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Chief Justice Raymond Zondo will leave office at the end of August, having served as the head of the country’s judiciary since April 2022. As part of his legacy, he will be remembered for chairing the Judicial Commission of Inquiry into Allegations of State Capture, Corruption and Fraud in the Public Sector, Including Organs of State, colloquially known as the Zondo commission. The inquiry, which was initially recommended in 2017 by former public protector Thuli Madonsela to run for six months, spanned a period of four years, with several extensions to its term and controversial cost increases over this time.
While Zondo has been hailed as having convincingly manoeuvred the complex details of South Africa’s grand corruption involving some powerful politicians, senior public servants and bureaucrats, he has also come under fire in some quarters as overstepping and disregarding the boundary between state and the judiciary.
His commission has, however, opened up opportunities for broad changes in the government system, including legislative changes, structural reforms in procurement and law enforcement sectors, and some vigour in how investigations into corruption are approached.
The National Prosecuting Authority, for one, has the now permanent Investigative Directorate as part of its structure, thanks to the commission. Other areas experiencing change include Parliament, regulatory bodies of state such as the Financial Intelligence Centre, and others that have been bolstered in their mandates because of the Zondo recommendations.
Predictably, however, the chief justice continues to receive criticism from political quarters that disagree with his handling of the commission.
Procurement redefined
One of the pieces of legislation that stemmed from the recommendations of the commission is what has recently become the Public Procurement Act. President Cyril Ramaphosa hailed it as the best tool to make public procurement an instrument for social and economic change. “This law eliminates the problem identified by Chief Justice Zondo of fragmentation in procurement laws by creating a cohesive regulatory framework,” said Ramaphosa in a recent edition of his weekly newsletter.
“Among other things, the law establishes a public procurement office (PPO) in the National Treasury, which must put in place measures to ensure the integrity of the procurement process. All the members of this office must perform their functions impartially and without fear, favour or prejudice.”
Corruption Watch in its submission to Parliament on the procurement bill was that while it made economic sense to position procurement in one entity under Treasury, it also opened it up to risk, particularly if the office of the minister of finance were to be compromised by corruption or abuse of power.
“We noted that we need to have a separation of the two entities, the PPO and the National Treasury, so that we could ensure independence, impartiality, more transparency, and accountability,” CW’s 2023 annual report reads, quoting Kirsten Pearson, who consults for the organisation in this area of work. In Ramaphosa’s view, however, transparency will be the key principle guiding how the law will be implemented.
Off to court
On the subject of legal matters, the Special Investigating Unit (SIU) has now joined the proceedings brought by Transnet against Nedbank over its role in interest rate swaps conducted in 2015 and 2016 on behalf of the state-owned company. The aim is to have the Johannesburg High Court set aside the swaps, which the two state entities claim benefited Nedbank unduly.
The deals happened at the height of the capture of Transnet, as revealed in the Zondo commission, with Nedbank coming in on a consultancy basis to restructure the interest on Transnet’s debt, used to finance its projects of the time. The Zondo commission report explored the relationship between Nedbank and Regiments Capital, the company that was found to have been irregularly contracted by Transnet as part of its massive locomotives procurement project.
For its work on the interest rate swaps, Nedbank made a profit of over R2.7-billion. The SIU and Transnet now want that money recovered on the basis that the bank’s conduct was in violation of public finance regulations.
A joint statement issued by the two organisations reads: “Transnet and the SIU are of the view that the interest rate swaps are void and unenforceable under the Public Finance Management Act, alternatively contravene section 217 of the Constitution, and are contrary to public policy. There is sufficient basis for the sought relief and Nedbank must account for its involvement and conduct in the swap transactions.”
Transnet and the SIU collaborated closely in preparation of the court proceedings, including during the SIU’s uncovering of evidence critical to the case.
The decision to head to the courts is a result of a breakdown in negotiations between Transnet and Nedbank.
