News in South Africa 5th January:

1. Companies named in state capture:

Zondo’s report on state capture “will consist of manageable volumes” to deal with different state-owned enterprises (SOEs) to “enable anyone who wishes to read a part of the report that relates to a specific SOE or topic to take the particular volume and read about that SOE or topic,” said Justice Raymond Zondo, in a preamble to the first volume he handed over to President Cyril Ramaphosa on Tuesday.

Companies named in state capture
Image taken by: Savvas Stavrinos

In the case of SAA, and some related companies, that means more than 400 pages of dense text, as part 1 of Volume 1 of the final report.

Zondo’s commission’s proceedings spanned more than 400 days, with more than 300 witnesses appearing – and presenting more than 1.7 million pages of documents as evidence.

“Approximately 1,438 persons and entities were implicated by evidence led before the Commission,” said Zondo.

In the case of the aviation sector, that includes a number of otherwise unknown companies – and some household names.

Much of the first chapter of the report deals with South African Airways (SAA), and South African Airways Technical (SAAT), and two key figures at their helm. There had been “a steady decline in the quality and effectiveness of the governance” at those companies from 2012, over the period that close associate of Jacob Zuma, Dudu Myeni, was chairperson of SAA, and a close associate of Myeni, Yakhe Kwinana, was the chair of SAAT, Zondo points out.

That created the conditions for large-scale corruption and looting. Some companies turned a blind eye, some appear to have been victims, and others profited. 

Below are some of the companies mentioned in the report:

  • SAA
  • VNA Consulting
  • Emirates
  • Airbus
  • LSG Skychefs
  • SAA’s Air Chefs
  • Bidvest
  • Swissport
  • Nedbank
  • PWC

2. Anti-corruption agency needed:

The Zondo commission has recommended the establishment through legislation of an independent agency against corruption in public procurement.

This recommendation formed part of the first report of the commission which was handed to President Cyril Ramaphosa on Tuesday.

The function of the proposed agency would be to initiate measures to protect procurement systems from corruption, issue guidelines for the betterment of procurement practices, prohibit any practices which facilitate corruption, fraud or undue influence in public procurement and protect and incentivise whistle-blowers.

The agency would also implement measures to increase the integrity and transparency of public procurement practices. It would issue reports detailing the nature and extent of fraud, corruption and undue influence which it identified.

The agency would be subject only to the constitution and the law and would consist of a council of five members with the chairperson being a senior legal practitioner with expertise in procurement matters. The members of the council would be selected by the chief justice, the auditor-general and the minister of finance after a public process.

The agency would also consist of an inspectorate, litigation unit, a tribunal and a court.

The commission has also recommended that government in consultation with the business sector draw up a national charter against corruption in public procurement.

The charter should include a code of conduct setting out the ethical standards that should apply in the procurement of goods and services for the public. Both the charter and the code of conduct should be given legal status by way of an act of parliament.

The national charter should be signed by the president, the cabinet, provincial premiers, members of provincial cabinets, local authorities, state-owned enterprises, political parties represented in parliament, constitutional entities, institutional representatives of the business sector, listed public companies, trade unions, anti-corruption bodies and civil society.

3. SARS crippled for state capture:

The report stated that the South African Revenue Service (SARS) was dismantled under former president Jacob Zuma and former commissioner Tom Moyane.

The report highlighted a massive failure of integrity and governance at SARS, demonstrated by what the tax body once was, and what it has become.

“That state of affairs was brought about by the (at least) reckless mismanagement of SARS on the part of Mr Moyane. What occurred at SARS was inevitable the moment Mr Moyane set foot there. He dismantled the elements of governance one by one. This was more than mere mismanagement. It was seizing control of SARS as if it was his to have,” it said.

This was done in a number of ways, including:

  • The failure of good governance was manifested from the fact that senior management was driven out or marginalised at SARS. Their replacements, appointed by Moyane, were simply compliant and neglected their oversight function.
  • The development of SARS’ sophisticated Information Technology systems was summarily halted, while the organisational structure of SARS that provided oversight was pulled apart.
  • Instead of fostering a culture of healthy dissent, Moyane engendered a culture of fear and intimidation. Dissent was stamped out by instilling distrust and fear, while accountability to other state authorities was defied and capacity for investigating corruption was disabled.
  • SARS’ investigatory and enforcement capacity presented a hurdle to those involved in organised crime, and was, therefore, a target for those engaged in state capture. The involvement of the media in perpetuating false narratives which discredited targeted people as well as providing grounds for their removal was a notable feature of the evidence led in regard to the capture of SARS.
  • Some of SARS’s most important units, which were set up to ensure tax compliance, were disbanded or restructured such that important projects were put on hold or abandoned, thus fundamentally weakening the revenue collection function.

“All these actions and events cannot be coincidental. This is especially so in the light of the planning documents which the Commission has been shown,” the Zondo Commission said.

“The only feasible conclusion is that the organisation was deliberately captured and president Zuma and Mr Moyane played critical roles to in the capture of SARS and dismantling it in the way it was done during Mr Moyane’s term as commissioner.”

“SARS was systemically and deliberately weakened, chiefly through the restructuring of its institutional capacity, strategic appointments and dismissals of key individuals, and a pervasive culture of fear and bullying. It is a clear example of state capture.”

4. Cold war with Zimbabwe coming:

Relations between South Africa and Zimbabwe appear to be deteriorating at an alarming rate following the decision by the Department of Home Affairs not to renew exemption permits for hundreds of thousands of Zimbabweans residing in South Africa.

The so-called Zimbabwe Exemption Permits (ZEPs) expired on December 31, leaving an estimated 250 000 Zimbabweans at risk of losing their jobs, their bank accounts and of being deported.

This decision is being challenged in court by the ZEP Holders Association and NGO Amity Africa, which argue that holders of the now expired ZEPs are entitled to be awarded permanent residence status in SA.

Dr Aaron Motsoaledi, the minister of Home Affairs, is accused of publicly insulting senior members of the Zimbabwean government, including President Emmerson Mnangagwa and several of his ministers. The public position of the Zimbabwean government is that it respects SA’s decision not to renew the permits, though privately, many Zanu-PF members are fuming, warning of a coming cold war between the two countries.

The funds from the proposed pollution levy would be used to assist the return of ZEP holders to Zimbabwe, as well as compensate truck drivers and Zimbabwean victims of xenophobic violence in SA. A portion of the funds raised from the levy would be used to plant flora and fauna in areas negatively impacted by air traffic over Zimbabwe.

The proposed aviation bill also envisages providing tax holidays and various other incentives for foreign aviation companies arriving and departing from Zimbabwe.

This would alleviate any financial burden imposed on them by the pollution levy. All levies on aviation companies arriving and departing from Zimbabwe would be reduced.

“SA was our closest ally for decades, as we – among the frontline countries – bore the brunt of the cost of the liberation struggle,” says one Zanu-PF member. “SA’s hostility to Zimbabweans comes at a time when nationalism is resurging, but this is a two-way street. Zimbabwe is not without means to respond peacefully to these provocations from SA. Many of us see this as an opportunity to rebuild the Zimbabwean economy, offer tax incentives to companies based in SA that are fearful of their future there, and start attracting companies to relocate here.

5. 8 078 new infections in SA:

South Africa recorded 8 078 new Covid-19 infections on Tuesday.

According to a statement by the National Institute for Communicable Diseases (NICD), as of Tuesday, the country recorded 3 483 590 laboratory-confirmed cases. There have been 139 new Covid-19 deaths, bringing the confirmed death toll to 91 451.

The NICD said the 8 078 new Covid-19 cases identified in South Africa represented a 20.1% positivity rate.

As of Tuesday, Gauteng recorded 1 139 446 confirmed cases, KwaZulu-Natal 618 948 and the Western Cape 600 427.

Most new cases were recorded in KwaZulu-Natal, which accounted for 28% of new infections, followed by the Western Cape with 22%. Gauteng accounted for 19%; the Eastern Cape 13%; Free State 5%; Limpopo 4%; Mpumalanga and North West 3% each; and the Northern Cape 2%.

KwaZulu-Natal recorded 2 281 new cases on Tuesday, the Western Cape 1 765 and Gauteng 1 549.

There were 309 new hospital admissions in the last 24-hour reporting cycle. As of Tuesday, 8 857 people were in public and private hospitals for Covid-19.

South Africa conducted 21 344 293 cumulative tests, of which 40 105 were carried out in the last 24-hour cycle.

According to the Department of Health, 28 095 848 vaccine doses have been administered. Of those, 59 929 were administered on Tuesday.

To date, 15 666 843 adults are fully vaccinated. Among children aged 12 and older, 932 169 vaccine doses have been administered.

All information sourced from articles posted by: Business Insider, Business Day, BusinessTech, Moneyweb and News24.

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