LIVE: 'Deviations' from procurement processes 'became the norm' - Treasury witness at #StateCaptureInquiry

Mathebula concludes: "We will continue to serve, and where we identify wrongdoing, that we make sure that the wrongdoing is dealt with. And of course also to make sure that our people who were historically disadvantaged by unfair discrimination, do benefit from the procurement of this country." 

"And I think that we can say that, without any fear, that it has to be done, but of course within law, that's what we are saying."

"There must be transformation... and people must repent at some point in time, and that is where we will leave it for now..." 

Gcabashe interjects: "Not quite, Mr Mathebula, but thank you very  much." 

Gcabashe wraps up and gives Zondo the opportunity to ask any questions to clarify certain things. But Zondo reserves his questions until after the break and adjourns proceedings.

Mathebula speaks of the "human" factor. 

On the topic of government's annual procurement spend of R800bn, Gcabashe asks if there is a "monitoring process to ensure that this money spent achieves its intended objective"? 

Mathebula says it is a difficult question, "quite difficult"... 

"The whole process also talks to the public finance, the management of the budgets after the tabling of the budget by the Minister of Finance in Parliament, that all of us, all divisions within the National Treasury, are enjoined to make sure that government departments and public entities spend that money correctly. But of course, there is a challenge, because we can't claim that all this money goes to where it is directed to, hence the problem that we are facing in the country." 

Mathebula brings up the issue of "evergreen contracts". 

Mathebula mentions the tender board, says even though measures were tightened, the board was not immune to fraud - there were allegations against some of the board members. 

Mathebula says the failure of the system also lies in governance. "Governance is a big issue." 

Gcabashe asks about enforcement consequences and what happens to transgressors. Mathebula says a number of entities have been appearing before Parliament to answer and that is an ongoing process.

Mathebula speaks of the "unintended consequences" of deviations. 

"Instead of deviations being an exception from the norm, deviations became the norm. So organs of state, instead of complying with Section 217, saw room to use deviations to circumvent the system. And this is where the challenge is."

"Remember deviations by their very nature, if you say to me, I must deviate from a normal procurement process, you're actually giving me a blank cheque, because then I decide, who do I award the tender to? It's given to me, I can decide, I can give it to anybody. I think that's just the unintended consequence of a very good intention in terms of that instruction." 

Mathebula says some institutions sometimes conflate emergencies and what they consider "urgent" matters. Says Treasury issued a notice in 2011 with revised terms for deviations.

Gcabashe: "Deviations form a substantial part of your statement... please address the question of deviations as fully as you can, and deal with the exceptional circumstances, but in doing that, deal with the deviations from those exceptional circumstances as well."

Mathebula cites "emergencies" as one of the reasons for deviation, mentions "life-threatening situations", fires and cybercrime as possible emergencies that would allow for deviations.

Mathebula: "Just lastly, I think I must also state that the BBBEE Act talks to transformation, of sectors and of course industries, and also the patterns of ownership in terms of the business in the country, whereas the PPPFA addresses preferences, so we allocate preference because you are a level four, or a level three, or a level two company, or a level one, etc., etc., these are some of the things that we are grappling with."

Gcabashe (using Transnet, Eskom, Denel as examples): "Are you saying that their procurement systems fall outside of 16A?" 

Mathebula: "In the current form, yes, falls outside of 16A, however, it doesn't fall outside the PFMA. So the PFMA still applies to them equally and we are of course the custodians of that instrument, so we apply it to them equally to make sure that the procurement system is fair, and transparent as well."

Mathebula now focusing on the specifics of processes and rules that need to be followed, to prevent any influence from people or entities outside of government. 

Mathebula, back after the short adjournment, now on the topic of ethical standards, following on from a question about irregularities in procurement.

Proceedings adjourn for a short 15-minute break.

Mathebula nears the conclusion of his lengthy explanation about the "rules of the game" as far as procurement processes are concerned, and will seemingly move onto the topic of "irregularities" next, led by a question from Advocate Gcabashe. 

Mathebula earlier described the PPPFA (Preferential Procurement Policy Framework Act) as the "soft underbelly" of procurement. 

OPINION: 

State capture commission can work, but Zondo will have to run tight ship 

(By Pieter du Toit) 

Day one of the judicial commission into state capture has made some things palpably clear: this is going to be a long and hard slog, the "defence" lawyers won’t hesitate to hurl a spanner in the works and Deputy Chief Justice Ray Zondo will be the biggest determinant of the body’s success.

There is no doubt that the start of the commission was a poignant moment in our country’s democratic history. We have become so used to news of grand corruption, patronage and state capture that South Africans are almost numb to the possibility of justice and accountability. This is of course not only understandable, but justified. We have yet to see anyone in government or the state being held accountable for misdeeds related to the Guptas and former president Jacob Zuma.

But this commission could be different to some of its recent forerunners, the Marikana and arms deal commissions. For one, the chairperson isn’t a retired judge but a sitting judge on the bench of the Constitutional Court, the deputy chief justice no less, appointed by the chief justice himself.

Mathebula is going into great detail about the Constitution and how it relates to procurement processes. 

Mathebula says there are 10 distinct pieces of legislation, in addition to the Constitution, that deal with the regulation of public procurement. 

"All these pieces of legislation must be in line with the Constitution, and oversight is conducted by National Treasury," says Mathebula.

Mathebula says the architecture of the procurement system in South Africa is centralised, in terms of policy, but the execution of the policy is decentralised. Government departments and institutions develop their own supply chain and procurement policies within the broader framework.

Mathebula: "The estimated procurement spend in government is just in excess of R800 billion for goods and services... that's the figure that we're talking about on an annual basis."

Mathebula says we are one of the luckier countries in the world because procurement is embedded in the Constitution and is an integral part of financial management. From that, we have the public finance management act and others we draw procurement processes from.

Mathebula says the office of the chief procurement officer was established in 2013 by the Minister of Finance to "ensure there was transparency in the system, and to deal with issues related to the abuse of public procurement, corruption and fraud".

Mathebula is asked if he has an intimate understanding of supply chain management, processes, procedures and prescripts... "Yes, I understand the policies of government insofar as supply chain management is concerned," he says. 

"Over all spheres of government," Mathebula says, clarifying that it includes state entities as well. 

Mathebula now delivering his opening statement, confirms he has been the acting chief procurement officer at Treasury since 2017.

Mathebula will speak about government procurement processes, and Advocate Leah Gcabashe, who is part of the legal team, will lead the witness. Gcabashe says Mathebula does not implicate anybody - his evidence is technically and really intended to give context.

Commission chair Deputy Chief Justice Raymond Zondo has taken his seat and commenced proceedings. 

Acting chief procurement officer at Treasury, Willie Ndleleni Mathebula, will be the first witness to testify at the commission, and will now be sworn in under oath.

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#StateCaptureInquiry: First witness to testify on Day 2 

Treasury’s chief procurement officer Willie Ndleleni Mathebula will be the first witness to testify at the commission of inquiry into state capture, sitting in Johannesburg, on Tuesday.

Mathebula is expected to speak on government procurement processes.

The inquiry is investigating allegations of undue influence by the politically connected Gupta family on members of the executive and at state-owned entities.

The commission has confirmed the names of at least eight witnesses who will be called to testify during the first sitting of the public hearings that are expected go on for three to six weeks, depending on evidence led. 

State capture commission Day 1: Everything you need to know

The much-anticipated judicial commission of inquiry into state capture commenced its public activities on Monday.

Deputy Chief Justice Ray Zondo cut a stoic figure at the front of the massive conference hall in Parktown as the opening addresses were delivered and the legal teams placed themselves on record.

The commission has 19 months left within which to complete the task of shining a light into the dark recesses of state corruption networks. 

OPINION: 

Winning the war against state capture 

(By Mpumelelo Mkhabela)

Had it been a military war, the near-defeat of South Africa would have been clear to all its citizens and throughout the world. The casualties would have left survivors and observers shocked.

We would have dominated global news headlines. Scars on the landscape and the trauma on the collective psyche of the nation would have characterised the post-war era. And our lacklustre escape from the jaws of defeat would have dented national confidence.

However, those from within the Republic who would have been entrusted with its defence, but had used their access to its artillery and intelligence to help the enemy in exchange for mere short-term pleasures, would have been charged with treason. They would be languishing in jail.

Who is Judge Raymond Zondo? 

Deputy Chief Justice Raymond Zondo was thrust in the limelight on Monday when the much-anticipated commission of inquiry into state capture kicked off.

Under his lead, the commission is expected to uncover the details of allegations of state capture, a mammoth task given the extent of corruption in recent years.

Is Zondo up to the task?

The 58-year-old was chosen to replace Justice Dikgang Moseneke as deputy chief justice of the Constitutional Court when the latter retired in 2017. He has been a judge in the Constitutional Court since 2012, before which he was in an acting position for one year.