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Op-Ed: We’re withdrawing from the Arms Procurement Commission, and here’s why


Daily Maverick

By A FEINSTEIN, P HOLDEN AND H VAN VUUREN

August 29, 2014

The Arms Deal was a uniquely damaging moment in our young democratic history. It was concluded after decades of uncontrolled spending on foreign and internal wars by the apartheid regime. From the signing of the contracts in 1999 up to R70 billion of public money continues to be spent on weapons of questionable utility. The country was not and is not facing any meaningful military threat. But rather the most pressing problems that faced us then as they do now are inequality, poverty and unemployment

Since its inception the Arms Deal has been dogged by well supported allegations of corruption. We together with many other activists have consistently challenged the State to fully investigate and prosecute these allegations. Four previous investigations have failed to fully probe the Arms Deal.

We have engaged with these matters in different capacities over many years and we have done this out of the commitment to the primacy of the Constitution and the rule of law in our democracy. Given this commitment we believe that all allegations of corruption must be investigated and prosecuted without fear and favour.

After careful consideration, with great disappointment we have decided to withdraw all participation in the Seriti Commission of Inquiry into the R70 billion Arms Deal.

The appointment of the Commission raised great expectations that the truth would finally be established, and that this would challenge the interests of politicians, middlemen and large corporations in one of the most corrupt industries in the world. The Commission had the prospect of serving not only South Africans but all people across the globe campaigning against the devastating impact of corruption in the arms trade.

The Commission has failed on both accounts. It has missed a historic opportunity to support the struggle for transparency and accountability of the powerful.

We have not made our decision lightly. It follows nearly two years of actively trying to support the work of the Commission, assisted by an exceptional pro bono legal team led by Lawyers for Human Rights.

We have taken our decision due to serious and fatal concerns we have regarding the manner in which the Commission has conducted itself. There are four key reasons why we have decided to withdraw:

  1. The Chairman, Judge Willie Seriti, indicated that he was not interested in hearing evidence from witnesses about documents that they had not themselves written. Judge Seriti made this ruling during the testimony of Member of Parliament Mr David Maynier. This prevented Mr Maynier from giving any substantive evidence, as he was not the author of documents that emanated from investigations or government departments. This is particularly disturbing as this limitation was not applied to previous witnesses who were supportive of the Arms Deal. The implication of this ruling is that only those who have been involved in the Arms Deal can introduce evidence. How the Commission intends to discover the truth by only hearing from participants in the Deal is a mystery.

The Chair has also ruled that witnesses should only speak to corruption allegations of which they have personal knowledge. The logical conclusion of this ruling is that only those who have been corrupted, who have corrupted others, or who were intermediaries in such corruption, can give evidence of it. It is obvious that all of these parties have an interest in hiding the truth. Why would the Chair choose to rely solely on their opinions?

We have conducted extensive research into the Arms Deal. We have analysed thousands of documents, and interviewed people who are able to point to where evidence of corruption is likely to be found. We were not direct participants in the Arms Deal. If we are not allowed to talk to documents that we have not written, nor speak to corruption allegations based on documentary evidence, there is no point in our appearing as witnesses. This process will serve to undermine the critics without addressing the evidence they have accumulated. This can only serve to protect the corrupt and compromised.

In response to our attempt to resolve this issue, the Commission has informed us in their correspondence of 27 August 2014 that “The decision [to admit evidence of which a witness not the author, nor facts within a witness’ personal knowledge] will be influenced by the circumstances of each case, including the document’s relevance to the terms of reference and the purpose for which it is sought to be used.” There is no basis on which we can have any expectation that we will be permitted to give evidence on matters not within our personal knowledge, and rely on documents we are not the authors of. The Commission’s rulings to date in respect of other ‘critic’ witnesses, and the Commission’s rulings to date in respect of our cross-examination of other witnesses, clearly indicate the contrary. The Commission has not undertaken that it will now reverse its previous approach. (If it did so, procedural fairness would require the recall of a number of witnesses). Read more here.

Uganda overhauls procurement rules to ‘eliminate influence peddling’


SupplyManagement

8 April 2014 | Will Green

Government procurement regulations in Uganda have been revamped to support local businesses, speed up processes and “eliminate influence peddling”.

Under the changes bid evaluation teams will have to work to fixed time frames, and officials and ministers will not be allowed to bid for contracts with the government institution they are employed by or responsible for. A tribunal will also be established to handle complaints about the work of the Public Procurement and Disposal of Public Assets Authority (PPDA).

The new regulations include preference schemes that give advantages to local suppliers when procuring goods, services and works. Some contracts will also be set aside for young people, women and people with disabilities.

Meanwhile, officials “shall not sign a contract whose contract price is above the market price of the product being procured” to “eliminate cases of the government paying ridiculously high prices for procurements”.

Government bodies will be required to publish procurement plans, firms will be able to request information on unsuccessful bids, and in certain situations bidders will be allowed to submit a non-monetary “bid securing declaration” instead of using a costly bid security.

A PPDA spokesman said: “With 60 per cent to 70 per cent of the government budget being spent on public procurement and the public outcry against corruption and influence peddling, the law has been strengthened to limit who can provide services to government.”

The changes, which came into force in March, also include special provisions to enable faster and more efficient procurement of medicines and supplies for medical facilities.

The spokesman said: “The amendments will significantly change the way public procurement is managed in Uganda. Some of the immediate benefits are promotion of local businesses under the preference and reservation schemes, and efficiency in public procurement. The new law also demands great accountability from both public and private officials involved in procurement.”

Kenya: Oswago Tells EACC of Bad Blood Between Staff, Supplier


AllAfrica.com

BY DOMINIC WABALA, 15 AUGUST 2013

The Independent Electoral and Boundaries Commission (IEBC) Chief Executive Officer James Oswago has revealed the “acrimonious” working relationship between the commission’s Director for ICT and representatives of the company that was awarded the tender to supply election equipment.

Oswago’s statement to the Ethics and Anti-Corruption Commission that is probing the pre-election procurement process at IEBC delves into the behind the scenes intrigues that surrounded the delayed procurement of the equipment, the change of specification for the kits and why they failed to perform as expected.

Oswago said this bad blood between the ICT director Dismas Ong’ondi and employees of Face Technologies (Facestec) caused a delay in the delivery of the kits which arrived a month before the election day.

“The director ICT raised most of the issues which had already been answered by Face Technologies. I may add that the relationship between Dismas and Face was sour/antagonistic for some reasons I never understood. The issues he was raising were relevant, but it was his duty to fully engage and provide a solution e.g. the CEO had to get personally engaged in the effort to get Face to deliver the EVID fully configured and load the final BVR Register per polling station at Kasarani, a function which would have been done by the Director himself and I later delegated that to be headed by Shollei/ICT managers,” Oswago said.

The CEO attributed the delay to request by the Directorate of ICT late changes of data without prior notification. “I stated that Face too are frustrated by poor response on critical issues from ICT Directorate and I had seen evidence of it as in the exchange of several emails between Dismas and Face Technologies in which Face lists clear instances of promises made but not fulfilled by ICT, late changes to the data on file without prior notification forcing Face team to redo some work afresh, areas where in correct data was sent to Face Technologies. Finally the Director ICT was never involved at all in the setting up of the EVID data processing centre at Kasarani Sports Complex,” Oswago says in his statement.

The CEO also blamed the failure of the Electronic Voter Identification Devices (EVIDs) during the March 4 2013 election on human error owing to inadequate training of poll clerks.

“The gadgets did not fail- human error resulting from insufficient training caused the problem. I can state that the EVID equipment hand held or laptop worked very well in all cases where charging issue was addressed. Indeed, in elections for CAW conducted in Kuria EAST AND Samburu, three week after the March 4th polls, the EVID worked perfectly well,” Oswago said.

The IEBC CEO said that the delivery of the kits was delay for over 30 days because a complaint had been lodged at the Public Procurement Oversight Authority (PPOA) challenging the award of the tender to Face Technologies while the ICT director constantly faulted any efforts by the South African company as they tried to deliver on time.

Oswago said that he delegated the EVID project to the IEBC Deputy Commissioner Secretary-Support Services Wilson Shollei and was not involved in some of the communication between Face Technology and IEBC.

The IEBC CEO told the investigators in his statement on June 28 2013 at 9:30am that on December 5 2012, he received a memo from Deputy Commission Secretary Support Services Wilson Shollei requesting him to authorize transfer of US $ 16,651,139 (Sh1.4 billion) to the Commission’s Kenya Commercial Bank account No. 1117602532 University way branch to complete the contractual obligation with Face Technology.

“I am aware that on December 05, 2012 the DCS-Support Services, Mr Wilson Shollei wrote a memo to me requesting for authority to transfer funds amounting USD 16,651,139.3 to the Commission account No. 1117602532 at KCB University Way. The Commission was in the process of entering a contract with Face Technologies to supply EVID and the contract required irrevocable letter of credit. Subsequently, I gave the approval on December 05, 2012 partly because I had earlier assigned Shollei responsibility to manage EVID procurement and implementation and partly because I had received verbal briefs from him that the vendor had specifically asked for an LC in the contract. This information was also included in the memo. I can see on the memo produced before me here today, Shollei gave instruction for voucher preparation to the Director manager Finance on 10th December and he has signed for the accounting officer. I am seeing this for the first time,” Oswago said in his statement.

He also denies being aware of the US$ 15 per kit for some rubber protection which is tax exempt yet the other items are taxable.

South Africa: Mbeki, Manuel to give evidence in arms probe


The Citizen

July 16th, SAPA

Former president Thabo Mbeki will testify as a witness in the first phase of the Arms Procurement Commission, it was announced.

The commission, which is probing the R70 billion arms procurement deal, will hold public hearings from August 5 until January 31, subject to President Jacob Zuma granting an extension beyond November, spokesman William Baloyi said in a statement on Monday.

Mbeki and Minister in the Presidency Trevor Manuel were set to testify in the second half of January.

Baloyi said the first phase of the commission would “deal with the rationale for the Strategic Defence Procurement Package”, and whether the arms and equipment acquired were under-utilised or not utilised at all.

The first witnesses would be navy and air force officials. Armscor witnesses would be named later.

Former Intelligence Minister Ronnie Kasrils and Congress of the People president Mosiuoa Lekota would be called as witnesses between September 30 and October 4, followed by department of trade and industry officials until November 11.

Former Public Enterprises Minister Alec Erwin was expected to testify for three days in November, followed by National Treasury officials until the end of that month.

“It is also important to note that the programme is not cast in stone and circumstances prevailing at the hearings may require that it be adapted or altered, and this may also effect the sequence of witnesses,” Baloyi said.

“Some of the witnesses may be recalled at a later stage, when the commission deals with the terms of reference relating to allegations of impropriety, fraud and corruption in the acquisition process, a phase in which the ‘whistleblowers’ and those who are implicated will feature.”

The commission would be held in the council chambers of the Sammy Marks Conference Centre in Pretoria.

The deal, which was initially estimated to cost R43 million, has dogged South Africa’s politics since it was signed in 1999, after then Pan Africanist Congress MP Patricia de Lille raised allegations of corruption in Parliament.

Zuma himself was once charged with corruption after his financial adviser Schabir Shaik, who had a tender to supply part of the requirements, was found to have facilitated a bribe for him from a French arms company.

The charges against Zuma were later dropped.

Algerians outraged over latest corruption accusations against state oil and gas behemoth


Fox News

March 3, 2013 / Associated Press

ALGIERS, Algeria –  Corrupt and gorging itself at the trough of Algeria’s vast oil wealth — that’s how most Algerians privately view the elites running the country. Yet few have been willing to say so publicly, until now.

New corruption scandals are shining a new spotlight on state oil company Sonatrach, which jointly with BP and Norway’s Statoil runs the desert gas plant that was the scene of a bloody hostage standoff in January.

A recent anguished public plea by a former Sonatrach official shocked Algerians and raised hopes that the leadership will try to clean up the oil and gas sector in Africa’s largest country.

There’s plenty at stake: Algeria is also one of the continent’s richest countries, as the No. 3 supplier of natural gas to Europe, with $190 billion in reserves, up $8 billion in the last year alone.

The Feb. 18 letter by former Sonatrach vice president Hocine Malti in the French-language Algerian daily El Watan broke the silence around the company. Addressing the shadowy leader of Algeria’s intelligence service, it asks if he is really serious about investigating new bribery scandals involving Sonatrach and Italian and Canadian companies.

When Italian prosecutors in January announced an investigation into oil company ENI and subsidiary SAIPEM for allegedly paying €197 million ($256.1 million) in bribes to secure an €11 billion contract with Sonatrach, it provoked a firestorm in the Algerian media, until the North African country’s justice system finally announced its own inquiry Feb. 10.

Malti, author of the “Secret History of Algerian Oil,” scoffed that Algerian authorities were only following the lead of international investigators and wondered if Mohammed “Tewfik” Mediene, the feared head of the Department of Research and Security, would allow the real sources of corruption to be tried in court.

“Is it too much to dream that some of your fellow generals, certain ministers or corrupt businessmen — members of the pyramid that you are on top of — members of this fraternity, might also end up in front of justice?” he asked in the letter. “Or will it be like always, just the small fry are targeted by this new investigation?”

“Will we have to continue to listen for news from the Milan prosecutor to know the sad reality of our country, to discover how certain people, whom you know quite well, people you have come across in your long professional career, have gorged themselves on millions of dollars and euros of the country’s oil revenues?” he added.

The response to the letter was swift. Energy Minister Youcef Yousfi promised that once an investigation was complete “we will take all necessary measures” against those harming the interests of the nation.

President Abdelaziz Bouteflika, who rarely appears in public, said in a written statement, “these revelations provoke our disgust and condemnation, but I trust the justice system of our country to bring clarity to the web of accusations and discover who is responsible.”

Malti told The Associated Press by telephone from his home in France that he wrote the letter partly out of anger that Algeria had to rely on foreign prosecutors to reveal the extent of its own corruption and addressed it to the head of intelligence to shock people.

“It made a lot of noise because with this letter, I broke a taboo,” he said. “The head of the DRS is an unapproachable figure in Algeria, at times we can’t even pronounce (say) his name.”

It is not the first time the state-owned hydrocarbon company, which provides Algeria with 97 percent of its hard currency earnings, has been enmeshed in scandal.

In 2010, its head, three of its vice presidents and the minister of energy were all fired in a corruption investigation run by Mediene’s intelligence agency.

However, rather than restore faith in the country’s corruption-fighting mechanism, the 2010 purge was widely seen as a chance to settle scores between the DRS and Bouteflika, since most of those fired were his close associates.

Algeria ranks 105 out of 176 in Transparency International‘s 2012 corruption index, and the occasional corruption investigation often just seems to be how the elites settle their scores, such as a string of revelations about prominent politicians in November, which observers said were linked to next year’s presidential elections.

“I realize that people might be shocked by what is happening at Sonatrach — these scandals are terrible and we condemn them as individual acts,” Sonatrach head Abdelhamid Zerguine said on the radio Sunday, the anniversary of Algeria’s 1971 nationalization of its oil industry from the French. He promised to fight further corruption “with utmost vigor,” even while denying it was systemic.

The scale of the scandals is staggering. Nearly €200 million ($260 million) was paid out by the Italians, according to the Milan prosecutor. ENI has pledged full cooperation with prosecutors in their investigations.

Meanwhile, according to a joint investigation by Canada’s Globe and Mail newspaper and an Italian business paper published Feb. 22, Canadian company SNC-Lavalin paid a series of bribes of its own to secure a $1 billion engineering contract. Company spokeswoman Lilly Nguyen responded to queries about the case saying “to the best of our knowledge, SNC-Lavalin is not specifically under investigation in the Sonatrach matter.”

With commissions on deals like this going to the highest levels of power, the Algerian press rarely reports about it — until the subject is broached by the foreign media.

Malti, who was there at the founding of Sonatrach in 1963, estimated that the country was losing between $3 and 6 billion annually to corruption in the oil sector alone.

“If a judge says that an inquiry has opened or even a minister promises to take measures against ‘people working against Algeria’s interests,’ I don’t believe them,” Mohammed Saidj, a professor of international relations at Algiers University, told the AP. “It’s just words to appease a public opinion shocked when it hears about the corruption and billions of dollars stolen by high-level political and military officials, including those close to the president.”

The chances of this situation changing are dim, considering how much the country relies on a single company.

In a chapter on Sonatrach in the 2012 book “Oil and Governance,” John Entelis, an Algeria expert at New York’s Fordham University, described the importance of a company established just a year after Algeria won its independence from France, and wrote, “Algeria’s governing elite rely upon Sonatrach for revenue from which they gain power, patronage, and privileges.”

Entelis told AP that the letter in El Watan shows that Algerians are increasingly able to complain about this system, even if that won’t necessarily change things.

“This is the heart of the Algerian political system — Sonatrach, the DRS, civil society in the form of … willingness to make these things public. Some say this is what enables it to maintain itself instead of collapse,” he said.

___

Paul Schemm reported from Rabat, Morocco. Associated Press writer Karim Kebir contributed to this report from Algiers, Algeria.

Analysis: New law fails to ease oil concerns in Uganda


IRIN NEWS

KAMPALA/NAIROBI, 13 December 2012 (IRIN) – Uganda’s parliament recently passed a law to govern the exploration, development and production of the country’s estimated three billion barrels of oil, a resource whose extraction will directly affect the livelihoods of tens of thousands of people.

While the law streamlines the burgeoning industry, analysts have raised concerns over transparency and over who controls the sector.

“The new law helps set clear guidelines under which the oil sector is to be run and managed, and makes clear who is in charge of what roles,” said Tony Otoa, director of Great Lakes Public Affairs (GLPA), a Uganda-based think tank focusing on oil and governance. “However, there are some concerns about transparency and too much power within the oil industry in the hands of the president.”

The bill was passed on 7 December after weeks of wrangling over its controversial Clause 9, which gives the energy minister wide-ranging powers, including authority over the granting and revoking of oil licenses, negotiating and endorsing petroleum agreements, and promoting and sustaining transparency in the petroleum sector. Many members of parliament (MPs) felt these powers should be held by an independent national oil authority.

“Essentially, the standoff, which has ended, was about the withdrawal of trust from a government that is battered by corruption scandals. Also the way the cabinet operates is that, in the past, the feeling has been that some key ministries, like finance, are effectively run by the presidency after being stuffed by yes-men or -women. The pushback against Clause 9 also comes as the Central Bank opened its vaults to a large withdrawal in 2010 [US$740 million to buy six fighter jets] only for approvals to be sought retrospectively,” said Angelo Izama, a Ugandan journalist and oil sector analyst.

“Loss of trust”

“This loss of trust is behind the resistance to greater control by the executive,” he added. “The executive has not been a bad shepherd of the process so far. Uganda’s negotiating position has been tougher with the oil companies, ironically, without the oversight of parliament. However, public scandals elsewhere have negatively affected the ability of the president to convince lawmakers – especially of his party – that he means well.”

A number of donors – including the UK and Ireland – recently suspended aid to Uganda following allegations of deep-rooted corruption in the Office of the Prime Minister. The prime minister, the former energy minister and the foreign affairs minister were all accused of taking kick-backs from oil companies in 2011, charges that remain unproven but that nevertheless damage the reputation of the government.

“The country lacks trust in the state… Institutions and officials have lost legitimacy, and for such an important bill to vest too much power into a political appointee is a recipe for disaster,” said Stephen Oola, a transitional justice and governance analyst at Uganda’s Makerere University Refugee Law Project.

“Granting and revoking licenses and negotiations are technical in nature. We need an independent commission or authority made up of people of good competence, technical ability and experience, and good morals to guard our oil,” said Frank Gashumba, a local businessman and social activist.

Proponents of Clause 9 say licensing powers are safer in the hands of the cabinet than under an oil authority. “The authority is open, easy to bribe and manipulate. Cabinet is bigger than the authority – members of the executive are answerable to Ugandans because they are elected leaders,” said Kenneth Omona, a ruling party MP.

Those opposed to it say they will challenge the law, which was passed with 149 votes in favour and 39 against; some 198 MPs did not turn up to vote.

“The fight is not complete; the passing of the bill is liable to be challenged in courts of law,” said Theodore Ssekikubo, ruling party MP and chair of the parliamentary forum on oil and gas. “If we fail to go to court, we shall subject the matter to a referendum for all Ugandans to pronounce themselves on this strategic resource. We want to ensure transparency and accountability in the oil sector.”

Transparency

There are also concerns about the law’s confidentiality clause, which limits the amount of information accessible by the public.

“The law is lacking transparency – it imposes confidentiality on officials working within the sector, even after they leave office, so there is no opportunity for whistle-blowing or for the public to have access to information on, say, production-sharing agreements,” GLPA’s Otoa said.

He noted that Uganda still hasn’t joined the Extractive Industries Transparency Initiative (EITI), an international scheme that attempts to set a global standard for transparency in oil, gas and mining, further compounding the sector’s lack of transparency. As a member of the EITI, Uganda and oil companies involved in the country would be required to publish all payments and revenues from the industry.

While Total and the China National Offshore Oil Corporation (CNOOC), two of Uganda’s major oil partners, are listed on Wall Street and are therefore subject to the Dodd-Frank Wall Street Reform and Consumer Protection Act – which requires disclosure of payments relating to the acquisition of licenses for exploration and production of oil, gas and minerals – the Irish firm Tullow Oil, another of Uganda’s main oil partners, is not under any similar obligations.

“I am worried we [legislators] and the public can’t access and scrutinize these agreements. You can imagine the recently negotiated and signed oil agreements have not been accessed by the public, not even by members of parliament,” Beatrice Anywar, former shadow energy minister, told IRIN.

The impact of the oil sector has so far been most acutely felt by communities around Lake Albert, thousands of whom have had to move – some willingly and some forcefully – to make room for an oil refinery, which is expected to take up 29sqkm and displace some 8,000 people.

Land issues

“The government is prosecuting the refinery resettlement by the book. However, managing public expectations and the process of multiple decision makers in Uganda’s complex land legal system [Uganda has multiple land systems, including customary, leasehold and freehold] has contributed some volatility to the process… What is adequate compensation? And who determines that? Is it the market or should this be done by the government?” said journalist Izama.

“As a partner to the oil companies, it’s questionable too if the government can make the best decisions for the affected people as it would look to keep project costs fairly low,” he continued. “It is still a dilemma which is jurisprudential as well as political.”

He noted that much of the oil is in game reserves and a sensitive basin with lakes, rivers and a rare biodiversity, and borders the Democratic Republic of Congo, which could also pose challenges for peaceful production; there has already been some tension between the two countries over their boundaries within Lake Albert.

“The process of consensus-building is still weak, and regardless of how it’s arrived at, displacements will create uncomfortable realities, including land and job pressure.”

According to Otoa, Uganda’s lack of a comprehensive land policy makes compensation issues more complex. “We need clear land policies to ensure people are properly compensated – there is a Resettlement Action Plan in place, but it has not been implemented, and a draft land policy has not been actualized, leaving these communities vulnerable,” he said.

He noted that the lack of education among the local population, both in the oil-rich areas and the rest of the country, had contributed to the continued problems in the sector.

“We have focused too much on educating MPs on the implications and importance of good oil governance. We need to move to people-centred approaches and encourage dialogue in the public sphere, which will lead to people demanding accountability from their MPs and the government,” he added.

Ultimately, Izama said, responsible actions by the government will be the difference between Uganda’s oil making a significant impact on the country’s economy or causing conflict and greater poverty.

“Pressure on public institutions prior to commercial oil production is an effective way of counteracting the resource curse. If this public engagement falters, if the transition [from President Museveni to his successor] is volatile, some of the scenarios of the so-called oil curse are possible,” he said. “Overall the tensions are high, but responsible actions by public and political institutions like the past debate show progress is possible.”

South Africa: Gordhan’s war on incompetence and impunity


Mail & Guardian

By Faranaaz Parker

July 24, 2012

Finance Minister Pravin Gordhan has revealed plans for the national treasury to take a much tighter grip on local governments‘ finances. See the full report here.

Following the release of a damning report on the scale of mismanagement at municipal levels, Finance Minister Pravin Gordhan on Monday revealed that the national treasury would take a tighter grip on procurement processes across the country.

Gordhan announced that treasury would create a procurement oversight unit to actively enforce supply chain management at a national level and would shortly appoint a chief procurement officer. The position would be advertised in two weeks and would be established within the next two months.

“Where there are transactions for a particular size or type within the national domain there must be the ability to assess whether they meet market criteria in terms of prices [and] whether proper processes havebeen followed,” he said.

The announcement was an indictment of local government’s failure to spend and account for public money effectively.

The minister was speaking at the release of auditor general Terence Nombembe’s report on local government audit results, which showed that only 5% of all municipal entities – a total of 13 – had achieved clean audits for the year 2010/2011.

Gordhan said IT systems would be developed to allow the treasury to actively monitor compliance with financial management requirements so that it may demand information regarding procurements, such as how decisions were made and by whom.

Spending fiascos

The move may help prevent public spending fiascos such as the multibillion-rand leasing scandal that saw former police chief Bheki Cele and former public works minister Gwen Mahlangu-Nkabinde sacked last year.

Gordhan said the government should be able to demonstrate that there were consequences for nonperformance and for working outside the law.

“At the moment, those consequences are not there. When consequences are not there continuously then a level of impunity develops,” he said.

He said the new oversight mechanism would require the help of law enforcement agencies, who would bear the responsibility of preparing cases against and prosecuting those guilty of corruption.

With reference to the auditor general’s report, Gordhan said he was particularly disappointed that some large metros, which had better skills and capacity than small municipalities, did not received clean audits.

“If they can’t meet simple criteria in financial management, then it’s a matter the treasury has to take a closer look at,” he said.

Nombembe’s damning report
Nombembe’s report showed there were three root causes behind the slow progress towards clean audits in local government.

The biggest problem, he said, was a general lack of consequence for poor performance. Modified audit results were simply considered the norm, he said.

In addition, over 70% of those audited did not have the minimum competencies and skills required to perform their jobs.

Worryingly, over half of the municipalities audited were slow in responding to the auditor general’s suggestions and were not taking ownership of key financial controls.

Nombembe said if these issues were not addressed, they would continue to weaken governance.

He also complained that most municipalities employed consultants in areas where they already had people to do the work, and even then the results were not as good as they should be.

Cedric Frolick, National Assembly house chairperson, agreed, saying: “What are the employees doing when 70% of the work is being done by people who must be paid for it on top of their salaries?”

“Why are people who are not doing their job, being allowed to keep on [not] doing it?”

Meeting the criteria
But Minister in the Presidency responsible for performance, monitoring and evaluation Collins Chabane said because of the way the three spheres of government were structured, it was difficult to make interventions in local government unless specific criteria had been met.

“It creates a complication where no other authority can intervene, by law, until that municipality makes a decision,” he said.

Chabane said in future, the performance of departments and institutions may be linked to the performance of the heads of those institutions.

“That will begin to bring accountability,” he said.

Meanwhile Subesh Pillay, chairperson of the South African Local Government Association, said it was important to remember that clean audits were a means to an end.

“That end is to ensure that local government become efficient and effective organs of service delivery,” he said.

World Bank Bars Two Oxford University Press Subsidiaries From Contracts


Ventures

By Busayo

July 4th, 2012

VENTURES AFRICA – In order to enforce corporate integrity, two wholly-owned subsidiaries of Oxford University Press (OUP), Oxford University Press East Africa Limited (OUPEA) and Oxford University Press Tanzania Limited (OUPT), have been blacklisted from participating in World Bank projects and other agency projects which have an agreement with the World Bank like the African Development Bank.

In their place, Oxford’s archrivals Kenya Literature Bureau (KLB), Longhorn Kenya and state owned Jomo Kenyatta Foundation (JKF) are expected to be the major beneficiaries of the three-year ban.

According to the World Bank, the Kenyan and Tanzanian subsidiaries were blacklisted for irregular payments to government officials for two contracts to supply text books under programmes funded by the Bretton Woods institution.

Oxford East Africa was penalised and delisted by the World Bank Integrity Vice Presidency (INT) from the World Bank’s multi-billion shilling project for three years after it was linked in a bribery scandal with top government officials.

The publishing house parent company, Oxford University Press (OUP), was billed Sh292 million ($3.5 million) as part of the settlement.

Oxford’s debarment comes one year after donors pulled out of the $80 million (Sh6.7 billion) Kenya Education Sector Support Programme (KESSP) citing rampant fraud involving senior officials at the Ministry of Education.

The bribery scandal investigation that culminated in a penalties and sanctions started in May last year and closed early this year after establishing that the subsidiaries bribed government officials directly and through agents to win tenders and publishing contracts for textbooks.

Investigators found that Oxford East Africa was involved in widespread bribery that spanned five countries including Burundi, Malawi, Rwanda, Sudan and Uganda.

“This debarment is testimony to the bank’s continued commitment to protecting the integrity of its projects,” said Leonard McCarthy, the World Bank Integrity vice-president.

“OUP’s acknowledgment of misconduct and the thoroughness of its investigation is evidence of how companies can address issues of fraud and corruption and change their corporate practices to foster integrity in the development business,” he added.

The World Bank Integrity Vice Presidency (INT) is responsible for preventing, deterring and investigating allegations of fraud, collusion and corruption in World Bank projects, capitalizing on the experience of a multilingual and highly specialized team of investigators and forensic accountants.

The Oxford University Press is to pay the World Bank $500,000 (Sh42 million) for flouting agreed procurement rules and additional £1.9 million (Sh250 million) to the UK’s Serious Fraud Office (SFO) for the same offences.
Oxford University Press voluntarily reported the bribery scandal to the World Bank and SFO on suspicion of the underhand dealings at its regional subsidiaries.

“We do not tolerate such behaviour,” said Nigel Portwood, Oxford’s chief executive adding that the company was committed to maintaining the highest ethical standards.

Oxford’s debarment follows a similar one on its rival Macmillan which was banned from bidding for world-bank funded contract till 2014 for bribery linked to an education project in Sudan. Macmillan was asked to pay Sh1.5 billion penalty to SFO after investigations revealed that it had bribed government officials in pursuit of public and World Bank-funded contracts in Africa.

In July last year, Macmillan paid a Sh1.5 billion ($18 million) penalty to SFO after investigations revealed that it had bribed government officials in pursuit of public and World Bank-funded contracts in Africa.

The publishing house was found to irregularly won tenders for the supply of text books to public schools in Rwanda, Uganda and Zambia between 2002 and 2009.

The publisher remains banned from bidding for World Bank–funded contracts up to mid-2014. After the scandal, Macmillan sold its Kenyan and Ugandan subsidiaries to veteran publisher David Muita for Sh300 million ($3.6 million).

Since 1970, foreign publishers like Thomas Nelson, Heinemann, and Longman have exited the Kenyan publishing market thereby creating more room for local publishers.

Helicopter crash kills Kenyan security minister, 5 others in forest outside capital


Washington Post

By Associated Press, Published: June 10

NAIROBI, Kenya — Kenya’s internal security minister was killed with five other people when the police helicopter they were traveling in crashed in a forest near Kenya’s capital, officials said. An anti-corruption crusader said the incident calls into question the government’s procurement of airplanes and helicopters for its security forces.

Internal Security Minister George Saitoti and his deputy, Orwa Ojode, were among the six killed in the Sunday crash, Vice President Kalonzo Musyoka said. Two pilots and two bodyguards also died in the crash, officials said.

Anti-Corruption crusader Mwalimu Mati said the crash should make the country focus on the history of bogus government purchases for the Kenya Police Air wing. Mati runs the corruption watchdog Mars Group, which has done several reports on the government’s purchase of police helicopters and their maintenance. It has called the purchases questionable, and pointed out that they have cost the country millions of dollars since 1999.

“Corruption in public procurement can come back to bite you,” Mati said…Read More.

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