South Africa’s new national government and nine new provincial executives have taken office following recent elections. They all have a huge job to do, and it cannot be business as usual.
The country is at a turning point following the nine years of former President Jacob Zuma’s ruinous administration. It needs strong, principled leaders in all spheres of government to put the country on a path of economic growth and to improve the quality of governance.
Many of the current governance failures are linked to corruption or state capture. This includes malfeasance in state-owned enterprises such as Eskom, the power utility and Transnet, the rail and port company. There are also other serious governance problems in some national government departments and provinces and in most of the municipalities.
The main governance problems are non-compliance with legislative requirements designed to keep the running of government clean and free from corruption. These include the Public Finance Management Act and the Municipal Finance Management Act.
The biggest challenges include a lack of oversight and accountability, poor appointments in key positions, tolerance of corruption, and poor management and technical skills.
All these problems can be fixed if some basic steps are taken. These can be narrowed down to a list of seven. The focus should be on improving governance and weeding out corruption. The list would include: bringing those involved in corruption to book, setting clear targets for each minister, imposing a proper accountability structure and appointing an ethics officer. Accountability will also be improved if the involvement of communities is improved.
The added ingredient is leadership. An important first step would be for President Cyril Ramaphosa and the nine new premiers to show commitment to ensuring integrity and to improve transparency and accountability.
South Africa performs badly in the global governance context. The country scores 43% and is 73rd out of 180 countries on the latest Transparency International’s Corruption Perception Index. The index focuses on public sector corruption. It draws on surveys and assessments by experts.
It’s also gone backwards from last year in the latest Ibrahim Index on African Governance. South Africa is in 7th position with a combined score of 68%, which is slightly down from 2017. Mauritius is in the first place with 79,5%.
South Africa’s weakest score (57,4%) on this index is on transparency and accountability.
The index defines governance as the provision of the political, social and economic public goods and services that every citizen has the right to expect from their state. It also factors in the state’s responsibility to deliver to its citizens.
One of the significant ways of improving accountability and governance would be to ensure that the work of the Zondo Commission of Inquiry into State Capture results in the successful prosecution of perpetrators.
Other practical steps that should be considered are:
Setting clear targets for each of the new ministers and members of the executive councils. This must include regular public reports on their performance;
Adopting a good governance programme that focuses on enhancing integrity, transparency and accountability;
Sourcing the best expertise in the public and private sectors to fill key senior management positions;
Appointing a senior manager as “chief ethics officer”. This could be the secretary to the national cabinet and secretary to the cabinet in each province;
Strengthening the oversight role of the nine provincial legislatures and Parliament. This could be done by ensuring compliance with the accountability requirements in the various pieces of legislation;
Ensuring the effective use of information technology to enhance good governance; and
Creating an enabling environment for more constructive community involvement when it comes to delivering public services.
Practical measures like this would help improve the quality of governance. It would also contribute to improving South Africa’s score on the Ibrahim Index.
Why governance matters
Poor governance compounds the already huge task facing the newly elected executives. South Africa has huge economic and social inequalities. This means that it needs a new pragmatic approach that uses the skills and expertise of all citizens, beyond what the government is able to provide.
This implies the development of innovative solutions to some of the country’s biggest problems. These include a lack of adequate housing, poor education and a lack of safety. And every day ordinary South Africans feel the brunt of dysfunctional municipalities. These need to be turned into well-functioning entities that serve their communities well.
The “co-production” method, which entails using the combined expertise of both the private and public sectors in the design and delivery of public services, should be used on a much larger scale. A good example of successful co-production is Partners for Possibility, which makes a significant impact in improving education.
A bank in South Africa collapsed after scores of people and companies looted 1.9 billion rand ($130 million) over three years, an investigation revealed Wednesday, in one of the country’s latest corruption scandals.
VBS Mutual, which collapsed in March, granted then president Jacob Zuma a 7.8 million rand loan for him to repay taxpayers for security upgrades to his private Nkandla homestead in 2016.
The investigation, commissioned by the central bank, released its damning report titled “The Great Bank Heist”.
It detailed the graft that sank VBS and named the executives allegedly responsible, including former CEO Andile Ramavhunga, who denies any wrongdoing.
“Many of those implicated in the looting of VBS are chartered accountants and some attorneys. They are not fit and proper persons to fill those offices, which require utmost honesty and integrity,” report author Terry Motau wrote.
The investigation was launched after VBS, a corporate finance and retail bank, suffered a severe liquidity crisis and was put under curatorship earlier this year. The probe revealed malpractice including extending overdrafts to well-connected clients and issuing payments to individuals in exchange for deposits from state-owned companies.
“It is corrupt and rotten to the core. Indeed, there is hardly a person in its employ in any position of authority who is not, in some way or other, complicit,” the report said.
Motau recommended criminal charges against those in charge at the bank, which had 23,000 retail depositors.
Previously, local media reports had revealed executives bought luxury cars and chartered helicopters with the bank’s money, and arranged huge illegal deals by Whatsapp messages.
Zuma was ousted from power in February amid multiple graft scandals during his nine years in office.
A judicial inquiry is probing government corruption under his term, while his successor Cyril Ramaphosa has vowed to crack down on financial misconduct.
This is more so because it is clear that deposed former President Jacob Zuma, who is at the core of the allegations, has launched a fightback campaign that can undermine President Cyril Ramaphosa’s efforts to clean up government.
The remit of the commission, which is headed by Constitutional Court Deputy Chief Justice Raymond Zondo, is to establish the extent of what’s become known as “state capture” by rogue elements in government. Its findings will reveal how the country’s democracy was so imperilled within two decades of its founding election in 1994. It’ll also help ensure that the necessary remedial action is taken to prevent a repeat.
South Africa needs to find out how Zuma and his cronies, the Gupta family, were able to exploit weaknesses in the country’s governance system.
To perform its role effectively, a judicial commission must act as an inquisitorial inquiry whose job is to find out what happened and why. This requires it to refrain from acting like a normal (adversarial) court of law. The commission isn’t a substitute for criminal prosecution or, for that matter, civil litigation.
A great deal flows from this foundational point.
Zondo’s job isn’t to “follow the money” as some have suggested. Important features of the corporate labyrinth built by the Guptas and their allies and accomplices has already been uncovered, for example the property holdings of the Gupta family, or examined in court proceedings.
The commission’s job isn’t to track the flow of funds or any money-laundering machines. That will be the job of the criminal courts, as and when they get the chance.
Instead, Zondo should grapple with the politics of state capture. He needs to get under the skin of the politics of state capture; to get on record why and what happened; and to make clear findings of political accountability. Speed is of the essence. He needs to move fast enough that the commission maintains momentum and does not allow Zuma and other implicated parties to get out ahead of it, or to seek to tilt public opinion in their favour.
The urgency is underscored by reports that Zuma is plotting with others against Ramaphosa.
Process and powers
To evaluate the commission’s progress, it is important to keep in mind its terms of reference and its powers. What can Zondo investigate and what can the commission do about whatever it uncovers?
Firstly, its terms of reference are deep, but narrow. Seven of the nine elements of the terms of reference refer directly to the Guptas’ or Zuma’s interference with government decision-making and procurement. Tthe remaining two invite a broader inquiry into state procurement.
So the terms of reference are essentially confined to the Gupta family and its relationship with the democratic state – from the presidency and the cabinet, down through state agencies and state-owned enterprises, and down deep into the executive arm of government.
In digging for the truth, those responsible for what happened will – or should – be identified by the commission so that they can be held to account.
But what powers does the commission have to take remedial action to address any wrongdoings it uncovers?
Very little. Certainly, far less than people seem to think. The commission’s task is to investigate and report back to Ramaphosa, which may include recommendations.
These recommendations are not, per se, binding. The commission is essentially a fact-finding mission and does not have the power to make orders.
So the report could say, for example, that criminal activity has been committed, and the commission may refer the matter for prosecution or further investigation.
But, the prosecutorial authorities don’t have to wait for the conclusion of the commission process. Indeed, they should be following the proceedings closely and initiating action wherever it suggests that criminality may have occurred.
Uncertainty about this point has led to some procedural confusion during the opening fortnight, particularly around whether those implicated would have an opportunity to cross-examine.
Unfortunately, Zondo let the matter fester unnecessarily before finally ruling on September 11. He had little difficulty dismissing the application of the Gupta brothers on the basis that they are, in essence, fugitives from justice who are unwilling to come back to South Africa to give evidence to the commission. In the case of Zuma’s son, Duduzane Zuma, he granted the application to cross-examine.
This may be justified. But it may also be a red herring. The best commissions of inquiry are those with strong “counsel for the inquiry” who don’t just lead evidence of one side of a story, but who test the evidence as they go along, adding to its weight and credibility, in pursuit of a robust version of the truth.
There are anxieties about Zondo’s pace. It is worth remembering that this commission derives from the report on state capture by former public protector Thuli Madonsela. Because she had had neither sufficient time nor resources to complete her work, appointing a judicial commission of inquiry was the remedial action that had to be taken.
Madonsela wanted the commission to complete its work in six months. It was a rather optimistic target. But it wasn’t entirely unreasonable provided that the commission focused on the narrow scope set by the terms of reference, and organised its procedure in a lean and equally focused manner.
Zondo has asked for an additional two years. It very far from clear why he needs so long and has led the lobby group, the Council for the South African Constitution, to join the court proceedings to object to any extension.
Regardless, the commission needs to act as swiftly as it can. South Africans are being reminded daily that Zuma may have left office, but that he still is capable of muddying the waters. If it focuses efficiently on its core task, and evidence of the political conspiracy that underpinned the state capture project is adduced and tested, the proceedings of the commission may serve to keep a lid on Zuma’s fightback campaign.
The stakes are very high for all concerned – for Ramaphosa’s political future, and for the country he leads.
Rumours that President Jacob Zuma has instructed the South African National Defence Force to draw up plans for implementing a state of emergency may or may not be true. Nonetheless they are evidence of South Africa’s febrile political atmosphere.
But any assumption that the election of Cyril Ramaphosa as the new leader of the African National Congress (ANC), after winning the race against Nkosazana Dlamini-Zuma, will place South Africa on an even keel are misplaced. Indeed, the drama may only be beginning.
It’s useful to look back to 2007 when President Thabo Mbeki unwisely ran for a third term as ANC leader. His unpopularity among large segments of the party provided the platform for his defeat by Zuma at Polokwane. Within a few months the National Executive Committee of the ANC latched onto an excuse to ask Mbeki to stand down as president of the country before the end of his term of office. Being committed to the traditions of party loyalty he complied, resigning as president some eight months before the Constitution required him to do so.
The question this raises is whether South Africa should now expect a repeat performance following the election of a new leader of the ANC. Will this lead to a party instruction to Zuma to stand down as president of the country? And if it does, will he do what Mbeki did and meekly resign?
There’s a big difference between the two scenarios: Mbeki had no reason to fear the consequences of leaving office. Zuma, on the other hand, has numerous reasons to cling to power. This is what makes him, and the immediate future, dangerous for South Africa, and suggests the country faces instability.
Why Zuma won’t go
It is not out of the question that Zuma may say to himself, and to South Africa, that he is not going anywhere. He is losing court case after court case, and judicial decisions are increasingly narrowing his legal capacity to block official and independent investigations into the extent of state capture by business interests close to him.
With every passing day, the prospects of his finding himself in the dock, facing 783 charges, including of corruption and racketeering, also increase.
Zuma will have every constitutional right to defy an ANC instruction to stand down as state president until his term expires following the next general election in 2019, and the new parliament’s election of a new president. In terms of the South African Constitution, his term of office will be brought to an early end only if parliament passes a vote of no confidence in his presidency, or votes that, for one reason or another, he is unfit for office.
In other words, there is a very real prospect that South Africa will see itself ruled for at least another 18 months or so by what is termed “two centres of power”, with the authority and the legitimacy of the party (formally backing Ramaphosa) vying against that of the state (headed by Zuma).
Throwing caution to the wind
As if that is not a sufficient condition for political instability, we may expect that Zuma will continue to use his executive power to erect defences against his future prosecution. He will reckon to leave office only with guarantees of immunity. Until he gets them, Zuma will defy all blandishments to go. And if he does not get what he wants, he may throw caution to the wind and go for broke.
Hence, perhaps, the possibility that he is prepared to invoke a state of emergency.
The grounds for Zuma imposing a state of emergency would be specious, summoned up to defend his interests and those backing him. They would be likely to infer foreign interference in affairs of state, alongside suggestions that white monopoly capital, whites as a whole as well as nefarious others were conspiring to prevent much needed radical economic transformation. Present constitutional arrangements would be declared counter-revolutionary and those defending them doing so only to protect their material interests.
After a matter of time, such justifications would probably be declared unconstitutional by the judiciary. It is then that there would be a confrontation between raw power and the Constitution. If such a situation should arise, we cannot be sure which would be the winner.
South Africa’s army
It is remarkable how little the searchlight that has focused on state capture has rested on the Defence Force. Much attention has been given to how the executive has effectively co-opted the intelligence and prosecutorial service, as well has how the top ranks of the police have been selected for political rather than operational reasons.
It seems to have been assumed that South Africa’s military is simply sitting in the background, observing political events from afar. But is it? Where would its loyalties lie in the event of a major constitutional crisis?
The danger of the present situation is that South Africa might be about to find out.
Were the military to throw its weight behind Zuma the country would be in no-man’s land. Of course, there would be a massive popular reaction, with the further danger that the president himself would summon his popular cohorts to “defend the revolution”.
And South Africans should not assume that Zuma would be politically isolated. Those who backed Dlamini-Zuma did so to defend their present positions and capacity to use office for personal gain. If they were to rise up, the army would then be elevated to the status of defender of civil order.
What is certain is that in such a wholly uncertain situation the economy would spiral downwards quickly. Capital would take flight at a faster rate than ever before, employment would collapse even further, poverty would become even further entrenched.
Reasons to be hopeful
Is all this too extreme a scenario? Hopefully yes. There are numerous good reasons why such a fate will be averted.
Zuma’s control over the ANC is waning, as is his control over various state institutions, notably the National Prosecuting Authority. And the country has a checks and balances in place: there is a vigorous civil society, the judiciary has proved the Constitution’s main defence and trade unions and business remain influential.
Even so, it remains the case that what transpires now that the ANC’s national conference is over will determine the fate and future of our democracy. South Africa is approaching rough waters, and a Jacob Zuma facing an inglorious and humiliating end to his presidency will be a Jacob Zuma at his most dangerous.
The suspense is tangible as the African National Congress (ANC) – South Africa’s former liberation movement that’s turned into a tired governing party – approaches its fiercely contested 2017 elective conference.
By December 5, the party’s branches had largely spoken, and its provincial structures had consolidated the branch delegates’ voting preferences. The lay of the land seemed clear. Yet, on close dissection it’s evident that developments could still subvert what appeared to be definitive trends in branch nominations.
Less than two weeks prior to ballots being cast at the Nasrec Expo Centre in Johannesburg, the contest is closer than both the Polokwane race of 2007, (when Jacob Zuma beat Thabo Mbeki) and 2012 in Mangaung (when Zuma beat then deputy Kgalema Motlanthe).
The branch nominations have confirmed that the two leading 2017 candidates for the ANC presidency are Cyril Ramaphosa and Nkosazana Dlamini-Zuma. While Ramaphosa has a lead, the intricacies of the election process caution against early celebrations: there are black holes that could still devour the advantages he appears to have.
The voters at the ANC conferences comprise roughly of 90% delegates from ANC branches across the nine provinces. Provinces had been allocated a total of 4,731 delegates (proportionately in terms of membership figures). The rest of the about 5,240 voting delegates come from the ANC’s national executive committee and top six officials (roughly 90 in total). The nine provincial executive committees (27 each, thus 243), the women’s, youth and veterans’ leagues (60 each, thus 180).
The number of branches endorsing Ramaphosa by the evening of December 4 were 1,860 and Dlamini-Zuma 1,333. A total of 3,193 for both candidates, or around 2,000 fewer than the total number of conference voters.
Given that the race will go down to the wire, and that a few hundred ballots in either direction could make a world of difference to the ANC and South Africa, this analysis dissects eight black holes that account for the approximately 2,000 “discrepancy”.
At the core, the uncertainties that make up the eight black holes are:
The scores released by the ANC’s Provincial General Councils have a “margin of error”. This is because the scores are of branches and not individual delegates. But big branches send more than one delegate and are given more weighting in the voting. This can substantially change the balance between leading candidates come the election.
Mpumalanga province brings its own black box of 223 “unity” votes. The biggest bloc of branches refused to endorse a particular candidate and entered ‘unity’ on nomination forms, following the instruction of provincial leader DD Mabuza. These votes can therefore go to either leading candidate should the delegates cast their vote rather than waste it.
A further uncertainty comes in the exact number of branches that have missed the deadline for their branch general meetings. The deadline for convening these was a week ago. Missing the deadline means they have missed the opportunity to be represented at the conference. The ANC in an interview with the author estimated that between 95-98% made the target date. Exclusions will lower the number of delegates.
A number of branches are caught up in disputes. Challenges centre on the lack of legality of the branch general meetings, some of which have been chaotic. Some battled to reach quorums (50% of members had to be present), or they faked quorums. In other instances officials disappeared with meeting materials and memberships lists, attendance registers were signed off-site, or bickering and fist-fights ruled. These branch delegates could still make it into the voting booths at the conference if the ANC task teams resolve the disputes.
A number of branches and provincial structures have taken their disputes to court. Prominent cases are in KwaZulu-Natal, Free State and the Eastern Cape. The national conference does not ultimately depend on the provincial structures, but provincial leaders may have influenced their branch-based underlings substantially, or have covered up irregularities that affected whom the branches nominated. Disputes at the time of conference could exclude some from voting, or having their votes counted.
The ballots of individual delegates are secret and it’s therefore uncertain to what extent branch nominations will convert into matching votes. Prior conference outcomes show that the branch or provincial counts tended to hold: delegates are inclined to vote according to their mandates. But, political times have changed. Beyond the scrutiny of the superiors and away from branch commissars, delegates might vote according to “conscience”.
Hand-in-hand with individual discretion in the voting act is the practice of “brown envelopes”, or bribes. Speculation is that the bribes could be enormously persuasive, going into six-figure rewards for the right vote.
The final big uncertainty comes via the three leagues - for women, youth and veterans - and the ANC’s executive structures. The large block of around 90 NEC and top-six votes, for example, could split relatively equally between the big candidates. It is this block that has kept Zuma in power through a series of votes in the National Executive Committee, and interventions in parliamentary votes. But, they could by now see that the writing is on the wall given that Zuma will cede his position as head of the party in two weeks time, and his post as head of state in 2019.
Hard to call
The battle lines are drawn and the result is close. Exact calculations will remain impossible; the result is likely to be known by 17 or 18 December. In the interim, all South Africans can do is rely on circumstantial evidence, including signs of confidence or panic in the ranks of the candidates. They can also try and plug the black holes.
South Africa and Morocco will resume diplomatic ties more than a decade after Morocco withdrew its ambassador from Pretoria, South African President Jacob Zuma said in a newspaper interview published on Sunday.
Morocco recalled its ambassador from South Africa in 2004 after former South African President Thabo Mbeki recognized a breakaway region in the Western Sahara, which Morocco claims as part of its territory.
"Morocco is an African nation and we need to have relations with them," Zuma told City Press in the interview. "We never had problems with them anyway; they were the first to withdraw diplomatic relations."
Zuma met Morocco's King Mohammed last week on the sidelines of an African Union-European Union summit.
"They felt that even if we differ on the Western Sahara issues, the two countries should have a relationship," Zuma said about Moroccan officials' position at the meeting.
South Africa's official government position - as re-affirmed by Zuma in one of his state of the nation addresses - is to support "self-determination and decolonization for the Western Sahara".
The decision to re-establish ties with Morocco is likely to go down badly with some members of South Africa's ruling African National Congress (ANC), of which Zuma is leader. The ANC - as one of Africa's oldest liberation movements - has long backed those seeking independence in the Western Sahara and has accused Morocco of occupying the region.
The ruling party said in a statement it had "unequivocal support for Western Sahara" but that this did not mean it harbored enmity towards Morocco.
"There is also no ANC policy that says South Africa should isolate Morocco," the statement said.
A spokesman for South Africa's foreign ministry could not be reached for comment on Sunday. Morocco has controlled most of the Western Sahara, which is rich in phosphates and has seen some initial oil exploration efforts, since 1975. A ceasefire in 1991 called for a referendum on self-determination for Western Sahara, but the vote has never taken place.
South Africa's Gupta family used HSBC Holdings PLC bank accounts in Dubai to transfer millions of dollars through companies that have been linked to suspected kickbacks for the sale of Chinese locomotives, according to documents reviewed by The Wall Street Journal.
The documents show money moving among three United Arab Emirates-based firms in January and February 2013 through HSBC accounts while one of the firms was receiving payments from a Chinese rail company with a contract to sell locomotives to a South African state-owned enterprise.
One of the documents, a spreadsheet of bank transactions, shows that the transfers among U.A.E.-based firms were made in dollars and cleared by HSBC in New York.
The spreadsheet and other documents cited in this article were among a trove of emails, bank statements and other documents that appear to have been obtained from Gupta-controlled companies earlier this year. The documents have buttressed longstanding suspicions among many South Africans that the powerful business clan leveraged its connection to President Jacob Zuma and other government officials to amass great personal wealth.
They also underscore the risks for banks of processing potentially illicit money flows.
HSBC said it is determined to keep criminals out of the financial system. It said it "has been reviewing its exposure to the Guptas for some time, and has closed a number of accounts for associated front companies wherever we have found them."
"This is inherently challenging because those who seek to launder money are often extremely sophisticated, hiding behind legitimate companies, layers of front companies, connected parties and individuals that have controlling interests in the subject companies," HSBC said.
South Africa's amaBhungane Centre for Investigative Journalism published documents in June showing the Guptas were involved in arranging the contacts between CSR Zhuzhou Electric Locomotive Co., a subsidiary of China's state-owned CRRC Group, and South African rail-and-port operator Transnet. It said the documents present evidence Gupta family companies received kickbacks of around 20% on three locomotive deals from CSR and other CRRC subsidiaries.
CRRC Group didn't respond to a request for comment.
South African police and prosecutors have said they are investigating allegations of wrongdoing by people and companies with ties to the Guptas, including potential kickbacks from international companies.
The Guptas, who didn't respond to a request for comment for this article, have previously denied wrongdoing. Atul Gupta, who leads the family's businesses, has said without elaboration that "there is no authenticity" to the documents, which have been dubbed #GuptaLeaks in South Africa. Mr. Zuma has also denied wrongdoing.
The possible role of U.K. banks in Gupta-related business was raised in October by Peter Hain, a former cabinet minister and a member of the U.K.'s House of Lords. At the time, the U.K. financial regulator said it had already asked two banks named by Lord Hain, HSBC and Standard Chartered PLC, to review possible Gupta-related business.
Standard Chartered said it shut down some accounts linked to the Guptas in 2014 after an internal investigation.
In a letter sent last week to U.K. Treasury chief Philip Hammond and seen by the Journal, Lord Hain accused HSBC of sanctioning money laundering. He alleged that accounts with U.K.-based HSBC in Dubai and Hong Kong were used for Gupta money transfers out of South Africa. He told Mr. Hammond that some of the transactions had been flagged as suspicious by HSBC staff, but "I am informed that they were told by HSBC UK to ignore it."
HSBC denies that it sanctioned money laundering. HSBC has spent billions of dollars improving its financial crime-fighting systems and hired thousands of compliance staff since paying $1.9 billion in 2012 to settle U.S. allegations of money laundering and sanctions breaches. Under the terms of a five-year deferred prosecution agreement, part of that settlement with the Justice Department, it must raise its standards to an agreed level or face an extension of the agreement, additional conditions or criminal prosecution.
The transactions in the #GuptaLeaks spreadsheet could draw scrutiny from U.S. authorities, since they are listed as having been made in dollars and cleared by HSBC in New York.
The Federal Bureau of Investigation is examining funds involving Gupta-linked businesses that may have traveled through the U.S. financial system, and the role any U.S. companies may have played, according to people familiar with the matter.
The spreadsheet shows a total of $2 million moving from two U.A.E. companies--Century General Trading FZE and JJ Trading FZE--to a third U.A.E. company, Global Corporation LLP, in January and February 2013.
The three companies appeared to be controlled by the Guptas, according to correspondence and financial data in the #GuptaLeaks documents. Century General Trading and JJ Trading didn't respond to calls seeking comment. Global Corporation couldn't be reached for comment.
Other #GuptaLeaks documents show that Century General Trading had another lucrative stream of revenue at the time. In October 2012, Chinese rail company CSR signed a 2.69 billion rand ($190 million) deal with South African state-owned Transnet for 95 locomotives. As part of the deal, CSR pledged to pay 20% of its proceeds, or 537.3 million rand, to Century General Trading, according to a table setting out the payments the firms were to receive from the Chinese company.
Transnet said it is investigating the procurement processes for the locomotive deals. Emails from the months preceding the deal show that the Guptas and companies they controlled were involved in arranging the agreement. One email chain from January 2012 shows that CSR directors forwarded a letter to the Transnet chief executive seeking participation in the locomotive tender to several employees and executives at Gupta-owned companies.
The transactions processed via HSBC accounts in early 2013 are part of much-larger money flows due to JJ Trading and Century General Trading in the years to come. One document states that by 2015, the two companies were entitled to 5.27 billion rand in payments from CSR, as the Chinese company went on to win two more tenders with Transnet, for 100 and 359 locomotives, respectively. The funds from the later deals, between 20% and 21% of the total proceeds, had been promised to JJ Trading, according to the document.
It is unclear how payments after February 2013 were processed. The JJ Trading and Century General Trading accounts with HSBC were shut down in 2014.
South African President Jacob Zuma sacked a vocal critic from his cabinet on Tuesday, a move expected to further deepen tensions as an elective conference to the ruling ANC draws near.
In his second reshuffle this year, Zuma dropped Higher Education minister Blade Nzimande, a member of the South African Communist Party, which is a key political ally of the ruling ANC. Zuma also moved State Security Minister David Mahlobo to the energy portfolio, the president’s office announced, reviving debate over controversial and costly plans for nuclear energy.
Nzimande has in recent months been incessantly vocal in calling for Zuma to go.
“The ANC is being stolen in broad daylight,” Nzimande told an anti-graft strike last month which urged Zuma to quit over a series of corruption scandals. The SACP and the country’s largest trade union, COSATU, are long-term political allies with Zuma’s African National Congress (ANC) party.
Both the SACP and COSATU have endorsed Cyril Ramaphosa as the ANC’s new president. Zuma is backing his ex-wife Nkosazana Dlamini-Zuma to succeed him. The ANC is due to elect Zuma’s successor as party leader in December, ahead of general elections in 2019.
South Africa’s Supreme Court of Appeal has dismissed President Jacob Zuma’s and the National Prosecuting Authority’s appeal against an earlier decision by the North Gauteng High Court that a decision to dismiss 783 charges against Zuma in 2009 was irrational. Then, Zuma had claimed that the charges against him were part of a political conspiracy to prevent him from becoming president. But the North Gauteng High Court, in a case brought by the opposition Democratic Alliance, ruled last April that the charges of corruption, money laundering and racketeering against Zuma should be reinstated. The Conversation Africa’s Politics and Society Editor Thabo Leshilo spoke to constitutional expert law Pierre de Vos about the latest decision.
What are the implications of the judgment?
The judgment means that the original decision by the North Gauteng High Court to charge President Zuma stands and – in the absence of another legal move – the National Prosecuting Authority is legally obliged to implement it.
This means Zuma will be prosecuted unless Shaun Abrahams, the national director of public prosecutions, decides again to drop the charges (but on different legal grounds). The judgment also contains scathing criticism of the National Prosecuting Authority and its senior leadership.
It raises questions about the integrity of senior National Prosecuting Authority leaders and of the independence and impartiality of the prosecutions body. The judgment also notes that it was illegal for Zuma’s legal team to obtain and share the intercepted communications – the so called spy tapes – which raises questions about why no one (including Zuma’s lawyer, Roger Hulley) was ever charged for breach of the law.
What happens now?
Zuma’s lawyers will probably make another submission to Abrahams to argue that the charges must be dropped. This may include arguments that too much time has passed since the alleged crimes were committed or that new evidence has come to light that raises questions on whether the NPA has a winnable case against the President.
The Appeals Court left open whether Abrahams has the legal power to review a decision by the National Director of Public Prosecutions or not. If Abrahams does have this power, and if he again drops the charges, it will probably be the end of the matter.
If the charges are not dropped, the NPA will proceed with the prosecution, at which point Zuma’s lawyers will almost certainly approach the court to ask for a permanent stay of prosecution. It is not practically possible for Zuma to appeal to the Constitutional Court as his lawyers already conceded before the Supreme Court of Appeal that the decision to drop the charges was invalid.
What are Zuma’s options?
As the Supreme Court of Appeal points out in its judgment, Zuma and his lawyers have done everything in their power to prevent a situation where the president would have his day in court and would have to answer to the charges levelled against him.
This is why the president and his lawyers will continue to try to stop the prosecution by submitting new arguments to the National Prosecuting Authority on why the charges should be dropped. And, if that does not work, to try and convince the court that his prosecution must be stopped permanently because for some or other reason he could not receive a fair trial.
Can a sitting president be put on trial? Does South Africa have a precedent for it?
South Africa’s sitting president can be charged. There is no provision in the country’s constitution – or in ordinary legislation – that stands in the way of this happening.
The South African parliament could pass a law that changes this and protects a sitting president from criminal liability. But this wouldn’t get very far as such a law would be unconstitutional. It would be breach of the Rule of Law as developed by the South African Constitutional Court and it would also be in breach of section 9(1) of the Constitution which states that:
Everyone is equal before the law and has the right to equal protection and benefit of the law.
No sitting president has ever been charged with a criminal offence in South Africa. President Nelson Mandela was required to testify in a civil (as opposed to a criminal) case, after which the Constitutional Court imposed limits on when a sitting president would be required to testify in a civil case.
It would be unprecedented for a sitting president to face criminal charges and be prosecuted.
South Africa's President Jacob Zuma must face charges of corruption, fraud, racketeering and money laundering, the Supreme Court of Appeal has ruled. It agreed with a lower court ruling last year that prosecutors could bring back 783 counts of corruption relating to a 1999 arms deal.
The charges had been set aside eight years ago, enabling Mr Zuma to become president. The president has always maintained his innocence.
The president now expected South Africa's National Prosecuting Authority (NPA) to consider representations from his legal team before making a decision about whether to prosecute him, it added.
The charges relate to Mr Zuma's relationship with a businessman, Shabir Shaik, who was tried and found guilty in 2005 of soliciting bribes from a French arms company "for the benefit of Zuma". Mr Zuma and other government officials have been accused of taking kickbacks from the purchase of fighter jets, patrol boats and other arms.
Charges were first brought against Mr Zuma in 2005 but dropped by prosecutors in 2009. Last year, the High Court in the capital, Pretoria, ruled in a case brought by the opposition Democratic Alliance that he should face the charges. Mr Zuma went on to lodge a challenge with the Supreme Court of Appeal.
It is the corruption case that will not go away. President Zuma has battled for years to avoid going on trial for 783 counts of corruption, linked to a politically charged bribery scandal that stretches back to the 1990s.
The case against him was dropped in controversial circumstances in 2009, when the security services produced recordings of phone conversations that apparently show there was "political meddling" by prosecutors.
Weeks later, Mr Zuma became president of the country.
But the so-called "spy tapes" have never been made public, and opposition parties have fought in the courts to have the corruption charges reinstated. After this appeals court ruling, that could now happen - in theory.
In practice, many believe South Africa's NPA is unlikely to proceed, at least not without further delays. Mr Zuma's presidential term ends in 2019, when he will not be eligible to stand in another election having already served two terms in office.
His eventful presidency has seen him survive eight votes of no-confidence, making him the most colourful and controversial president South Africa has had since white-minority rule ended in 1994.