Global South African Weekly News Wrap Up 9 March 2012

Contents
JZ’s strike silence spoke volumes ............................................................................... 2 Back from brink as SA apologises to Nigeria ............................................................ 3 In the ANC's crosshairs: New road map for coal producers ................................... 5 Avoid protectionism and implement urgent reforms ............................................... 7 Changes on ANC wish list ......................................................................................... 10 ANC to give land reform a shove.............................................................................. 11 ANC Women’s League ‘in disarray’ ........................................................................ 13 Vavi says ANC risks being overthrown ................................................................... 14 Proposals put ANC in labour’s firing line ............................................................... 16 Gordhan in labour law reform plea amid strike ..................................................... 17 ‘Little to show’ for Seta funds — Nzimande ........................................................... 18 Vavi breaks march date with Zille by SMS ............................................................. 20 Support grows for Cosatu national strike ............................................................... 21 'Life of hell' under Bheki Cele .................................................................................. 22 ANC 'holy cows' emerge ............................................................................................ 24 Zuma's lawyer and the mega tender ........................................................................ 26 Vavi takes his toll on the ANC .................................................................................. 29 ANC and Cosatu agendas take centre stage ............................................................ 32 Fund did get preference — Cele ............................................................................... 34 Constitutional Court post to be re-advertised ......................................................... 35 Malema rivals on ropes ............................................................................................. 36 Sisulu seeks to gag MPs on air force ........................................................................ 37 State mining company comes closer to reality ........................................................ 39 Cele identified building, Hlela tells inquiry ............................................................. 40 New research fails to find proof of child-grant abuse ............................................ 42 Spin and hysteria cloud ANC’s ‘dramatic’ changes ............................................... 43 DA shocked at ANC draft proposals to change constitution ................................. 45 ANC vows no change to Reserve Bank’s brief ........................................................ 47 It’s simple: just slap another tax on mining industry ............................................. 48 Vavi shuns ANC executive again despite Zuma call ............................................... 52 Respect ANC disciplinary process: Sexwale............................................................ 53 State bodies squander billions without internal auditors ....................................... 54 Mandela grandson to face charges by Aurora liquidators..................................... 56 Unions, managers demand probe at Armscor ......................................................... 57 Youth leader says he learnt‘madness’ from ANC elders ....................................... 59 Justice Minister sticks to his guns ............................................................................ 61 Dodgy firm hosted ANC ............................................................................................ 64 A role model Malema should have heeded .............................................................. 66 Power grab is thinly veiled by these soothing words .............................................. 68 League treasurer survives censure ........................................................................... 70 Cele hires top lawyer for inquiry.............................................................................. 71 ANC could lose power – Mchunu ............................................................................. 72

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9 March 2012 Business Day Page 10 Editorial

JZ’s strike silence spoke volumes
The Congress of South African Trade Unions (Cosatu) national strike has come and gone and its virtues and failures have been and will be debated. Was it a success? Was it justified? We believe the strike was a bad idea even from the point of view of Cosatu members because it was unlikely to change anything and the issues are poorly founded. In short, it was a pointless waste of a kind Cosatu regularly inflicts on the economy with little consideration for the personal and financial consequences. However, outside the much-canvassed issues of tolling the highways and the seemingly endless debate over labour brokers, there is one further political issue that this strike inadvertently managed to illustrate — the inability of the government to communicate effectively. Or, in this case, at all. For perspective, it’s worth backtracking a bit. Some might disagree, but the broad consensus is that the administration of p resident Thabo Mbeki communicated poorly. The analogy often used was of a professorial president, smoking his pipe, in an ivory tower. Here was a leader who deigned to present himself to his electorate only occasionally, while being frequently photographed at foreign functions among the international elite. This aloofness, deserved or not, is cited as a possible reason for Mr Mbeki’s decline in popularity and ultimately contributed to his ousting. Before President Jacob Zuma became president, there were many debates that surrounded his appointment but there was at least one thing about which most commentators agreed: at the very least, he would break this tradition of ivory-tower aloofness. Mr Mbeki, the intellectual and academic, was contrasted with Mr Zuma, the traditionalist family man. Mr Mbeki, anxious and up tight; Mr Zuma, friendly and warm. Whatever doubts there were about the new president and his policy choices, one thing everybody agreed on was that he would communicate more effectively with ordinary South Africans. How sadly we have been disappointed. If this strike has demonstrated anything, it is how badly the African National Congress (ANC) performs in a head-to-head battle with a master of the populist art such as Cosatu general secretary Zwelinzima Vavi. The ANC was beaten to a pulp i n the strike publicity war, a failure made more poignant by the fact that it had at its disposal some respectable ammunition. The g overnment announced a host of measures to address the e-tolling debate a fortnight ago, including halving the toll and reducing fees for taxis to zero. Those were big concessions, but the party and the government decided to retreat into its shell rather than put forward these arguments with any conviction.

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At the head of this retreat was Mr Zuma himself, who did not utter a word on the strike. In other words, the government removed from the field its most powerful weapon in the communications war, either voluntarily or because the weapon decided he did not want to fire. With no heavy artillery, the battleground was quickly overwhelmed with specious arguments, misstatements and meaningless cant by the other side, which in this case included the odd alliance of between the ANC’s main political opponent, the Democratic Alliance, and Cosatu. In the greater scheme of things, the strike was a skirmish in the longer war, and perhaps this is why the ANC failed to rise to the challenge. Some also argue Mr Zuma’s silence was strategic, especially as he needs Cosatu to win re-election as ANC leader in December. If so, it merely illustrates how wide the gap between the national interest and the president’s interests has become. The fact is, it is a concern — for the party as much as anyone else — that the ANC appears to be losing its ability to connect with ordinary South Africans. This gap is quickly being filled by extremists and sector al interest groups. 9 March 2012 Business Day Page 1 Natasha Marrian and Sam Mkokeli

Back from brink as SA apologises to Nigeria
SA and Nigeria yesterday stepped back from the brink as relations between the continent’s two emerging and rival superpowers threatened to hit new lows, amid a furious diplomatic row and tit-for-tat deportations. Pretoria yesterday apologised unreservedly to Nigeria for having deported 125 Nigerians last week. They had landed at OR Tambo International Airport with yellow fever certificates which local officials suspected to be bogus. The deportation of the Nigerians ratcheted up tensions, with Abuja retaliating by sending back 78 South Africans this week, mainly business travellers. The incident strained already uneasy diplomatic relations between the two countries, which have been vying for economic and political dominance in Africa. Yesterday, SA’s Deputy International Relations Minister Ebrahim Ebrahim apologised to Nigeria at a specially convened press conference, in the presence of Nigerian diplomats who declined to comment. SA also sent a letter to Nigeria, in which it apologised. "It is a regrettable incident and we wish to humbly apologise," Mr Ebrahim told journalists.

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Mr Ebrahim said he hoped the incident would not affect relations permanently. Nigeria had demanded the apology. The climbdown follows heated comments by Nigerian officials earlier this week. They condemned SA’s "disrespectful" attitude — before applying reciprocal foreign policy by sending back South African travellers. "I find the action as totally unfriendly and un-African. "They should know that they do not have a monopoly of deporting travellers," Nigeria’s Foreign Minister Gbenga Ashiru said on Tuesday. "What you see playing out is … xenophobia by South Africans against all Africans, not just Nigerians, including even those from their neighbouring countries." Relations between Pretoria and Abuja have been strained in recent years, with clashes in their country-to-country dealings, and differing positions on key questions of continental politics and diplomacy. Last year’s election in Côte d’Ivoire, in which SA proposed mediation between the winning and losing candidates, highlighted stark differences in their approach to regional questions and contrasting visions of the spread of democracy on the continent. At a social level, relations between the countries’ nationals are also not always cordial. Nigerians living in SA complain of xenophobia and rough treatment by police and immigration officials, and of being associated with crimes such as drug trafficking and money laundering. There has long been tension over what are known as 419 scams — believed to have originated in Nigeria — in which fraudsters often use SA as a base to lure foreigners with the promise of great financial rewards in return for an "investment". Nigeria also failed to back SA’s bid to install Home Affairs Minister Nkosazana Dlamini-Zuma as the new chairwoman of the African Union (AU) commission. Instead it supported the incumbent, Jean Ping, in his failed bid to get another term, an outcome which nonetheless proved a setback to SA’s broader continental aspirations. SA is also opposed to the idea, backed by Nigeria, of a Central Bank of Africa, in terms of which the AU would take over the responsibilities of an African Monetary Fund and establish a single currency by 2028. However, there remained "big questions" over whether the certificates the Nigerian nationals had presented at OR Tambo were fraudulent. Pretoria yesterday took responsibility for the deportations incident, although Mr Ebrahim said Nigeria’s reaction had been "knee-jerk". His department had decided senior officials should be consulted by immigration officers at the airport before acting.

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"We think that the Department of Health and our department should have been consulted to see how we could have handled it," he said. Department of Health officials said immigration officers at OR Tambo were not totally satisfied with the Nigerians’ certificates. Health department spokes-man Fidel Radebe said the officials found there was something "amiss" with the vaccine certificates, and concluded it was in the interest of the public’s health to deport them. He said there was no question of Nigerians being targeted. "They could have been from Congo or anywhere else." A researcher in the Institute for Security Studies’ African conflict programme, David Zounmenou, said the acrimonious relationship between Africa’s economic powerhouses could undermine progress on the continent. Dr Zounmenou said the latest incident pointed to a "serious rift" between the two countries. The growing animosity had to be curtailed as both countries stood to lose from continued tensions. Exports to Nigeria grew from R185m in 1999 to almost R11bn in 2007, he said. South African companies such as MTN, Standard Bank and Shoprite had a strong presence there. High-level contact was needed between Nigerian President Goodluck Jonathan and President Jacob Zuma , said Dr Zounmenou. The honorary CEO of the SA-Nigeria Chamber of Commerce, Dianna Games, said it was good that Pretoria moved quickly to apologise as demanded by the Nigerian government. However, it was important for officials in both countries to be circumspect, as the relationship with Nigeria was uneasy. "It doesn’t take much for (a diplomatic row) to blow up into a bigger issue," she said. Officials in both countries needed to learn from this. Nigeria was important to SA, and was the biggest source of visitors to SA from within Africa. 9 March 2012 Mail & Guardian Lynley Donnelly

In the ANC's crosshairs: New road map for coal producers
The ANC has listed a number of dramatic interventions to deal with Eskom's coal supply problems as the power utility battles to secure long-term access to its primary feedstock. The suggestions include the introduction of coal export certificates managed by the National Energy Regulator of South Africa to ensure that Eskom's demands are met before coal is exported, as well as the

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allocation of Transnet export rail or port terminal capacity to coal exporters only once local power needs have been met at "cost plus a reasonable return". The proposals are contained in a full-length draft of the party's policy discussion document on state intervention in the minerals sector, posted on the ANC's website. They include the concessioning of select power plants to consortiums of coal producers and electricity consumers under certain conditions, such as: •The expansion of capacity for supply to Eskom; •The supply of the expanded capacity to Eskom at cost plus 12%; •An annual concession fee to Eskom to compensate it for the revenue forgone, plus an additional premium; •The employment of all Eskom power plant staff with a five-year moratorium on retrenchment and the servicing of pension, health and other commitments; and •The direct supply of third parties with Eskom's agreement on nondiscriminatory, cost-plus terms. The recommendations are a response to the critical issue of South Africa's reliance on coal for electricity generation and the host of problems this reliance has begun to exhibit, according to the report. Eskom has for some time highlighted its concerns about securing longterm coal contracts needed beyond 2018 and the roughly R100-billion new investment required in coal mining to ensure its future coal needs are met. The utility has also come up against competition from export markets. Demand from countries such as India and China has resulted in supplies traditionally reserved for Eskom being sold internationally at more lucrative prices. Rising input costs could have an impact on Eskom's tariffs at a time when the utility has been asked by President Jacob Zuma to find ways to curb its tariff increases. The document says problems range from Eskom's inability to secure sufficient coal, arising "from a conflict between the mining industry's need to exploit lucrative international markets", to "concerns over the quality and price of coal that is supplied to the energy utility". Such practices, it notes, "have prompted Eskom to seek the introduction of mechanisms such as price controls, quotas on exports and restrictions on the exports of the types of coal used by Eskom". Eskom spokesperson Hilary Joffe said the company was still studying the document, but it welcomed the debate and would give input on the matter where appropriate.

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There have been calls from "some quarters" to get the department of minerals to declare coal a strategic mineral, which would allow it to apply certain conditions on the production, storage and use of coal, the document says. Although these calls have yet to be formally considered, the issues need to be addressed, given that the demand for seaborne coal is "at an all-time high, a trend that is set to continue for years, if not decades". It is not "difficult to appreciate the continued tension between the local mining industry supplying the lucrative export market over Eskom". The state would, however, have to strike a balance between increased regulation "which might create its own problems" and allowing exports of coal that bring in foreign currency to South Africa, it notes. But the document emphasises the need ultimately to wean the country off its reliance on electricity from coal, pointing to power generated from potential shale gas resources in the Karoo. Early "guesstimates", it says, indicate that there could be enough gas to replace the build of coal-fired plants with gas through closed-cycle gas turbines. The state, through the ministries of mineral resources, energy, public enterprises, environmental affairs and trade and industry, should assess the viability of this option. The document stresses that exploration and evaluation for their exploitation. It "already been allocated to the shale gas areas should be reserved for by the state to deliver the optimal strategy notes, however, that large areas have Shell and a few other companies".

Another option is tapping into the natural-gas reserves of countries such as Mozambique, Angola and Tanzania, but it needs to take into account questions of regional integration. The document also recommends the further exploration of the viability of imported hydropower from the Southern African Development Community.

7 March 2012 Business Day Page 12 Pravin Gordhan and Wayne Swan

Avoid protectionism and implement urgent reforms
Jobs are fundamental to people‘s lives, to their expectations and ability to improve their living standards. The importance of a job lies not only in the income that is earned and the skills that are acquired but also in the intangible and invaluable benefits it provides, including dignity, independence, accomplishment and freedom. As the International Labour Organisation has noted, the top priority for most people is to have a fair chance at a decent job. Yet we have unacceptably high unemployment across the global economy, particularly among our youth.

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Despite a rebound in global gross domestic product growth to about 5% in 2010 and robust growth in developing countries last year, the recovery has failed to deliver a significant improvement in global employment levels. Annual global job creation is about 20-million below pre crisis levels. As a result, employment growth has been insufficient to reverse, or even dent, the labour market slack built up as a result of the global recession. With the global recovery looking increasingly fragile, future employment prospects are disheartening for many. Of particular concern is the disproportionate cost borne by young people and the less skilled. The Organisation for Economic Co-operation and Development has shown that youth employment declined by 10% between 2007 and 2010 and low-skilled employment dropped by more than 9%. Youth unemployment rates in some countries are as high as 50%. For the young, the effect of starting their working life unemployed can last a lifetime and is associated with poverty, crime, violence and a loss of morale. For society, it means lower growth, political disengagement and even unrest. SA is no exception. After a period of rapid job losses, about 520000 jobs were created between September 2010 and December last year. This has not been enough to make a serious dent in unemployment, which remains unacceptably high at 23,9%. This backdrop provides a stark reminder to Group of 20 (G-20) f inance m inisters that efforts under the Framework for Strong, Sustainable and Balanced Growth are ultimately directed at creating jobs. The success of the G-20 in the eyes of many will largely be judged by the contribution it makes to creating jobs. From Pittsburgh to Cannes, G-20 l eaders have reiterated their commitment to put jobs at the heart of the recovery. The creation of jobs must not only be a key focus of the G-20, it must be seen to be so. The global policy-making community faces a number of choices in how to promote faster job creation. There is pressure for greater protectionism to "keep jobs at home". Superficially, this road may be tempting, but history has taught us that it is likely to lead to lower growth, lower employment and the possibility of recurrent crises. The better option is to work collectively and collaboratively to implement reforms and measures that will grow our economies, expand trade, increase investment and deliver jobs. Credible structural reforms — particularly of labour and product markets — combined with targeted fiscal investments can provide lasting benefits to our economies and boost jobs now. This is the path that can help lift people from poverty and improve living standards for all. The framework should provide the basis for implementing the reforms needed to boost growth and job creation as well as enhancing development outcomes. The most conducive environment for maintaining employment is one in which a government‘s fiscal position is, in the long run, sustainable and financial systems are stable. The immediate challenge we face is ensuring the current situation does not deteriorate. Commitments to sustainable medium-term fiscal policies and secure financial systems will provide the platform for improved growth and employment. Credible policies that deliver medium-term fiscal consolidation and sustainability will

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facilitate growth and maintain access to public debt markets. Shifting public spending towards socioeconomic priorities — including infrastructure investment and job creation — will raise the rate of potential output growth in the longer term and support stronger investment. Unsustainable fiscal policies place question marks over private investment returns, discouraging growth and jobs. We need to establish adequate firewalls to prevent contagion from the current euroarea sovereign-debt and banking crisis. We also need to maintain our commitment to improving financial stability. All these measures are essential to boost confidence in the global financial system. While sustainable fiscal policies and secure financial systems are necessary, they are not sufficient to stimulate growth in jobs. They forestall worse outcomes but would still leave too many unemployed for too long. Given the scale of the unemployment challenge, no single policy offers the solution. There is no panacea, no silver bullet. What is needed is a comprehensive set of reforms that maximise job creation. Product-market reforms can improve the demand for labour quickly, through facilitating and encouraging new firm creation, firm expansion, the growth of new industries or the revitalisation of old ones. They can also encourage higher investment and boost productivity, which in the long run will lead to sustainably higher employment and incomes. Labour-market reforms can directly improve employment by providing flexibility and the right incentives to work, hire workers, develop skills and become more productive. Employment outcomes can be further enhanced through active labourmarket policies that improve job search, job matching, training and entry into the labour market. In countries with skills shortages, it is crucial to implement reforms to improve the quality of education and skills development. Of course, there must be a credible and sustainable safety net and social protection systems for those unable to adapt or who are in weak bargaining positions. This is particularly the case in emerging markets and developing countries, where poverty remains high and income support needs to be targeted at those who need it most. We must not step away from commitments to the rights of workers. People should not be seen as simply commodities in a free market for labour. The design of these systems is critical and can also contribute to improved labour outcomes through influencing the incentives to work and formal employment. There is also a role for sensible fiscal investments for countries with the available fiscal capacity to do so. Particularly beneficial is spending, which can provide longrun productivity benefits and raise the rate of potential growth. Spending on infrastructure, education and skills development, or appropriate tax reforms, can assist in boosting current demand while also enhancing the structural shifts in the world economy. It is the responsibility of the G-20 to show leadership. We must work together and ensure we make the right policy choices. We must implement the reforms needed to boost confidence, lift growth and create more employment opportunities for all. We

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must avoid the mistakes of the past in resorting to protectionism and delaying reforms. And we must make it clear to all that our collective policy action is focused on the issue that matters to people — jobs.

4 March 2012 Sunday Times Page 13 S'thembiso Msomi

Changes on ANC wish list
The ANC has strongly hinted that it wants to change South Africa's constitution to enable faster social and economic transformation. A Strategy and Tactics discussion document prepared for the party's national policy conference in June say s "elements" of the constitution have to be reviewed as they may be slowing down South Africa 's "second transition". "Constitutions are living documents and reflect the stage of development of a given society. There may therefore well be elements of our constitution that require review because they may be an impediment to social and economic transformation, such as for example the narrow mandate of the Reserve Bank or the relationship between and powers of different spheres of government," the discussion document says. Cosatu and other left-leaning groups within the ANC have in the past argued that the Reserve Bank's mandate should be expanded beyond the protection of the value of the currency and fighting inflation. They want the bank to also have responsibility towards job creation, economic growth and helping South Africa meet its economic distribution targets. There have also been calls for a review of the powers bestowed by the constitution on provinces. These include the administration of health and public education, as opposed to setting policy. Some in the party believe that the state of public education can be improved if public schooling became a constitutional responsibility of the national government. In the discussion document, the ANC says while most of the constitution "encapsulates the key principles" of the party's beliefs, other aspects of it were "based on the sunset clauses" negotiated before the advent of democracy and may not be suitable for today's conditions. "Our first transition was characterised by a framework and a national consensus that may have been appropriate for a political transition, but has proven inadequate and even inappropriate for a social and economic transformation phase," reads the discussion document.

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ANC national executive committee member Ngoako Ramatlhodi caused a legal and political storm late last year when he wrote in The Times that South Africa's constitutional framework reflected "a compromise tilted heavily in favour of forces against change". This was followed by comments from a number of other ANC leaders who questioned the powers of the Constitutional Court, with some stopping short of accusing the judiciary of being anti-ANC and the government. Last month, President Jacob Zuma further muddied the waters when he called for the powers of the Constitutional Court to be reviewed. His office later argued that Zuma's comments had been taken out of context as he was merely repeating the cabinet's statement that it was a review of how the court's decisions had impacted on social transformation over the past 15 years. Justice Minister Jeff Radebe will this week release a document detailing the terms of reference for this judicial review amid fears among opposition parties and the legal fraternity that the government intended to reduce the Constitutional Court's powers because it was not happy with some of the decisions that went against the cabinet. At the release of a discussion document on the review on Monday, Radebe denied that the government had such intentions. "The constitution is an embodiment of the values that the ANC stood and fought for. The ANC-led government will defend these values at all cost, including the independence of the judiciary and the rule of law, which are the bedrock of our constitutional democracy," Radebe said. 4 March 2012 Sunday Times Page 4 Sibusiso Ngalwa

ANC to give land reform a shove
The ANC is considering establishing a land management commission which will have sweeping powers to subpoena people, initiate prosecutions and confiscate land obtained in dodgy deals. The proposal is the ruling party's response to the willing-buyer, willing-seller policy which, the ANC argues, has not worked. The scheme is contained in discussion documents to be distributed to all ANC branches from tomorrow, ahead of its national policy conference in June. According to the document: "There is sufficient evidence that the current land acquisition strategy, which is primarily the willing-buyer, willing-seller model, tends

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to distort the land market through inflating the prices of land earmarked for restitution. This has the dual effect of making land reform expensive and, indeed, delays the process of increasing the access of the poor to land." The ANC has made several proposals to remedy matters, including establishing the committee, which will be an autonomous structure reporting to Rural Development and Land Affairs Minister Gugile Nkwinti. The committee, which would consist of political appointees and stakeholders in land issues, would also submit regular reports to the minister. The ANC has proposed that the land committee "will have the power to subpoena anyone and any entity, private and public, to appear before it and answer any questions relating to its land-holding or land interest ... [inquiries] about any land question out of its own initiative or at the [request] of interested parties. [It can] verify and/or validate, invalidate individual or corporate title deeds ... demand a declaration of any land-holding, with all the necessary documentation relevant to such a declaration, grant amnesty and/or initiate prosecution, whichever case might be, at its own discretion and seize or confiscate land gotten through fraudulent or corrupt means." The committee will advise the minister, conduct research and develop guidelines on land management. Land reform has caused tensions between the government and interest groups, particularly farmers, with plenty of finger-pointing about who is to blame for the failure of the programme. Another proposal is for the creation of the office of land valuer-general, who will determine land prices. According to the document: "The institution will ensure the provision of fair and consistent land values for rating and taxing purposes, determine financial compensation in cases of land expropriation, under the Expropriation Act or any other policy and legislation, in compliance with the constitution. "[It will] provide specialist valuation and property-related advice to government; norms and standards and monitoring service delivery ... undertake market and sales analysis, set guidelines required to validate the integrity of the valuation data and create and maintain a data-base for valuation information." Most expropriation deals collapse due to disputes over evaluations. Discussion documents are not final, as they have yet to be examined by the branches, which could either accept or reject the suggestions. 4 March 2012 The Sunday Independent Page 9 Gcwalisile Khanyile

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ANC Women’s League ‘in disarray’
The ANC Women‘s League – led by Basic Education Minister Angie Motshekga – is in disarray and its provincial structures have collapsed amid divisions and infighting. Its most senior national structure between conferences – the National Executive Committee (NEC) – could not meet and non-members were allegedly roped in to make up the numbers. The league has twice postponed its National General Council (NGC), a crucial gathering to review its programmes between conferences. One NEC member, who spoke on condition of anonymity for fear of being marginalised, said the failure to hold an NGC was due to the collapse of provincial structures. ―The problem emanates from bad leadership and back-stabbing,‖ she said. She told The Sunday Independent the league‘s NEC had not been able to make up a quorum for the whole of last year. Last weekend the league had an extended NEC meeting ―in order to allow us to bring in members who are not part of the NEC, just for quoration (sic) purposes‖. Another senior league leader – who also asked not to be identified – confirmed that members stayed away from meetings and that there were factional tendencies, including the sidelining of rivals. Three league leaders from different provinces independently confirmed that the league was dysfunctional. However, Motshekga said: ―I will not be drawn into commenting on rumours and gossip, because they are neither here nor there. People who have issues must raise them through the proper channels. ―Only then will I be able to comment.‖ She said the postponement of the NGC meeting was not due to the collapse of provincial structures. She later changed her statement and said: ―We have not set the date for an NGC and there hasn‘t been any postponement.‖ Motshekga said it was news to her that women didn‘t want the league. ―We have had NEC meetings. If your sources say we have not quorated for the whole of 2011, how else were we going to have those meetings? ―At some stage in the beginning of the meetings we did not quorate, but by the end of the meeting we normally quorate,‖ Motshekga said. Members from provincial offices who spoke on condition of anonymity told The Sunday Independent they had received calls from the national office instructing them not to divulge internal problems to this newspaper.

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The Sunday Independent spoke to league leaders from Mpumalanga, Western Cape and KwaZulu-Natal and Gauteng. Some denied there were problems in the organisation but others privately confirmed the league was in a bad state. The league in Gauteng has accused the national leadership of incompetence, tampering with audit reports and running the organisation like a spaza shop.
9 March 2012 Business Day Page 3 Sam Mkokeli

Vavi says ANC risks being overthrown
Fresh from a march that exposed the deep divisions between the unions and the ruling party, Congress of South African Trade Unions (Cosatu) general secretary Zwelinzima Vavi said yesterday that the African National Congress (ANC) needed to pull up its socks or risk being overthrown. Mr Vavi’s criticism of the ANC suggests that his relationship with the party and President Jacob Zuma is severely strained. He was addressing a gathering organised by the South African Democratic Teachers Union in East London, where he decried the "bad management" that led to the crisis in the Eastern Cape’s public education system. In a recording of his speech, Mr Vavi said factions in the ANC would ultimately lead to the party losing power. "We’ve been told that we will govern until Jesus comes back. That is not going to happen … people can see (the fights) … they are not fools," he said. The ANC was not learning from its mistakes and the fact was that its failures were leading to the party losing support during elections, he said. By way of example, he cited the Nelson Mandela Bay Metropolitan Municipality in Port Elizabeth where the party scraped through, managing only 50% of the votes in last year’s local government elections. "We nearly lost Port Elizabeth — we camped there for two weeks (during the campaign) — away from our homes to make sure that Port Elizabeth was not taken by vultures," he said. Mr Vavi was among key figures who was in Port Elizabeth to campaign for the ANC. The party got 63% of the votes in the municipality during the 2006 elections. Mr Vavi said that education in the Eastern Cape was in crisis because the provincial government had mismanaged even the great initiatives they had introduced, which included feeding and school transport schemes. Factions in the ruling party allowed tenderpreneurs to flourish, and diverted funds away from much-needed initiatives.

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"The Eastern Cape department of basic education has been receiving qualified reports from the auditor-general since 2005. This simply means the education department in this province, much like all others, is haunted by a reality of financial mismanagement," he said. The Eastern Cape was not alone in mismanaging its departments. Nationally, only three out of 39 departments had received clean audit reports. Mr Vavi said that unions were criticised for failing students when material conditions made it difficult for teachers too. "Comrades and friends, let me emphasis e that we simply cannot expect teachers to produce miraculous results in this kind of situation. This is more so since this bleak picture is also replicated in the working environment for thousands of teachers in this province." ANC spokesman Jackson Mthembu said yesterday that the party would respond to Mr Vavi’s statements at a later stage. "We cannot lead with anger," he said.

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9 March 2012 Business Day Page 11 Anthony Butler

Proposals put ANC in labour’s firing line
The discussion documents released this week in advance of the June policy conference of the African National Congress (ANC) suggest that the movement is struggling to maintain intellectual control over its long-range political project. The overarching Strategy and Tactics paper, disputatiously titled The Second Transition?, is informed by the diagnostic work of the National Planning Commission. It implies that the National Development Plan (NDP) could serve as a blueprint for creating a "National Democratic Society". Drafters of the individual policy papers were apparently instructed by the ANC’s national executive committee (NEC) to review the implementation of existing policies; to ascertain whether problems have arisen as a result of poor policy design or implementation failure; and then to determine whether any potential changes are "aligned to" the NDP (and also to the New Growth Path). Only then would drafters be permitted to submit fresh proposals. The routine papers addressing gender, health, education and international affairs generate few new policy ideas. The legislature and governance paper, however, proposes to devolve new functions to big metros and to end duplication between district and small town municipalities. Alongside these welcome proposals, the paper controversially suggests reducing the number of provinces so as to "integrate communities on a non racial basis" — presumably code for a merger of the Western Cape with one or more of its neighbours. The real meat is found in three economic policy papers. The mining sector document has already sparked debate, but the paper dealing with state-owned entities (SOEs) and development finance institutions may be even more controversial. Its authors assert that the Presidential Review Commission on SOEs commissioned by President Jacob Zuma "played an important role" in developing their document, implying that that body is merely a publicly funded front for the NEC. They also explicitly reject any subservience to the NDP. Much portentous drivel about the "crossroads of capitalism" follows. Readers will be reminded of comedian Woody Allen’s observation: "More than any other time in our history, mankind stands at a crossroads. One path leads to despair and utter hopelessness. The other, to total extinction. Let us hope we have the wisdom to choose correctly."

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The paper has nothing to say about the inefficiency that characterises the SOE sector. Instead, it dwells on acquiring additional resources for what will remain, if unreformed, a vast patronage machine. The government must "create a regulatory environment" to allow development finance institutions and SOEs to access private and public retirement and life assurance funds. A proportion of workers’ savings should also be extracted and devoted to whatever "additional strategic investment programmes" ministers may identify. The general policy paper of the economic transformation committee offers a more pertinent analysis of the economic crisis and the dynamism of the Chinese economy. It fails, however, to register fully that SA’s much decried traditional trading partners in Europe continue to be responsible for the bulk of foreign investment in this country. The drafters eccentrically propose a new "commission" to offer all unemployed higher education graduates jobs in the state. They then leave delegates to decide for themselves how to double electricity generation by 2028, reduce carbon emissions, and beneficiate uranium, all at once. (The correct answer, dummies, is French nuclear power stations paid for by loans from Chinese state banks.) The committee also bravely bites the bullet of "critical skills retention" in the public sector, arguing for higher pay for doctors, lawyers, accountants and "specialist teachers" but "without having to pay the entire public service more". This proposal, when set alongside plans to loot private-and public-sector pension funds, may result in further confrontation with organised labour.

7 March 2012 Business Day Page 1 Mariam Isa

Gordhan in labour law reform plea amid strike
Finance Minister Pravin Gordhan has issued a new call for labour market reforms, as South Africa braces itself for a national strike on Wednesday in protest against labour brokers and toll charges. Mr Gordhan said the reforms would boost South Africa‘s employment prospects by providing incentives to hire staff and develop skills. His comments, in an op-ed piece published in Business Day on Wednesday, coincide with a strike called by the Congress of South African Trade Unions (Cosatu), which is fiercely opposed to any relaxation of labour regulations. "Given the scale of the unemployment challenge, no single policy offers the solution…. What is needed is a comprehensive set of reforms that maximise job creation," Mr Gordhan said.

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"Labour market reforms can directly improve employment by providing flexibility and the right incentives to work, to hire workers, develop skills, and become more productive," he said. The Treasury said the reforms Mr Gordhan was advocating included reducing red tape for small companies and introducing policies to improve job searches, job matching, training and entry into the labour market. He also supports a proposed youth employment incentive — one of the measures Cosatu opposes. The federation wants a ban on labour brokers, which it says exploit temporary employees. Mr Gordhan‘s op-ed piece is based on a paper he and Australian Treasurer Wayne Swan submitted at a Group of 20 meeting in Mexico last month. His remarks appear to support some relaxation of labour regulations. This is out of step with proposed amendments to labour legislation, which analysts warn will make the market more rigid. The Basic Conditions of Employment Amendment Bill and the Labour Relations Amendment Bill have been finalised after two years of debate between business, labour, civil society and the government. The bills, which go to Parliament later this month, will compel employers to make temporary staff permanent after six months. They also regulate labour brokers, rather than ban them. "It‘s not simply labour market flexibility that promotes job creation but the fact of the matter is it‘s a major contributor," labour consultant Tony Healy said on Tuesday. "Deregulating labour legislation will help get those unemployed who are not getting a foot in the door the opportunity to generate income and build an experience base that will increase their marketability." South Africa‘s jobless rate stands at 23,9%, with about half of its young people unemployed. 7 March 2012 Business Day Page 1 Linda Ensor

‘Little to show’ for Seta funds — Nzimande
Higher Education and Training Minister Blade Nzimande yesterday took his fight with the sector education and training authorities (Setas) to Parliament, saying there was "little" to show for the R37,5bn ploughed into them since 2000. Mr Nzimande and the Setas have been in conflict since he was appointed higher education and training minister.

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He says the Setas are not giving the government value for money, with the boards and management members enriching themselves. But the Setas say he is usurping their powers and overstepping his authority. The R37,5bn spent comes as the economy is struggling to achieve higher rates of growth, in no small part due to the dire shortage of skilled workers. Mr Nzimande, who is trying to transform the Seta system, criticised "parasites" who had fleeced the system to make themselves "filthy rich". He told the portfolio committee on economic development that part of the reason for the resistance by the Setas to his attempted reforms was because "this thing has become a money maker". The R37,5bn sunk into the Setas over the past 11 years was money "going down the drain with no accounting", Mr Nzimande said. At the same time that all this wastage was taking place, there was a "ticking time bomb" of youth unemployment, he said. Another major problem of the Seta system was the poor quality of the training provided. The state aims to produce 10000 artisans annually by 2015, and Mr Nzimande said the indications were that the target would be surpassed. In total, 30000 trainees would be registered by 2011-12 to pursue artisan trades. The government was also determined that state-owned enterprises would become sites of intensive training, as was the case in the apartheid era, when the principal mandate of state companies such as Sasol , Iscor, Eskom and the railways was to train artisans. Mr Nzimande said this system unfortunately disappeared along with the increased emphasis on the commercialisation of state-owned enterprises, one of the biggest casualties of which was skills development. Most state-owned enterprises did not focus their budgets adequately on this, he said. "We need to reinstate this mandate (skills development) of state-owned enterprises." Local companies — unlike their foreign counterparts, which understood training to be part of their core mandate and used their own money for this — were not offering training, though they complained about the lack of output from universities. Mr Nzimande said the state should provide more learnerships and that no government tender should be issued without a commitment to provide training on the project. He said his department would this month start on a major skills audit with the Human Sciences Research Council and other research bodies to collect data on the skills, qualifications and experience of the population, which would take many years to complete. The database would help to identify skills shortages.

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7 March 2012 Business Day Page 3 Natasha Marrian

Vavi breaks march date with Zille by SMS
Much like a jilted lover, Democratic Alliance (DA) leader Helen Zille complained after Congress of South African Trade Unions (Cosatu) general secretary Zwelinzima Vavi disinvited her — by SMS — to today‘s planned protest against e-tolling and labour brokers. Ms Zille said Cosatu‘s invitation to the DA was "prominently reported" in the media on Monday and she had decided to accept. However, just when DA members were preparing to join the workers‘ revolution, Ms Zille‘s bubble burst when she received an SMS from Mr Vavi, disinviting her and her supporters. She had tried the previous day to have a discussion with Mr Vavi about the strike but he was too busy for her, explained Ms Zille in a statement. Her office contacted Cosatu to accept its invitation to join the march, with Ms Zille leaving a message for its general secretary. When they finally spoke, Mr Vavi had more important priorities — first, he had to take another call, then do a radio interview. He promised to get back to her at 7pm but never did. Yesterday morning, Ms Zille received an SMS from Mr Vavi which read that Cosatu did not want to "get the opposition political parties joining the march". In what could be seen as a case of political sour grapes, Ms Zille said the invitation was not genuine. "It is apparent now that Cosatu‘s invitation to us was disingenuous from the start. It was clearly designed to place us in a dilemma by joining two disparate issues: etolling and labour brokering," she said. But Cosatu spokesman Patrick Craven said the federation never invited the DA to the march. In fact, it was a polite statement — that all workers were welcome to join, even those who belonged to the DA. Mr Craven said inviting leaders of selected political parties would undermine Cosatu‘s credibility.

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The official opposition joining hands with Cosatu, an African National Congress ally, in protest against the government is not likely to go down well with the ruling party, particularly at a time of tense relations within the alliance. 7 March 2012 Business Day Page 3 Alistair Anderson and Amanda Visser

Support grows for Cosatu national strike
THE Congress of South African Trade Unions‘ (Cosatu‘s) national strike against etolling, labour brokers, and the youth wage subsidy gained momentum yesterday, with some political parties and civil society organisations throwing their weight behind the protest action. At least 34 marches will be held around the country today, with the main march taking place in Johannesburg, according to Cosatu. It is unclear whether the one-day strike will do anything to change the government‘s position on the issues in dispute. The government has said e-tolling and a youth wage subsidy will go ahead this year, and regulation of labour brokers has already been included in amendment bills. Cosatu general secretary Zwelinzima Vavi warned yesterday that it was looking at "creative ways" of making the tolling system on inner-city freeways in Gauteng completely unworkable if the government did not take the plight of struggling workers to heart and scrap it. Speaking at the National Press Club in Pretoria, Mr Vavi said the tolling system would perpetuate exclusion. In the past there was racial discrimination and the etolling system would introduce economic discrimination, he said. The strike is expected to be supported by municipal workers. Putco and Metrobus drivers are expected to protest, but taxi operators have indicated they will not take part. "Taxis are exempt from paying the e-tolls. Tomorrow it‘s business as usual for us," South African National Taxi Council spokesman Thabiso Molelekwa said yesterday. Waste removers Pikitup, the municipalities‘ water and roads agencies, as well as teachers and some essential services workers are expected to take part. South African Chamber of Commerce and Industry CEO Neren Rau said yesterday the effect of the strike would depend on the turnout. "The impact could vary considerably depending on the extent of the protest activity and the duration, ranging from simply depriving the economy of labour to more serious impacts on economic infrastructure," Mr Rau said.

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He warned that the level of protests in SA meant the country was on rating agencies‘ watch lists for a sovereign downgrade. Workers will march from the Johannesburg Library Gardens to the labour department, the Gauteng premier‘s office, the Chamber of Mines and the finance department to deliver a memorandum. Unions said there would be strikes by essential services workers, but they had agreed to abide by the minimum service level agreement, which ensures essential services such as hospitals, laboratories and water and electricity services will be able to operate with skeleton staff. South African Democratic Teachers Union spokesman Nomusa Cembi said yesterday that union members would go on strike, despite calls for teachers to refrain from doing so. Ms Cembi said school governing bodies were informed of the action two weeks ago and had time to put measures in place. The Democratic Alliance had planned to join the march, but only in protest against etolling. The march was also supported by the Congress of the People, the Pan Africanist Congress and the Black Sash. Union Solidarity appealed to those who were unable to take part in the march to hoot every time they drove through a highway tollgate between today and Friday. 7 March 2012 The Times Page 2 Chandré Prince

'Life of hell' under Bheki Cele
One of South Africa's former top cops has lifted the veil on a life of "hell" and "extreme discomfort" under suspended national commissioner Bheki Cele, that eventually landed him in hospital. While General Hamilton Hlela gave the board of inquiry into Cele's fitness to hold office a glimpse of the bad blood between them, he - for the first time - opened up to The Times. He revealed how he collapsed in May last year and was admitted to a Pretoria hospital's intensive care unit after the stress at work had taken its toll. After two days of grilling from Cele's defence, Advocate Vincent Maleka SC, Hlela told how he had suffered sleepless nights and nightmares over the controversial R1.6billion police headquarters lease deals. The deals led to Cele's suspension and the axing of Minister of Public Works Gwen Mahlangu-Nkabinde in October last year.

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"The whole thing was stressing me out. I could not sleep properly. "This thing has affected my health badly," said Hlela. But it was during day two of the inquiry in Pretoria yesterday that Hlela revealed how he and Cele did not enjoy a collegial relationship after Cele took command in August 2009. Hlela told inquiry chairman Judge Jake Moloi how Cele wanted his office and kicked him out, only for it be left vacant for a year and for Cele to move to another building. "When Cele took over ... he didn't speak to me. He sent a deputy to me to tell me that he wanted that office. He never even occupied it and left for another building." Hlela, who had been a police officer for 31 years, said the pressure from Cele and the drama around the lease deals forced him into requesting early retirement. "I was not intending to leave the police force at 55 years. I felt very [un]comfortable." Hlela admitted to Maleka that he told Cele that "I want to go and relax with my family" as the reason for opting out of the police, but in earlier reports he said he was forced out for questioning the lease deals. Hlela had, throughout a public protector investigation, maintained that Cele flouted procurement procedures and instructed that two buildings be leased at inflated costs to house the police top brass. But yesterday, he conceded that he flew to Durban to assess the Transnet building, though procurement processes dictate otherwise. Hlela confirmed that SAPS responsibility in procuring premises limited him to doing a needs analysis and to ensuring that a budget was available. The specifications would then be handed over to public works who would send it out for tender. "I was put under severe pressure to put the leases in place. He [Cele] phoned me several times." When asked why he never raised any objections either in writing or verbally about his problems with the processes followed to acquire the buildings, Hlela only said: "I didn't." But he later said: "He phoned me several times. He was fuming. I explained to him that I'm not dealing with leases, but that the department of public works is ... I was in extreme discomfort." When told that Cele would deny that he identified the Middestad building in Pretoria or that he instructed Hlela to procure the building, Hlela responded: "He will not be telling the truth. He will not be truthful." The inquiry will enter its third day today, but it has been two years of a tit-for-tat war since the exposure of the lease scandal in 2010.

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In February last year, Cele claimed that Hlela defied a September 2009 management instruction to source police uniforms from BEE and public-private partnerships. He instead extended the contract with an unnamed supplier to 2013. Cele claimed that Hlela violated "serious" procurement procedures when he entered into a R1-billion contract with an Eastern Cape company. He refused to reveal details of the contract. Cele also said Hlela "went beyond" specifications on equipment bought for the 2010 soccer World Cup. Hlela, at the time, said he would not be made the scapegoat of the saga. He said yesterday: "I'm glad it's all over now." He also revealed that he had recently registered a security company. "I will concentrate on that now that this is over. I get frustrated from doing nothing," said Hlela, who travels to his home town of King William's Town in the Eastern Cape once a month. 7 March 2012 The Times Page 15 S'Thembiso Msomi

ANC 'holy cows' emerge
The ruling party promised there would be "no holy cows" and that "everything [would be] on the table" when it reviewed its policies ahead of its policy conference at the end of June. However, judging by the discussion documents the ANC publicly released on Monday, it would appear there are, indeed, a number of "holy cows" for the 100-yearold party. In the latest version of its Strategy & Tactics document, titled The Second Transition? - Building a National Democratic Society and The Balance of Forces in 2012, the ANC has left out a number of thorny issues contained in earlier drafts. Most prominent among these are changes to the country's constitution, mooted in a version of the document presented before the ANC's national executive committee last month. In that draft, the ANC said the first few years of post-apartheid South Africa were "characterised by a framework and a national consensus that may have been appropriate for a political transition, but has proven inadequate and even inappropriate for a social and economic transformation phase".

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It further argued that though the constitution largely encapsulated what the party had stood for over the years, aspects of it were based on "sunset clauses" that had to be included to allay the fears of the then ruling National Party and minority groups.

"There may, therefore, well be elements of the constitution that require review because they may be an impediment to social and economic transformation, such as the narrow mandate of the Reserve Bank or the relationship between, and powers of, different spheres of government," the drafters wrote. But in the version released for public comment this week, all references to possible constitutional amendments have been removed. Also excised the discussion document is a potentially provocative debate over the ruling party's relationship with coloured voters. In the February version, the drafters asked whether - 18 years into democracy - it was still adequate for the party to describe its historical mission as the liberation of "Africans in particular" and "blacks in general". "There are some in the coloured communities who questioned them being lumped together as part of the 'national minorities' when their socioeconomic profile today remains closer to Africans than to Indians and whites. In addition, the question of origin also comes to bear - with coloureds not seen as African enough [and many in the community not regarding themselves as such] despite many now laying claim to San, Khoi and Nama ancestry." The drafters further pointed out that the party's electoral support in this community is on a decline. "Given these trends, the search for explanations must go beyond [the] DA's behaviour in the Western Cape and the ANC's organisational problems in that province," they wrote. It is unfortunate that the ANC's national executive committee has deemed the two issues to be too sensitive to be openly discussed. There is clearly some discomfort within sections of the ruling party about the current constitutional arrangement. Very senior ANC and government leaders have, on numerous occasions, expressed similar sentiments as the drafters of the February version about the Constitution hindering transformation. But, perhaps fearful of a backlash from an increasingly suspicious public, the ANC's national executive committee decided not to open this debate. Doing so, though, would have been hugely beneficial to both party and country. The ongoing uncertainty about the constitution's future - arising from the criticism of the basic law of the land that keeps coming from certain quarters within the ANC - is unhealthy.

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By opening up the debate within its ranks and resolving the issue once and for all, the ANC would have ended all this uncertainty and done us all a great favour. Another "holy cow", judging by its absence from the discussion documents, is the question related to the quality of ANC leadership. In its ANC birthday message on January 8, the party's national executive committee promised a review of how internal party elections were to be conducted in future. "This will protect the ANC from the tyranny of 'slates, factions and money' and ensure that at all times, the organisation is led by the most experienced, most committed, most talented and best collective across generations," it promised. Despite it being clear to everyone that the lack of new and relevant rules governing how ANC elections are conducted is at the heart of ongoing party squabbles - and the appointment of unsuitable cadres - the ruling party has not seen the wisdom of reviewing its voting process. There is no greater opportunity than now for the ANC to debate the pros and cons of allowing those who want to stand for party elections to campaign openly for the posts they seek to occupy. After all, as ANC policy head Jeff Radebe put it on Monday, the period leading up to the June conference should be a "festival of ideas".
9 March 2012 Mail & Guardian Craig Mckune

Zuma's lawyer and the mega tender
President Jacob Zuma's personal lawyer, Michael Hulley, who is also presidential legal adviser, played a major behind-the-scenes role in the controversial awarding of a massive social grants tender, it has emerged. Cash Paymaster Services won the contract, worth R10-billion, from the government's grants management body, the South African Social Security Agency (Sassa), following an on-and-off process that took years to complete and is now the subject of court action by one of the losing bidders, Absa-owned Allpay. The Mail & Guardian reported a fortnight ago that in an earlier round of bidding that was ultimately aborted prominent advocate Norman Arendse had turned down and reported a bribe attempt made by sports administrator Gideon Sam, allegedly on behalf of Cash Paymaster Services. Now it appears Hulley played a complex dual role in the process, which apparently had him first advising Sassa on how to settle a rash of law

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suits with Cash Paymaster Services and then switching to a new role in which he earned R21 000 per day for providing "commercial, financial and legal advice" to the agency. Apart from any questions this may raise about the role his political connections may have played in securing such lucrative work, it might be regarded by other bidders as evidence that the award of the tender to Cash Paymaster Services was influenced by the perceived need to settle with the company. His involvement was revealed in a court affidavit filed this week by Allpay. Conflict of interest Further concerns about the tender, one of the biggest awarded, are revealed by Mail & Guardian investigations, which show that the chair of the bid committee, National Development Agency chief executive Vuyelwa Nhlapo, was in a business relationship with Cash Paymaster's key black economic empowerment (BEE) partner, Mazwi Yako, as recently as 2010. She failed to declare this obvious conflict of interest -- although it has been claimed that the connection between the two was "tenuous". She has also been accused of "irrationally" lowering AllPay's scores to Cash Paymaster Services' benefit. This is among several hard-hitting claims in AllPay's affidavit, made by general manager Charmaine Webb. The company is seeking to have the Cash Paymaster Services' contract, for the distribution of social grants in all nine provinces over five years, set aside. Webb claims the bid documents show that the process followed by Sassa in awarding the contract was "very deeply flawed". Cash Paymaster Services, wholly owned by the South African-based but United Stateslisted multinational Net1 UEPS, was awarded the contract in January following a stop-start tender process already dragging on for five years. For the past 12 years the company, AllPay and Empilweni Payout Services have held provincial contracts for the payment of social grants. These were to be centralised after the formation of Sassa in 2005, but an early iteration of the tender was cancelled in 2008 because, in the words of Arendse, chair of the then-adjudication committee: "The evaluation process was completely and utterly flawed." Cash Paymaster Services is suing the agency over the cancellation. In February this year, after AllPay withdrew its initial urgent attempt to interdict Sassa from implementing Cash Paymaster Services' appointment, the agency agreed to share "all" bid documents with AllPay. Webb claims Sassa gave them a "highly filleted" record devoid of key documents, including those relating to Hulley. Having requested further information, Webb said Allpay was given Hulley's letter of appointment, which stated his role was to provide "commercial, financial, legal and operational advice" on the tender. Startling

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But Serge Belamant, chief executive of Net1, offered the M&G a wholly different and startling explanation of Hulley's role. He said the lawyer had been brought in before the tender in an attempt by Sassa to settle various lawsuits Cash Paymaster Services had brought against it. "[Hulley] was given the task to manage the existing law suits that we had against Sassa, because we've got a lot of law suits against Sassa. His job was to peruse them to see what was real, what wasn't real and could we get to a point whereby we should settle some of that." But, said Belamant, once the new tender was under way, "this entire investigation into the lawsuits was halted because they didn't want anybody to somehow infer that these lawsuits and their resolution had anything to do with a potential tender award." If true, it is remarkable that after investigating the possibility of settling Cash Paymaster Services' cases against Sassa, Hulley was drafted as an adviser on a tender the company later won. Now that it has won the tender, Belamant confirmed that it wanted to to settle with the agency. Hulley told the M&G he did play a role but referred further questions to Sassa. Department of social development spokesperson Lumka Oliphant said a decision had been taken by both the department and Sassa not to comment at all. At the heart of AllPay's attempt to have Cash Paymaster Services' contract reviewed and set aside is their claim that Sassa imposed an "eleventh-hour" change to the tender's specifications, fatally prejudicing their bid and favouring the winner. According to Webb, Sassa initially told bidders the identity and "proof of life" of beneficiaries should "preferably" be biometrically verified -- using fingerprints or voice recognition technology, for example -- for every single payment. This is important because, according to AllPay's bid, for ATM payments recipients would have accessed their money using a card and pin number. In Cash Paymaster Services’ case, grant recipients would phone a tollfree call centre, which would verify their voices before they drew money. In other words, it offered biometric verification for each payment and AllPay did not. Alteration But just five days before the bids were due in June, AllPay said it received notification "for clarification" from Sassa that biometric verification was "required" for every payment. Webb argued that this notice substantially altered the bid specifications, but Sassa denied this. In Webb's affidavit, she takes issue with Nhlapo and a second evaluation committee member, Wiseman Magasela, a director in the department of social development, who she says "irrationally" lowered AllPay's scores after an oral presentation in October.

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The oral presentations were an opportunity for bidders who had scored more than 70% in their written bids -- AllPay and Cash Paymaster Services -- to clarify technical aspects of their proposals. Webb says that after the presentation AllPay's score was lowered to 58% and only Cash Paymaster Services proceeded to the next stage. But, she says, Nhlapo and Magasela had substantially lowered AllPay's scores on issues that were not even discussed at the presentation. "Most astoundingly, Nhlapo halved the scores which she had allocated under 'financial security'," despite her committee later noting that, as an Absa subsidiary, AllPay carried "minimal" financial risk, Webb says. Increased score She adds that Nhlapo had increased Cash Paymaster Services' scores for each of the criteria after the presentation: "Put differently, the increase in [its] scoring was attributable solely to Nhlapo." Yako, through Born Free Investments 272, is a long-standing BEE partner of Cash Paymaster Services and Belamant confirmed he was a key player in the bid consortium. He and Nhlapo were on both on the board of Reflective Learning Resources until early 2010. Nhlapo said she never declared this to Sassa "because it just didn't ring a bell". She had not realised her former partner was part of the consortium. Yako also said he had not realised his former business partner was the committee chair. Mercia Smuts, Reflective Learning's founder, said she only remembered them meeting once. She believed their relationship was "tenuous". Oliphant said Yako and Nhlapo's relationship was not a conflict of interest. 9 March 2012 Mail & Guardian Matuma Letsoalo

Vavi takes his toll on the ANC
Cosatu general secretary Zwelinzima Vavi emerged as the biggest winner after this week's massive strike, while the trade federation's president, Sdumo Dlamini, expressed anger about the way it was conducted, indicating fault lines that are mainly rooted in the ANC's Mangaung battles. Cosatu's decision to embark on a nationwide strike this week to protest against labour brokers and the e-tolling system has angered some leaders within both the federation and the ANC, who see the action as an attempt to embarrass President Jacob Zuma and his government.

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The strike action was seen as a political show of strength by the Vavi-aligned group ahead of the federation's national congress in June, the ANC policy conference, also in June, and the party's crucial elective conference in December. While Vavi continues to enjoy popular support among ordinary members of Cosatu he appears to have lost significant support within the federation's central executive committee, largely because of his hardline stance towards the ANC and the government under Zuma. Cosatu president not pleased with Jo'burg march Dlamini, who led a march in Durban, was critical of the way the Johannesburg march was conducted, saying the decision to go on strike was a collective Cosatu decision, not a Vavi initiative. And he lambasted the ANC Youth League for using Cosatu platforms to fight factional battles in the ANC after Julius Malema addressed the Jo'burg marchers on Wednesday. Malema stole the limelight as the marchers cheered: "Juju, juju, juju!" Although he was initially not on the list of speakers, Cosatu leaders were forced to afford him the opportunity to address the marchers, who impatiently chanted his name. Dlamini told the Mail & Guardian that Cosatu leaders had initially agreed that youth league secretary general Sindiso Magaqa, not Malema, would address the marchers. "People were desperate to get Julius to speak, in spite of the decision that the league's secretary general would speak," said an angry Dlamini. "That was out of order. Cosatu is not going to be used. We are going to discuss the matter internally. We cannot allow ourselves to be divided by the youth league. It disrupted the march. It came there to boost its situation in the ANC." Cosatu's top dogs no longer speaking Once a close ally of Zuma, Vavi has now become one of the key critics of the ANC president, while Dlamini has said publicly that Zuma should be re-elected. This has led to a breakdown of trust between Vavi and Zuma, who are no longer on speaking terms, according to reliable sources within the alliance. The M&G has been told about behind-the-scene attempts by a powerful section within the ANC's national executive committee led by ANC secretary general Gwede Mantashe to isolate Vavi from the rest of Cosatu's leadership . Mantashe has denied that he was part of a group that wanted to control Cosatu. "I left Cosatu in 2006," he said. "When I was there, I did not want anyone to interfere. So I would not do that now. We are not expecting Cosatu to be silent. We want it to be radical but reasonable." Mantashe criticised leaders for putting the integrity of Nedlac -- the chamber in which government, business and labour negotiate -- in question by going on strike while negotiations over how best to deal

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with the issue of labour brokers were still taking place. He said Cosatu was involved in discussions about e-tolling with the Gauteng government. "I know government made concessions in the budget speech," he said. "But Cosatu is bargaining from a corner where there is no space to make concessions. The ANC instructed the government to make concessions, but I did not see any concessions from the other part." A dominant group within the federation's executive committee is pushing for Zuma's re-election. It includes Dlamini, National Union of Mineworkers (NUM) general secretary Frans Baleni, NUM president Senzeni Zokwane, National Education Health and Allied Workers' Union general secretary Fikile Majola and the general secretary of the South African Democratic Teachers' Union (Sadtu), Mugwena Maluleke. Most of these leaders also serve as members of the South African Communist Party's central committee, led by general secretary Blade Nzimande and Mantashe, who is the SACP chairperson. Under Nzimande's leadership, the SACP has been widely criticised for its soft stance towards Zuma's administration. Although the Zuma-aligned group within Cosatu's executive committee enjoys majority support, it has found it difficult to impose decisions on the Vavi-aligned group, which includes metalworkers union (Numsa) general secretary Irvin Jim, Sadtu president Thobile Ntola and leaders of the municipal workers union Samwu. The Vavi contingent believes the ANC under Zuma has failed to implement the resolutions taken at Polokwane, including abolishing the labour brokering system and creating decent jobs in the country. The Vavi group is also pushing for radical policy change in the ANC and supports the ANC Youth League's call to nationalise mines and other key sectors of the economy. While SACP leaders, including Nzimande, joined Cosatu's march, the party does not agree with Cosatu's argument that the tolling system should be scrapped, saying tolls will affect only the wealthy. Speaking to the M&G this week, Sadtu's Ntola acknowledged a fight was taking place for the control of Cosatu because it was a significant factor within the alliance. "There is a tendency that when people pass policy, they want to be supported," said Ntola. "Cosatu is independent and should remain the instrument for fighting for the rights of workers."

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5 March 2012 Business Day Page 2 Natasha Marrian

ANC and Cosatu agendas take centre stage
The political week ahead is set to sizzle, with the African National Congress (ANC) releasing policy documents and its ally, the Congress of South African Trade Unions (Cosatu), promising to draw thousands in its march against the Gauteng e-tolls and labour broking. Today the ANC will publicly release papers that spell out the party‘s priorities for the next five years, at Lil iesleaf Farm in Rivonia. Secretary-general Gwede Mantashe and party policy chief Jeff Radebe will address the media. The ANC‘s economic transformation subcommittee will release three policy documents. Policy positions on gender, international relations, social transformation, strategy and tactics and organisational renewal will also be unveiled. Two hours later, all eyes will be on Luthuli House where former ANC Youth League presidentJulius Malema and his leadership collective will brief the media after the ANC sacked Mr Malema last week. After the national disciplinary committee converted Mr Malema‘s initial five-year suspension to an expulsion after hearing arguments in mitigation and aggravation of sentence, the league went to ground, declining to comment on the issue. The "young lions" convened a special meeting of the top brass at the weekend to thrash out a way forward for its embattled leader. At a press conference two weeks ago t he league said its president would serve his full term to 2014, and that only the league could remove him. The outcome of this weekend‘s national executive committee meeting will be announced at 11am today, with early indications that the league is not going to bow out gracefully and comply with the national disciplinary committee‘s decision. Mr Malema may take the expulsion up with the party‘s appeals committee and, failing a positive outcome, may raise the matter with the ANC‘s national executive in a bid to have the party‘s leaders review it. Thousands of Cosatu members, and irate Gauteng motorists, will down tools on Wednesday in protest against the contentious e-toll system and labour brokers. Cosatu has urged motorists not to buy the e-tags required for the e-tolling system to work and called on all South Africans to sacrifice a day‘s wage to fight the system‘s implementation. Thirty-two protest marches will take place across SA, with Cosatu in the Western Cape marching to Parliament. In Gauteng Cosatu general secretary Zwelinzima Vavi

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will lead the protest march to the office of Premier Nomvula Mokonyane, the Chamber of Mines and the transport and roads department. The Democratic Alliance (DA) in Gauteng will hold its elective conference on Saturday, set to be a two-horse race between a member of the Gauteng legislature, John Moodey, and DA MP Ian Ollis. DA leader Helen Zille and party parliamentary leaderLindiwe Mazibuko will address the conference to take place in Tshwane. More than 1000 delegates will vote for a leader to take the party into the 2014 elections in Gauteng, the country‘s economic hub. The public inquiry into suspended police commissioner Bheki Cele ‘s fitness to hold office, begins today. Gen Cele was suspended by President Jacob Zuma last year over two multimillion-rand lease deals for police office buildings. A report by Public Protector Thuli Madonsela said Mr Cele had acted unlawfully. Ms Madonsela may make a submission at the inquiry. It is unclear whether Gen Cele will make a submission or whether his legal team would do it on his behalf. The hearings will take place in Tshwane. In Parliament, committee meetings will include the SABC on the auditor-general‘s recommendations and progress with a Special Investigating Unit probe into finances at the broadcaster. On Wednesday the social cluster of ministers will answer questions in the National Assembly.

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9 March 2012 Business Day Page 3 Ernest Mabuza

Fund did get preference — Cele
Suspended national police commissioner Gen Bheki Cele yesterday conceded that the identification of two buildings to accommodate the South African Police Service (SAPS) in Pretoria and Durban compromised the tender process. He also agreed Roux Property Fund received an undue preference, saying it was the only company that could provide the accommodation needed by the police. Gen Cele was testifying in Pretoria at an inquiry established by President Jacob Zuma to look into his fitness to hold office. The inquiry related to a R500m lease agreement for police headquarters in Pretoria, and another deal for provincial headquarters in Durban. The public protector found SAPS officials had flouted procurement procedures by identifying buildings, a duty that should have been left to the Department of Public Works. When asked by evidence leader Adv Viwe Notshe why he did not query the identification of specific buildings before tenders had been advertised, Gen Cele said he thought the process was in the hands of people in the SAPS who were capable of dealing with procurement issues. Gen Cele could also not explain why he did not address pre-identifying the building for leasing in Durban by the police, an issue raised by the deputy director of public works in KwaZulu-Natal, Irene Nel. Ms Nel, responsible for the SAPS portfolio, wrote an e-mail in July 2010 in which she also questioned the planned move of family violence, child abuse and sexual offences units from the stations to the Transnet building. The e-mail prompted Gen Cele to request a meeting with the director-general of public works, Siviwe Dongwana, where he raised the issue of Ms Nel’s apparent overstepping of her mandate by questioning Gen Cele’s right to decide where the units should be placed. When asked why he did not raise the issue of pre-identifying the building with Mr Dongwana, Gen Cele said this was a complaint by a public works employee. "It was me having a problem, not with the processes of Ms Nel, but with the way she questioned the running, command and control of my department." He said he regarded her complaint over the identification of the Durban building as an internal issue within the police. The inquiry continues on Monday.

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9 March 2012 Business Day Page 4 Franny Rabkin

Constitutional Court post to be re-advertised
Despite extending the nomination date by two weeks, the Judicial Service Commission (JSC) was still unable to find enough short-list candidates for a single vacancy on the Constitutional Court, forcing it to re-advertise the post. This is not the first time the JSC has had to extend the nomination date, but it is the first time that, in spite of an extension, there was still "an insufficient number of appropriate nominations". In terms of the constitution, the JSC must give the president a list with three more candidates than the number of posts available. So where there is one vacancy, the JSC would have to give the president a list of four names, from which he would choose one. It is understood that only four nominations were received by the JSC and that only two of these were likely to make it on to a short list for interviews. But even if the JSC’s sifting committee thought all four were appropriate to short-list, there would still be a chance that, after the interviews, the JSC would not be able to recommend them all to President Jacob Zuma . Instead, judges who had applied for the Constitutional Court in 2009 — Labour Court Judge President Dunstan Mlambo and North Gauteng High Court Judge Malesela Legodi — have now made themselves available for judge president of SA’s busiest courts, the North and South Gauteng high courts. Also nominated for this post is South Gauteng High Court Deputy Judge President Phineas Mojapelo. All three are highly respected judges. But Johannesburg lawyers said that the popular Judge Mojapelo should have the edge over the other two; he is more senior than Judge Legodi and has more experience of leading the Gauteng courts than Judge Mlambo. He also has the support of the National Association of Democratic Lawyers and the Black Lawyers Association. However, Judge Mlambo is the longest-serving and has a reputation for excellent court administration. He has made significant strides in improving the efficiency of the labour courts. This would strengthen his chances as the administrative burden in Gauteng is sizeable. In Judge Legodi’s favour is that he is already based in Pretoria. With incumbent Judge President Bernard Ngoepe, and his Pretoria deputy, Willem van der Merwe, both on their way out this year, the appointment

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of Judge Legodi could mean a more seamless transition for the Pretoria court. But commissioners might question Judge Legodi on whether he would be able to juggle the arms deal inquiry, to which he has been appointed, and his work as judge president should the two overlap. Only high fill open five candidates were short-listed for the North and South Gauteng courts, despite six vacancies. Recently, the JSC has struggled to vacancies in the Gauteng courts. In October a vacancy was left and in April only four out of six places were filled.

On the list for two spots on the Supreme Court of Appeal were Free State High Court Judge Shamin Ebrahim, Eastern Cape High Court judges Clive Plasket, Xola Petse and Ronnie Pillay and North Gauteng High Court Judge Brian Southwood.

5 March 2012 The Times Page 4 Chandré Prince

Malema rivals on ropes
The ANC Youth League has begun a purge of anti-Julius Malema members and is planning to publicly humiliate some of the expelled youth leader's rivals. At what insiders said was an "emotionally charged" meeting, the national executive committee of the league yesterday reined in treasurer-general Pule Mabe and read him the riot act. A unanimous vote of no-confidence in him was passed. Other members spearheading a revolt against Malema were warned they would face disciplinary action and possibly expulsion from the league. What was meant to be a meeting to discuss Malema's expulsion from the party last week, and to decide what to do next, turned nasty when dirt on Mabe and tactics to embarrass other politicians, including President Jacob Zuma, were raised. NEC members said plans were afoot to highlight discrepancies in disciplining ANC members, especially with regard to Zuma. The league intends citing how Zuma on several occasions - including when he fathered a child out of wedlock with Sonono Khoza, daughter of soccer boss Irvin Khoza - embarrassed the party but got off scot free. "Zuma has gone unpunished for being scandalous, yet Malema speaks on behalf of the league and he is expelled. Where is the fairness?" asked an NEC member. The meeting turned sour when leadership rumours were discussed.

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Hotly debated was whether to suspend Mabe or expel him after complaints about him were made by the league's KwaZulu-Natal regions. Fifteen NEC members wanted Mabe to go, 11 said he should remain and be given another chance and three said he should be reprimanded He, however, apologised to the NEC and will at today's press conference read out a statement pledging his support for Malema. The complaints were made after the league in KwaZulu-Natal launched a public attack on Mabe, claiming he was campaigning in their province to replace Malema. "Some wanted him expelled immediately but we decided to give him a chance to explain himself in a disciplinary hearing," said one source. Mabe has denied he went to KwaZulu-Natal to campaign, saying he was mandated by the league's national lekgotla to meet regional treasurers throughout the country to develop a fundraising strategy. Malema, league spokesman Floyd Shivambu and secretary-general Sindiso Magaqa on Wednesday unsuccessfully appealed against their suspensions for ill-discipline. Malema fared worst and was expelled, spurring a defiance campaign, also discussed yesterday. Part of the campaign, which will be further discussed at provincial and regional level, will be how to purge those who have not only been vocal against Malema, but have spoken out against the youth league.

9 March 2012 Business Day Page 1 Wyndham Hartley

Sisulu seeks to gag MPs on air force
Defence Minister Lindiwe Sisulu has drawn a veil of secrecy over the operations of the air force by demanding that a parliamentary committee give guarantees of confidentiality before it can be briefed. Lt-Gen Carlo Gagiano was to have briefed the joint standing committee on defence yesterday, but the briefing was called off after Ms Sisulu wrote to the committee saying effectively that this could happen only if the committee met behind closed doors. Lt-Gen Gagiano was certain to have faced questions about the recent flights that shadowed President Jacob Zuma ’s Boeing Business Jet on a flight to New York as well as the air force’s inability to keep many of its new jet fighters and trainers in the air.

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He would also have fielded questions about the state of the VIP transport squadron, which has been involved in a number of incidents. Ms Sisulu has frequently refused to answer parliamentary questions, saying the information was classified — most famously when she refused to reveal details of President Jacob Zuma’s past flights on the grounds that it would compromise his security. When the committee met there was no sign of a delegation from the air force. Then committee chairman Sediane Montsitsi told the members he had received a letter from the minister, of which he read the contents. Ms Sisulu said "Section 199 (8) of the constitution requires that oversight of the security services should be done in a manner determined by national legislation or rules and orders of Parliament because the information required might be classified". "I would therefore require that you urgently provide me with the necessary legislative framework that would ensure the protection of the information made available to the joint standing committee on defence, so that I may authorise the South African Air Force to brief yourselves. Without this framework the air force would be in breach of the constitution and the Defence Act and unable to brief the committee." She added that the "challenges" facing the air force were very important and it needed the support of Parliament. "I therefore urgently need the (committee) to provide the necessary assurances of information security," she said. Mr Montsitsi suggested that the committee write to the speaker to request a closed meeting. The ANC used its majority muscle to push this resolution through, despite objections from Democratic Alliance MP David Maynier. He argued that committee sessions could only be closed if it was reasonable and justified in a democratic society. Mr Maynier said the onus was on Ms Sisulu to show that the information was classified and its disclosure would prejudice the operation of the defence force or the lives of serving members. He suggested a legal opinion be sought from Parliament’s legal advisers. Lt-Gen Gagiano resigned late last year because of the problems in the air force. Ms Sisulu declined to accept his resignation and ordered him to return to his post but accepted the resignation of the directorgeneral of the Department of Defence, Mpumi Mpofu. Lt-Gen Gagiano resigned after taking responsibility for a mishap with a military aircraft that caused Deputy President Kgalema Motlanthe to miss a visit to Scandinavia. "He was informed that the best way of taking responsibility was not to resign, but to remain and sort out the problem. He accepted that his resignation was rejected."

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Lt-Gen Gagiano was admitted to hospital early in November with symptoms of stress. Some of the incidents which have plagued the air force’s reputation include one in which a VIP aeroplane that it chartered developed technical problems as it was taking off from Waterkloof Air Force Base in Pretoria last month. Mr Motlanthe was on board the aircraft at the time. In September, the aircraft the deputy president was flying on to attend the opening of the Rugby World Cup in New Zealand missed its first landing slot. In 2009, his aircraft was forced to make an emergency landing while flying back from Libya. Then there were revelations that two pilots who flew Mr Zuma to the US earlier this year had been implicated in a failed coup in Equatorial Guinea in 2004. 9 March 2012 Business Day Page 2 Linda Ensor

State mining company comes closer to reality
The government’s plan to establish a state-owned mining company moved a step closer to realisation this week with the decision by the Cabinet to hive off a subsidiary of the Central Energy Fund, the African Exploration Mining & Finance Company, allowing it to become the nucleus of the new company. The proposal to set up a state-owned mining company was made at the African National Congress’s (ANC’s) policy conference in Polokwane in 2007 and will to some extent address the call of the ANC Youth League for the mining industry to be nationalised. It will also address the failure of the industry to beneficiate commodities mined locally, rather than exporting it for value-addition elsewhere. Minister of Performance Monitoring and Evaluation in the Presidency Collins Chabane said at a post-Cabinet media briefing yesterday that the state’s interests in mining — held mainly through the Industrial Development Corporation — would be assessed for possible transfer to the new company, which could also enter into strategic partnerships with players in the mining industry "in order for the state to participate meaningfully". The Department of Mineral Resources has undertaken a comprehensive audit of all the state’s mining assets with a view to consolidating them within the proposed company. "The state-owned mining company will contribute to key national objectives such as beneficiation of strategic minerals for industrial development as well as employment creation," Mr Chabane said. He also said at the post-Cabinet meeting that e-tolling of the Gauteng highway would proceed as planned, despite the mass marches by the Congress of South African Trade Unions this week.

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He said the government had tried to address the union’s concerns by allocating R5,8bn to the South African National Roads Agency in the budget. He noted that taxis and buses would not have to pay the toll fees. "Government has made a decision and will proceed with it." On labour broking, Mr Chabane said the issue was under discussion at the National Economic Development and Labour Council and the government was confident that a "lasting solution" would be found. Chief director in the Department of Labour Thembinkosi Mkalipi said agreement had been reached on about 80% of the issues in the labour bills currently before the council. Mr Chabane reiterated the Cabinet’s "conviction that abusive labour practices should be prohibited". He also noted that the President’s Co-ordinating Council (PCC) was concerned about the large number of officials who were suspended on full pay while other people had to be hired to do their jobs. The problem was due to the long period it took to finalise disciplinary procedures. The co-ordinating council urged authorities to restrict suspensions to situations where the official would interfere with an investigation. Mr Chabane said interaction between the government and the office of the auditor-general was needed "to ensure enhanced credibility of clean audits". The problem was that while a department might get a clean audit, it might not pick up corruption or maladministration. Systems had to be put in place to ensure that a clean audit really was an indication of sound financial management. Performance audits were also necessary to supplement financial audits of departments, Mr Chabane said. His comments follow the concern expressed by Transport Minister Sbu Ndebele in Parliament earlier this week about the fact that financial services group Deloitte had failed to pick up irregularities at the Road Traffic Management Corporation.

7 March 2012 Business Day Page 4 Ernest Mabuza

Cele identified building, Hlela tells inquiry
SUSPENDED police commissioner Bheki Cele would not be telling the truth were he to deny that he identified the Sanlam Middestad Building for police accommodation, former South African Police Service deputy commissioner Hamilton Hlela said yesterday.

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Gen Hlela was testifying on the second day of the inquiry instituted by President Jacob Zuma in October into allegations of misconduct against Gen Cele over the procurement of office accommodation for the police. Last year, Public Protector Thuli Madonsela forced the termination of the R500m lease agreement for police headquarters in Pretoria, and another deal for headquarters in Durban. The board of inquiry would not re-investigate what the public protector had already scrutinised. Instead, it would seek to establish whether the police chief acted dishonestly or with an undeclared conflict of interest in relation to the two leases. The board would also examine his fitness to hold office and his capacity to efficiently execute his duties, chairman Judge Jake Moloi said at the beginning of the inquiry on Monday. In his statement before the board, Gen Hlela said he was put under severe strain by Gen Cele to finalise the leases of the Sanlam Middestad Building and Durban‘s Transnet Building. Gen Hlela told the board that one afternoon while driving home, Gen Cele called him and asked whether he (Cele) would get the two floors of the building he had identified. "He was fuming…. I told him the Department of Public Works was dealing with the matter." Gen Hlela said the strain of the police lease after the publication of the public protector‘s report forced him to take early retirement. "Gen Cele will deny that he identified the Sanlam Middestad Building. He will tell the board he did not do so. He will also deny he instructed you to find the building for him," Gen Cele‘s advocate, Vincent Maleka, told Gen Hlela yesterday. Gen Hlela said this was not true. When asked for his view on whether Gen Cele had efficiently discharged his constitutional obligation in combating and preventing crime, Gen Hlela said he could not comment. Mr Maleka also told Gen Hlela that he would argue that his claim that he had suffered severe strain after the publication of the public protector‘s report was an afterthought made to suit his testimony. Mr Maleka said Gen Hlela did not give reasons for his application for early retirement and did not tell the board he was under strain. Evidence leader Viwe Notshe thereafter asked for the inquiry to be postponed until Monday to allow his team to call Irene Nel, an official in the Department of Public Works‘ KwaZulu-Natal office.

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Ms Nel has raised concern about noncompliance with supply-chain management prescripts in a planned lease for the Durban office. According to the rules, the police service was responsible for identifying the need for accommodation and ensuring that such needs were linked to budget plans. The department was responsible for procurement. Judge Moloi said the board expected the matter to be heard continuously until it was finalised. The board instructed Ms Nel to be at the inquiry today. 7 March 2012 Business Day Page 5 Karl Gernetzky

New research fails to find proof of child-grant abuse
Criticisms of the child support grant are unfounded, with the support having a positive effect on children‘s school attendance, food security and health, according to research from the University of Johannesburg (UJ). The R270 grant allocated to 10,7-million children each month has been criticised for fostering dependency on the state, increasing teenage pregnancy rates and misuse of the funds. But the director of the Centre for Social Development in Africa at the University of Johannesburg, Prof Leila Patel, said yesterday a study that assessed the effect of the grant in 343 households in Doornkop, Soweto, did not corroborate "anecdotal reports" of grant misuse. Speaking at a briefing on the research, Prof Patel said the grant was "reaching people that it should reach" and there was strong "statistical correlation" between the grant and good care of children. Doornkop had been selected as the location for the research as it had high numbers of grant beneficiaries, and would give a good example of a poor, urban community in SA, Prof Patel said. There was "no evidence" the grant encouraged teenage pregnancy, she said. Only 5% of the recipients of the grant were "young women" between the ages of 16 and 20, and fertility rates in the community had been falling, she said. About 92% of the grant beneficiaries received grants for children they actually cared for in their households, and only in one household were the children receiving a grant not being cared for by their biological families.

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Prof Patel said despite the majority of respondents saying the grant had positive economic effects, with 80% saying they were now better able to care for their children, negative perceptions about the grant continued, even among recipients. Of the homes receiving grants, 55% believed the grant money was not being used for its intended purpose, 45% said it encouraged teenage pregnancy, and 36% said it "makes people lazy". The centre warned that this "negative social discourse" over the grant stigmatised recipients, undermined children‘s rights to social assistance and caused unnecessary fear that the grant may be stopped. Stephanie Brockerhoff, senior researcher at the Studies in Poverty and Inequality Institute, agreed, saying the grant suffered a huge "image problem" that was not borne out by research. "Research shows that the child support grant alleviates poverty and actually increases job-search activity," she said. Ms Brockerhoff said that given the structure of social grants, the nature of the grant, the amount, and how it was distributed needed to be revisited. "No one has actually sat down and calculated what it costs to raise a child," she said. Finance Minister Pravin Gordhan said in his budget speech last month that poverty and inequality in SA would be worse without social grants. Nearly 16-million South Africans received social grants, and spending on social grants would grow from R105bn in 2012-13 to R122bn in 2014-15, Mr Gordhan said. 7 March 2012 Business Day Page 13 Steven Friedman

Spin and hysteria cloud ANC’s ‘dramatic’ changes
WHEN the African National Congress (ANC) and many of its critics have a mutual interest in overstating how much change lies ahead, working out the truth about our politics becomes harder than usual. The release of ANC policy documents ahead of this year‘s conference illustrates the point. We are told of "dramatic" changes that will threaten property rights, compromise the Reserve Bank‘s independence and control the provinces. What we know of the documents so far suggests that what we are actually getting is major rhetoric and minor change. This is likely to be a pattern this year because ANC politicians have a reason for exaggerating the changes they plan, and their critics are sure to help them by overreacting to every proposal for change. Initial coverage of one of the documents, on ANC strategy, illustrates the point. Its rhetoric suggests changes are on the way that threaten the interests of racial minorities

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in general, the affluent in particular. The ANC is talking of a "second transition", by which it means that some sections of the constitution were inserted to mollify minorities and the well-off. The time to placate them is over and so changes to the constitution may be needed to ensure it can fight poverty and lead economic development. When we look at what constitutional changes are suggested, the "second transition" seems a great deal less dramatic than the first. The document is not proposing less independence for the Bank — it suggests looking at its "narrow mandate". This means considering the argument that it should be charged not only with protecting the currency but with stimulating growth. This would not affect its independence: it would require it to consider a wider set of issues. On land, the document repeats a time-worn ANC view that "willing seller, willing buyer" does not work. It has been saying this for at least seven years and clearly hopes to negotiate some changes. But all it is saying is that the bargaining that has been under way for a while will continue. As for provinces, the documents say the ANC wants a "blueprint policy to underpin and guide the task of reforming, rationalising and strengthening" them to be devised by a panel of experts. So at some point we will have suggestions for change. No-one knows what they will be because the panel has not yet been appointed. None of the documents contains firm decisions. They are proposals for discussion that will be taken to the ANC‘s midyear policy conference and to Mangaung at year‘s end. Even if they are adopted, they are not law or government policy until they pass through a process: some policies adopted at the ANC‘s previous conference almost five years ago have still not been implemented. Any changes it does adopt will look very different if they ever become law — that is the way policy works in every democracy on the planet. So why these promises of major change — by the ANC and commentators — followed by modest proposals that might never happen? The ANC has realised it is under pressure to show disenchanted supporters and a wider public that it is not simply a vehicle for the connected to enrich themselves. It believes the best way to do that is to be seen to be planning major changes that will assist development and ensure a better life for all. The constitution is a handy scapegoat because blaming it enables politicians to insist that limited progress against poverty is not their fault but that of the compromises that had to be made to win majority rule. But most ANC strategists also know the constitution is not really the problem — there is nothing the government could have done since 1994 to help us towards a more equal society that was prevented by the constitution. They also know the realities that produced compromises in the early 1990s have not disappeared — minority interests still need to be taken seriously if we are to have growth and stability, and law and policy must reflect that. The obvious solution is to promise great changes to gain credibility and to plan only modest ones to preserve stability. The ANC is partly helped in this endeavour by opinion-formers, who are only too happy to blow out of proportion any change it

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suggests. Many ANC critics believe majority governments always tear up the constitution, crack down on opposition and confiscate wealth. This is simply prejudice but ensures that any ANC proposal to change anything is seen as a sign that Armageddon is coming. That is why, earlier this week, commentators were already analysing changes that are not proposed. All this makes working out what is really happening difficult. The only way to cut through the one side‘s spin and the other‘s hysteria is to believe only that which appears in black and white in policy documents — and to remember that any change that follows from them will not happen soon and will look different after it is negotiated.

5 March 2012 Business Day Page 5 Linda Ensor

DA shocked at ANC draft proposals to change constitution
The Democratic Alliance (DA) has expressed "shock and extreme concern" over draft proposals by the African National Congress (ANC) to scrap the "sunset clauses" in the constitution and amend the property clause in the bill of rights, which stipulates that property may be expropriated only on the basis of fair compensation. According to City Press newspaper, c hanges to the powers of the Reserve Bank and of provinces vis-€-vis national government have also been proposed in the draft policy documents. Any changes to the constitution will, however, require a two-thirds majority in the National Assembly and endorsement by at least six provinces in the National Council of Provinces. The ANC captured 65,9% of the vote in the 2009 general election. According to City Press, t he draft policy documents question the suitability in present circumstances of the 1996 constitution, which "may have been appropriate for a political transition, but it has proven inadequate and even inappropriate for a social and economic transformation phase. "There may well be elements of our constitution that require review because they may be an impediment to social and economic transformation". The ANC proposal said the sunset clauses — adopted on the basis of a national consensus during a period of political transition — were proving "inadequate and even inappropriate for a social and economic transformation phase", or the "second transition", which SA was now entering. Constitutions, it said, were "living documents and reflect the stage of development of a given society".

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But yesterday, DA spokeswoman on justice Dene Smuts said the ANC was either trying to mask its own ineptitude or embarking on a phase which threatened "the very foundation of our constitutional state. It is notable that social and economic transformation is consistently cited as the justification for the proposed review of the Constitutional Court decisions and for the transformation of the judicial system as well. It is becoming clearer by the day that the ANC is contemplating a fundamental ideological shift." Ms Smuts dismissed the suggestion that the property clause in the bill of rights was a "sunset clause" in the constitution, emphasising that it "represents the full, final and exhaustively negotiated right of all South Africans not to be arbitrarily deprived of property — as so many were in the apartheid era". She said the constitution already empowered the government to embark on an extensive programme of land reform. DA national s pokesman Mmusi Maimane said the constitution was the "product of negotiation, compromise and sheer common sense. It is the very embodiment of our rainbow nation. It is the real and lasting legacy of the Mandela era. "Giving the state the power to arbitrarily tamper with property rights, for example, will hinder our ability to grow our economy at the rate required to create jobs for the millions of unemployed people ... The DA will fight any changes to the constitution that take power away from the people and put it into the hands of politicians." AfriForum CEO Kallie Kriel said the ANC was "playing with fire" if it broke negotiated accords. "The ANC‘s breaking of negotiated agreements will lay the foundation for renewed polarisation in the country," he said.

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6 March 2012 Business Day Page 1 Sam Mkokeli

ANC vows no change to Reserve Bank’s brief
The African National Congress (ANC) yesterday ruled out any changes to the mandate of SA‘s Reserve Bank, in a move to allay fears that the party‘s drive to speed up economic transformation would see it change the country‘s constitution and the duties of the Bank. Earlier versions of the party‘s documents contained a suggestion to review the mandate of the Bank, and consider widening it to more than just watching inflation and protecting the value of the rand. Fears were expressed when an earlier version of the party‘s strategy and tactics document suggested the "narrow mandate" of the Reserve Bank was one of the constitutional areas that impeded social and economic change. Party officials said the statements about the ANC wanting to change the mandate of the Bank were contained in an earlier draft of the strategy and tactics document, which was changed on Sunday night, ahead of yesterday‘s official release of the documents. The ANC‘s leftist allies have been calling for the mandate to be widened. They would like to see economic growth and employment creation being included in the Bank‘s areas of focus. They have also called for the rand to be pegged against the dollar to protect the export-oriented manufacturing and mining sectors. ANC policy gurus have constantly questioned the wisdom of pegging the rand, especially against a currency as volatile as the dollar. The party stuck to proposals to impose a resource rent tax on mining operations, which has been suggested as an alternative to calls for the nationalisation of mines. The paper, State Intervention in the Minerals Sector, has suggested a raft of measures, including a resource rent tax on super-profits in mining that would create ways for the state to reap greater benefits from the industry. New tax proposals include a 50% resource rent tax on higher than normal returns on investment. The ANC‘s policy thrust is concerned with the slow pace of economic change — necessitating a "second transition" beyond political freedoms obtained in 1994. It is under pressure to protect its credibility among its supporters, whom it liberated from apartheid oppression but who still suffer from poverty. The party wants to improve the rate of social and economic change, warning that a business-as-usual approach would affect its credibility two decades into democracy.

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Speeding up land redistribution is at the centre of the party‘s plans to accelerate economic transformation. Land policy to be considered at the June policy conference mirrors that in the land reform green paper. The policy recommendations on equitable and sustainable rural communities express the party‘s confidence in the various institutions the green paper wants to be created to facilitate speedy sales and transfer of land to the state. These include a land management commission, a land valuer-general and a land rights management board, with local management committees. Some of the policy suggestions will require constitutional changes — which the ANC cannot make without regaining its two-thirds majority in Parliament. On health, the party has suggested that the national government take over the running of "central hospitals" from provincial governments. The Democratic Alliance -run Western Cape is expected to fight to hang on to the Groote Schuur and Tygerberg hospitals, which would be affected if the takeover passed policy scrutiny. There is also a suggestion to allow the public to make use of military hospitals, wellequipped centres that provide high-level care to the defence force and senior leaders. However, there may be resistance due to the security sensitivities around opening up military health facilities. 5 March 2012 Business Day Page 12 Tim Cohen

It’s simple: just slap another tax on mining industry
The African National Congress (ANC) study group report on the mining industry has been covered fairly extensively in the press. These reports were based on a leaked version of an executive summary, but the report as a whole has now been published. Since, as they say, the devil is in the detail, what does the report as a whole tell us that the summary does not? The summary is about 60 pages, but the report as a whole is just under 400, so there is detail there. In this article I‘d like to highlight a few topics that help explain why the specific diagnosis was arrived at in the conclusion — and perhaps also why I think it presents a misdiagnosis that could really hurt the patient. But first let us recap quickly. The report is not ANC policy, not yet; it constitutes an investigation into the issue that will form part of ANC discussions at its policy conference later this year. It has the character of an opinionated challenge and

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extended research document rather than the formality you might expect from a policy white paper, for example. Its main conclusions are to deride the notion of nationalisation, but propose a string of alternatives. The most significant of these are: the implementation of a "resource rent tax", of the same type recently imposed in Australia, but at a much higher rate; the creation of a state-owned mining company; and the fairly extensive revision of the now famous Mineral and Petroleum Resources Development Act. The report was greatly anticipated for its views on nationalisation, but oddly this highly charged topic was not really meaningfully grappled with in the text. In the final summary, the conclusion was essentially drawn that nationalisation would be costprohibitive, coming in at about R1-trillion, and that without compensation it would transgress bilateral trade agreements and would generally be disastrous. Hooray for that pretty obvious conclusion. But it is disappointing that the discussion of why state ownership had been so disastrous, is lacking in the report itself. It does not actually address that topic in any real way, other than expounding at length on the international trends, which have generally speaking been strongly away from state ownership over the medium term. It does, however, note the three main trends of recent years: that state ownership currently is between 90% and 40% lower than its peak level; that state ownership has increased recently from 22% in 2000 to 30% now; and that most of that increase is accounted for by the increased influence of Chinese state companies on the mining sector. But it does formulate an argument implicitly in favour of state-owned mining companies, which prepares the ground for the recommendation that SA should have a state-owned mining national champion in the conclusion. For example, it heaps praise on Chilean copper miner Codelco and cites the company as one of the "few and important" examples of successful state-owned mining companies. The others are LKAB, the Swedish iron-ore mine, Finnish miner Outokumpu and Botswana‘s Debswana. It notes that state-controlled national oil companies have become the norm internationally, but that state-owned mining companies have not been able to operate successfully, leading to privatisation. It then concludes, entirely wrongly in my opinion, that "the energy sector shows, however, that such poor performance is not a corollary of state ownership". It then lists a whole string of requirements for state-owned mining companies to be successful, most of which are absolutely correctly identified — and are consequently extremely unlikely to exist in practice. These include having a knowledgeable and independent board; transparency; the need for constant reinvestment; and the need for politicians to understand the long-term nature of mining, and so on. But importantly, the report fails to explain why mining companies and oil companies are different, and why oil companies tend to succeed under state ownership and mining companies do not.

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This is a complicated topic, but at root I suspect the reason is pretty basic: drilling for oil is fabulously profitable, returns come fast, and (the industry is going to hate me ) it is comparatively easy. The oil industry also has the major advantage that it is very outsourced; many national oil companies are national in name only, and the people who do the actual drilling are companies such as Halliburton and General Electric. The oil industry also has a very effective supplier cartel at its disposal, which tends to support the industry in bad times — not that we have had those in almost a decade. Oil is also mainly pumped in totalitarian states, or ones that often end up that way — witness Venezuela and Iran. The point is that state ownership of the oil industry is absolutely not a reason to support a state miner; if anything, it is a reason to avoid establishing a state miner. Perhaps the most important part of the report is not what is explained, but what goes unexplained. The report ultimately suggests the imposition of a super-profits tax. So you might expect a detailed explanation of how it would work, some kind of economic model that supports it. In some ways, the tax does not seem like a terrible idea, particularly since it includes reducing the new mining royalty tax at the same time. The result, it might seem, would be to reduce the tax on mining turnover, thereby reducing the load on mining companies that are just getting off the start line, and increase it on those elements of the mining industry burning up the tarmac. Yet, and it is so disappointing, the report does not include a real attempt to grapple with the issue. The report suggests that the super-profits tax, called the "Resource Rents Tax", kicks in when a company earns a certain amount, but will be applied at 50%, and that it will be applied to the whole industry. The Australian tax which brought down the government and ended the car eer of former prime minister Kevin Rudd, applies only to the iron-ore and coal industry, and it is set at half the rate. Hence, the proposal is, frankly, for an onerous new tax. Why do the report‘s drafters think the industry will be able to take that kind of taxation strain, and simultaneously, beneficiate, do empowerment, pay carbon tax and do all the other things? We don‘t know. They don‘t say. WHY would a state-owned mining company succeed where private companies have failed? The ANC‘s study group uses some interesting, and controversial, examples to argue its point. Imbedded in the report are serious allegations against South African manganese producers, an implicit criticism of the ANC for allowing Anglo to move its listing to London, and a really vociferous attack on ArcelorMittal. These all have the common thread of justifying the creation of a state miner. How so? Well, at a fundamental level, the report really works on the basis that the mining industry has not and does not sufficiently beneficiate its product. A whole range of new weapons are therefore designed to bring the industry into line. But is this charge really justified?

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The main exhibit for the prosecution is the manganese industry, which the report claims has colluded in order to gain higher export prices, and consequently it not only wasn‘t interested in beneficiation, it was positively against it. "One of the beneficiation enigmas is manganese, where two-thirds of this high-grade resource is exported as crude ore, despite the next step (smelting to produce manganese ferro alloys) being electricity intensive and SA having had low electricity prices over the last 30 years," the report says. The manganese export ore price was controlled by an oligopoly of four companies, which resulted in monopoly ore prices and very high returns for mining. "Any downstream investments in capital-intensive smelting would consequently have yielded lower returns on capital than selling ore at monopoly prices. "In this way one distortion (monopoly pricing) led to another (lack of beneficiation) and this would be a good example of the necessity for state intervention to effect a correction, through, for example, applying a correcting export tax on manganese ore exports, a resource rent tax on the excess profits or using infrastructure tariffs." Personally, I have no idea whether this allegation is justified, but if it is not, the manganese industry could do us all a favour and explain why not. The next example is Anglo American ‘s divestment from its main platinum group metals downstream beneficiator and technology developer, Johnson Matthey, which the report criticises. Anglo was a 40% holder of Johnson Matthey in the early 1990s, and invested heavily in it for years, precisely in order to understand the technology behind platinum group metals. It divested from Johnson Matthey because of the pressure to focus on its core competence. "This appears to indicate that the decision to allow Anglo to relist abroad was possibly ill advised and that a developmental state might take a different view on the ‗unfettered‘ movement abroad of domestic capital," the report says. The same sort of argument is forwarded with respect to ArcelorMittal SA (AMSA). The report says that "due to the ISI (import substitution industrialisation) strategy of the apartheid era, Iscor/AMSA have always relied on monopoly pricing to maximise profitability and/or subsidise inefficiencies, with devastating impacts on the competitiveness of downstream steel-intensive manufacturing. Post-liberation in 1994, the democratic ANC government has been markedly unsuccessful in curbing this job-destroying abuse, despite concerted efforts to achieve competitive steel pricing by the Competition Commission." It strikes me that these are all credible complaints that the respective companies need to answer if they are to escape the charge that their own narrow interests have not unleashed an unfortunate experiment on South African taxpayers.

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The report fails to explain why mining companies and oil companies are different, and why oil companies tend to succeed under state ownership and mining companies not These are credible complaints the companies must answer to escape the charge of causing an unfortunate experiment to be unleashed on taxpayers

5 March 2012 Business Day Page 1 Carol Paton

Vavi shuns ANC executive again despite Zuma call
Congress of South African Trade Unions (Cosatu) general secretary Zwelinzima Vavi has once again turned his back on an opportunity to serve on the African National Congress (ANC) executive. Instead, he will run for another term of office at the helm of the union federation when it holds its national congress in September. This means, he says, that he will not stand for election to the leadership structures of the ANC in December, as it would compromise his independence. Two weeks ago President Jacob Zuma encouraged labour leaders to serve on the ANC‘s national executive committee (NEC), instead of criticising the party‘s policies and their slow implementation from a distance. Mr Vavi is the most influential labour leader and is virtually assured of re-election. He has been very critical of the government of Mr Zuma, who is also likely to be reelected by his party in December. In an interview after Cosatu‘s central executive committee meeting last week, Mr Vavi said: "I‘m making myself available in September. That, in my view, rules me out in December. That is my view and I feel very strongly about it." Mr Vavi, who has been general secretary of Cosatu for 12 years, indicated at the last Cosatu congress three years ago he would not be available for another term. However, the federation‘s central executive committee in June last year requested him to rescind his decision, as it would fuel an early succession race in the federation. His decision not to wear two hats is in contrast to the appeal by Mr Zuma last week that trade unionists join the leadership structures of the ANC. Speaking at "a political school" convened by the National Union of Metalworkers of SA (Numsa), Mr Zuma said it was "a weakness" if workers were not in ANC structures, where they could influence its direction. "(Workers should be) not just in the branch region or zone or province, but at a place where decisions are taken, the NEC," Mr Zuma said.

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While Mr Vavi himself will not stand for the NEC, other prominent trade unionists are likely to do so, in line with Cosatu policy that its members should "swell the ranks of the ANC". This applied also to its highest structures, Mr Vavi said. But although it is Cosatu policy to allow its leadership to stand for other leadership positions, Mr Vavi says for "the public face" of an organisation to wear "two hats" often leads to confusion and contradictions, especially when tactical and strategic differences inevitably emerge. A position in the ANC "top six" would possibly have allowed Mr Vavi to play a broader political leadership role, after serving four terms in the federation. However, two previous general secretaries of Cosatu — Jay Naidoo and Mbhazima Shilowa— who both stood for ANC leadership positions after leaving the federation, failed to forge successful careers in politics, after losing their power base in the unions. An elevation to the top structures of the ANC would also not be assured. Although Mr Vavi was at the forefront of the group that toppled Thabo Mbeki as president of the ANC, he has been stridently critical of the Zuma administration as well. His constant criticism of the ANC, including corruption in its ranks and its fiscal and monetary policy stance, has distanced him from the group backing Mr Zuma at Luthuli House. He has also fallen out with ANC secretary-general Gwede Mantashe, a dependable defender of Mr Zuma. Cosatu‘s election will come three months before the ANC‘s Mangaung conference. If Mr Vavi is re-elected as general secretary, he could be one of the strongest voices in the last few months before the Mangaung elections. Cosatu is divided between unions sharing Mr Vavi‘s critical stance and those strongly backing a second term for Mr Zuma, includ ing Cosatu president S‘dumo Dlamini. In an effort to build unity in the federation, the central executive committee decided last year it was premature to discuss leadership succession. Last week, it reiterated this, saying Cosatu members would be encouraged to "evaluate the leadership of the ANC at the right time". 5 March 2012 The New Age Sapa

Respect ANC disciplinary process: Sexwale
The disciplinary process against ANC Youth League leader Julius Malema should be respected, Human Settlements Minister Tokyo Sexwale said in a report on Monday. "I think one can only say, you know, we all did what we could," Sexwale said, according to SABC radio news, after being asked to comment on Malema's expulsion.

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"The situation also has to respect the processes that have unfolded. The ANC is a very old organisation. It thinks things through, it thinks very carefully and we are not prone to thinking that we are bigger than ourselves. "The ANC cannot be bigger than itself... what has occurred, has occurred. As members of the ANC there's an internal [code of conduct] that we adhere to and I cannot say more." Malema was expelled from the African National Congress last week for bringing the party into disrepute and sowing divisions. He has two weeks to appeal. At the time of Malema's disciplinary hearing, Sexwale was among those who testified in his favour.

4 March 2012 Sunday Times Business Times Page 6 Moyagabo Maake

State bodies squander billions without internal auditors
The Department of Defence was not the only government body without an internal auditor in the last financial year - when it spent R799.3-million irregularly and R490880 fruitlessly while racking up R167-million in material losses. A list provided by the office of auditor general Terence Nombembe shows that, in the year to last March, seven government entities did not have custodians of internal control, corporate governance and operational performance. These were the SA Library of the Blind, the Ports Regulator of SA, the Performing Arts Centre of the Free State, the Department of Women, Children and Persons with Disabilities, the Driving Licence Card Trading Account, the Safety and Security Sector Education and Training Authority and the Department of Defence. The report on 2010-11 audits showed government money wastage rising. Unauthorised spending rose to R802-million from R362.4-million the previous year. Fruitless and wasteful spending climbed from R143.6-million to R593-million. Irregular spending of taxpayers' money rose to R4.5-billion from R3.9-billion. Nombembe blamed weaknesses in internal controls, government procurement processes and public servants' lack of awareness. A significant contributor was the automatic extension of tenders without giving others a chance to compete for contracts.

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Of the seven entities without internal auditors, only the Driving Licence Card Trading Account did not contribute to these losses. Four entities said internal auditors were operational for only part of the year. The library for the blind appointed an internal auditor two weeks before year's end. The Driving Licence Card Trading Account's internal auditors did the first audit in February. The ports regulator, the Department of Women, Children and Persons with Disabilities and the Department of Defence were without internal auditors for the whole year. "The Department of Defence does not have a functional internal audit function," said the report. But its inspector-general division performed a high-level management review and some of the functions of an internal auditor. Nombembe said audit committees and internal auditors of fewer than half of all municipalities and municipal entities audited reported findings that aligned with those of the auditor general. About 67% of departments' and 56% of public entities' internal auditors and audit committees reported no findings after internal audits, while the auditor general found non-compliance with law on public sector finances. Nombembe said the mismatches were caused by the internal auditors and audit committees not working with the auditor general. "The confusion is caused by looking at things from different perspectives," he said. Claudelle von Eck, CEO of the Institute of Internal Auditors SA, said the difference between external audit (by the auditor general in the public sector) and internal audit contributed to different opinions. "External audit is primarily a financial discipline, whereas internal audit is a multidimensional discipline," she said. The auditor general's scope was much narrower. Internal auditors looked at all aspects. A hospital internal auditor would, unlike the auditor general, focus on risk of disease spreading between patients. "It is ... natural that internal auditors have a broader look at the risk and compliance matters. The auditor general's primary focus would be on financial statements." Nombembe said he wanted to formalise his office's relationship with the institute to avoid such confusion in future. 6 March 2012 Business Day Page 1

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Nicky Smith

Mandela grandson to face charges by Aurora liquidators
THE liquidators of Aurora Empowerment Systems, which is accused of assetstripping bankrupt Pamodzi Gold , will lay charges of fraud this week against Nelson Mandela‘s grandson Zondwa, and Ahmed Amod, an attorney for the company. The liquidators are also said to be planning to lay charges this week against Aurora chairman Khulubuse Zuma and possibly other directors under section 424 of the Companies Act, under which directors can be held personally liable for company debts. The charges follow a threat by the liquidators to lay charges of perjury against Thulani Ngubane, a director of Aurora, after he gave evidence at an inquiry. Aurora‘s directors are a political "who‘s who", including President Jacob Zuma ‘s former attorney Michael Hulley and Mr Zuma‘s nephew, Khulubuse Zuma. The directors of the company are also facing a potential R1,7bn in claims from the liquidators, who allege millions have been taken from the company in cash, gold sales, scrap metal and mining equipment. The Solidarity trade union, a creditor of Aurora on behalf of members who are owed about R3,1m in unpaid wages, said yesterday it would ask the JSE and the police "to treat these charges as a priority as more than 5300 South Africans were ruined financially by the Aurora case, while those responsible for the crisis are apparently untouchable". A sensitive section 417 and 418 investigation into the demise of Pamodzi has uncovered evidence that Aurora directors manipulated information to the Securities Regulation Panel. This had the effect of delaying the cancellation of Aurora‘s management contract with the liquidators, frustrating attempts to revitalise the mines, lead liquidator Johan Engelbrecht said yesterday. Mr Engelbrecht said letters sent to the JSE and the Securities Regulation Panel regarding Aurora‘s reverse listing into Labat in 2010 — a move meant to create a platform for Aurora to raise capital to resuscitate Pamodzi‘s operations — were fraudulent. Cheques written by Aurora in March that year were stopped and the funds meant to pay out Labat minority shareholders never reached Mr Amod‘s trust account, Mr Engelbrecht said. Despite this, Mr Amod wrote to the panel on March 15 to say his office, acting on behalf of its client Aurora, confirmed receipt of R5,35m in his trust account. This was " the maximum amount that would be payable to the minority shareholders of Labat

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Africa " in the event that they accepted the Aurora offer and that the funds had been cleared. Under the Labat deal Aurora placed two small gold mines into Labat in order to get JSE approval for its reverse listing. In terms of a deal Aurora had with Global Emerging Markets (GEM), a Swiss private investment group, once on the JSE, it would receive R725m and GEM would take a stake in the new company. GEM would invest a further R725m to recapitalise the business and fund acquisitions. The Labat transaction lapsed in November 2010 after conditions of the transaction were not met. Aurora was removed as the preferred bidder for the assets by the courts in May last year. The liquidators will give the police "supporting documents" later this week for the charges against Mr Mandela and Mr Amod, Mr Engelbrecht said. Mr Mandela said he had not been informed of the charges. Mr Amod declined to comment, saying only: "I deny that I committed any fraud." 6 March 2012 Business Day Page 3 Wyndham Hartley

Unions, managers demand probe at Armscor
Cape Town — Trade unions and divisional managers at state armaments procurement agency Armscor have called on Defence Minister Lindiwe Sisulu to appoint an independent inquiry, claiming secret dealings by top management were delaying contracts worth billions. The National Education, Health and Allied Workers Union, Solidarity and a group of divisional managers claimed in a letter that the management style of Armscor chairman Moreti "Mojo" Motau, acting CEO Johannes Mkwanazi and the new board of directors had become problematic through the private vetting of defence contracts — a deviation from established policies. They say this was delaying R1,5bn in contracts and could see the Department of Defence‘s requests for further funding denied. Armscor takes contract requirements from the department — its only client — and subcontracts these. Armscor made headlines recently when it was revealed a payment of R3,5bn from Airbus, a refund of money advanced in the cancelled purchase of the A400 military transport aircraft, had not been returned to the Treasury as required by law.

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The letter alleges a new strategy had been devised in secret, and that managers were simply instructed to implement it. The writers said the main element of the strategy, a funding model based on a percentage of contract value, would cause a conflict of interest in Armscor and would mean higher prices for the Department of Defence as Armscor went in search of higher income for itself. The letter says this strategy was not approved by Ms Sisulu. "Evidently a civil war between top management, divisional managers and workers is about to break out at Armscor," Democratic Alliance defence spokesman David Maynier said yesterday. The minister‘s office said Ms Sisulu was out of the country and would respond on her return. Armscor last night referred all queries to the Department of Defence. The letter said "service delivery is being greatly compromised by the breakdown of the organisation‘s contract management processes. At the time of writing (the last week in February) R1,5bn worth of orders are being held back by the board of directors. This could result in huge rollovers of capital funds for the department. The situation will certainly not assist the department in its endeavour to solicit an increased funding allocation …." The letter also complained Armscor‘s board used to meet monthly, but had now decided to meet quarterly and this had "greatly compromised Armscor‘s ability to provide efficient and effective service". It also described the withholding of the Airbus refund as "a lack of good judgment".

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4 March 2012 The Sunday Independent Page 1 Moloko Moloto, George Matlala and Moffet Mofokeng

Youth leader says he learnt‘madness’ from ANC elders
UOYED by the support from Robert Mugabe‘s Zanu-pf youth, Julius Malema says he has learnt mischief and ―madness‖ from ANC elders as the ruling party admits that illdiscipline could soon be ―irreversible‖. The Sunday Independent understands that organisations such as Zanu-pf youth, Chama cha Mapinduzi youth of the ruling party of Tanzania, Cuban and youth from Botswana National Front – Gaborone‘s main opposition – have pledged their support to Malema after he was expelled from the ANC pending his appeal in less than two weeks. ―(Comrade), we wish u well, aluta continua. Think of paying a visit to (Tanzania) with my invitation brother, u have our full support. Young people here they (sic) sing your name,‖ reads an SMS from Beno Malisa, president of CCM youth. Malema yesterday called for the expulsion of ANC leaders who taught him bad manners. He was speaking at a rally of the Limpopo ANC Women‘s League, which openly pledged its support and organised a cake for his 31st birthday in his hometown of Polokwane. He indirectly likened the ANC‘S decision to expel him to a parent who badly influences their child and then discards them. ―Even if this child is mad, he is your child, it basically means they learnt this madness from you,‖ Malema said in Sepedi. ―All we are doing, we have learnt from our elders. ―If there are people who should be expelled, it‘s our elders,‖ Malema continued. The controversial youth leader – who once vowed to die and kill for Zuma – had a bitter fallout with the president who used to defend his rude and bullying behaviour. But Malema said he has accepted his expulsion, and that unlike former ANC leaders such Mbhazima Shilowa and Mosiuoa Lekota – who left the party to form Cope – he remained a member of the ANC. He pinned his hopes on the upcoming ANC elective conference in Mangaung in December.

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―Even if Mangaung does not liberate us, the future generation of the ANC will liberate us, because whether you like it or not, one day you will go on pension,‖ said Malema in what could be construed as a reference to Zuma. But Malema avoided mentioning any names. However, he changed his tone and sounded like a desperate man begging to be accepted back into the ANC fold. ―If we made a mistake, then discipline us, don‘t kill, don‘t throw us in the dustbin,‖ he said. Malema said he was prepared to relinquish his position as youth leader, in order to keep his membership ―because I love the ANC, I worship the ANC, there is nothing I know besides the ANC‖. The provincial women‘s league pledged to stand by Malema, singing his praises in slogans. ―Kae kapa kae, Malema re ya le Bwena (Wherever you go, Malema we are with you),‖ they chanted. His friend and ally, Sports Minister Fikile Mbalula, intimated a fierce fight on Friday that Malema‘s expulsion was ―unprecedented‖ and ―a political tragedy‖. ―I characterise this as a political tragedy for all of us who come from the ranks of the youth league. Julius and his generation have actually suffered a blow that we did not come to realise or test,‖ Mbalula told the SABC TV news. Malema wants Mbalula to replace Gwede Mantashe as party secretary-general. Some youth league leaders from seven provinces have declared their support for Malema. However, the league is not homogeneous. There are factional divisions within its structures. The league‘s North West chairperson Papiki Baboile said yesterday: ―If between now and Mangaung the leadership of the ANC doesn‘t review the expulsion, then we will plead with the branches of the ANC to review the expulsion.‖ ―We still affirm him as our president. We will continue to invite him to lectures,‖ he said. Northern Cape provincial league secretary Shadrack Tlhaole said ―it is Julius or nothing‖. ―If people want their friends to lead the youth league, then they must fire all of us,‖ said Tlhaole.

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―We must be engaged politically. This is a political matter. The ANC must make peace that they need to meet us and explain to us the wrong things they say Julius did. ―He never went to the streets calling people prostitutes,‖ Tlhaole told The Sunday Independent. Malema‘s friend and Limpopo league secretary Jacob Lebogo said the expelled youth leader ―remains president until 2014‖, the end of his term. ―He remains our leader. We are still waiting for the leadership of the ANC to engage us. ―Anybody who has got a problem with the way the youth league articulates its position, they must engage us,‖ Lebogo said, adding that ―these charges against Julius are personal. He was representing us.‖ Eastern Cape league secretary Mziwonke Ndabeni said the decision was punitive and not meant ―to build‖. The league is expected to hold an emergency meeting of its national executive committee – the highest decision-making body between conferences – to discuss and take a stance on his expulsion. Meanwhile, the ANC – in its discussions documents ahead of policy conference in June – has admitted that ill-discipline would soon reach a consequential climax. ―We have not succeeded in effectively dealing with factionalism and ill-discipline. ―Mangaung must be (the) turning point, because unless we halt the decay, we will soon reach a stage where it becomes irreversible.‖ The party said its relationship with its youth wing needed examination, given the controversial dispute regarding the autonomy of the league. ―The matter should be debated openly, since the league is too important an organ to leave to chance.‖ 4 March 2012 The Sunday Independent Marianne Merten

Justice Minister sticks to his guns
Justice Minister Jeff Radebe is ready for a fight. He is adamant a cabinet-ordered review of the impact of Constitutional Court decisions and the transformation of the judiciary is not a precursor to curtailing judicial independence. ―How will we ever curtail judicial independence when the constitution is so clear? It‘s a perception,‖ Radebe said on Friday.

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―Since 1994, (the) government has done nothing but to support the judiciary, has done nothing more than ensuring that the judgments are implemented,‖ he added. However, he may face an uphill battle in the face of concerns raised in the wake of several senior ANC politicians‘ comments comparing, particularly the Constitutional Court, to an opposition and suggesting the constitution contains ―fatal concessions‖ that shifted power from the executive and legislature to the judiciary. More recently, President Jacob Zuma said the Constitutional Court‘s powers would be reviewed, although his office quickly tried to spin the controversial comments. This week Radebe published a discussion document on the transformation of the judiciary, which sparked critical reaction. It will run in tandem with a review of Constitutional Court judgments, linked to an assessment of how the executive implements such judgements. On Monday, the Justice Department will issue tenders for this review project aimed at research institutions with an interest in issues of law and justice. The aim is to complete the review research within 18 months. And the timing of this discussion document and review? Nothing sinister, the minister says: it was released to coincide with the 15th anniversary of the constitution coming into effect. So far Radebe appears not to be too happy with that debate – the discussion document talks of ―irresponsible commentary‖, while the minister‘s deputy, Andries Nel, has described concerns over the possible impact on judicial independence as a ―slight deficit of rationality‖ (see page 7). The justice minister said it appeared many people were too focused on the executive and legislature, while the discussion document, review and envisaged interactions with civil society and communities would ensure the focus also fell on the judiciary. ―We do hope at the end of the day people should move away from their political constructs and become rational when we discuss these matters… People must free their minds and engage in discussion with the aim of ensuring that all of us in SA participate in this transformation project. ―Dialogues, seminars and so on, they communicate a message to the broad crosssection of South Africans so they understand that judges are part and parcel of society: they don‘t come from Mars periodically to make these judgments.‖ But the debate takes place as steps are already under way to reposition the judiciary. The Superior Courts Bill, currently before Parliament, is intended to rationalise the hierarchy of courts, including the establishment of one high court with nine divisions. It entails spending money: neither Mpumalanga nor Limpopo have their own high courts yet, while there are three in the Eastern Cape. Such changes could also affect the North West.

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Perhaps more significantly, the Superior Courts Bill places the chief justice at the head of the whole judiciary – the Bench and the magistracy – while making the Constitutional Court the final instance of appeal in all matters. Critics have contended this may detract from the court‘s role in establishing constitutional jurisprudence. However, Radebe says these steps are unprecedented measures to give the judiciary its institutional independence. The discussion document notes that the establishment of the office of the chief justice as a national department, even as an interim measure, ―appears incompatible with the independent character of the judiciary‖. The intention, however, was to ensure the office got sufficient resources and appropriately skilled staff to drive the restructuring. ―This is the beginning. I think we‘ve done enough to kickstart the process so that the chief justice can have the resources… As the executive, we want that all those (administrative) functions that will enhance the judiciary must be transferred to them. That‘s a building block… which has never happened in SA,‖ said Radebe. After all, why should a court registrar be accountable to the Justice Department, when all the work was closely associated either with a magistrate or a judge? There are no time frames for this development, although it is regarded as urgent. ―It is not only dependent on the executive, but also the judiciary itself. When will it be positioned to assume those responsibilities and when will it be able to conclude on a model that will fit our constitutional democracy,‖ said Radebe. These measures, the government anticipates, would contribute to access to justice for ordinary South Africans – something that goes to the heart of transforming the court system. However, Radebe says the judiciary has taken strides – not just in terms of racial transformation, but also attitude. In particular, the Constitutional Court has the capacity to help in the realisation of the Bill of Rights‘ socio-economic aspect, as happened in the case for housing brought by Irene Grootboom in 2000, which the minister described as ―one shining example‖ of how a judgment could impact on transformation. ―I see the judiciary playing a more proactive role in ensuring it participates in the acceleration of the transformation process. We need to see that in the judgments that they pronounce,‖ he said. ―We need to be open-minded, because 300 years of colonial rule, 40 years of apartheid, cannot be overcome overnight. So it is a process. If you look where the judiciary is today… the strides that are being made indicate that even the mindset of the judiciary is gradually changing.‖ There was nothing untoward in a review of the impact of Constitutional Court judgments, the executive‘s capacity in implementing these and the broader

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transformation of the judiciary and its place in what the ANC calls the developmental state, or a system of governance in which the state plays a key role. The executive had conducted similar reviews at 10 and 15 years. Radebe dismisses concerns that the independence of the judiciary is at risk as unfounded, given the government‘s track record. ―By their actions, you shall know them. Our actions, practical action, in this area speak louder than words. ―We are not afraid, but promote debate as the ANC. We do not want people, like a herd of cattle or sheep, to go in one direction. People have divergent views, but at the end of the day there has to be a plan to ensure that access to justice happens. That is what is important.‖ 4 March 2012 City Press Carien du Plessis and Adriaan Basson

Dodgy firm hosted ANC
A company implicated in massive government tender corruption donated a conference centre for a lekgotla meeting to the ANC in Gauteng. Multimillion-rand contracts awarded by the correctional services department to Bosasa Operations and affiliated companies are currently the subject of a criminal investigation by the Hawks. This comes after the Special Investigating Unit (SIU) found there was a corrupt relationship between officials in the department and Bosasa. City Press revealed last year that Bosasa, according to the SIU final report handed to Correctional Services Minister Nosiviwe Mapisa-Nqakula in 2009, showered former prisons boss Linda Mti and the department‘s ex-finance chief, Patrick Gillingham, with gifts, including houses and cars. This is the first time a direct benefit from Bosasa has been linked to the governing ANC. In the company‘s news-letter, Bosele, Bosasa boasts about hosting the Gauteng ANC for its yearly lekgotla at the company‘s ―ecofriendly‖ headquarters in Krugersdorp, West Rand, early last year. Bosasa brags about giving the venue to the ANC and printing party banners with Bosasa‘s branding on it – at only three days‘ notice. Company spokesperson Papa Leshabane was vague when asked why Bosasa hosted the ANC, what the costs of the event were and which other organisations it had helped in similar ways.

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―Bosasa, as a responsible corporate citizen, sponsors and hosts a myriad organisations?.?.?.?(including) political, religious and welfare organisations, as well as schools and tertiary institutions. ―As a private group of companies, we owe no obligation to the (media) to comment on our dealings with such organisations,‖ Leshabane said. ANC Gauteng spokesperson Nkenke Kekana responded: ―Any issues related to donations and support from companies and private individuals are in-house matters. We won‘t be able to have a discussion about any matter relating to our lekgotla, but the lekgotla did happen.‖ In the newsletter, Bosasa said it hosted the party‘s lekgotla in January 2011 ―as a contribution to nation- building‖. On the front page of the same newsletter, the company announced that it got 38% of ―a major security tender‖ from the justice department to safeguard courts. This amounted to R391 million. Lawson Naidoo, spokesperson of the Council for the Advancement of the South African Constitution, said the relationship between the ANC and Bosasa was a cause for concern. He said: ―This once again demonstrates the need for an independent anti-corruption agency. The allegations against Bosasa have been hanging around for a couple of years now, and the investigation seems to have stalled.‖ Naidoo also said there should be full disclosure of party political funding or support, ―especially when it involves a company that has been implicated in corruption‖. Last week, Parliament‘s portfolio committee on correctional services laid down the law to prisons boss Tom Moyane, saying there would be no more outsourcing of catering services after Bosasa‘s latest contract ended at the end of next January. This comes after Bosasa‘s tender to provide food to prisoners lapsed last month, and prison staff themselves weren‘t ready to take over catering, as announced by MapisaNqakula last year. Moyane extended Bosasa‘s contract for another year.

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4 March 2012 Sunday Times Page 1 S'thembiso Msomi

A role model Malema should have heeded
Militant youths were firing shots in the air from all directions, putting the lives of thousands of mourners at risk. Marshalls and local leaders tried in vain to persuade the gun-toting youngsters to stop. Senior ANC leaders needed to intervene fast if they were to prevent the mass funeral of the 30 people killed during an attack on Tembisa township by Inkatha Freedom Party vigilantes from ending in another bloody tragedy. And no leader was better suited to this role than Peter Mokaba, the then president of the ANC Youth League. His fondness for militant rhetoric, at a time when most ANC leaders were talking peace with the apartheid government, made Mokaba highly popular among radical youths. Tembisa was no exception, and there was no doubt among ANC leaders at the funeral that Mokaba needed only to utter a few words for the anarchy to stop. But, then, typical of Mokaba in front of a large crowd, he got carried away. "Comrades", he shouted, "don't waste your bullets. Direct them against De Klerk!" It worked. The guns fell silent and were replaced with loud cheers from the crowd. But the other leaders cringed, fearful of the political storm that was to follow. It was late 1993, and the then ANC president, Nelson Mandela, was leading delicate negotiations with the then state president and National Party leader, FW de Klerk, for a nonracial and democratic South Africa. And now one of the most influential personalities in Mandela's party was encouraging impressionable youths to "direct" their bullets against his negotiating partner? Mandela was furious and demanded action against Mokaba. Although Mokaba remained defiant in public, steadfastly defending his controversial remarks, those who worked closely with him in the youth league said he was so fearful of Mandela's retaliation that he actually stayed away from Shell House, the ANC headquarters, for a number of days. But Mandela persisted in his demand that action be taken, and the man current youth league president Julius Malema fashions his leadership style on went out of his way to avoid being hauled before the ANC's disciplinary committee.

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He sent a group of senior youth league leaders to negotiate a deal with the ANC that would make Mandela happy while saving Mokaba's standing in the eyes of his radical supporters. Mokaba eventually apologised to the ANC leader, and a joint statement by the ANC and the youth league was issued. Herein lies the major difference between Mokaba and Malema, the firebrand youth league leader who is now facing expulsion from the ruling party. While both shot to national prominence through recklessly militant statements and statements, Mokaba often knew where to draw the line and avoid being kicked out of the ANC. Popular as he was among township and rural youths, Mokaba - a former Robben Island prisoner - always knew that, without the party backing, his popularity would evaporate. Malema, on the other hand, seems to have believed himself to be invincible - taunting President Jacob Zuma and other ANC leaders even when it was clear to everyone that they had become so irritated with him that they were looking for any excuse to suspend or expel him from the party. Malema has so far kept mum about his next move following the ANC national disciplinary committee's decision to expel him from the party and strip him of his youth league title this week. Although the youth league's next step will be decided at a special national executive committee meeting this afternoon, it is safe to expect that he will be appealing against the sentence. But even if the Cyril Ramaphosa-led ANC national disciplinary committee of appeal strikes down the expulsion sentence, Malema looks set to be suspended from the ANC for a lengthy period. Yet, had he closely followed how Mokaba and other past youth league rabble-rousers carefully played the populist game, Malema would not be in the kind of trouble in which he now finds himself. At its national conference in 2004, the youth league took a controversial decision to support Zuma, who was then the ANC's deputy president, as a successor to then party president Thabo Mbeki. The decision was controversial not only because corruption allegations were being levelled against Zuma, but also because Mbeki had not stated that he would be standing down at the next conference. Instead of publicly announcing the decision, Fikile Mbalula and Sihle Zikalala - who had been elected president and secretary-general, respectively, at the 2004 conference

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- paid a courtesy visit to Mbeki's office at Luthuli House, where they told him of the league's plans. Mbeki was obviously not happy with the decision, but could not accuse the league's leaders of ill-discipline, because they didn't publicly announce their decision before first privately informing him. Malema abandoned this approach and publicly pronounced on a number of youth league decisions that were in conflict with ANC policy. He probably thought no action would be taken against him. After all, the postPolokwane ANC leadership had shown little appetite for maintaining the type of discipline demanded by Mandela in the 1990s. His greatest miscalculation was to undermine Zuma's determination to secure a second term as party leader. To do so, Zuma knew that strong action would have to be taken against the one man who had come to epitomise the anarchy that has characterised the party since he took office in 2007. 4 March 2012 Sunday Times Page 4 Mondli Makhanya

Power grab is thinly veiled by these soothing words
Make no mistake about the government's intentions towards judicial authority IF Justice Minister Jeff Radebe had his way, we would all believe that the government's proposed review of the judiciary was informed by a noble desire for judicial reform and not by a need to curtail the powers of the courts. "The independence of the judiciary is not at stake," Radebe said this week as he unveiled a discussion document on the subject. If Radebe's deputy, Andries Nel, had his way, we would accept that this process is a way of strengthening the judiciary. If Science and Technology Minister Naledi Pandor had her way, we would believe that President Jacob Zuma was misunderstood when he made troubling anti-judiciary comments a few weeks ago. Pandor essentially told parliament that Zuma did not mean what he said when he said what he said. "He [Zuma] stated that the intention of [the] government is to review decisions that are germane to the executive and its exercise of power in terms of national and other

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legislation that has been [the] subject of rulings by the Constitutional Court," the usually logical Pandor said in defence of the indefensible. If Presidency spokesman Mac Maharaj had his way, we would buy Pandor's argument and pretend we had misheard the president. This was Maharaj's attempted damage-control spin: "The [judicial review] is with a view to assess the transformative nature of jurisprudence from the highest court in the land in promoting an equal, nonracial, nonsexist and prosperous society. "This must therefore not be viewed as an attempt by [the] government to undermine the independence of the judiciary and the rule of law which are entrenched in our constitution." For the record, Zuma told Independent Newspapers that the government wanted to review the Constitutional Court's powers. "We don't want to review the Constitutional Court, we want to review its powers," he said, before mouthing some gobbledygook which exposed an embarrassing lack of understanding of the functioning of the courts. If all the aforementioned individuals had their way, we would also ignore the comments of senior ANC leaders, including secretary-general Gwede Mantashe and national executive committee member Ngoako Ramathlodi, to the effect that the nation's judges are too big for their boots. Unfortunately for them, South Africans are not imbeciles. Most of the 50 million citizens (plus the five million Zimbabweans in our midst) have substantial brain matter inside their skulls. Radebe went to great lengths this week to stress that the 18-month exercise was innocent and for the good of us all. On the surface, some of the outcomes sought are not controversial. They include the strengthening of the Judicial Service Commission and Magistrates' Commission, improving the skills of judicial officers, and creating ways for the state to monitor the execution of court decisions. Another is to achieve greater dialogue between the judiciary, parliament and the executive on each arm's role in transforming society. But there are disturbing questions that Radebe and his colleagues cannot answer. Why is there a need to review judgments of the Constitutional Court in the first place? Is it pure coincidence that this review follows hot on the heels of judgments which have gone against the government? Why is this review coming at a time when the government has voiced its displeasure at the courts as a result of these unfavourable judgements? Are we to turn a blind eye to the fact that it follows open hostility towards the courts by the governing party? Are we to read nothing into the fact that there is growing antipathy towards the constitution in senior ANC ranks, with some even falsely arguing that this noble document was the fruit of compromise with the evil Nats?

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These questions may sound somewhat conspiratorial, and Radebe and Co will probably be acting puzzled as to why they cannot be taken at their word. They are, after all, men and women of integrity who have taken a public oath of allegiance to the constitution. Well, I think we would all dearly like to take them at their word. But it is no secret that the sentiment in the ANC right now is that there is too much power in the hands of judges, who party apparatchiks describe as unelected individuals. Powerful people in the party believe that, because it has an electoral mandate to govern, it should not be interfered with by pesky judges when it misgoverns or crafts bad laws. So we should not be lulled into complacency by comforting talk from Radebe et al. There is a power grab at play here. Now that the government is proceeding with the review, it will be up to the citizenry to make sure that those who want to undermine our constitutional democracy do not succeed. It will be up to the public to loudly demonstrate to our governors that we are not the imbeciles they take us for.

5 March 2012 Business Day Page 1 Setumo Stone

League treasurer survives censure
African National Congress (ANC) Youth League treasurer Pule Mabe survived a motion of no confidence at the weekend, as the league sought to consolidate its power following the expulsion of its leader, Julius Malema. Mr Mabe apologised and the motion, proposed by the league‘s national working committee on Saturday, was then withdrawn. Reasons for the motion include that he was "acting outside of the collective" and "misbehaving". The working committee also rejected a special general council to elect a new leadership. An emergency meeting was also held yesterday to plot a strategy to deal with the fallout from Mr Malema‘s expulsion. Mr Mabe is understood to have been secretly lobbying to take over Mr Malema‘s position, in defiance of the organisation‘s position on the succession issue. Mr Mabe has repeatedly denied any interest in succeeding Mr Malema.

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According to the league‘s constitution, its deputy president, Ronald Lamola, should take over the reins once the decision to expel Mr Malema is confirmed. While concern has been raised by Mr Malema‘s allies in the ANC that expulsion seemed too harsh, the abandoned move to oust Mr Mabe is likely to damp any public sympathy for Mr Malema. News of the proposed action against Mr Mabe drew mixed reactions on social networking sites yesterday. Political analyst Ralph Mathekga said it was expected that the youth league, in its efforts to consolidate its unity, would swiftly move to curtail any potential voice of "disruption" from inside. However, this could backfire by reinforcing perceptions of a leadership crisis within the organisation. The outcome of the emergency meeting is expected to be announced today.

5 March 2012 The Times Page 4 Chandré Prince

Cele hires top lawyer for inquiry
One of the country's top legal minds will represent suspended national police commissioner Bheki Cele when the inquiry into his involvement in the controversial R1.6-billion police lease deal starts today. A-list advocate Vincent Maleka SC will deliver the opening statement on why Cele should be cleared of negative findings of maladministration and unlawful conduct. Maleka - who has acted for several high-profile personalities and defended nowexpelled ANC Youth League president Julius Malema in his dubul' ibhunuEquality Court case - will, however, square up against another legal hotshot, advocate Viwe Notshe SC, who will lead evidence for the state. The board of inquiry is headed by Judge Jake Moloi, who will be assisted by advocates Terry Motau and Anthea Platt. The board was established after President Jacob Zuma came under tremendous pressure to act against Cele following Public Protector Thuli Madonsela's findings that Cele and former public works minister Gwen Mahlangu-Nkabinde had acted improperly and unlawfully when they tried to lease - at highly inflated rentals buildings owned by politically connected property mogul Roux Shabangu. MahlanguNkabinde was subsequently fired. The buildings were to have accommodated the police's national headquarters in Pretoria and KwaZulu-Natal provincial headquarters in Pietermaritzburg.

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Madonsela found that the lease deals were illegal and invalid and urged Zuma to act against both Cele and Mahlangu-Nkabinde. The board has invited the public to make submissions, but spokesman Bongiwe Gambu said she was not sure of the total number of submissions made so far. The board has been mandated to inquire whether Cele: ■Acted corruptly or dishonestly or with an undeclared conflict of interest in relation to the two leases; ■Contravened provisions of the Public Financial Management Act and Treasury regulations leading up to the conclusion of the leases; ■Failed to prevent irregular expenditure incurred in relation to both leases; and ■Failed to prevent any financial losses or wasted expenditure to be incurred by the state. DA police spokesman Dianne Kohler Barnard said her presentation would include Cele's apparent lack of understanding of the Public Finance Management Act, the increase in deaths at the hands of the police during his tenure, and the militarisation of the police. 5 March 2012 The Times Page 4 Canaan Mdletshe

ANC could lose power – Mchunu
The ANC in KwaZulu-Natal is concerned that the party could collapse if factionalism, ill-discipline, power-mongering and the use of money to swing votes are not urgently dealt with. Speaking during the ninth elective Ukhuhlamba regional conference in Ladysmith yesterday, provincial deputy chairman Willies Mchunu said new tendencies "creeping" into the party would bring instability and destroy the organisation if ignored. "There are regions where comrades find it difficult to even talk to one another. This is a danger to the ANC," said Mchunu. "It will lead to an undesirable situation of instability . Any organisation that is unstable [could] l ose power. Our conduct must be [ consistent with] the noble objectives of the ANC, which are to unite the people of South Africa. But it has to start by unity among ourselves as comrades, " Mchunu said. "Discipline is crucial. In the ANC we are revolutionaries and we are guided by iron discipline. Once we lose discipline, we create chaos and a state of anarchy. Once you create a state of anarchy, you destroy the ANC."

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He said it appeared as though some members did not understand why they had joined the party. "It seems it's now about material things . about what's in there for me. Yearning for power is now the order of the day," he said. Mchunu warned that the party's Mangaung national elective conference could have "far-reaching consequences" and called on members to avoid the situation that prevailed at the 2007 elective conference in Polokwane, when the party emerged more divided. "We emerged with discontent and we must guard against this because it will kill the ANC." The newly elected Ukhahlamba regional leaders are Bongani Dlamini (chairman), Winnie Zondi (deputy chairman), Maphitha Sithole (secretary), Sipho Hlomuka (deputy secretary) and Tony Sgubudu (treasurer).

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