Government and the civil service are constantly engaged in weighing up competing national, constituent-based, political and personal interests. A conflict of interest emerges when competing professional, personal or financial interests mean that a person cannot do justice to the actual or potentially adverse interests of the competing parties. For example, when a public official's personal interests are contrary to his or her duties to the public, or work in the interests of the public, there is a risk that that public official cannot represent the public fairly. Managing these potential conflicts of interest in the public sphere is very complicated but public representatives and government officials are obligated to do so.

 

 

 

Codes of conduct are designed to ensure that public officials manage these interests in an open, accountable and efficient manner. Failure to regulate conflicts of interest can have far-reaching implications for good governance and public trust in government institutions. One of the “successes” claimed by the South African government’s “Towards Ten Years of Freedom” review is the implementation of a host of anti-corruption legislation and the establishment of a Code of Conduct for the Public Service.

 

 

 

 

Government has in the past ten years passed panoply of legislation pertaining to corruption and potential conflicts of interest in government and the public service. However serious gaps remain in the implementation of such legislation. Moreover, the vexed issue of post-employment regulation of senior government officials and public servants remains largely unaddressed.

 

 

 

 

Since 1994 a number of codes of conduct have been introduced to prevent conflicts of interest, and to guide the behaviour of senior public officials where such incidents occur. The defining characteristic of these codes of conduct is the principle of disclosure and the concomitant act of recusal wherein the officials concerned disqualify themselves from discussing, voting on or acting on the relevant matter.

 

 

 

 

The logic of disclosure, and recusal, is that a public admission of a conflict of interest prevents a public official from placing himself or herself in a position that could compromise their work, even if the official would not have taken advantage of the conflict. Recusal ensures the internal integrity of the administration of government, fosters public trust in government and protects officials from allegations of misconduct.

 

 

 

 

In 1995 parliament established an Ethics Sub-Committee to serve the Rules Committee in its quest for a suitable code of conduct for Members of Parliament and the work of the institution. The Ethics Sub-Committee established a code of conduct – the National Parliamentary Code – that became law in 1997. This code, which has been replicated in its entirety in the executive, provincial and local spheres of government, requires MPs to declare their private financial interests annually to the Registrar of Members’ Interests.

 

 

 

 

In 1998 the Executive Members Ethics Act no. 82 was passed to “provide for a code of ethics governing the conduct of Members of the Cabinet, Deputy Ministers and Members of Provincial Executive Councils; and to provide for matters connected therewith”. The Act required that the president must, after consultation with parliament, by proclamation in the Government Gazette, publish a code of ethics prescribing standards and rules aimed at promoting open, democratic and accountable government and with which cabinet members, deputy ministers and Members of Executive Councils (provincial MECs) must comply in performing their official responsibilities.

 

The Code of Executive Ethics is meant to make provisions for specific standards of conduct that Ministers and MECs have to adhere to in carrying out their official tasks. Accordingly, in 2000 after consultation with parliament the Executive Ethics Code was published in terms of section 2(1) of the Executive Members Ethics Act, 1998.

 

 

 

 

The Executive Members Ethics Act of 1998 and the pursuant Code of Ethics requires cabinet ministers and deputy ministers to disclose to an official in the office of the president designated for this purpose, and MECs to disclose to an official in the office of the premier, all their financial interests when assuming office. These financial interests include their personal interests; the financial interests of their spouses, permanent companions and/or dependent children; and any financial interests acquired after the assumption of office, including gifts, sponsored foreign travel, pensions, hospitality and other material benefits received by them or by anyone in their family or anyone who may have a relationship with them as may be determined in the Code. The Code of Ethics of 2000 also requires ministers and MECs to declare any personal or private financial or business interest in a matter before the cabinet, executive council or a cabinet committee on which the member serves or in relation to which the member is required to take a decision as an MEC or minister. Furthermore, members are required in terms of the Code to recuse themselves from the proceedings of any cabinet committee or executive council considering a matter in which the member has any personal or private financial or business interest, unless the president or premier decides that the member’s interest is trivial or not relevant.  

 

 

 

 

The prevention of conflicts of interest regulations also extends to senior members of management in the public service. Chapter 3 of the Public Service Regulations requires members of the senior management service (from director level upwards) to annually declare their financial interests to the office of the Public Service Commission. These regulations mirror the National Parliamentary Code.

 

 

 

 

In the local sphere of government, section 7(1) of schedule 5 of the Municipal Structures Act of 1998 provides that within 60 days of being elected or appointed, a councillor must declare in writing to the municipal manager his or her listed financial interests as well as gifts above a prescribed amount. Section 5(1) (a) requires that councillors disclose to the municipal council, or to any committee of which that councillor is a member, any direct or indirect personal or private business interest that councillor, or any spouse, partner or business associate of that councilor, may have in any matter before the council or the committee.

 

 

 

 

The rationale behind these disclosure requirements is that on an annual basis public officials have an opportunity to reflect on their activities to identify any potential or actual conflicts of interest and recuse themselves if necessary.

 

 

 

 

Effective application of these regulations enables the official responsible for monitoring members’ interests to prevent, address and resolve imminent conflict of interest situations. An important element in this is transactional disclosure. This type of disclosure relates to a transaction that a public servant may be involved in, usually at the time of a conflict of interest. It reveals the name of the government official and the nature of the potential conflict of interest that the transaction or business has given rise to. It is usually followed by a recusal.

 

 

 

 

The South African framework of codes of conduct provides for both annual and transactional disclosures. Although the implementation of annual disclosure is well established, little is known about the application of transactional disclosure. This is mainly because executive meetings are not open to the public. In addition, implementation of the code of conduct, in particular the declaration of interests, in the local sphere of government has never been tested.

 

 

 

 

 

In 2003 IDASA initiated groundbreaking research on compliance and the implementation of the codes of conduct outlined above in national and provincial government. Ethics in Post-Apartheid South Africa highlighted a number of challenges and weakness. Although this report reliably established the state of implementation in the national and provincial spheres of government it did not shed light on the local sphere. IDASA is currently pursuing a follow up study in this regard. The research report showed that in the national sphere the codes of conduct have been implemented well, although implementation still faces a number of challenges. In the provincial sphere, while some provinces are outstanding, others are lagging behind in complying with the code.

 

 

There are currently two contested areas on ethics in South Africa. These are business ventures between government departments and the immediate families of executive members, and post-employment restrictions.

 

 

 

 

 

Concerns have recently been raised about the spouses of ministers and MECs doing business with government departments. When relatives of ministers win contracts from government departments it raises the suspicion of irregularities. However, does this mean that these ministers are inherently corrupt? Do they always look after their own interests instead of the people they represent? 

 

 

 

 

Some argue that spouses of government ministers should not be allowed to do business with government because members of the executive have a relationship with each other and have the power to influence the allocation of public resources. Furthermore spouses of ministers are said to be connected to the executive through their familial relationships. The Ministerial Handbook asserts that awarding a contract to a spouse is only considered a conflict of interest when the husband or wife is in charge of the relevant department, but some assert that awarding state contracts to spouses reflects badly on the department concerned and inevitably raises questions about the conduct of the relevant official. Proponents of this view call for a rule excluding the immediate family of government ministers from bidding for contracts with government departments.

 

 

 

 

In opposition it is argued that spouses of members of cabinet and MECs, like any other citizens, are entitled to the full and equal enjoyment of the rights and freedoms in the bill of rights, including the right to freely choose their trade, occupation or profession. Spouses are said to be first and foremost citizens before they are wives or husbands. To deny them opportunities to do business with government, it would follow, would violate their constitutional rights. 

 

 

 

 

An extension of this argument relies on the proper application of procurement processes. Proponents would argue that if government departments follow the proper procedures of procurement – the declaration of interests where necessary and recusal in the event of a potential or actual conflict of interest – then contracts won by spouses of officials will be above board. This also implies that prevention of conflicts of interest is not limited to the immediate families of government ministers but also extends to business partners, partner organisations and so on.

 

 

 

 

It is true that business relations between immediate families of public officials and government departments raise ethical questions. However many of these questions are about perceived conflicts of interest which may not necessarily be genuine. Often this perception is based on the assumption that politicians are inherently corrupt and always advance their own interests. This assumption is not necessarily correct. For this reason the purpose of conflict of interest regulations lies not so much in stopping and punishing corrupt public officials but rather in promoting the reality and the perception of integrity in government by preventing unethical conduct before it occurs. Excluding immediate family members of government ministers and MECs from doing business with government would not be consistent with this spirit. However government has to ensure that proper procedures are adhered to when contracts are awarded to members of the public.

 

 

 

 

It is also important to note that implementation of ethics regulations needs to be improved. The study conducted by IDASA on the implementation of ethics laws in post-apartheid South Africa found that implementation was a serious challenge. In some instances the required annual disclosures were not submitted to the relevant offices. This means that public officials should ensure that they comply with the regulations by submitting their declaration of interest forms in time. Furthermore the effectiveness of the declaration of interests laws and regulations depends heavily on oversight and monitoring. More often than not implementing agencies do not have the necessary capacity to monitor and review records filed with them. For instance, the IDASA report noted that in the office of the Public Service Commission there were only two employees responsible for processing more than 3 000 declaration of interests submissions. Lack of capacity in the implementing agencies could mean that they are unable to identify any potential or actual conflicts of interest. In addition, the conflict of interest’s codes do not make provisions for review mechanisms. Effectively submitted disclosures are not checked against activities of the official in question. This also limits opportunities for identifying conflict of interest. 

 

 

The IDASA report noted that the media and civil society organisations have an important role to play in this regard as the only institutions that can help implementing agencies identify any conflicts of interest. 

 

 

 

 

The second lacuna in South Africa’s ethics laws is post-employment restrictions. These have been defined as restrictions imposed upon people who leave, retire from or resign from public office. They are designed to ensure that former public office holders derive no unfair advantage for themselves or others from:

 

 

* the confidential information to which they had access while holding public office;

* their former association with government; and

* using their current positions to secure future personal advantage.

 

 

 

 

They are not designed to deny those in government or other public office

the right to earn a living once they have left government. The South African Parliamentary Code, the Executive Ethics Act of 1998 and other related ethics codes were created to protect the integrity of public office. The aim is to ensure that people trust and have confidence in those in public office. It has been argued that where regulations do not exist to guide the behaviour of public officials it is easier for them to be corrupted or to act unethically.

 

At present there are no post-employment restrictions that apply to ministers or senior government officials to ease the move through the “revolving door” from government to business. This “revolving door” scenario has been criticised because many politicians around the world have taken up positions in companies with which they had dealings or contacts when they were in government.

 

 

 

 

Although South Africa has a sophisticated set of regulations and codes guiding the behavior of public officials, it has yet to introduce restrictions on the activities of officials after leaving office. The Joint Investigative Team (JIT) report into allegations of corruption in the Strategic Defence Procurement Package (“arms deal”) made important but often-overlooked recommendations in November 2001 on post-employment restrictions. In its report, the JIT recommended that: “Parliament should take urgent steps to ensure that high ranking officials and office bearers, such as Ministers and Deputy Ministers, are not allowed to be involved, whether personally or as part of private enterprise, for a reasonable period of time after they leave public office, in contracts that are concluded with the state”. Parliament’s Ethics Committee has yet to consider this recommendation. 

 

 

 

 

It is imperative that such measures are in place to ensure that conflicts of interest are avoided when public officials leave office, thereby ensuring that the gains accrued through the current codes are not undermined by the conduct of former public officials. The case for post-employment restrictions should therefore be seen as an effort to consolidate the broader codes of conduct and ethics laws currently in operation.

 

 

 

There are several options one could follow when adopting post-employment restrictions. The type of restrictions adopted in South Africa would very much depend on the socio-political environment and what is practically possible.

 

 

 

There is no doubt that South Africa, while drawing from comparative examples, should rely on its own experience when thinking of legislating in this area. Many believe that post-employment restrictions should only apply to members of the executive with an option of extending them to certain key figures in parliament (for example chairpersons of certain committees). The proposal to exclude ordinary MPs from post-employment restrictions is premised on the fact that the nature of their work does not give them similar powers and control as ministers have. For instance, ministers may be involved in deciding who receives tenders in their departments, but MPs do not necessarily engage in these kinds of exercises. In Nigeria for example post-employment restrictions are not applicable to members of the legislature.

 

 

 

One of the key challenges when drafting post-employment restrictions is finding a way of drafting a reasonable and implementable set of regulations. The tricky part of this is deciding on the period of restriction. The US provides a valuable lesson by setting different restrictions depending on the nature of the work and the rank of the public official. A common period for restriction is two years, which is considered long enough to render confidential information acquired during tenure irrelevant and out-dated.

 

 

 

Post-employment restrictions are applied in other democracies in different ways. For instance, Canada has some form of restrictions prohibiting former public officials from taking up employment in the private sector while in the US specified activities are restricted. In France, members of the national assembly may accept outside employment after leaving office, provided they do not hold any position in any corporation that is either government-subsidised or primarily undertakes local or foreign government contracts. In Mexico the law prohibits members from accepting or applying for employment in private sectors related to their service in government for one year.

 

 

 

It is expected that parliament will soon attempt to address this issue. The chairperson of the Parliamentary Ethics Committee is on record as welcoming the debate. In addition, Joel Netshitenze has recently stated that government is applying its mind to the introduction of post-employment restrictions. By doing so, it will contribute meaningfully to the mosaic of transparent, accountable and responsive governance in South Africa.