Professional Ethics and Anti-Corruption

1
Professional Ethics and Anti-Corruption

• Presentation by the
• Public Service Commission to the
• Portfolio Committee on Public Service and
  Administration
• Cape Town
• 15 May 2002

2
Presentation on Professional Ethics and Risk
Management reports

• RESEARCH AND EVALUATION REPORTS
• Requirements for Blacklisting
• Evaluation of Hotlines
• Risk Management- Provincial Overview
• Review of South Africas National Anti-Corruption
  Agencies
• National Ethics Survey
• PROMOTIONAL MATERIALS
• Explanatory Manual on Code of Conduct
• Whistle-blowing Guidelines

3
Blacklisting

• Aims
• To identify existing legislation that supports
  blacklisting
• To establish the gaps in existing legislation,
• To consider the creation of an accessible
  computerized national data basis of blacklisted
  companies, and
• To establish where such a data basis could be
  appropriately based

4
Blacklisting Research Methodology

• Comparative study of foreign countries,
  international trends and best practices
• Consultation with institutions implementing it.
• Determining the institutional, financial,
  procedural and legal requirements for the
  creation of a computerized national database
• Propose efficient and effective mechanisms and
  structures to detect companies involved in
  corrupt activities and
• Assess risks underlying blacklisting

5
Blacklisting findings

• Key findings
• State Tender Board Act provides for a form of
  blacklisting-restriction of persons/ tenderers
• State Tender Board compiles a list of restricted
  suppliers updated and circulated to all
  departments. Distribution of and electronic
  Access to list is problematic
• Provincial Tender Boards tend to follow
  procedures as set out by State Tender Board

6
Blacklisting findings continued

• PFMA and Treasury Regulations create basis for
  system that can be equated with the Register of
  Employees Dismissed used by the Banking Council
  of South Africa
• Some form of black listing occurs in national and
  provincial departments- process is not uniform or
  coordinated
• Systematic programme of blacklisting is very
  ambitious, initial implementation may be very
  litigious

7
Blacklisting findings continued

• Risks underlying blacklisting
• False, misleading or incorrect information
• Outdated information
• Information unlawfully obtained
• More information collated than necessary for
  intended purpose
• Collation of information infringes on rights to
  privacy and not in line with the constitution
  limitations and justification of reasonable and
  justifiable in an open and democratic society
  based on human dignity, equality and freedom

8
Blacklisting findings continued

• Short to medium term measures to address corrupt
  and unethical conduct by companies
• Anti-Corruption pacts
• Supplier/Procurement codes
• Public Information programmes
• Whistle Blowing mechanism
• Administrative processes prior to blacklisting

9
Blacklisting findings continued

• Options for housing of blacklisting facility
• National Treasury
• Office of the Public Service Commission
• Department of Public Service and Administration

10
Evaluation of Hotlines

• Purpose of the report
• To assess the current situation in South Africa
  regarding existence, operation and management of
  hotlines covering public sector corruption
• To draw from comparative experience and assess
  how hotlines can be made more effective
• To make recommendations on the feasibility of
  establishing a national anti-corruption hotline

11
Hotlines Findings

• EXISTENCE AND FUNCTIONING OF HOTLINES
• Only eight National Departments have established
  hotlines
• Trade and Industry
• Public Works
• Water Affairs and Forestry
• Home Affairs
• Correctional Services
• Justice and Constitutional Development
• South African Police Service
• South African Revenue Services

12
Hotlines Findings continued

• Three provinces have not established hotlines
• Eastern Cape
• North West
• Free State Province
• Provinces with the most efficient hotlines are
  those that are well resourced
• Only one department (Trade and Industry) has
  established International Best Practice on
  Hotlines

13
Management of information and cases

• In Gauteng, reported cases are captured and
  compiled on a monthly basis. An estimated 54 of
  the reported cases coming through hotlines were
  solved.
• In Northern Cape reported cases are captured and
  callers allowed to remain anonymous. Calls are
  not recorded
• In Mpumalanga, 3600 calls were received in 2001.
  Twelve criminal charges were laid against
  individuals
• In Western Cape Province there were a total of 83
  recorded calls, resulting in 27 successful
  disciplinary/criminal being prosecuted

14
Hotlines Recommendations

• There is a need for the establishment of a
  national hotline either in the Public Service
  Commission or Office of the Auditor-General
• A data management system should be established
  for the national hotline to provide a coherent
  recording of disclosures

15
Hotlines Recommendations continued

• Training courses are needed to support the
  specialized staff working on hotlines
• A Standard Investigating Procedure should be
  developed for the hotline investigation unit
• There is a need for the implementation of
  International Best Practice
• Responsibility for day to day operations of the
  hotline system must be at the appropriate
  management level to ensure buy in of senior
  managers and staff in the organization

16
Risk Management Provincial Perspective

• First report on risk management practices in the
  public service
• Provides overview of the status of integrated
  risk management in the public service
• Emanates from consultative workshops held in
  seven of the nine provinces in 2001. Workshops
  were done in partnership with the KZN Provincial
  Treasury
• 224 senior and middle managers attended

17
Risk Management Workshop Aims

• Provided officials with a theoretical framework
  of risk management
• Provided understanding on the roles,
  responsibilities and relationships in the
  application of risk management
• Provided them with an overview of the risk
  management experience in other provinces.
• Provided an opportunity to discuss relevant
  provincial barriers

18
Risk management findings

• Awareness is high at the level of accounting
  officers and internal audit components due to
  legal imperatives of PFMA
• Formal Commitment to risk management processes
  exists at highest levels
• Limited integration into strategic management
  processes is taking place
• Most fraud prevention plans are not based on risk
  assessments
• Departments lack capacity and resources to ensure
  effective learning, provision of background
  information, knowledge, skills and tools to
  implement risk management

19
Risk management Findings

• Consultants drive risk management processes.
  Contents of reports not cascaded to lower level
  staff
• Officials at operations level (9-12) not
  empowered to implement risk management practices
• Treasury Regulations and private sector good
  practice do not provide adequate framework for
  the public service
• 5 provinces have not repealed the Exchequer Act.
  Some arrangements are in conflict with PFMA and
  it leads to confusion

20
Risk management findings

• Pockets of excellence exist in some provinces
• Comprehensive PFMA compliance monitoring system
  was developed by the Eastern Cape.
• Best practice was developed and implemented in
  KZN and Western Cape
• Accountability framework
• Role clarification
• Implementation principles and approaches
• Excel programs were developed to manage and
  monitor risk

21
Compliance by provincial departments April 2001
100 80-90 50-80 20-50
Gauteng, KZN N West W Cape Limpopo None Eastern Cape N Cape F State
22
Audit of National Anti-corruption agencies

• Purpose
• To conduct an audit of agencies, entrusted with
  aspects of the anti-corruption mandate
• To establish the possibility of rationalizing
  agencies with similar functions
• To contribute towards the development of a
  national anti-corruption strategy for the public
  service

23
Aspects of the assessment

• Aspects that were investigated
• Mandates
• Structural arrangements
• Legislative reform
• Resource constraints
• Public perceptions
• Case Loads
• Performance
• Coordination

24
Mandates of Agencies

• Some organizations audited have very specific
  mandates, e.g. Recovery of public funds and
  assets (Asset Forfeiture Unit and SIU)
• In other cases, mandates are broad and overlap
• Public Service Commission, AG and Public
  Protector investigate maladministration
• SIU and SAPS anti-Corruption Unit are the only
  institutions focusing solely on corruption

25
Resources of agencies

• Few bodies believe they have sufficient resources
• ICD only able to fill 100 of 500 desired posts
  while the Public Protector could only fill half
• Training is seen as a top priority by all
  agencies
• Levels of interaction with the public vary across
  agencies. This area requires attention.
• More needs to be done to determine client
  satisfaction
• Forum shopping occurs as a consequence of the
  multiplicity of agencies

26
Case Loads

• Difficult to obtain information on cases
• Only certain agencies have readily available
  figures (Independent Complaints Directorate, SIU
  and SAPS Commercial Crime Branch)
• Significant backlogs that need to be dealt with
  urgently. AG is busy with a project in this
  regard
• Cases land up at agency not best placed to deal
  with e.g. Public Protector, PSC, ICD and
  Directorate Special Operations

27
Performance and cooperation

• Performance can be improved through better use of
  shared resources
• Interaction does take place between agencies-
  specifically prosecuting authorities
• No formal agreement regarding coordination of
  case related information
• Need for formal co-operation exists

28
Single agency

• A Single agency will not be appropriate at this
  stage
• Real concerns exists about the location, funding
  and mandate
• Not merely encouraged because existing mechanisms
  are not functioning optimally
• Priority to obtain current agencies with some
  rationalisation and formalising coordination
  arrangements
• Complimented by an audit on the capacity of
  anti-corruption units in the various national and
  provincial departments in 2002

29
National Ethics Survey 2001

• Undertaken in partnership with KPMG, Transparency
  South Africa
• First ever survey of its kind
• Purpose to assess the ethical infrastructure in
  place in public and private institutions
• Provides snapshot of current ethics practices
• A total of 166 respondents participated 30
  public service, 76 private sector, 60 civil
  society respondents

30
Ethics Survey Focus areas

• Ethics documents
• Ethics related evaluations
• Responsibility for the ethics function
• Resolution of ethics problems
• Reporting mechanisms
• Ethics training
• Performance evaluation
• Risk assessment
• Future ethics management

31
Ethics Survey findings

• Flaws in basic ethics infrastructure- many
  organisations have not integrated ethics
  management practices into other management
  processes
• Few organisations train new employees on the code
  of conduct
• Many organisations do not assign ethics
  management to a senior manager

32
Ethics Survey findings continued

• Findings continued
• 54 of respondents had access to confidential
  reporting mechanisms
• 84 of organisations surveyed have written
  documents outlining organisational values and
  principles
• Most organisations have codes of conduct and
  whistle blowing mechanisms

33
Explanatory Manual On The Code Of Conduct

• Serves as guide to employees to understand and
  resolve ethical dilemmas in their daily work
• Five focus areas
• serving government
• serving the public
• professionalism and integrity
• conflict of interest
• working in the service
• Produced 1 million pocket-sized booklets to be
  distributed to all public servants

34
Promotion and implementation of Whistle Blowing
mechanisms

• Guidelines have been produced in easy to use,
  booklet format to serve as reference framework
• Participatory and learning orientated workshops
  (in conjunction with Open Democracy Centre) are
  being conducted in the provinces
• to familiarize public servants with the Protected
  Disclosures Act
• to implement best management practice on whistle
  blowing mechanisms