The purpose of this study was to critically investigate corruption in the procurement sector in local government with specific reference to the case of the eThekwini Municipality. This study found that corruption in the public procurement sector in eThekwini Municipality is widespread.
LIST OF TABLES
CHAPTER ONE INTRODUCTION
- Preamble
- Geographical Orientation
- Motivation for this Study
- Chapter Sequence
Due to the publication of the Manase Report and the informative role of the media, it has become known that corruption is widespread in the eThekwini Municipality (Maharaj & Karodia, 2013). Prior to 1994, the study of corruption was virtually non-existent due to the secretive nature of the issue and reporting limitations.
5 1.4.4 Chapter Four: Data Analysis
Conclusion
CHAPTER TWO
LITERATURE REVIEW 2.1 Introduction
Definitions, Forms and Types of Corruption
Instead of fulfilling their role as administrators of government resources, disloyal employees steal from their employers (Andvig et al., 2000). Extortion occurs when money and resources are taken through the use of coercion, violence or the use of threats (Andvig et al., 2000).
10 iii) Forms of corruption
Measuring corruption
This resulted in the creation of cross-country datasets and perception-based assessments of corruption (Arnone & Borlini, 2014). Due to the different forms of corruption assumed, it is not possible for one indicator to capture the multidimensional nature of corruption in an objective way (Rohwer, 2009).
13 2.4 Theories of corruption
Causes of Corruption
It is important to understand the causes of corruption in order to facilitate effective measures to combat it (Bayar, 2003). However, not all officials react in the same way to bribes, highlighting the complex nature of corruption (Tanzi, 1998).
Consequences of Corruption
However, these approaches do not provide an understanding of the actual social consequences of corruption. Widespread corruption also has a detrimental impact on development and the distribution of associated benefits (Pearson, 2001).
24 2.6.4 Environmental
The International Context
25 2.7.1 The Current Situation
- Public Procurement and Corruption
- Corruption in Africa
- Public Procurement Corruption in Africa
- Corruption in South Africa
Methods to prevent corruption in the public procurement sector should be the responsibility of government officials and bidders. In recent years, governments have used the Internet for the procurement process (Søreide, 2002).
45 Table 2.5 Anti-Corruption Agencies in South Africa
Public Procurement Corruption in South Africa
During the apartheid regime, government procurement was a method of protecting the interests of the minority, that is, large white corporations. Collusion between government officials, politicians and business owners can occur at any stage of the procurement process, allowing kickbacks and illegal activities (Ambe & Badenhorst-Weiss, 2012). This contract did not comply with the procurement principles of Article 217 of the South African Constitution and the 2007 Department of Public Works and Supply Chain Management policy (Zondi, 2012).
Following the Public Protectors' investigation, it was determined that the leasing of the Transnet buildings and the Middestad buildings was in breach of public procurement rules.
Conclusion
In eThekwini Municipality, corruption in the procurement process means that procurement rules and regulations are often violated and ignored (Ellero, 2015). Nepotism, cronyism, executive deployment and conspiracy between government officials, politicians and entrepreneurs with a view to self-enrichment characterize the purchasing process. Instead of providing basic services necessary for survival, the eThekwini Municipality's procurement sector is manipulated for private gain and characterized by 'turning a blind eye' and 'cover-ups' for personal enrichment.
Therefore, many citizens experience poor service delivery and are largely dissatisfied; this spurred violent service delivery protests and fueled political instability in the eThekwini region.
CHAPTER THREE METHODOLOGY
Objectives
Study Area
Tongaat in the north, extending inland to Ndwedwe and ending at Cato Ridge in the west (Cogta, 2015). The council consists of Mayor James Nxumalo councillors, executive committees and several mayoral committees. In addition, the council facilitates the provision of infrastructure and services to the people of the municipality (eThekwini Municipality, 2011).
All of these have their own roles and responsibilities to assist the delivery of services in the municipality (Ethekwini Municipality, 2011).
54 Figure 1. 1: The eThekwini Municipality
55 3.5 Research Methodology
56 3.5.2 Sampling Methodology
The Manase Report consists of more than 7,000 pages detailing corruption and fraud in eThekwini Municipality. In this study, a Councilor of the Municipality issued to the researcher the Agenda of the KKPK Commission for May 5, 2015, above. It is imperative that respondents are informed of the nature of the study and their consent obtained prior to their participation in the study (Hesse-Biber & Leavy, 2011).
In this study, the councilors and bureaucrats willing to be interviewed for the study were asked to sign a consent form providing a detailed description of the study (Appendix 3).
61 3.5.5 Limitations
Conclusion
Assessing the levels of corruption is a difficult task, measuring corruption is almost impossible due to the illegality and secrecy surrounding the subject (Pellegrini & . Gerlagh, 2008). The main challenge was the reluctance of officials and councilors to talk about corruption issues.
CHAPTER FOUR DATA ANALYSIS
Corruption in eThekwini Municipality
When the Manasa report was made public in June 2013 (after some public and political pressure), it revealed massive monetary irregularities. An additional concern was that the ANC had tampered with the Manase report and that a redacted version had been released to the public (IFP 1, 14 May 2015; DA 1, 4 May 2015). The Manasa report highlighted many cases of corruption and implicated many councilors and officials in corrupt activities.
The following sections in this chapter will draw on the Manasa report to illustrate examples of corruption.
66 4.2.2 The Corruption Conundrum
Corruption in the Supply Chain Management in eThekwini Municipality
Despite protestations to the contrary, one sector where corruption is rife in the eThekwini municipality is in SCM. SCM Regulation 13 (c) (i) and (ii) requires a provider to declare whether they are in the service of the government. This was a breach of the MFMA in relation to the fact that persons in the service of the government cannot do business with the municipality.
This apparent breach of the law in the eThekwini Municipality has serious implications for the procurement process.
73 Services
He further stated that he had no knowledge of the provisions of the MFMA and that both companies were properly declared and that he believed that if he disclosed his business interests he could do business with the municipality. When asked why he had not indicated on his disclosure form that he had acquired money from these companies, he indicated that he had left it blank because he did not understand how to complete the form. In the second interview the Manase team conducted with Xulu, he stated that all three companies had stopped doing business with the eThekwini Municipality in mid-2011.
He also wrote a letter to SCM indicating that all three companies were in the process of ceasing operations.
75 Case Study 2: Councillor M Shezi
It is clear that the SCM in eThekwini Municipality is an area prone to corruption. The Manase report highlights numerous examples of abuse of Article 36 in the eThekwini Municipality and a deviation from prescribed procurement procedures to ensure certain companies or individuals obtain lucrative contracts from the municipality. An example from the Manase report is the case of Section 36 contracts awarded to H20 Networks.
Article 36(1) (b) has also been manipulated and caused improper adjustment of irregular expenditure in the eThekwini Municipality.
91 4.3.8 Inadequate and inefficient contract management
Implications of Corruption in the eThekwini Municipality
Councilors and bureaucrats in the eThekwini municipality spoke about various social impacts that corruption has on the eThekwini municipality and its citizens. The eThekwini municipality was the third highest protest-prone municipality in South Africa (Powell & Visser, 2015). Councilors and bureaucrats identified the various economic impacts corruption has on the eThekwini municipality and its citizens.
Corruption in the eThekwini municipality has led to irreparable irregular spending and budget deficits which drastically affect service delivery.
Measures to Curb Corruption in the eThekwini Municipality
Thus, it is imperative to discuss the measures to curb corruption in eThekwini Municipality, which is the theme of the latter part of this chapter. Some interviewees believed that the Ombudsman was an effective tool in tackling corruption, but only among those in lower government positions. Others argued that the Ombudsman was ineffective, lacking legitimacy and a waste of time because he was selective in the cases of corruption he investigated.
I have seen the Office of the Ombudsman act very quickly against an employee who was accused of theft by false pretenses.
102 Governance Processes Unclear separation,
Overall, the opposition members interviewed indicated that the government has not done enough to address corruption in the eThekwini municipality. One of the biggest challenges facing the eThekwini Municipality in the fight against corruption is the lack of accountability and transparency. Councilors mostly suggested that those found guilty of corruption face the full force of the law.
Therefore, through the implementation of the law, individuals found guilty of corruption should be named, shamed, fired and arrested.
111 4.6.4 Role of the Media
Conclusion
Councilors and officials lack expertise and basic knowledge of legislation, resulting in misuse of SCM and ZMFM legislation. This was evident from the misuse of Article 36 and the failure to disclose the business interests of councillors. The various social, economic and political consequences of corruption in eThekwini Municipality have been identified to illustrate how corruption actively undermines democracy and creates a society dominated by inequality where the rich get richer and the poor poorer.
Since the publication of the Manase Report, the eThekwini Municipality has publicly stated that it is dedicated to the fight against corruption.
115 CHAPTER FIVE
EVALUATION, RECOMMENDATIONS AND CONCLUSION
Introduction
The second section provides some theoretical reflections on how the human rights-based approach relates to corruption in the eThekwini Municipality.
Evaluation
- International trends in corruption and the procurement sector
- Corruption in the procurement sector in the eThekwini Municipality
- Implications of corruption in the eThekwini Municipality
- Measures for preventing, detecting and responding to corruption in the eThekwini Municipality
This study showed that corruption in the eThekwini municipality also has economic consequences. This investigation revealed the various anti-corruption agencies and committees that were effective in eThekwini Municipality. The study found that some NGOs played an important role in drawing attention to corruption in eThekwini Municipality.
The study shows that the media has to some extent played an influential role in reducing corruption in eThekwini Municipality.
122 5.3 Theoretical reflections
However, all these theories do not sufficiently take into account the corruption in the public procurement sector in eThekwini Municipality. Thus, there is poor service delivery to the citizens of eThekwini Municipality and the local government is struggling with corruption in the public procurement sector. This was illustrated in eThekwini Municipality as it is the poor and those who depend on basic services.
Corruption in the public procurement sector is a serious problem that has many knock-on effects.
125 5.4 Recommendations
Conclusion
Corruption in public procurement in the eThekwini Municipality is a reflection of the challenges and manifestations of corruption experienced across South Africa and globally. This research revealed numerous social, economic and political consequences of corruption. Nevertheless, the main implication of corruption in the procurement process is poor service delivery to citizens. It is the poor of eThekwini Municipality who face the damaging effects of corruption as they depend on the government for basic services for their survival.
A holistic approach that identifies the consequences of corruption for society is required to fully understand the true extent of corruption.
127 REFERENCES
Countering Corruption in South Africa: The rise and fall of the Scorpions and Hawks: SA Crime Quarterly 39, pp. Crumbling housing and failed promises: A Critical Study of Corruption in low cost housing in the Phoenix Area, Durban: University of Kwazulu-Natal . Fighting corruption in southern Africa: survey of anti-corruption agencies in Botswana, South Africa and Namibia.
Tenders and Corruption in Post-Apartheid South Africa: Rethinking the African Ethic as a Antidote to Corruption.
145 APPENDICES
146 Appendix 2
147 Appendix 3: Consent form
