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In September 2018 the Constitutional Court handed down unanimous judgment on then social development minister Bathabile Dlamini’s personal liability in the matter of costs relating to the South African Social Security Agency (Sassa) extending the contract of grants distributor Cash Paymaster Services (CPS) despite a finding in 2013 that the contract was invalid. But Sassa had no alternative plan or provider and was unable to itself take over the task.
The case was brought by Freedom Under Law and the Black Sash Trust, with Corruption Watch (CW) as amicus curiae or friend of the court. The order was made that Dlamini, in her personal capacity, must pay 20% of the costs of the applicants’ legal fees, including the cost of two counsel. The minister of social development, and Sassa and its CEO were to pay the 80% balance.
Dlamini has complied, with a payment of around R600 000. The Black Sash Trust, Freedom Under Law, and the Centre for Applied Legal Studies – which represented Black Sash in the hearing – said in a statement that Dlamini “has paid the costs awarded against her personally by the Constitutional Court for her role in the social grants crisis almost three years ago”.
“We’re pleased that Dlamini has finally complied with the order against her,” commented Corruption Watch’s executive director David Lewis. “We hope this acts as an example for others who have had similar costs orders imposed on them, like Jacob Zuma and the public protector [Busisiwe Mkhwebane].”
Until recently, according to the statement mentioned above, Dlamini had made every effort to avoid paying the costs she owed, “not only ignoring letters of demand but even going as far as to change attorneys in the process … in the past two weeks the order has now been complied with and Ms Dlamini has paid our costs.”
Nicole Fritz, CEO of Freedom Under Law, said it is essential that government leaders entrusted with important positions of care and responsibility on behalf of our society’s most vulnerable members, “be required to face real reckoning when they so starkly fail to discharge their responsibilities”.
Unprecedented court ruling
At the time the ConCourt’s ruling was unprecedented in holding a sitting cabinet minister personally responsible for their failures in carrying out their duties. The ruling related to a March 2017 judgment, also handed down by the ConCourt, in which it ordered Dlamini to give her reasons, in an affidavit, why “she should not be joined in her personal capacity; and she should not pay costs of the application from her own pocket.”
The affidavits duly filed, the court noted, “raised conflicts of fact in relation to an alleged parallel process of responsibility initiated by Minister Dlamini”.
Dlamini was joined in her personal capacity to the case in June that year.
“The remedy … was considered quite extreme,” said Lewis, “but considering the extremity of the corruption and maladministration of those upon whom it’s imposed, it’s clearly the right remedy and will, we hope, act as a caution for other public servants ho do not conduct themselves in the manner expected of them.”
This is a good moment for all who have been fighting corruption, Lewis added.
Long fight for justice
Corruption Watch joined the fight against Sassa’s maladministration as far back as 2013, when it appeared as a friend of the court in September of that year, in a case where losing bidder Allpay disputed the awarding of a R10-billion tender by Sassa to CPS, a private company, for the distribution of social grants.
In December 2013 ConCourt judge Johan Froneman handed down a unanimous judgment, which found that the decision to award the tender to CPS was constitutionally invalid. The matter had begun in the High Court where the tender was declared invalid, but because of the potential upheaval and delay in issuing the grants, the Court declined to set the award aside.
With his judgment, Froneman overturned the decision of the Supreme Court of Appeal (SCA), which had turned down an earlier appeal by Allpay against the refusal to set the award aside. CPS, meanwhile, had cross-appealed the High Court’s declaratory order of invalidity. The SCA upheld the cross-appeal, and dismissed AllPay’s appeal, and AllPay approached the ConCourt to have the SCA’s rulings set aside.
Froneman also suspended the declaration of invalidity, pending determination of a just and equitable remedy – the premise was that either a new five-year tender would be awarded after a proper procurement process, or Sassa itself would take over the payment of social grants when the suspended contract with CPS came to an end on 31 March 2017.
In its own submission CW argued that irregularities in a tender process were red flags indicating possible corruption. It further submitted that in the interest of justice, “the Sassa/CPS contract should be terminated with minimal disruption to the payment of social grants.”
The court accepted both arguments, holding that “deviations from fair process may themselves all too often be symptoms of corruption or malfeasance in the process. In other words, an unfair process may betoken a deliberately skewed process”.
And for the millions who depend on a social grant for their very survival, such skewed processes only mean more suffering.
Ceaseless Sassa shenanigans
At a further hearing in 2014, the remedy decided on was that Sassa must initiate a new tender process for the payment of social grants within 30 days of the judgment.
Sassa issued a new request for proposals (RFP) – but CPS approached the court directly seeking an order declaring the new RFP invalid. In the March 2015 judgment on that order, Sassa was to award the new tender by 15 October that year.
In November 2015 Sassa finally reported that it had decided not to award a new tender, but instead would itself take over the payment of social grants. It said it would be able to meet the deadline of 31 March 2017, the date of the end of CPS’ contract.
“But this assurance turned out to be without foundation,” the ConCourt said in a March 2017 judgment. “Since April 2016 the responsible functionaries of Sassa have been aware that it could not comply with the undertaking to the Court that it would be able to pay social grants from 1 April 2017.”
Dlamini claimed she was informed of this only in October 2016, but the court was unmoved, saying: “There is no indication on the papers that she showed any interest in Sassa’s progress before that. Despite repeated warnings from advising counsel and CPS, neither Sassa nor the Minister took any steps to inform the Court of the problems they were experiencing. Nor did they see fit to approach the Court for authorisation to regularise the situation.”
So the declaration of invalidity of the CPS contract was further suspended for 12 months from 1 April 2017.
The judgment also embarrassingly ordered Dlamini and Sassa to report to the court every three months, setting out how they planned to ensure the payment of social grants after the expiry of the 12-month period, what steps they took in that regard, what further steps they would take, and when they would take each future step.
Also in 2015, Corruption Watch approached the North Gauteng High Court to set aside Sassa’s decision to make a payment of R316-million to CPS. Sassa’s reasons for this were unclear. It said that the payment was in lieu of services rendered for the re-registration of beneficiaries, citing various reasons justifying the payment and the re-registration process.
But CW probed the matter and our further engagement with Sassa, including an on-site inspection, revealed serious irregularities surrounding both the payment and the re-registration process.
On 23 March 2018, Judge Moroa Tsoka ordered CPS to pay back the R316-million, plus interest from June 2014 to the date of payment, to Sassa.
Personal costs
In that March 2017 judgment Dlamini was instructed to defend, in an affidavit, the possibility of being joined to the proceedings in her personal capacity, and having to personally pay the costs of the application.
She filed that affidavit, but sought to place the blame for what went wrong on officials from Sassa and the Department of Social Development.
Again, the bench was unimpressed. “The Minister is rather coy about her personal involvement in the process,” stated a further judgment, handed down in April 2017, in the personal costs issue.
In September 2018 the Constitutional Court made the personal costs order.
“It has been a sorry saga and it is proper that Minister Dlamini must, in her personal capacity, bear a portion of the costs. It would account for her degree of culpability in misleading the Court – conduct which is deserving of censure by this Court as a mark of displeasure – more so since she held a position of responsibility as a member of the Executive. Her conduct is inimical to the values underpinning the Constitution that she undertook to uphold when she took up office.”
