Address by Public Protector Adv Thuli
Madonsela at the 44th SAPOA International Property
Convention and Exhibition at the Durban International
Convention Centre, KwaZulu-Natal on Thursday, May 31, 2012
“The Commercial Property Industry and
the State: Jointly Building a Sustainable Future for South
Africa.”
Programme Director, Mr Bruce Whitfield;
Former President, Mr FW de Klerk;
President of Sapoa, Mr Kevin Roman;
Chief Executive of Sapoa, Mr Neil Gopal;
Members of Sapoa;
Members of the commercial property industry at large;
Members of the media;
Ladies and gentlemen
It is such an honour for me to address the 44th South
African Property Owners Association (Sapoa) International
Property Convention and Exhibition.
I am informed that this convention has, for the past four
decades, been South Africa’s leading knowledge sharing and
networking forum for the commercial and industrial property
industry.
This gathering presents an opportunity to take part in the
debates that will form part of the knowledge sharing and
networking activities, and therefore it is a pleasure for me
to be here today.
I am honoured by the privilege to address this gathering of
an important sector in our society and the world, the 44th
SAPOA International Property Convention. I am sincerely
grateful to SAPOA, specifically Mr Neil Gopal the CEO, for
graciously and tenaciously extending this platform for
dialogue to my office.
To our guests from several parts of the world, I wish to
extend a warm welcome to our country and the beautiful city
of Durban. I trust that our hosting has met your
expectations, which I expect to have been high in the light
of the world class reputation acquired following the
successful hosting of FIFA 2010 and the recent award of the
SKA project.
As I prepared to engage with you, I wondered what could
possibly be of value to a gathering of people that Karl Marx
would refer to as the owners of the means of production. I
eventually settled on the fact that we have a mutual
interest in the proper management of state affairs. I
believe you want a climate that allows you to make money in
a sustainable way as business persons while pursuing joyful
and peaceful lives as citizens and residents. My office, on
the other hand, is part of a network of institutions set up
to support and strengthen constitutional democracy.
During one of my office’s stakeholder dialogues last, I had
a brief encounter with a young man who advised me that he
was in the property industry. He thanked my team for what he
said was sterling work that is ensuring clean business
practices within state affairs regarding property matters,
specifically relating to leasing and construction. He said
my team’s efforts had provided a glimmer of hope to him and
other genuine entrepreneurs that had given up on doing
business with government because they were not connected to
the right people or prepared to engage in corrupt
activities. My heart sore though at the end of that
conversation, I wondered how sustainable are business
practices that favour the weak while destroying the strong
ones.
It is true that some of my office’s activities impact on
SAPOA members and, some of the activities in the sectors
from which SAPOA draws its members are increasingly coming
under my office’s scrutiny?
Many of you would know about the ‘Against the Rules’ reports
I issued in 2011 and which contained findings of systemic
maladministration in the procurement of office leases for
the South African Police Service (SAPS). The reality is that
my office receives complaints alleging irregularities in
property related matters, primarily regarding leasing,
construction, and allocation of the so called RDP houses.
Increasingly, we are receiving complaints regarding the
disposal an acquisition of state land and the construction
of basic infrastructure such as roads, and schools.
I’m particularly encouraged by the content of your dialogue.
Tomorrow, Today, suggests that you are concerned
about the sustainability of the sector and the impact of
today’s actions on the sector’s future. It is true that the
quality of tomorrow depends on the quality of the decisions
and actions we take today.
In view of the above and in response to the theme of your
deliberations, I seek to share some thoughts on the
commercial property sector’s role and interest in good
governance in state affairs. My address topic, accordingly,
is “The Commercial Property Industry and the State:
Jointly Building a Sustainable Future for South Africa.”
Programme Director,
Perhaps the best place to start is my role as Public
Protector. What really does my office do and how does this
relate to your work and interests as members and
stakeholders of SAPOA?
Often referred to as the voice of the voiceless and
conscience of the state, the Public Protector is a
non-judicial public complaints or grievance body that seeks
to supplement the public accountability mechanisms
historically associated with democracy. In simple terms, my
role as Public Protector is to help the people exact
accountability in the exercise of state power and control
over state resources, when direct accountability fails.
After failing to get answers or justice through direct
interface with organs of state, my office steps in by
invitation or on own initiative as an alternative to court
action.
Section 182 of the Constitution gives the Public Protector
the power to investigate any alleged or suspected improper
or prejudicial conduct in state affairs or the public
administration, report on that conduct and take appropriate
remedial action. It is important that unlike the provisions
for similar Ombudsman type institutions, the Constitution of
South Africa does not say “recommend remedial action”
as many would like to believe.
Section 182 of the Constitution specifically states that the
Public Protector has the power to “take appropriate
remedial action”. The learned colleagues in the room
will agree with me that a view that confuses take
appropriate remedial action with recommend appropriate
remedial action is cannot be consistent with the general
approach to interpretation of statutes.
So serious was the vision of the architects of our
constitutional democracy as they contemplated the role of
this office that they ensured several guarantees for it,
which include a parliamentary vote process with a 60%
minimum vote in the National Assembly before a name is
submitted to the President for appointment. An equally
stringent impeachment process is stipulated for removal from
office.
Addressing Parliament during the Justice Budget Vote, Deputy
Minister of Justice and Constitutional Development Mr
Andries Nel highlighted the fact that the architects of our
democracy made a deliberate decision to establish strong
Chapter 9 institutions such as the Public Protector to
support and strengthen constitutional democracy. Referring
to action required following the findings of these
institutions, Deputy Minister Nel likened the process to
good patients swallowing their medicine.
The views expressed by Deputy Minister Nel are not far from
the paradigm that must have informed President Nelson
Mandela when he said the following:
“Even the most benevolent of governments are made up of
people with all the propensities for human failings. The
rule of law as we understand it consists in the set of
conventions and arrangements that ensure that it is not left
to the whims of individual rulers to decide on what is good
for the populace. The administrative conduct of government
and authorities are subject to scrutiny of independent
organs. This is an essential element of good governance that
we have sought to have built into our new constitutional
order. “
“An essential part of that constitutional architecture is
those state institutions supporting constitutional
democracy. Amongst those are the Public Protector, the Human
Rights Commission, the Auditor General, the Independent
Electoral Commission, the Commission on Gender Equality, the
Constitutional Court and others.” (Nelson Mandela)
His successors, President’s Mbeki and Zuma have similarly
pronounced on the place of the Public Protector and other
constitutional institutions in our democracy general and
public accountability architecture specifically.
The legislative mandate of the Public Protector extends to
the power to resolve disputes and redress injustice relating
to maladministration and abuse of state power under the
Public Protector Act(PPA); enforcement of executive ethics
under the Executive Members Ethics Act(EMEA); Investigation
of Corrupt Practices under the Prevention and Combating of
Corrupt Activities(PCCAA), whistle-blower protection under
the Protected Disclosures Act(PDA); Review of the Home
Builder’s Registration Council under the Housing Protection
Measures Act(HPMA) and resolution of access to information
disputes under the Protection of Access to Information
Act(PAIA).
These six statutes are part of about sixteen pieces of
legislation that mention the Public Protector. Others
include NEMA, the Equality act, the Energy Act, the PFMA and
the SIU Act.
You will note from the range of matters covered in the
mandate that many of my office’s operations and my decisions
have an impact on this sector. Earlier on I referred to my
encounter with the young entrepreneur. He probably had been
exposed to the ‘’Against the Rules’’ reports.
One of the unknown aspects of the mandate of the Public
Protector is the review of the decisions of the Home
Builders Council. This should be of interest to SAPOA
although this is a mandate we’d like to part with.
I thought you might be interested in some of the experiences
my team and I are able to share on the commercial property
sector.
Leasing
We’ve already touched on leasing matters and specifically
the “Against the Rules” reports. What we need to know
is that these reports simply dealt with are a tip on an
iceberg regarding the problems in the management of
government leasing.
My office is currently dealing with lot of cases involving
leasing matters that transcend the leasing of building of
office space at all levels of government and state owned or
controlled entities.
Key concerns in this are as identified in the gainst the
rules reports and include the following:
-
Process irregularities, for example, a
non-competitive and preferences of connected bidders.
Lack of due diligence.
-
Gross overpricing. Whistle-blower who
said the information he was going to give me would make
‘’Against the Rules’’ child play.
-
Shoddy service due to poor quality
assurance. D- Grade buildings at pricing that exceed
A-Grade plus cost of renovation on the state.
Allegations of organised corruption
involving many rain makers (those who make things happen)
and beneficiaries.
Construction
Government recently announced an intention to abandon rental
of office space in favour of building its own infrastructure
for permanent needs or services. This is a great idea indeed
and is in line with global trends.
But this is no guarantee against the looting of state
resources. Problems bedevilling leasing are endemic in state
construction projects. I’ve heard a joke that it takes far
less money than it takes to build a simple police station,
school, hospital or office block.
Problems are the same as above namely procurement, pricing
and quality assurance. Two examples come to mind from our
experience as the Public Protector Team. Braamfischerville
Gauteng and Nala in the Free State
Lessons emerging from the two are the following:
-
Planning and approval of projects,
including geotechnical report
-
Procurement
-
Quality assurance. For example in
Braamfischerville, Gauteng, where we are currently
investigating and intervening, a settlement build before
the 1994 dawn of democracy, part of the settlement is
built on wetlands and the sanitation system is
dysfunctional. In Nala Free State where we are also
intervening and investigating, we went to the house of a
grandmother who has been forced to revert to a
dysfunctional bucket system and were told that the
piping for the supposedly waterborne sewage system ends
just in front of her toilet. Now isn’t that fraud?
Problem includes ensuring that you pay for what was
procured. In these cases who are the officials,
including engineers that approved and thus certified
that there was a match between the specs and what had
been delivered. One province is said to have paid one
million rands for one RDP house. Who approved?
-
Pricing. Overpricing plus escalating
costs.
-
Complaints regarding corruption
particularly corruption executed as organised crime with
multiple actors and therefore multiple beneficiaries of
kick-backs and other benefits or proceeds of such
organised crime
Planning of Capital Projects
Escalating costs brings me to the issue of planning. Let us
take Gautrain for example. Do you recall how much it was
meant to cost when the project was approved by Cabinet? How
much are we talking about today?
I’ve been asked to find out the causes of uncontrolled
escalation. The idea is to also draw lessons on causal
factors and implications for our national budget in the
future.
On the issue of planning of capital projects, a related
matter prioritisation, we are increasingly getting
complaints about non-delivery on basic services because
money suddenly went into unplanned projects not in the
strategic plan. In Cape Town they complained about a stadium
that had become a white elephant. Anyway the Constitutional
protection of socio-economic rights requires the
ring-fencing of public resources for basic needs before
undertaking nice to do projects. You’ll agree with me that
you can’t drive a Ferrari while leaving in a squatter camp.
Clearly then, we have a common interest in ensuring clean
governance within our state. As the young person who
approached me in Cape Town it is in everyone’s interest to
have clean governance and that one of the benefits of this
is the levelling of the playing field. We also do not want a
bad name for the industry nor for our country. The reality
is that this industry has done excellently in placing us on
the global map, including the attraction of tourists.
Indeed, most industry workers are hard workers who want to
earn an honest living. In government too, the average public
servant works hard and honestly.
It is incumbent upon all of us to ensure that we do not look
the other way when things go wrong. Public resources are
finite, when they are looted. Soon there will be nothing for
delivering the better life promised by the Constitution. If
that’s not done and where accountability fails
constitutional democracy is undermined leaving our people
with extra-judicial options such as the Tunisian option.
One of the things we need to be honest about is the link
between maladministration and corruption. In fact it’s so
hard to prove gratification in corruption matters and a
maladministration finding is all we can do. This is where
the industry can help. Whistle-blowing and the protection of
whistle-blowers may help us to collectively flush out the
bad apples.
In other words when SAPOA members see wrong-doing, they
should not look the other way.
The commercial property industry and the state need to work
together so that we can be a step closer to the realisation
of the ideal of an accountable state that operates with the
highest order of integrity while being responsive to the
needs of its citizens.
We are co-creators of our own future. Lets a build the
future we want to be part of and let’s not squander our
children’s future through bad decisions that will place the
state in unmanageable debt.
Thank you.
Adv. T. N. Madonsela
Public Protector of the Republic of South Africa
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