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STATEMENT BY PRESIDENT JACOB ZUMA ON THE RELEASE OF THE

REPORT OF THE COMMISSION OF INQUIRY INTO ALLEGATIONS OF FRAUD,


CORRUPTION, IMPROPRIETY OR IRREGULARITY IN THE STRATEGIC
DEFENCE PROCUREMENT PACKAGE (ARMS PROCUREMENT COMMISSION)
Tuynhuys, Cape Town
21 April 2016

Fellow South Africans,


Various calls were made since early 2000 for the establishment of a Commission of
Inquiry to investigate allegations of wrongdoing in the Strategic Defence
Procurement Packages.

Around November 2010, legal proceedings were instituted in the Constitutional Court
for direct access.

The applicant in that matter asked the court, amongst others, to declare that the
Presidents failure or refusal to appoint an independent commission of inquiry into
allegations of irregularities, fraud and corruption in the Strategic Defence
Procurement Packages, which the applicant refers to as the arms deal, was
inconsistent with the Constitution.

He asked for an order directing the President to appoint within 10 days an


independent commission of inquiry under section 84(2)(f) of the Constitution read
with the Commissions Act, 8 of 1947, to inquire into allegations of wrongdoing and to
report publicly thereon.

On 12 September 2011, I filed an affidavit in response to the application, wherein I


set out that despite not conceding any of the contentions advanced by the applicant,
I had decided to appoint a commission of inquiry.

On 24 October 2011, I appointed the Commission of Inquiry into Allegations of


Fraud, Corruption, Impropriety or Irregularity in the Strategic Defence Procurement
Package (also known as the Arms Procurement Commission).
The Commission was chaired by Justice Willie Seriti of the Supreme Court of
Appeal, Judge Hendrik Thekiso Musi, then Judge President of the Free State High
Court; and Judge Francis Legodi of the North Gauteng High Court.
Judge Legodi resigned a few days before the Commission was to start public
hearings, and the two judges continued with the work.
The final report, which consists of three volumes, was delivered to me on 30
December 2015.

I undertook to process the report and in due course, make further communication on
the matter.

Having considered the contents of the Report and the findings thereof, I have taken
a decision to release the three volume report to the public.

Included in the Commissions Terms of Reference were the following:

The rationale for the Strategic Defence Procurement Package; in other words

why the country needed it;

Whether the arms and equipment acquired are underutilised or not utilised at

all;

Whether job opportunities anticipated to flow from the Package have

materialised at all;

Whether any person or persons within and/or outside the Government of the

Republic of South Africa improperly influenced the award or conclusion of any of the
contracts awarded and concluded, and if so whether legal proceedings should be
instituted against such persons and what form they should take and;

Whether any contract concluded is tainted by any fraud or corruption capable

of proof, such as to justify its cancellation, and the ramifications of such cancellation.
The Commission conducted its inquiry for a period of four full years, exceeding the
two years it had been initially given to do the work.
The inquiry involved conducting private investigations and interacting with entities
and persons with knowledge of the Strategic Defence Procurement Package.
Public hearings took place between 19 August 2013 and June 2015, and fifty-four
witnesses appeared before the Commission.
The key witnesses included Former President Thabo Mbeki and former Ministers of
his Cabinet.
Serious allegations had been made by individuals in the media that investigators
abroad had collected evidence of wrongdoing in the Strategic Defence Procurement
Package linked to some of the winning bids.
To verify these assertions and obtain the evidence that had been gathered, the
Commission undertook visits to the United Kingdom, Sweden, France, the United
States of America, Switzerland, Germany and Liechtenstein.

After the extensive process of gathering information from various sources the
Commission made the following findings:
1.

On the rationale for the package, the Commission found that it was
necessary for the South African National Defence Force to acquire the
equipment it procured in order to carry out its constitutional mandate and
international obligations of peace support and peace-keeping.

2.

On the question of whether the arms and equipment acquired are


underutilised or not utilised at all, the Commission found that all the arms
and equipment acquired are well-utilised.

3.

On whether the job opportunities anticipated to flow from the Package have

materialised, the evidence tendered before the Commission indicated that the
projected number of jobs to be created through the arms procurement process was
achieved.
The Commission states that the probabilities are that the number of jobs created or
retained would be higher than eleven thousand nine hundred and sixteen.
4. On whether the off-sets anticipated to flow from the arms procurement have
materialised, the Commission found that it was fair to conclude that the anticipated
offsets have substantially materialised.
Adequate arrangements are in place to ensure that those who have not met their
obligations do so in the immediate future.
5.

On whether any person or persons improperly influenced the award or

conclusion of any of the contracts in the procurement process, the Commission


found that the evidence presented before I,t does not suggest that undue or
improper influence played any role in the selection of the preferred bidders, which
ultimately entered into contracts with the Government.
6.

On whether any contract concluded through the procurement process is

tainted by any fraud or corruption, the Commission states that the widespread
allegations of bribery, corruption and fraud in the arms procurement process,
especially in relation to the selection of the preferred bidders and costs, have found
no support or corroboration in the evidence, oral or documentary, placed before the
Commission.
No evidence was found as well through the Commissions own independent
inquiries.
The Commission also probed the engagement of consultants by some of the bidding
companies.

The Commission points out that the large payments made to consultants gave an
impression that the money may have been destined to decision makers in the arms
procurement process and that they may have been bribed.
The fact that some of the consultants knew or had personal contact with some of the
senior politicians in the government of the day, was cited as corroboration.
On this point, the Commission states that not a single iota of evidence was placed
before it, showing that any of the money received by any of the consultants was paid
to any officials involved in the Strategic Defence Procurement Package, let alone
any of the members of the Inter-Ministerial Committee that oversaw the process, or
any member of the Cabinet that took the final decisions, nor is there any
circumstantial evidence pointing to this.
The Commission states that the preferred bidders confirmed that the money was for
the consultants services and nothing else. Some of the individuals implicated in the
allegations of wrongdoing gave evidence before the Commission and refuted the
allegations and insinuation levelled against them. None of them was discredited as a
witness.
Members of the Inter-Ministerial Committee that oversaw the whole process and
recommended preferred bidders to the full Cabinet, which approved the
recommendations unaltered, have given evidence before the Commission and
refuted any suggestions that they may have been bribed or unduly influenced in any
way whatsoever to take the decisions they took. None of them was discredited as a
witness.
The key members of the technical teams that conducted the extensive evaluations of
all the offers, gave evidence and refuted any suggestion that they may have been
unduly influenced or any way manipulated to produce the relevant scores or
rankings.
None of them was discredited as a witness nor was there any credible evidence
placed before the Commission to refute their testimony.
Other than the Lead-in Fighter Trainer (LIFT) programme, the Inter-Ministerial
Committee accepted, unaltered, the results of the evaluations produced by the

technical teams and recommended to the full Cabinet, the preferred bidders
identified by the technical evaluations.
Where the cabinet took a different decision, for example the selection of the BAW
Hawk aircraft for the LIFT programme, they gave full reasons of the strategic nature
for this decision.
Moreover, says the Commission, there was no evidence that such decision was
tainted by any improper motives or criminal shenanigans.
There was also no basis whatsoever for disbelieving the evidence submitted by the
members of the Inter- Ministerial Committee in this regard.
The Commission concluded by stating that there was no room for it to draw adverse
inferences, inconsistent with the direct, credible evidence presented to it, in respect
of all material aspects of the Terms of Reference.

Government had been of the view that any findings pointing to wrongdoing should be
given to law enforcement agencies for further action. There are no such findings and
the Commission does not make any recommendations.

I wish to express my sincere gratitude and appreciation to the Chairperson of the


Commission, Judge Seriti as well as Judge Musi for the professional, efficient and
effective manner in which they conducted the Commission.

We also wish to thank the evidence leaders, the legal teams, all the witnesses, staff
members of the commission and all those who contributed to making the work of the
Commission a success.
I thank you.
Issued by The Presidency