More than a code of ethics needed to monitor who is awarded state tenders

Over the past few weeks, allegations of scandals involving ANC members and their families have dominated the media space, prompting public outcry, investigations and eventually calls for more Covid-19 procurement transparency.

There is a growing feeling that spouses, children and relatives of politicians should not do business with government as this is akin to corruption. It further posits that these should voluntarily desist from state-linked economic benefit without legal compulsion.

The government has tried over the past few years to address politicians and officials’ family entanglements. However, the entrenched patronage networks that enable government employees to bid for state contracts through their friends and relatives have not ended. It is through tighter laws and stronger enforcement rather than political will and social mobilisation that this may be addressed.

It is worth noting that SA is a constitutional democracy and the Bill of Rights is a cornerstone of democracy. It enshrines the rights of all people in our country and affirms the democratic values of human dignity, equality, and freedom. Thus on the freedom of trade, occupation and profession section 22 reads “Every citizen has the right to choose their trade, occupation or profession freely.”

The Public Finance Management Act (PFMA) and the Municipal Finance Management Act (MFMA), alongside the legislated requirement to put in place measures to prevent fraud, corruption, favouritism and irregular practices are in place to promote ethical conduct.

While there are legal prescripts, including legislated codes of conduct, and regulations to ensure good governance — both from the public administration and politicians, there is currently no law precluding children, spouses, and relatives of politicians from doing business with the state.

However, both the office holder and the relative have an obligation to the South African people not to create   an impression that the office-bearer profile is being used for the personal financial gain of the relative because that simply undermines public confidence in the whole system.

The direct approaches to instil ethical behaviour through codes of ethics and other policy-like measures often fail. Self-regulating approaches at the professional level are more successful because they build a culture of trust. Within this culture, ethical behaviour is regulated through members of the society who share this culture. But, have we created a society that could be governed by ethical behaviour and moral campus? I hasten to say no.

In one of  his recent  weekly newsletter, President Cyril Ramaphosa again made corruption his focus, saying profiteering during a state of disaster was a heinous crime.

“While everyone in SA has a right to engage in business activities, we are faced with the real problem of families and friends of political office-bearers or public servants receiving contracts from the state. Not all conduct of this sort is necessarily criminal, but it does contribute to a perception and a culture of nepotism, favouritism, and abuse,” he said.

We however need to define these categories carefully to avoid a situation where every relative or person you share a surname with is considered a relative and whether he/she is in a position to influence the outcome of a tender through proximity and influence. Without the law forbidding it, this becomes an ethical albatross made only for the ANC or ruling party. According to the Financial Intelligence Centre  Act, a politically exposed person or PEP is the term used for an individual who is or has in the past been entrusted with prominent public functions in a particular country.

The term “families” includes close family members such as spouses, children, parents, and siblings and may also include other blood relatives and relatives by marriage. While the FIC Act precludes government officials from conducting business with the state, it doesn’t exclude PEPs from doing so. The act does call for extra special provisions to be in place for PEPs, to ensure that contracts and tenders are won fairly and that all checks and balances are in place to guarantee everything is above board.

Further to this view, government must define the levels of proximity instead of a blanket suggestion that spouses and children can’t exercise their right to earn an income in a fair and competitive process. At worst and without proper clarity, it would mean a child of a Port St Johns councillor who runs a business in the Western Cape cannot do business with that government. This is not only absurd but unfair. It is a known fact that private sector opportunities for SMMEs are limited and constrained.

What needs to be done though is strengthen government’s response to corruption by bringing together the Financial Intelligence Centre, the Independent Police Investigative Directorate, National Prosecuting Authority, the Hawks, Crime Intelligence and the SAPS Detective Service, SA Revenue Service, Special Investigating Unit and the State Security Agency to deal with corruption, in general, using the standard bidding document declaration of interests as a start.

Luthando Bara is an entrepreneur and president of the Black Business Forum.