PRESENTATION TO PARLIAMENT BY THE PUBLIC PROTECTOR, ADV SAM BAQWA SC, ON THE PUBLIC PHASE OF THE JOINT INVESTIGATION INTO THE STRATEGIC DEFENCE PROCUREMENT PACKAGE

15 November 2001

The Public Protector

Madam Speaker,
Mr President,
Honourable Members of Parliament

Due to the considerable interest in the joint investigation, it was decided that it would be in the public interest that a part of it be conducted in public.

The reasoning behind this decision was as follows:

* Openness and accountability are principles which not only underpin our constitutional democracy, but also require that matters of national interest be dealt with in a manner that is accessible and comprehensible to the citizens of South Africa and every interested person or institution. However, not every part of the investigation could be bared to public scrutiny because the format of a forensic investigation does not allow for public insight and participation. On the other hand, the Public Protector Act, 1994, makes provision for investigations to be conducted in public where it is deemed appropriate to do so.

* We were further of the view that it was in the interest of the public to be informed of what the acquisition process under investigation was about. Arms procurement is rarely exposed to public view and since there were suggestions of institutional irresponsibility and/or individual mischief, it was necessary for Mr and Mrs Public to know, not only the origin of the Strategic Defence Packages, but also why the procurement was necessary, what was procured, at what cost it was procured and what its effect on the country was going to be.

* Total secrecy or investigation behind closed doors could only exacerbate the atmosphere of distrust and pervasive suspicion which existed at the beginning of this investigation.

* There is an international tendency towards greater transparency, to the extent practicable, in conventional arms deals. This tendency has led to the establishment of the United Nations Arms Register.

* An outcome of an investigation which would be totally closed to public scrutiny would be less credible.

As different parts of the joint investigation involved many of the same role players and key issues, considerable care was taken to ensure that one part of the investigation did not have a negative impact on any of the other parts. Particular care was taken to ensure that neither the forensic investigation nor possible prosecution would be prejudiced by the public investigation. Caution therefore dictated that the selection of issues to be addressed and witnesses to be called during the public phase be carefully managed.

In order to limit overlaps and possible interference in the other parts of the investigation, it was decided to divide the public phase of the investigation into two stages. The first stage was referred to as the "scene setting stage" and comprised testimony in respect of the requirements of the SANDF and the process and procedure of acquisition. This part of the public phase of the investigation is referred to throughout the report, but is discussed in the main in Chapter 3.

The second stage was referred to as the "specific complaints stage" and it included the evidence of a tenderer who complained of certain alleged improprieties in the acquisition process that caused his company not to be selected from obtaining a specific contract. This part of the public phase of the investigation is dealt with in Chapter 11 of the report.

Some negative comments have been made about the questioning of witnesses during the hearings. There appeared to have been a perception that the questions posed amounted to cross examination similar to what is found in a criminal trial and that some witnesses were treated differently from others in this regard. These perceptions were, however, clearly based on ignorance about the process of a public investigation conducted in terms of the Public Protector Act. The Act provides for questions to clarify matters and not typical cross-examination. Furthermore, the number and length of questions were mostly determined by the legal representatives of the different parties affected by the investigation. So, for example were Dr Young of C2I2 exposed to many questions to clarify his detailed and technical evidence, whilst only a few questions were put to the Minister of Defence, clearly because he became involved in the procurement process at a very late stage.

I was, very ably, assisted during the public phase of the investigation by Dr S Ramaite, Director of Public Prosecutions and Mr H van Zyl, Executive Manager of the Office of the Auditor-General.

During the hearings the following aspects of the procurement process were, inter alia, clarified:

* The procurement process began with the Defence White Paper presented to Parliament by the former Minister of Defence in May 1996.It received strong support from all the political parties and was approved by Parliament. The process was taken further through the Defence Review, which involved the widest consultation process regarding arms procurement in the Republic and which was accepted by Parliament in April 1998.

* Consensus was established to transform the SANDF into a leaner and meaner Defence Force, taking into consideration not only the security requirements of the Republic of South Africa, but also the regional security arrangements and peace keeping obligations.

* The actual procurement amounted to the acquisition of less arms than were agreed to in the Defence Review Process.

* South Africa's defence expenditure dropped under the democratic government from more than 4% of the national budget to just under 1.5%. This is on par with international norms.

* There was a conflict of interest with regard to the position held and the role played by the Chief of Acquisitions of the Department of Defence, Mr S Shaik, by virtue of his brother's interests in the Thomson Group and ADS, which he held through Nkobi Holdings.

* The imposition of a risk premium on the IMS of C2I2, the company owned by Dr Young, was not unreasonable. The selection of the Detexis Databus System in preference to the IMS of C2I2 was not unfair, when one takes into account all the circumstances of the selection process.

On the day of the commencement of the public phase of the investigation, the SABC and Midi TV lodged applications for the direct and/or delayed broadcasting of the proceedings. Counsel for both institutions submitted extensive arguments in this regard. In the subsequent ruling made by the Panel, the applications were denied. However, still photography and videotaping were allowed until the proceedings started and journalists were allowed to be present during the proceedings to take notes. We were accused by the media, and certain individuals of limiting the right to freedom of expression by refusing live broadcast of the proceedings. The SABC and Midi TV even went to the extent of applying to the High Court (Transvaal Provincial Division) to have the above ruling reviewed. A full bench of the High Court dismissed the application, finding that the limitation by the ruling of the right of freedom of expression could not be held to be unjustifiable under the circumstances.

The public phase of the investigation was widely publicised, both in the print and electronic media and I submit, with respect, that it was not only an essential component of the joint investigation, but also served to demonstrate that openness and accountability do not bend or become flexible when they reach the doors of some high placed individuals or institutions. These principles were upheld even with regard to matters which would have ordinarily been proscribed by the Defence Act.

Issued by: The Public Protector, 15 November 2001