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Abstract
For nearly a decade now, the South African government's multibillion Rand expenditure on the Strategic Defence Packages (SDP) – the “Arms Deal” – and its spin-offs continue to make headlines in the South African media and spark intense debate in Parliament. This has ensured that the Arms Deal remains in the public consciousness. This article is an analysis of both the SDP process and the Joint Investigating Team (JIT) Report on it. The article examines the formation of the JIT, paying particular attention to the exclusion of the Special Investigating Unit (SIU) and the interventions of the Speaker of Parliament, the Honourable Frene Ginwala. It identifies in close detail the principal flaws in the SDP process as well as the inconsistencies and gaps in the JIT Report itself. Specifically, the article is concerned with a) whether the SDP process was transparent and conformed to acceptable protocols and standards of procurement; and b) whether the probe of the SDP process by JIT has met Parliament's and the South African public's expectation apropos of the serious allegations raised in both the Auditor-General's Special Review (RSA, 2000a) and Parliament's Standing Committee on Public Accounts' (SCOPA) Fourteenth Report of the year 2000 (RSA, 2000b) on the SDP which the JIT was commissioned to investigate. Clearly the flaws in the SDP process question the integrity of the Arms Deal. The contradictions and lacunae in the JIT Report itself together with its acceptance by Parliament and the government render the JIT Report suspect.
Notes
1. Offers for the supply of armaments entailed packages consisting of naval, air force and army equipment, hence DoD's adoption of the ‘package’ approach to the acquisition process as opposed to the individual/off-the-shelf purchasing equipment type. These offers became known as the Strategic Defence Procurement Packages, the ‘Arms Deal’ in popular parlance. Of particular importance is that Cabinet approved the principle of the acquisition of the SDP on 23 September 1997, on the same date the Ministry of Defence sent Requests for Information (RFIs) to 11 countries for the procurement of the defence packages (see JIT, Citation2001, § 7.1.7, 7.2.1.2). This was before the Defence Review, which was to determine the structure, force design, force levels and armaments in the SDP relevant for the SANDF was approved by Parliament (JIT, Citation2001, § 1.1.4.4).
2. In order not to contravene s 41(6) of the National Prosecuting Authority (NPA) Act, the JIT considers it inappropriate to include areas of a criminal and sensitive nature in its report.
3. The conclusion of the Auditor-General's Special Review (RSA, 2000a) that procedures of the acquisition process during the government arms procurement programme ‘were not in accordance with procedures laid down for armament acquisition’ remains valid beyond the conclusions of the JIT Report. The conclusions of the JIT in this regard are suggestive of the investigators' concurring with government ministers that indeed the A-G's Special Review (RSA, 2000a) on which SCOPA couched its 14th Report of 2000 to Parliament, was: a) just a review; b) did not do justice to the arms procurement process by which it questioned the process unjustly; c) was not adequately exposed to high-level decision-making processes and accordingly based on incomplete information; d) was incorrect in having to see the counter-trade aspects of the arms acquisition programme as a major objective rather than an important achievable consequence of the strategic procurement even when decision-makers agree that the LIFT technical aspects and the NIP/DIP (National Industrial Participation/Defence Industrial Participation) were decisive on the LIFT/Gripen contract rather than the cost; e) could not understand the intricacies of the acquisition process; and f) was superficial. This was an adjustment (in the material findings of the A-G's Special Review) which the JIT had no restraint in making, most obviously, after ‘adequate exposure to high-level decision-making’, ‘complete information’, ‘full understanding of the intricacies of the procurement process’, and all that which ministers alleged both the A-G's Special Review and a ratified paper of Parliament were devoid of (RSA, 2001a; Kane-Berman, Citation2001). How else could state institutions strengthening a constitutional, nascent and ‘fragile’ (Speaker Frene Ginwala's word) democracy better shoot themselves in the foot, and denigrate themselves at the altar of the Executive they were supposedly to watch over?
4. A milestone document of an acquisition project for an arm of service of the SANDF is the different levels and stages of progressive authorisation during the life of the (acquisition) programme. Each stage or level of authorisation is depicted in a prescribed documentation, namely: a) the Required Operational Capacity; b) the Staff Target (ST); c) the Staff Requirement (SR); d) the Study Report; e) the Acquisition Plan; and f) the Closure Report. A milestone document is either mandatory or non-mandatory (see JIT Report, Citation2001, 3.1.1.4).
5. SAAF had a three-tier fighter philosophy. SAAF strategy for the long-term replacement of its air combat capacity, which embraced Project Ukhozi and Project Kambro programmes, was based on that three-tier fighter philosophy. The failure of the British government proposal – for the supply of the Hawk jet trainer or a combination of the Hawk and the Gripen fighter via British Aerospace (BAe) for the replacement of the Impala – to satisfy the requirements of the RFI technical value system for an advanced fighter trainer (AFT) and proceed to the request for proposal (RFP) stage raised ‘concern’ from DoD that, ‘although the acquisition process for Ukhozi had followed the normal path and had not taken into account the MoD package offer made by the British Government, the wrong impression might be created if the RFP were issued without the inclusion of the Gripen aircraft’ (JIT, Citation2001, § 4.1.16). It was this ‘concern’ by the DoD that set the process in motion for the reversion from the three-tier fighter training philosophy of the SAAF to a two-tier philosophy. The unacceptability to the Minister of Defence of the two-tier fighter philosophy led to a reversion back to the three-tier fighter training philosophy of the SAAF and hence the incorporation of both the ALFA and LIFT (which constituted an additional requirement to the SDP) into the defence procurement programme. ‘The turning point in the SAAF strategy’, as investigators said. But what they omitted was the coincidence of this turning point in the arms procurement process with the visionary approach of Defence Minister Joe Modise, this being the genesis of the initiative of considering a non-costed option in the LIFT programme, contrary to the testimony of Minister Alec Erwin that this initiative originated from the Ministers' Committee; neither the minutes of the said Cabinet sub-Committee meetings nor the entire 400-page JIT Report create any visible audit trail for this claim.
6. Both the British Aerospace Hawk 100 and the Saab Jas 39 Gripen were, after this exercise, according to JIT, eliminated. The former was disqualified on ‘high cost. Does not satisfy SAAF operational requirement’, and the latter, on ‘unaffordability’ (see JIT, Citation2001, § 4.1.11, 4.1.12, 4.1.14).
7. The government initialled the contract to purchase three submarines from the German Submarine Consortium (GSC) worth R4,226 million on 12 June 1999; however, the supply of equipment would depend on a) the affordability study undertaken by Department of Finance (DoF) on the SDP concluded only on 31 August 1999; b) ratification of the Ministers' Committee; and c) its approval by Cabinet on 1 December 1999. All that the report says in this regard is that ‘the initialling of the contract without the actual signing thereof by all the parties did not constitute a binding agreement’ (JIT, Citation2001, § 6.1.9–11, 6.6.5–7) but it did not explicitly remark on the impropriety of the act.
8. Government officials testified that C2I2 was not allowed to resubmit subsequent tenders in order to adjust their quotations as was allowed ADS on the System Management System (SMS) ‘because C2I2 was not the designated supplier’ (JIT, Citation2001, § 11.8.2.8). Could it be that ADS was awarded the contract for the SMS solely on the grounds that it was the nominated supplier, notwithstanding evidence before JIT (JIT, Citation2001, § 11.8.2.13) that C2I2 may have offered a cheaper proposal for the supply of the SMS? If ADS got the SMS contract regardless of its more expensive option, as evidence indicates, what then would have been the rationalisation or justification for awarding of the contract – value for money? – given the potential harm to the state (JIT, Citation2001, § 11.5.2.8) created by the idea of the nomination of a single supplier?
9. The explanation by the JIT of the seemingly indefinite probe into allegations of wrongdoings on the part of the Government during the SDP process, as Business Day would say, ‘does not hold water’. Certain allegations of a criminal nature, relating to the regularity or not of the ‘mysterious overruling’ of SA C2I2's IMS in favour of French Thompson-CSF Detexis Diacerto databus, which were brought to finality as per the draft documentation to the final report, were strangely omitted in the final JIT Report published in November 2001 and, thus, hidden from the SA public taxpayers, the ultimate financier of the weapons packages. The draft version of the report suggests that a group of ministers was informed that C2I2's databus was ‘high risk’. This information was immediately followed by paragraphs 12.8.9.6–7 in the draft report, namely: ‘This statement is contrary to the evidence of all Naval and ARMSCOR personnel who testified, and to all documents made available to us. It is not clear who did the assessment of the IMS and who informed the DoD; it should be noted that this meeting took place well before the PCB meeting of 24 August 1999’. Although the final JIT Report discussed the issue of risk, it simply omitted this statement, which ‘suggests that a Cabinet Committee might have been misled’ and that something went very wrong in the procurement process (see Business Day (Johannesburg), 7 January 2005; The Star (Johannesburg), 27 January 2005).
10. The minutes of 11 meetings of the Board between 29 September 1998 and 6 October 2000 reflect that the HoP of DoD declared a conflict of interest on four occasions; handed over the Chair to Chief of the Navy in two occasions but remained present; and took part in the discussions relating to the munitions suite on three occasions (JIT, Citation2001, § 11.10.12).
11. The conflicts of interest rooted in the selection of the main suppliers could only make themselves manifest in the selection of subcontractors. The irregularities of the selection process at subcontract level could not have taken place had the process which selected the main contractors not been in equal proportion unduly influenced, incorrectly slanted and skewed. The same role by government officials whose recommendations transubstantiated into the Ministers' Committee's decisions and ultimately the government's choices of prime suppliers of weapons equipment were only made to appear irregular at the sub-suppliers' selection process where it was mistakenly assumed the state and not the government has jurisdiction. Having established the degree of impropriety that was permitted in the process of the awarding of the contract for the supply of the corvettes' combat suite databus to ADS, JIT then says the decision was taken by the state, less the state government. Again, JIT worked hard, in futility though, to hide the questionable integrity of the controversial armaments procurement process, this time under the cloak of ‘the state’ and the mistaken assumption that ‘government’ has no jurisdiction. Just as I have, with respect to ministerial responsibility and accountability, demonstrated the logical dubiousity absurdity of JIT's attempt to restrictively define government as distinct from the departments of government, I point here to the futility of the JIT's attempt to hermetically insulate, and thereby protect, the government from the decisions that are supposedly the business of the state. But the state does not run her affairs herself, but under the management of government. Where the state is involved in an irregularity or wrongful act, it could only have acted through the government. In fact, in respect of the government's multibillion expenditure on weapons purchases, the state was implicated in all the wrongs committed precisely through the irregular and improper doings of government, i.e. Cabinet, the Ministers' Committee, her accounting officer – a conclusion apparently in collision with the ‘Key Findings and Recommendations’ of the JIT Report where ‘no evidence was found of any improper or unlawful conduct by the Government…’ (JIT, Citation2001, § 14.1.1). It remains the contention of this article that ‘all wrongdoers, whoever they may be’ including all those in collusion of wrongdoing, in respect of both the SDP process and its investigation, ‘will meet their just deserts’ (GCIS, Citation2001a, p. 5), to quote the State President himself.
12. The process through which BAe/SAAB was chosen for the supply of LIFT/ALFA rather than the winning Italian Aermacchi MB 339 FD, was characterised by gross contraventions of laid down arms acquisition process: ‘There were fundamental flaws in the selection of BAe/Saab as the preferred bidder for the LIFT and ALFA programme’ (in Business Day (Johannesburg), 7 January 2005; Mail & Guardian (Johannesburg), 7 January 2005), according to the draft reports. The way the main suppliers of armaments were chosen undermines the whole idea of having to constitute the arms acquisition process in terms of a [so-called] ‘staged-approached’, ‘the long and interactive process’, comprising ‘the distinctive structure of the evaluation teams’ (Committee Minutes, SCOPA, 26 February 2001). Drafts of the final report confirm this: ‘options as were decided by the AAC in essence meant that the acquisition process for LIFT was a fruitless exercise’ (in Business Day (Johannesburg), 7 January 2002). Could JIT have been set up just to determine that Cabinet was entitled to select the preferred bidder and hence do all it pleases and that the decisions of the ANC-in-Government with implications for proper finance management and accountability amount to a ‘political choice’? The choice of GSC, Germany, for the supply of submarines, instead of either the French DCN International or Fincantieri of Italy, and the selection of GFC Meko in place of the winning Spanish Bazan 590 B in the bid for the supply of the corvettes, were made with a clear disregard for – and involved the continual rewriting of – standard procurement principles. The DIP evaluation process with regard to the submarines was fundamentally flawed resulting in ‘potential prejudice to the unsuccessful bidders’, according to the drafts to the final JIT Report (in Mail & Guardian (Johannesburg), 7 January 2005, p. 2). Juxtaposed side by side with these is the wrongdoing which marked ‘the decision to opt for the Detexis bus and not the C2I2's IMS (JIT, Citation2001, § 11.6.9.8, 11.11.4.14–5), it is not clear when and by whom the decision was taken not to award the contract to C2I2.’
13. The Ministers' Committee made a strong distinction between the evaluation process and the decision-making process, and, using such phrases as ‘the very new feature of decision-making’, ‘the distinctive structure of the evaluation teams’, ‘the very nature of the complex and staged-approach’, ‘due diligence built into the mechanism, and institutional arrangements of the negotiating team’, ‘its ad hoc nature’, ‘the role of the Cabinet sub-Committee itself in decision-making’, they argue that ‘no single individual had the capacity to influence the process disproportionately’ and thus, according to them, ‘conflict of interest is an imprecise term’ (Committee Minutes, SCOPA, 26 February and 29 May, 2001). The government further contends, ‘the nature of the structure of the acquisition process was such that any corruption in the awarding of the tenders would have had to infiltrate effectively up to ministerial level’ (JIT, Citation2001, § 4.6.7). In this regard, the Cabinet sub-Committee must be pointed to that portion of the JIT Report which held that the ‘Government's contention that the nature of the structure of the acquisition process was such that any corruption in the awarding of the tenders would have had to infiltrate effectively up to ministerial level, ‘was [only] theoretically impossible’ (JIT, Citation2001, § 4.6.7, my emphasis). Because it took a dereliction of duty on the part of the Ministers' Committee, which was the ultimate – and importantly, natural – ‘checking mechanism’ in the SDP process ‘due to its overall responsibility’ over Government Departments (Committee Minutes, SCOPA, 26 February and 29 May 2001) for the Chief of Acquisitions, DoD, to participate disproportionately, sometimes unlawfully, in the much vaunted ‘new’, ‘complex’, ‘staged-approach’ arms deal structures, the vicarious responsibility of all the wrongful doings of the Head of Procurement, DoD, ultimately falls on Cabinet, Government. To be sure, the article acknowledges the investigators' recommendation in this regard, namely: ‘steps should also be taken to ensure that a particular individual, irrespective of his/her position is not tasked with incompatible functions in multifaceted procurements to prevent a conflict or perceived conflict of interest, which could have a detrimental effect on the overall acquisition process’ (JIT, Citation2001, § 14.2.12). But this just reflects the protest of the public that, in the absence of distinct guidelines, conflicts of interests bore heavily on the outcome of the SDP process. Given that the Cabinet sub-Committee could not ensure the regularity and propriety of the arms procurement process, critics of the arms deal charge that the reasons for the Ministers' Committee's usurpation of the DoD/State Tender Board, in the allocation of tenders, during the SDP process, lie elsewhere, and require explanation.
14. See further A.K. Asmal MP (ANC) in SA Hansard (columns 2288 and 2290, 5 June 1996).
15. Whereas the government has declared the investigation into the SDP programme by JIT ‘completed’, the probe into allegations of criminal conducts continues. However, in light of the seeming indefiniteness of this investigation by the DSO arm of JIT, can we be content that the Executive has declared the investigation closed on behalf of the JIT? When the JIT stepped into the hurly-burly of contested politics by making controversial political statements at the release of their report, typical of which is the exoneration of the government of all blame in respect of the arms procurement process, does this mean that the government and watchdog institutions are now partners? Commenting (as he shouldn't) on the resignation of IFP's Gavin Woods from SCOPA, Auditor-General Sauket Fakie said he was ‘very disappointed’ with the manner in which it had been done. The Sunday Times reminds him though that he is not called upon to make political pronouncements as the Auditor-General is merely an appointed official (see Sunday Times (Johannesburg), 3 March 2002).