Gauteng announced to the nation that they understand the Constitution to give my office the power to investigate and remedy maladministration, in cooperation with organs of state and pledged to cooperate, including, implementing remedial action. I make the following findings: Whether Moteko was appointed irregularly in violation of a required fair, transparent and cost effective procurement process that complies with procurement policies, Treasury Regulations and the PFMA: (aa) The allegation that Moteko was appointed irregular in violation of the required fair, transparent and cost effective procurement process although subsequently withdrawn by the Complainant, was found to be unsubstantiated during my office’s preliminary investigation; (bb) My office’s preliminary investigation established that Moteko was initially appointed pursuant to it responding to an advertisement dated 3 December 2004 that appeared in the local newspapers, after it had expressed interest in a follow up advertisement that called for an Expression of Interest by Project Management Resource Groups (PMRGs). Moteko and other service providers responded to the advertisement and were shortlisted. That process was followed by an Adjudication Council meeting that decided based on Moteko’s credentials relating to engineering projects, to award it a contract to oversee several projects in the Gauteng Province. (cc) With regard to the Suikerbosrand Project Moteko was appointed by way of an Instruction to Perform Work within permissible deviation in terms of Treasury Regulation 16A6.4. (dd) The Department’s failure to open the Suikerbosrand project to a fair, equitable, transparent, competitive and cost effective procurement process and opting for an IPW with a view to fast track service delivery was not viable and cannot be justified; (ee) Contrary to what was anticipated by the IPW, the Project has been plagued by delays and it remains incomplete 6 years since it was commenced on 17 November 2008 and was supposed to be completed on 20 May 2009; Whether the Department failed to play its oversight role effectively to ensure the smooth running and timely completion of the Project: (aa) The allegation that the Department failed to play its oversight role effectively to ensure the smooth running and timely completion of the Project was found to be substantiated; (bb) The Department through Mr Eksteen failed to ensure that the service providers appointed to deliver the Project completed it within the period specified or shortly thereafter; (cc) Mr Eksteen failed to rein in Mr Singo who most of the times failed to attend site meetings, where his input was required to move the Project forward and who also provided Shatsane with incorrect and inadequate drawings for the installation of a pipe on a bridge, electrical connections and pumps for a pump house; (dd) Such failure is in violation of paragraph 3 of the National Treasury Supply Chain Management Guide which provides that demand management is the first phase of SCM and further that the objective is to ensure that the resources required to fulfill the needs identified in the strategic plan of the institution are delivered at the correct time, price and place and that the quantity and quality will satisfy those need. (ee) The Department’s violation of the National Treasury Supply Chain Management prescripts in this regard constitutes improper conduct as envisaged in section 182(1) of the Constitution and maladministration as envisaged in section 6(4)(a)(i) of the Public Protector Act No. 23 of 1995. Whether the Department failed to appropriately manage the state funds allocated for the Project: (aa) The allegation that the Department failed to appropriately manage the state funds allocated for the Project were found to be substantiated; (bb) The Department failed to account for the monies allegedly paid to Mr Singo irregularly in the Project despite being alerted to a possible fraudulent inflation of KSB payment invoices by Mr Singo using Shatsane’s letterheads; (cc) The Department also failed to ensure the effective, efficient, economical and transparent use of financial resources involved in the Project in violation of section 195(1)(b) of the Constitution and section 45 of the PFMA; and (dd) The conduct of the Department in this regard was improper as envisaged in section 182(1) of the Constitution and constitutes maladministration as envisaged in section 6(4)(a)(i) of the Public Protector Act No. 23 of 1994. Whether the Department unduly failed to pay for work done on the Project by the Complainant, and if so, was the Complainant improperly prejudiced: (aa) The allegation that the Department unduly failed to pay for work done on the Project by the Complainant was found to be substantiated; (bb) It has been established that when Moteko was unable to pay Shatsane, Shatsane approached the Department directly and the Department paid thus creating a legitimate expectation that in case of failure by Moteko to pay Shatsane the Department would pay. The Department has also on 26 November 2010, by way of a letter to Shatsane, attempted to impose penalties in the sum of R4, 200,740.98 on Shatsane for delays in the Project, which delays were as a result of the non-cooperation on the project by Mr Singo. (cc) The Complainant’s company is still owed a sum of R9 622 075.08 for the services rendered by his company in the Project to which a final account was submitted to the Department on 13 September 2011; (cc) The failure by the Department to pay the Complainant within 30 days of receipt of his invoices was in violation of Treasury Regulation 8.2.3; (dd) Such failure constitutes improper conduct as envisaged in section 182(1) of the Constitution and maladministration as envisaged in section 6(4)(a)(i) of the Public Protector Act No. 23 of 1994; and (ee) The Complainant was improperly prejudiced by the Department’s failure to pay him for work done on the project by his company. The appropriate remedial action I am taking in pursuit of section 182(1)(c) of the Constitution is the to call upon : The Head of Department (aa) To ensure that the Project is finalised within 3 months from the date of this report and within budget; (bb) To ensure that appropriate action is taken against those officials responsible for the delay in completion of the Project and improper conduct associated therein; (cc) To ensure that the Complainant is paid all monies due to his company within 90 days from the date of the final report. The monies owed to be verified in consultation with the Complainant and Moteko must be paid in trenches. The first payment must be made within 30 days from the date of this report. The next report I want to deal with is titled Fish Farming Paralysis. The report communicates my findings as Public Protector and remedial action I consider appropriate following an investigation into the allegations of improper prejudice suffered by Aquaculture Project Consultants (APC) as a result of alleged improper conduct or maladministration by the Bojanala District Municipality with relating to reneging on an agreement involving the implementation of an aquaculture (fish farming project) and refusal to pay 50%(R850,000,00) towards a feasibility study in relation therewith. The Complainant, Mr Mmeli Hendrick Mdluli is an emerging entrepreneur and Managing Director of Integrated Fish Farming South Africa (IPFF) trading as Aquaculture Project Consultants (APC), who, in 2009, approached the Bojanala Platinum District Municipality (the Municipality) and others to support the implementation of a Rural Development Project relating to commercial harvesting and farming of fish within poor communities in South Africa as a poverty alleviating project. The project, presented under a proposal titled “An Entrepreneurial Approach providing a Sustainable Solution for ending Hunger and poverty in Impoverished Rural South Africa Communities”, was to be implemented in 2009/10 as a pilot project, focussing on “the breeding of tilapia fish in ponds or controlled environments. In his complaint lodged in 2010, the Complainant alleged that the Municipality had improperly (unduly) reneged on its undertaking to support and participate as a partner in his pilot project on aquaculture (Fish farming) as an anti-poverty mechanism for poor rural communities. He further alleged that this followed APC being selected by the United Nations Development Programme UNDP as an implementation partner on pilot poverty combating projects under programmes referred to as One Municipality One Project(MOP) and One Village One Project(OVOP). The Complainant further alleged that the Municipality unfairly “strung him along” for months and wrongfully withdrew after APC’s partial implementation of the project in the form a Pre-feasibility Study for which the Municipality refused to pay despite having agreed to pay for it, thereby causing him severe financial and personal prejudice. He further alleged that, not only did the Municipality improperly renege on the said agreement; it did so after communicating to third parties, including the Development Bank, that it was a party to the fish farming project and feasibility study. The Complainant further alleged that an official of the Municipality, Mr Mike Mokgatsi, unduly substituted the area of Molatedi for the Jericho area, which had been the target of APC’s original proposal and which would not have needed a feasibility study. I make the following findings: a) Did the Bojanala Municipality improperly renege on an agreement to participate in APC’s fish farming project and to pay 50% towards a project feasibility study and did its conduct constitute a misrepresentation and a violation of the Municipal Finance Management Act (MFMA)? (aa)The allegation that Bojanala Municipality improperly reneged on an agreement to participate in APC’s fish farming project and to pay 40% towards a project feasibility study is substantiated by evidence. (bb) By the Municipality’s own admission, the Municipality’s officials informed APC that his project proposal had been accepted, redirected the project to a different pilot site than one proposed by him (Jericho), committed the Municipality in writing, including to the Development Bank, to pay 40% of R1. 7m fees towards a feasibility required for the Municipality’s chosen pilot site (Molatedi) and asked the Complainant to prepare a Memorandum of Understanding (MOU) to formalise the agreement. (cc) There was no wrongdoing on the part of the complainant in preparing the draft MOU framing the project as a Public Private Partnership (PPP), following at the request of and following wrongful classification of the relationship by the Municipality’s officials. The wrongdoer was the Municipality in failing to acquaint itself with the appropriate procurement regulatory framework and appropriate vehicle for the project before making a resolute commitment to the Complainant. (dd) The fact that the MOU had not yet been signed when the Municipal Manager eventually refused to sign it and advised that the project would be subjected to a tender process, does not mean there was no agreement. (ee) Reaching an agreement in the manner it was done by the Municipality, however, was unlawful as the procedural requirements stipulated by local government laws and internal policies for such agreements had not been met. It further created a lot of uncertainties before the Municipality canned the arrangement with him, and for that reason the Complainant is justified in alleging that the Municipality “stringed him along.” (ff) I am unable to fully accept the Municipality’s defence that there was no agreement and that if there was such an agreement it was improperly entered into and was accordingly unlawful and invalid. The only valid part of this defence is the argument that the agreement was entered into unlawfully. This is supported by evidence showing that the Municipal officials acted in violation of section 217 of the Constitution, Section 2(d)(i) and (ii) of the Preferential Procurement Policy Framework Act No 5 of 2000, Section112.of the MFMA and Regulation 10 of the Municipal Supply Chain Management Regulations, 2005 (the Regulations)that: • It failed to ensure proper demand management as required by the MFMA and Treasury Regulations, starting with proper planning and budgeting for the aquaculture project in its IDP before engaging the Complainant. • It failed to follow a procurement process that is open, fair and competitive or alternatively, abiding by applicable deviation requirements, which in this case would have been those regulating unsolicited bids as provided for in section 113(2) of the MFMA, section 21A of the Municipal Systems Act, Regulation 37(2) of the Regulations. • It failed to ensure that decisions were taken properly by lawfully mandated structures such as the Municipal Manager and Council before being communicated or executed and that such decisions were recorded and communicated in the prescribed manner. • There were many violations of Treasury Regulations which if they had been adhered to would have saved time and obviated the uncertainties that have led to the dispute over the aborted project. Among key administrative failures, was the failure of Municipal officials to conduct due diligence on the viability of the project and the capacity, including financial functionality of the preferred service provider as required by Treasury regulation 16A, before making commitments such as the letter telling the DBSA that APC was communicating on its behalf and that the acuaculture project belonged to it. (gg) However, I find no impediment in law that prevented the Municipality from entering into a partnership with the Complainant using either an unsolicited bid or a donation and adhering to the requirements of either. Failure to do so is entirely its own fault. (ii) The Municipality’s entering into an unregulated and uncertain relationship with the Complainant and then unceremoniously jumping ship is at odds with the principles of good administration I section 195 of the Constitution and fair conduct as envisaged in section 33 of the Constitution and thus constitutes improper conduct and maladministration. b) Did Bojanala Municipality improperly renege on a commitment to pay 50% toward a project feasibility study by APC on the fish farming project targeting Molatedi after the study had already been undertaken? (aa) There is no question that the Municipality’s officials committed the Municipality verbally and in writing to pay 40% of the feasibility study fees and that it was its idea that the pilot site be moved to Molatedi, which required a feasibility study. However, such commitment was made unlawfully as the persons who did so had no authority to do so and did so without following prescribed supply chain procedures. (bb) What I am unable to find incontrovertible evidence of is that the Municipality increased its share from 40% to 50% as alleged and that it authorised the Complainant to commence with the feasibility study even though no contract had been signed. (cc) Communication between the Complainant and the Municipality, particularly through Mr Mike Mokgatsi, including the draft MOU, however, gives a strong indication of the Municipality’s officials being aware that the pre-feasibility study had commenced and acquiescence in the execution of same despite the MOU still outstanding. (dd) Although the M unicipality’s conduct leaves a lot to be desired, I have not found evidence to support the allegation in the Complainant’s affidavit that the Municipality lost interest when the feasibility study discounted its preferred Molatedi and the Complainant’s failure to bow down to pressure to go with this area despite of its water supplies and market access being not viable. (dd) While I consider the Complainant’s conduct as a business person unduly risky in beginning to execute a contractual project without written agreements, it is the Municipality’s conduct, including “stringing him along”, that I consider to be the cause of or exacerbating factor that led to the uncertain business environment APC found itself in resulting in an unauthorised study being conducted. c) Did Bojanala Municipality unduly cause the Bojanala Pilot Project on Aquaculture to be moved from Jericho in the area of the Madibeng Local Municipality to Molatedi in the area of the Moses Kotane Local Municipality. The Municipality has not denied that it was its idea that the pilot site for fish farming be Molatedi. While the complainant is adamant that the story about Jericho being not viable due to water contamination is suspect, the correspondence between him and others, including Mr Swanepoel who is the author of the Jericho Feasibility study and Prof Kruger who is said to have microbes that can address the contamination, shows that the Complainant accepted that Jericho water was contaminated. There is further no evidence linking the Bojanala Municipality to the allegation of water contamination, I am further unable, despite the Complainant’s many submissions, including a letter and statements from the Chief of Jericho, that trickled from the Complainant into my office until early this week, that there isn’t and the Municipality knew there was no water problem in Jericho and that the relocation of the pilot site from Jericho to Molatedi was due to improper motives. I am further persuaded by the Municipality’s explanation that Molatedi was preferred because its IDP identified it as a very poor community (poverty node), which were to be given for poverty alleviating projects. The selection of Molatedi would therefore, have been in line with the priorities, objectives indicators and targets contained in the Muncipality’s IDP. The IDP in question corroborates this. The allegation of dishonesty on the part of the Municipality in choosing Molatedi as its preferred site is, according, not substantiated. d) Was the Complainant improperly prejudiced by the conduct of Bojanala Municipality? (aa) The Municipality accepted my finding of prejudice in the provisional report and proposed remedial action without reservations in its response to the provisional report and notice issued in terms of section 7(9) of the Public Protector Act. For completeness, I have decided to include my considerations and determination on the question of prejudice suffered by the Complainant. (bb)It simply cannot be argued that the Complainant was not prejudiced by the Municipality’s improper conduct and bad administration. (bb) The evidence, which has not been disputed by the Municipality, shows that being “strung along” was not only a major inconvenience to the Complainant but also caused him to lose a lot of business time and money going up and down following up on whatever was suggested by the Municipality as the next course of action in pursuit of the project. Project planning on its own is costly, which is why project budgets include fees for project scoping and planning. (cc)I have noted that apart from “stringing him along” for months, the Municipality undoubtedly caused the Complaint to spend lots of time and money creating documents in pursuit of whatever procurement vehicle it favoured at any given time from a PPP then an Unsolicited Bid to announcing that the process would be taken on tender. (dd) What I am unable to determine though is the amount that would constitute a fair amount to place the Complainant as close as possible to where he would have been had the Municipality acted properly. “I am also unable, in good conscience, to lay the entire blame for the project’s failure at the door of the Municipality. In other words, I am not convinced that the Complainant’s own hands are clean, having advised the Municipality, among other things, that he was a the sole UN approved agent for aquaculture under OMOP, that he was implementing a similar project in Marble Hall and that the DBSA had agreed to fund the Project” e) Did targeted beneficiaries also suffer improper prejudice as the result of the Municipality’s conduct? (aa) While the investigation has not asked the beneficiary community about the impact of the non-implementation of the poverty busting project, although the Complainant alluded to the Jericho Traditional Leader’s disappointment. After raising hopes, it is not unreasonable to assume that the morale of the community was probably impacted negatively. It is also worth noting that this was the second time a poverty combatting project was announced in Bojanala Municipality and ended up not taking off. (bb) It is also not unreasonable to conclude that had the project been properly researched and an appropriate pilot site selected, the project may have created a few jobs while contributing to food security within whatever community that would have been selected in the Bojana Municipality. (cc) The Municipality’s poor handling of this poverty combatting project accordingly failed to meet the standard set for the Municipality and approved in terms of the Municipal structures Act imposing the duty to establish and act in accordance with a clear framework for leveraging and marshalling its resources or other commitments towards such a project in line with strategic priorities, linked plans and budgets in the IDP. (cc) The Municipality’s conduct clearly fell short of the requirements of section 152 and 153 of the Constitution imposing a duty to facilitate development. (dd)The Municipality failed to discharge its duties and responsibilities in terms of sections 25 to 36 of the Systems Act, section 15 of the MFMA with due consideration to its strategic focus areas and the interests and priorities of the wider population that it serves. (ee) The conduct of the Municipality and its officials that were involved, accordingly constitutes improper conduct and maladministration. The Remedial action I am taking to in pursuit of section 182(1)(c) of the Constitution, and the Batho Pele principle of redress, is the following: The Municipal Manager Complainant The municipal manager is to give the compliant Complainant a written apology for the manner in which he has been treated, particularly being subjected to various fruitless procurement processes for months, being made to understand his project proposal had been accepted and having it cancelled after investing time and money in it for months. The municipal manager, acting with the Municipal Council and with the Complainant’s concurrence, is to ensure that the Complainant’s Company APC is paid an amount that is not less than R100 000, 00 as consolatory pay and to cover expenses incurred in pursuit of the prefeasibility study and project scoping, loss of income while pursuing the project and inconvenience. Community The municipal manager to assess the aquaculture project and consider reviving it, with a lawfully selected partner, as a poverty combating and food securing rural development initiative through consultation with the communities in Bojanala as part of IDP consultations, with input of experts sought. The Municipal Manager with the help of the Speaker and Council Supply Chain Management System The Municipal Manager with the help of the Speaker and Council is to investigate the actions of the officials involved to determine if disciplinary or other steps should be taken in respect of the possible breaches of the MFMA and relevant legislation or codes of conduct, and to avoid a repetition in future; The Municipal Manager with the help of the Speaker and Council ensure that Standard Operational Protocols are developed and implemented to regulate all agreements to ensure that everything is in writing, unambiguous and correct; The Municipal Manager with the help of the Speaker and Council ensure that guidelines are set for itemised quotes and invoices from suppliers The Municipal Manager with the help of the Speaker and Council ensure that all Managers and employees involved in procurement of goods and services are properly trained in Supply Chain Management Policies, the Municipal Finance Management Act and other Legislative Prescripts relating to all procurement processes. I now deal with the report titled A Matter of Interpretation, which communicates my findings and the remedial action I am taking in terms of section 182(1) of the Constitution having concluded an investigation into complaints were lodged on 02 July 2010 and 15 June 2011 by Ms Slabbert A and Mr. Dembovsky HD, chairperson of the Justice Project South Africa on its behalf (the Complainants), respectively. In the main Mr Dembovsky alleged that the infringement notices that were issued by the JMDP during the period June 2010 to December 2012, were unlawful and unenforceable since they were dispensed in contravention of section 30 of the AARTO Act, which provides for infringement notices to be served by registered post and not ordinary post. Both Mr Dembovsky and Ms Slabbert alleged that the JMPD had misinterpreted the provisions of section 30 of the AARTO Act (the Act) and further that its application and /or implementation of Section 24 of the Act would result in drivers being disqualified to operate a motor vehicle within a year of introduction. Mr Dembovsky further alleged that expecting that persons who had become aware of the unlawful nature of the infringement notices be allowed to benefit from that knowledge whilst those who had not be prejudiced by it is in itself unconstitutional. Mr Dembvosky further alleged that a commitment made by the JMPD and the Road Traffic Management Cooperation (RTMC) to refund all affected parties who were issued with unlawful infringement notices was not honoured. I made the following findings: (a) Regarding whether the implementation of AARTO by the Johannesburg Metropolitan Police Department failed to comply with the provisions of its founding legislation, the AARTO ACT, I find that: (aa) The allegation that the JMPD failed to comply with the provisions of AARTO is substantiated. (bb) The infringement notices that were served by Johannesburg Metropolitan Police Department to alleged infringers for the period August 2010 until 21 December 2012 did not comply with the requirement as contained in section 30 of the Act. The acts of the JMPD accordingly constitute improper conduct and maladministration. (cc) However, no remedial action could be made in this regard since JMPD has since complied with the provisions of section 30 of the Act as at 22 December 2012 by issuing infringement notices by registered post as provided for in the aforementioned section. (dd) The allegation that the Johannesburg Metropolitan Police Department had not implemented AARTO in accordance with the AARTO Act, during the period August 2010 until 21 December 2012, is accordingly justified. This constitutes improper conduct and maladministration. (b) Regarding whether the manner of serving of infringement notices through ordinary post by the Johannesburg Metro Police Department constitutes a contravention or violation of section 30 of the Administrative Adjudication of Traffic Offences Act, 1998, I find that: (aa) The Johannesburg Metropolitan Police Department issued infringement notices through ordinary post during the period August 2010 and 21 December 2012 following the withdrawal of the service by Road Traffic Management Corporation. The issuing of such infringement notices by ordinary post constituted a violation or contravention of section 30 of the AARTO Act, 1998, which provides for same to be served through registered post. (bb) The Infringement notices that were served by the Johannesburg Metropolitan Police Department through ordinary post during the period referred to above in paragraph (aa) above were in violation of section 30 of the AARTO Act which provides for serving of infringement notices by registered post. (cc) The violation by the Johannesburg Metropolitan Police Department of section 30 of the AARTO by serving infringement notices through ordinary post as a substitute for registered post was irregular and constitutes maladministration. (c) Regarding whether the Road Traffic Infringement Agency, an organ of state, is assigned with the legislative mandate to serve infringement notices and what method is provided for by the relevant legislative prescript, I find that: (aa) In terms of section 17 of the AARTO Act, the obligation to serve notices to infringers rests with the issuing authority which in terms of section 1 of the Act is a local authority or municipality, in this case the Johannesburg Metropolitan Police Department. (bb) The argument by the Johannesburg Metropolitan Police Department that section 4 (4) (a) of the Act makes provisions for the Road Traffic Management Agency to carry the legislative mandate of serving infringement notices was a misinterpretation of the law, and therefore has no merit. (cc) Regarding whether the point demerit system was applied during and after the pilot project, and whether it is likely to unfairly result in the disqualification of driver’s license by issuing authorities if applied in the future, I find that: (dd) Although the AARTO Act makes provision for the demerit of point in case an infringer violates road traffic laws, evidence that was obtained from the pilot project that was implemented by the Johannesburg Metropolitan Police Department shows that points were neither allocated nor deducted during the implementation of the pilot phase. (ee) Even though the allegation that the implementation of the point demerit system in the future would result in having the driver’s licenses of infringers being revoked, its implementation would be the best interest of the country as it seeks to eradicate the culture of road traffic infringement by replacing it with the culture of road traffic obedience. (e) Regarding whether the Johannesburg Metropolitan Police Department undertook to refund all infringers whose infringement notices were served in violation of section 30 of the AARTO Act, I find that: (aa) No evidence was found that supports the allegation that JPMD undertook to refund infringers who had paid their respective infringement notices that were issued in violation of section 3 AARTO Act, during the period covering August 2010 to 21 December 2012. (bb) Notwithstanding the above discussion or finding, the acceptance by JMPD and/ or RTIA of payments that emanated from an unlawful process was improper, and therefore constituted maladministration by the Johannesburg Metropolitan Police Department and Road Traffic Infringement Agency. (cc) Evidence obtained from the Johannesburg Metropolitan Police Department show that the undertaking it had made through the joint statement was in respect of a different event that occurred in 2009. Appropriate remedial action I have taken on my findings of maladministration as envisaged by section 182 (1) (c) of the Constitution, is the following: The Chief of Police of the Johannesburg Metropolitan Police Department is to: (a) Ensure, in consultation with the City Manager, the issuing of a formal apology to be presented to all newspapers in circulation within the City of Johannesburg explaining the reasons for the issuing of infringement notices in contravention of section 30 of the Administrative Adjudication of Road Traffic Offences Act during the period August 2010 until 21 December 2012. The Chief Executive Officer of the Road Traffic Management Cooperation and the Registrar of the Road Traffic Infringement Agency are to: (a) The Road Traffic Management Corporation should facilitate the insertion of a phrase in the Act which makes it an offence and carries a penalty against issuing authorities in case of violation of the Act. (b) The remedial action discussed above in paragraph (aa) above aims at ensuring that in its execution of the AARTO issuing authorities conforms to the provisions of the Act. (c) To ensure that RTIA intensifies its already existing educational drive to ensure that individuals understand their rights and options, as provided for in section 4 (1) (d) of the Act. The main report for the day is titled “Broken Promises”. It relates to an investigation into the alleged maladministration relating to the City of Johannesburg (COJ)’s failure to comply with City by-laws and the Constitution, in connection with illegal occupation by COJ residents of two privately owned buildings, involving alleged failure to terminate services as advised by the Complainants and unduly billing the Complainants for such services; failing to reverse wrongful billing despite numerous undertakings to do so; and failing to keep promises to help with the eviction process while encouraging the said illegal occupation. The illegal occupation of buildings, or hijacking of buildings, has become a major nightmare for investors seeking to earn their fortune through property or to use purchased properties for business purposes. While the phenomenon appears to be a national one, anecdotal evidence suggests it is particularly rife in the COJ within the Gauteng province. The Complainants, Mr. Tshepo Kgaudi and his wife, Ms Phindi Kgaudi, are young business persons that jointly purchased two property owning companies, Plankomat and Loujac, Jeppestown in the COJ, with intention to use the buildings for a shoe factory and other commercial purposes. During 2009, the Complainants requested the COJ to execute electricity cut offs in the buildings as they were occupied by illegal occupiers. The alleged illegal occupiers were mostly business persons, who had been tenants of business persons whose bid to purchase the buildings that had fallen through on account of non-payment before the buildings were sold to the Complainant and his wife. The Complainants allegedly approached the COJ for assistance and certain undertakings were made but never honoured by the COJ. At the core of the complaint is that the COJ: improperly undertook to help with evictions without a court order and later advised it couldn’t after laying down various compliance requirements that the Complainants complied with losing time and money in the process; failed to hold one of its councillors, Councillor Zwane, for encouraging the illegal occupation and interfering with eviction attempts in the said buildings; wrongfully failed to terminate electricity and water services to the buildings despite being asked and undertaking to do so several times; wrongfully billing the Complainants for the illegal consumption of services leading to a huge liability which undermined attempts to sell the buildings; failed to honour promises to reverse the wrongful billing despite undertaking to do so several times and generally failed to honour its by-laws regarding law enforcement on illegal consumption of municipal water and electricity; and has for years failed to honour its Constitutional responsibility to provide access to housing, including emergency housing to its residents leaving the Complainants and their family to shoulder such responsibility. The background to the complaint as presented by Mr and Mrs Kgaudi, with minimum disagreement from the COJ officials is the following: 2008: The Kgaudi’s purchased two companies owning a building each in Jeppestown, with each occupied by a few tenants from a previous business person whose attempt to buy the buildings had fallen through; 2009: The COJ was requested to cut off services and this is not done; 2010: The Complainants commenced eviction process with an attorney up to issuing eviction notices; 2010: The Premier’s Office was approached which referred the Complainants to a Task Team within Department of Planning and Urban Management(DPUM), in the COJ which promised to conduct a raid provided the Complainants provide proof of having secured security services for the building to ensure there is no reoccupation, among other things.; 2011: The Complainants secured a private security company which deployed resources to the buildings and provided required proof to the DPUM of the COJ; September 2011: The promised raid was conducted but on the way to raid the buildings, the Complainants received a threatening phone call from Councillor Zwane who said that the raid must not proceed. The raid was carried through but without evictions as promised with illegal occupants only served with 2 month notices to vacate the premises which they ignored. On the same day criminal charges are laid by the Complainants against Councillor Zwane at the Jeppestown Police Station of the South African Police Services (SAPS) for threatening him and the security company; September 2011: The Mayor was approached about unkempt promises and Councillor Zwane’s alleged criminal conduct; October 2011: A meeting took place at COJ to discuss eviction, health concerns at buildings, service charges and required reversals, disconnection failures and other related matters, where COJ promised spot fines against the illegal occupants but never fulfilled this promise; February 2012: The Presidency (Help Line) having been approached, facilitates a meeting with COJ where undertakings are made to reverse charges and give consideration to purchasing of buildings from the Complainants and temporary house occupants as COJ residents, until their housing status is sorted but this too fell through; April 2012: The Public Protector was approached and immediately conciliated resulting in promises to reverse charges, cut services and consider the possibility of purchasing the buildings; April 2013: The Complainants were finally issued with a revised invoice but were unhappy with aspects of it and after attempts at further conciliation on all outstanding issues, a decision was made to make a determination on whether or not there was maladministration on the part of the COJ and if such caused the Complainants, their family and their business prejudice or injustice; and December 2013: The Public Protector was advised that the Complainants had been re-invoiced but it turned out that this was not done. Today the Kgaudis have lost everything, and their home is in the process of being sold in execution of a court order, while the two buildings remain unavailable for use due to illegal occupation. An attempt from my office, to get Legal Aid South Africa (LASA) to help with the evictions was aborted due to the Complainants’ inability to raise fees for the sheriff to serve process as required by law. LASA was unable to provide although able to help with the legal assistance aspect of the eviction. The COJ has not denied that when the Complainants started on the perilous journey with the COJ, they were young fairly successful business persons who had been able to mobilise the capital outlay to pay for two multiple story buildings for use as a shoe factory and other commercial purposes. It is undeniable that before purchasing the buildings, the Kgaudis were successful business people, who owned a multiple branch shoe business with shoes manufactured in Brazil. It is also undeniable that their business started falling apart when the two buildings purchased at cash with a view to domesticate the shoe making, with a view to creating jobs and maximising profit, could not be used for the purpose for which they were purchased. It also has not been denied that at the time of the Complainants purchasing the buildings, there were already occupants, albeit quite few, who had been installed by a business person who was in the process of purchasing the buildings from the original owner but failed to secure funding. This means the risk of illegal occupation was not created by the COJ. The COJ also did not have a duty to evict anyone, and in fact doing so, without a court order would have been illegal and unconstitutional. If the COJ did not cause the illegal occupation nor did it have a duty to evict the illegal occupants, what then was its wrong? The investigation process commenced with an attempt to mediate with a view to endeavouring to help the parties resolve the dispute by mutual agreement. When the mediation failed, a formal investigation conducted through meetings and interviews with the Complainants and relevant officials of the Department, as well as inspection of all relevant documents and analysis and application of all relevant laws, policies and related prescripts followed. The Executive Mayor (the Mayor) was also engaged with through face to face meetings and telephone conversations throughout the process. In this regard I am grateful for the Mayor’s compassionate response, including agreeing to have his officials negotiate with a financial institution to delay in the eviction of the Complainants from their home pending the finalisation of the investigation. The COJ assisted in negotiating with the financial institution in putting the impending auction of the Complainants in abeyance. It is worth noting that the COJ has not denied many of the alleged acts of maladministration relating to failure to terminate services, wrongfully billing the Complainants for the unauthorised consumption and failure to timely reverse the wrongful billing. It is also worth noting that the COJ has not denied that no formal investigation or disciplinary process was instituted against Councillor Zwane for possible violation of the relevant Code of Conduct. On the issue of law enforcement, the COJ has conceded that spot fines were only issued once against the illegal occupants and that no arrests have ever been made. In other words, the illegal occupation of the Complainants’ building has principally taken place mostly with impunity in so far as law enforcement is concerned. The COJ has also not denied promising to raid and evict illegal occupants at the said buildings but explained that it was an unlawful promise as the law only allows court authorised evictions. However, it is worth noting that the COJ has to date not indicated its specific solution to the accommodation of the said illegal occupants, as the bearer of responsibility for public housing in its jurisdiction both on an emergency basis and in the long term, as stipulated by the courts in the Blue Moonlight Properties judgement and the Grootboom judgement, respectively. Key laws and policies taken into account to help me determine if there had been maladministration by the COJ and prejudice or injustice suffered by the Complainants were principally those imposing administrative standards that should have been upheld by the COJ or its officials, when dealing with the complaint raised by the Complainants regarding the illegal occupation of their buildings and the illegal consumption of electricity and water in their buildings. Having considered the evidence uncovered during the investigation against the relevant regulatory framework setting the standard the COJ should have complied with, I make the following findings: Regarding whether the COJ fail to disconnect electricity and other services at the Complainant’s illegally occupied buildings in violation of its own Municipality by-laws and if so does such conduct constitute maladministration? I find that: (a) The COJ failed without good reason and over a long period of time failed to disconnect electricity services to the Complainant’s illegally occupied properties. This is contra the COJ’s Debt control Policy and s95 of the Municipal Systems Act. (b) The acts of the COJ constitute maladministration as envisaged in section 6 of the Public Protector Act and improper conduct as envisaged in section 182 of the Constitution. Regarding whether the COJ fail to disconnect electricity and other services at the Complainant’s illegally occupied buildings in violation of its own Municipality by-laws and if so does such conduct constitute maladministration? I find that: (a) The COJ failed without good reason and over a long period of time failed to disconnect electricity services to the Complainant’s illegally occupied properties. This is contra the COJ’s Debt control Policy and s95 of the Municipal Systems Act. (b) The acts of the COJ constitute maladministration as envisaged in section 6 of the Public Protector Act and improper conduct as envisaged in section 182 of the Constitution. Regarding whether the COJ unduly billed the Complainant’s companies for electricity and other services in respect of the Complainant’s illegally occupied properties and if so does this constitute maladministration? I find that: (a) The City did whereas it should not have billed the Complainant for services it supplied in violation of his and his predecessor’s request as well as its own by-laws. (b) The acts of the COJ constitute maladministration as envisaged in section 6 of the Public Protector Act and improper conduct as envisaged in section 182 of the Constitution. (c) Regarding whether the COJ promised the Complainant and the Presidency to disconnect electricity and other services debt at his properties and later improperly failed to honour such promise? I find that: (d) The City did promise the Complainant and the Presidency. (e) The City failed to keep its promise not only to the Complainant and Presidency but also to my office, not once but several times. (f) The acts of the COJ constitute maladministration as envisaged in section 6 of the Public Protector Act and improper conduct as envisaged in section 182 of the Constitution. Regarding whether the COJ improperly encouraged the illegal occupation of the Complainant’s buildings by failing to take action against its Councillor Zwane who actively encouraged and admitted to encouraging illegal occupation of the Complainant’s buildings? I find that: (a) By failing to take resolute action against Councillor Zwane, the COJ did encourage not only illegal occupation but also encouraged other councillors to do what he did. (b) By not taking action or instituting an investigation into the matter the COJ contravened the Municipal Systems Management Act and its Code of Conduct. The acts of the COJ constitute maladministration as envisaged in section 6 of the Public Protector Act and improper conduct as envisaged in section 182 of the Constitution. Regarding whether the COJ unduly failed to take resolute criminal action against illegal occupants in violation of its own by-laws? I find that: (a) The COJ did indeed fail to enforce its own by laws as per the Greater Johannesburg Metropolitan Electricity by-laws and it’s policies as explained above. (b) The acts of the COJ constitute maladministration as envisaged in section 6 of the Public Protector Act and improper conduct as envisaged in section 182 of the Constitution. Regarding whether the COJ undertook to assist the Complainant with an eviction process and later improperly failed to do so and in the process caused him to incur security costs for security meant to guard the buildings at the conclusion of the eviction process? I find that: (a) The COJ undertook to do something unlawful, by undertaking to assist in the eviction of the unlawful occupiers whilst it did not have the power or authority to do so, and accordingly could not do it. (b) The COJ failed to conduct a proper assessment of its powers and accordingly advised the complainant wrongly in violation of section 195 of the Constitution and because of the wrong advice he lost time and money. (c) The acts of the COJ constitute maladministration as envisaged in section 6 of the Public Protector Act and improper conduct as envisaged in section 182 of the Constitution. Regarding whether the COJ failed to discharge its responsibilities in terms of the right to property under section 25, right to access of housing under section 26, duty to ensure good administration under section 195 and duty to give priority to constitutional obligations under section 237 of the Constitution? I find that: (a) The COJ has known about the need for housing of the illegal occupants occupying the Complainant’s buildings and done nothing about it thus causing the Complainant to shoulder its and other responsible organs of state’s responsibilities under section 26 of the Constitution, thus violating Complainant’s rights under section 25 of the Constitution. (b) The COJ failed to discharge its constitutional responsibilities particularly as outlined in the Blue Moonlight Properties case and under section 237 of the Constitution. (c) The COJ failed to honour promises made to the Public Protector arising from a meeting held on 23 September 2014, that the COJ will assess the Complainant’s buildings in view of acquiring them if they meet the requirements for premises earmarked by the COJ for temporary accommodation. (d) The COJ’s treatment of the Complainant, involving unmet promises and being misled, further violates principles of public administration in section 195 of the Constitution. (e) The acts of the COJ constitute maladministration as envisaged in section 6 of the Public Protector Act and improper conduct as envisaged in section 182 of the Constitution. Regarding whether the Complainant and his family prejudiced by one or more of the City’s acts of maladministration? I find that: (a) The Complainant was severely prejudiced by the COJ’s maladministration, financially, emotionally and psychologically. (b) The Complainant’s family and employees have also been prejudiced by the COJ’s maladministration. The appropriate remedial action I am taking in pursuit of section 182(1)(c), with the view of placing the Complainant as close as possible to where he would have been had the improper conduct or maladministration not occurred, is to call upon: The Mayor of the COJ to: (a) Cause an urgent evaluation of the Complainants’ buildings, approach the Council with the request to buy the buildings as redress for harm caused to the Complainants by the COJ. (b) Ensure that an internal investigation on the cause of the COJ failure to provide Mr Kgaudi with service expected under section 195 of the Constitution and the Batho Pele principles. (c) Ensure that an urgent investigation is conducted in respect of all privately owned buildings that are illegally occupied, ensure that the COJ complies with its responsibility to provide emergency housing. (d) Apologise to the Complainants’ family for the gross maladministration and consequent trauma. The Chairperson of the Municipal Council to: (a) Ensure that appropriate action is taken against Councillor Zwane in terms of the COJ’s Code of Conduct for Councillors and to report to the MEC for local government in the province on the matter. (b) Assists the Mayor with the above remedial action. It was a year of great moments and a year of turbulence and yet it was a wonderful year. We’ve learnt from it and hope all organs of state and role players have also learnt and grow for it. As we move into 2015, let us commit ourselves to walk the talk better on good governance and to play our part in ensuring that the state becomes more accountable, operates with more integrity and is more responsive to all Happy Holidays and to those that Celebrate Christmas, Merry Christmas. Thank you. Adv. Thuli Madonsela Public Protector of SA
Posted on: Thu, 18 Dec 2014 16:02:12 +0000
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