TREVOR MANUEL: Mosebenzi Zwane’s power grab, and the limits on ministers’ horse trading
The constitution circumscribes the powers of cabinet members — a fact that a recent column about Treasury’s ‘horse trading’ ignores
There are provisions in the constitution that set out the cabinet's responsibilities. Cabinet members are collectively and individually responsible to parliament for the exercise of their duties and responsibilities, as articulated by section 92(2).
For this to happen, it is important to recognise that the powers and functions, together with the administration of any legislation, are assigned to ministers by the president, as set out in section 97.
These may be used to determine, for example, whether the exercise of the “interministerial committee on the banks”, led by former mineral resources minister Mosebenzi Zwane, was ever constitutional. It could be legitimately argued that, unless the Banks Act was assigned to Zwane, his intervention was a naked abuse of power. The powers of ministers are fettered by the provisions of our constitution.
But in the column, “The Treasury has always been embattled, its ministers always horse traders” (October 5), it is argued, in relation to public enterprises minister Pravin Gordhan, that “on his watch, the cost of Transnet’s Johannesburg to Durban pipeline escalated from R10bn to R25bn in the space of two years”.
There are quite a few statutory and regulatory steps that were ignored in the column, presumably for the purpose of pillorying Gordhan.
The Public Finance Management Act regulates the financial conduct of all state institutions. Transnet is listed in the act under schedule 2, that effectively permits such an entity to manage its own affairs.
Transnet, for example, borrows against the strength of its own balance sheet. The board is accountable for Transnet, acting under the aegis of the director-general for public enterprises. Gordhan was not ever an accounting officer, legislatively his role as minister is that of an executive authority.
If my memory serves me right on this, at the point of initiation of the reconstruction of the Durban-Johannesburg multifuel pipeline, no special government guarantee needed to be sought. There were other external factors that intervened — the national energy regulator had instructed that the pipeline diameter be increased. This resulted in significant cost escalations and construction delays.
Also, in the early stages of the project, there were massive increases in global steel prices and the pipeline project could not escape these. I am sure that an evaluation of cost escalations on the pipeline would make an interesting topic for a student of public finance.
The issue here is that public accountability is actually quite rationally structured, and the mere fact that parliament does not adequately exercise its authority does not alter that fact.
The column also equated the circumstances of the strategic arms procurement and those of the attempted nuclear transaction. It argues that “the ostensible legal strictures that prevented Nene from signing off on a nuclear deal did not deter Manuel from adding his signature to the strategic arms procurement”.
Despite the many views at the time, we have a constitutional obligation to establish a security service to defend our sovereignty. Chapter 11 of the constitution is devoted to this purpose. It stands to reason that of we are to have a defensive capability, that the defence force would need to be reasonably equipped.
There was the recognition, even before the advent of democracy, that SA’s naval defence systems were badly neglected and that it needed to be recapitalised. In addition, a democratic SA could not be entirely dependent on the Israeli Defence Force for the maintenance of its air-defence systems through the then already dated Cheetah squadron.
These matters were the subject of the “First Defence Review” that had been approved by parliament. Beyond the parliamentary approval was the process of acquisition, led by the SA National Defence Force, and steered into a special cabinet subcommittee.
The processes followed have been examined repeatedly and found to be above board. At no time during these processes did any cabinet committee or member (perhaps with the exception of the minister of defence) involve themselves with matters such as the appropriate missile systems, the electrics on vessels, or any such matters of high specialisation.
There was a separation into primary and secondary contracts — and collective cabinet responsibility related only to the primary contracts. The minister of finance had to ensure that the project was affordable in the medium term and that loan agreements were the best SA could raise.
My signature was appended to the loan agreements that were all lawful, and repeatedly found to be so. Any minister who would single-handedly seek to usurp the powers of the cabinet in a process that had already been thoroughly canvassed by parliament in the defence review would create an unthinkable constitutional crisis.