By Ryan Brunette and Jonathan Klaaren
South African public procurement law needs a tougher approach to enforcement. It will have one if it empowers and incentivises whistle-blowers.
Government’s procurement budget is larger than its employee compensation budget. At around R926-billion in 2018, it accounts for about a fifth of South Africa’s gross domestic product. At this scale, public procurement is key to the public administration’s operational efficiency and effectiveness. It is central to the country’s politics and to allocative patterns in the broader economy. The preeminent site of corruption, public procurement is simultaneously a fulcrum for South Africa’s transformation into a society free of the racism and sexism of colonial and apartheid political economy.
The Public Procurement Bill, viewed against this background, has features of a grand compromise. It aims to construct – from the dozens of legislative improvisations of the last quarter of a century – a single, coherent legal framework for the entirety of South Africa’s public procurement regime. The Bill defines and strengthens central regulatory and oversight authority in a proposed Public Procurement Regulator in the National Treasury. It promotes a more flexible and expanded approach to preferential procurement from black people, women, and disabled people. The Bill goes on to formalise some existing practices that are not yet explicitly authorised in South African law, such as geographical set asides in the allocation of contracts, to businesses located in specific provinces, municipalities, and underdeveloped areas.
The Bill, as such, intends to bolster public procurement ethics, even while it augments post-apartheid efforts to reshape patterns of ownership and control of South African capitalism. It gestures towards positive synergies, between anti-corruption and broad-based development, by carving out wider channels for the economic empowerment of historically disadvantaged groups, at the same time that it works to better-regulate and harness these channels to a broader public interest. We believe, however, that the Bill does not follow through on this final commitment, insofar as it fails to underpin public procurement law with a credible enforcement strategy.
To do so, the Bill should empower whistle-blowers to bring civil claims for the recovery of damages suffered by the state as a result of procurement fraud and corruption. These whistle-blowers must be incentivised, made whole again for the sacrifices incurred in the course of their civic endeavours, by rewarding them with a specified percentage of damages won.
The problem that this would address is greater than the Public Procurement Bill. South Africa’s criminal justice system as a whole is struggling to keep up with the growth of the country’s corruption problem.
In her report for the 2019 financial year, the National Director of Public Prosecutions says that 210 government officials were convicted for corruption and related offences. That was three convictions less than the previous year. The Asset Forfeiture Unit attained corruption-related civil recoveries worth an impressive R2.8-billion, but this was off the back of freezing orders worth R4.4-billion in 2018, a figure that has fallen to just R262-million in 2019.
There is no lack of potential corruption cases.