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Oilgate: AG confirms billions are missing. Why no action from Hawks, NPA?

Sipho Pityana received a lengthy standing ovation after “The Speech” at the Joburg Mining Indaba where he called for the impeachment of President Jacob Zuma who he says is at the centre of a web of plundering of State resources – calling him South African corruption’s “sponsor-in-chief”. In this superb summation of the facts, retired Supreme Court judge Rex van Schalkwyk explains why Zuma – and his crony capitalist cronies the Guptas – are able to ignore laws that apply to the rest of society. Just as happened in Brazil, when it comes to the politically influential, the dobermans which should be pouncing on miscreants have been replaced by spaniels. Instead of baring their teeth, the NPA and Hawks compete in a tail wagging contest to please their perceived masters. Van Schalkwyk uses Oilgate as an obvious example: even after the Auditor General reported billions went missing in the unsanctioned sale of SA’s Strategic Fuel Reserves, there’s not even a whiff of an investigation from those charged to do just that. But as the Brazilian example showed us, the bigger they are, the harder the corrupt tend to fall. Witness jail-bound former President Lula and his protege Dilma. – Alec Hogg

By Rex van Schalkwyk*

The National Prosecuting Authority (N.P.A.) has a duty, both at common law and under the constitution, to perform its obligations without fear, favour or prejudice. This means that no individual or institution should be feared or favoured by any decision taken by the prosecutorial authority to institute or desist from a prosecution. Such prejudice as will inevitably be suffered as a result of a legitimate prosecution, must pass the test of lawfulness. The National Director of Public Prosecutions has the ultimate oversight authority to ensure that these duties are fulfilled.

Former Supreme Court of South Africa judge Rex van Schalkwyk
Former Supreme Court of South Africa judge Rex van Schalkwyk

The Hawks (the Directorate of Priority Crimes), (unlike the Scorpions, which was replaced for overtly political reasons), is not assured against political interference. Like its predecessor, it has a mandate to urgently investigate what is referred to as “priority crimes”, which includes cases of corruption, especially those emanating from high office.

There has been litigation, undertaken principally by the Helen Suzman Foundation, intended to ensure that the independence of the Hawks replicates that previously assured for the Scorpions. The Hawks, like every public institution in South Africa, is however subject to the rule of law, and is bound to act accordingly.

As the primary law enforcement agencies, the N.P.A and the Hawks must at all times act with the utmost integrity.

The first principle of the rule of law is that every individual and institution, subject to the law, must be equally subjected to the same law.

The Hawks has, for several months, and with much publicity, been pursuing a possible prosecution on as yet unspecified charges, against Finance Minister Pravin Gordhan. He has been instructed to attend the premises of the Hawks, to provide what has been called a warning statement. This investigation is said to relate to certain alleged offences committed whilst he was previously the Commissioner of the South African Revenue Service. He chose to ignore the instruction, whilst giving the assurance that he would, through his attorneys, co-operate with the investigation.

Picture courtesy of Twitter @eNCA
Picture courtesy of Twitter @eNCA

Although unclear, the matter appears to relate to two unconnected events: the approval of an early retirement and subsequent re-hiring of a deputy commissioner, and the establishment of what has been referred to as a “rogue unit” within the organization. There may or may not have been a crime or crimes committed in connection with these issues. The sparse information available makes it impossible to tell.

The Hawks are making an extraordinary effort to pursue this matter. There has been much attendant publicity; more than with any previous investigation. There has also been the much publicised instruction that Gordhan provide a “warning statement”, accompanied by a stipulated deadline.

There is also a curious co-incidence. All of this occurs in the wake of the exposure of what has long been suspected – the “state capture” by the brothers Gupta; the closure of their company account by the leading South African banks, and the evident desire by President Jacob Zuma to take control of the mechanisms of the Treasury – with only the worthy Gordhan standing in his way. Gordhan was not Zuma’s first choice after he had dismissed the principled Nhlanhla Nene to replace him with the more pliable Des van Rooyen. This appointment had such a devastating effect upon the capital markets that Gordhan’s appointment was forced upon a reluctant president, to stabilize the financial system.

Read also: List of corruption scandals: 9 events costlier than Nkandla

In reply to Zuma’s vexed entreaty: “who will rid me of this turbulent priest,” the dutiful Hawks appear to have stepped into the breach. They will do their utmost to satisfy the requirements of their sovereign. Whether they succeed is yet to be seen.

And now, for a contrast in policing style: The Minister of Defence and Military Veterans, Nosiviwe Mapiasa-Nqakula, used a military aircraft to illegally transport a Burundian woman, Michelle Wege, from the Democratic Republic of the Congo into South Africa, using fake travel documents. Various offences emerge from the minister’s public pronouncements.

Offences were committed under the Immigration Act. And the unauthorized use of a military aircraft for private purposes would certainly constitute a further offence. In addition there were offences of fraud arising from the use of false travel documents; all of this committed by an individual occupying high government office, abusing that office. This is a case that requires the immediate attention of the Hawks.

Although this incident occurred as long ago as 28 January 2014, with all the relevant facts already in the public domain by May 2016, there has been no suggestion from the Hawks that the matter is being investigated; nor has the minister been publically instructed to provide a warning statement. The minister remains in office.

In December 2015 the Strategic Fuel Fund, a government agency under the Ministry of Energy, sold the entire South African strategic oil stockpile of 10 million barrels at an aggregate price of US$28 per barrel. This was at least US$10 and maybe as much as US$15 per barrel below the then ruling market price. The responsible minister is Tina Joemat-Pettersson, a personal friend and confidante of President Zuma.

#Oilgate
#Oilgate

It is inconceivable that a transaction of this kind will have been concluded without the minister’s approval.

An international oil market expert, who spoke on condition of anonymity, expressed himself to Alec Hogg of BizNews in this way: “The oil reserves were sold for a purpose we don’t understand, at a price we don’t understand and at a price no international oil market participant would understand.” Hogg’s conclusion: “those who engineered the sale… did it solely to enrich themselves. They stole at least R1.5bn. and perhaps as much as R2.2bn. from South African taxpayers.”

If such clear deductions can be made by Alec Hogg, as well as by an international oil expert, and if these conclusions accord with common sense, then why have the Hawks, who are required to investigate priority crime, apparently been so inactive? It was reported on Monday, 26 September 2016, that the Auditor General had found the sale to have been illegal, with a loss of R2.5 billion.

The brothers Gupta have boasted that they have never been prosecuted on account of any of the allegations of state capture that have been made against them. This is true, but the reason does not arise from their self-proclaimed innocence; rather from the obvious inertia of the N.P.A. to pursue charges laid by the Democratic Alliance as long ago as 17 March 2016, under the Prevention and Combating of Corrupt Activities Act. The principal accusers, Deputy Minister of Finance, Mcebisi Jonas and former chairperson of the Portfolio Committee on Public Finances, Vytjie Mentor have persevered in their accusations.

There is an easily discernable commonality in this matter with the apparent determination of the Hawks to drive Pravin Gordhan from office: They both relate to the one government department not yet captured, which would represent the ultimate prize for the Guptas as well as for Zuma.

Can there be any doubt in these cases that the various individuals are not being impartially subjected to the law? And is that the hand of Zuma that lurks in the obscurity?

  • Rex van Schalkwyk is a former judge of the Supreme Court of South Africa and is the Chairman of the Free Market Foundation’s Rule of Law Board of Advisers.
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