Passing of Business Interests of Employees Bill in the Western Cape Marks a Watershed in Curbing Corruption in the Public Service

Today, I signed into law the Business Interests of Employees Bill recently passed by the Western Cape Provincial legislature. This marks a watershed for rooting out corruption and cronyism in the public service. The Bill has been signed into law a day before International Anti-Corruption Day.

Corruption in the public service has reached alarming levels in recent years. This crisis is highlighted by the Public Service Commission's (PSC) 2010 State of the Public Service Report which found that:

• 1204 financial misconduct cases committed in departments were reported to the PSC during 2008/2009 - the highest number to be reported over the last 7 years
• 1430 complaints of corruption were reported through the PSC's National Anti-Corruption Hotline and referred to departments in 2009/2010 - the feedback rate on these cases was only 10% across national and provincial departments. (the Western Cape government led all provinces with a feedback rate of 72%).

A PSC report released last month on the Financial Disclosure Framework for 2009/2010 found that:


• Only 46% of senior managers in national and provincial departments submitted their financial disclosure forms to the PSC by 31 May 2010 - the submission due date (the Western Cape government achieved a 100% compliance rate, the first time a province has achieved this by the due date)

One of the key drivers of corruption is the absence of restrictions on state employees doing business with the state. State employees with a financial interest in companies that tender for goods and services have a clear conflict of interest, yet this has never been regulated.

The Business Interests of Employees Bill is designed to do just that by:

1. Provincial government employees and their families will be prohibited from directly or indirectly holding more than 5% of shares, stock, membership or other interests in an entity that does business with the provincial government, unless approval is given by the relevant Minister in accordance with certain criteria set out in the Bill.
2. Before the provincial government enters into any contract with an entity for the sale, lease or supply of goods and services, the entity must provide an affidavit disclosing whether or not it is owned or part-owned by employees of the Western Cape government
3. All provincial government employees will be required to disclose their business interests at prescribed intervals, in the same way that members of Cabinet already do so

Now that the Bill has been signed into law, the Director-General will compile and maintain a database of all employees' business interests disclosed in terms of the legislation. All provincial government employees will be given three months to disclose. If employees fail to disclose their business interests, disciplinary action will be initiated against them.

It is fitting that this Bill is being signed into law the day before International Anti-Corruption Day. The United Nations Convention, in the October 31, 2003, signed a resolution declaring the 9th of December each year as the international anti-corruption day.

On this day all signatories to the resolution, including South Africa, are encouraged to actively campaign against corruption, to take responsibility for rooting out corruption and to implement a plan of action in this regard.

The Business Interests of Employees Bill is part of the Western Cape provincial government's plan of action to curb corruption and cronyism in the public service.