Ladies and Gentlemen
Our hearts are with the families and the victims of the Jagersfontein mining dam collapse disaster.
I must admit, when I read the invitation to this conference, I just knew I had to attend.
In this country, there are many things that divide us.
But I have never come across an argument which downplays the importance of the BIG FIVE!
In fact, our President is referred to as the Buffalo.
Buffaloes are not pushovers when it comes to facing off against danger.
They form a circle around their young, old, and weak members, bravely fighting off predators.
Buffaloes are lethal in self defence.
Distinguished Guests, Ladies and Gentlemen, I am fully aware that this conference has nothing to do with our prestigious wildlife.
Nonetheless, I am mindful that the investment environment does have many survivals of the fittest undertones. The recent stats that indicate that our economy is back to pre- pandemic levels shows that our economy is resilient, but it needs all hands on the deck to grow and create jobs.
Our current economic environment is complicated by several issues which the Ministry of Justice and Correctional Services is able placed to respond to.
The most recent issue is the potential Grey listing of South Africa which would have dire consequences for the country. Chief amongst the consequences, is the risk of reducing investor confidence and a negative impact on the financial wellbeing of South Africans.
Although our economy is reaping the benefits of commodities upturn, the effects of the upturn are yet to manifest themselves structurally.
As such, one is concerned that a grey listing by the Financial Action Task Force would certainly deepen if not enhance our well documented structural inequalities. This will affect the costs of borrowing and of raising capital for our country.
We are making progress in response to the Financial Action Task Force findings.
Allow me to detail five strategic interventions.
High level interventions:
The National Prosecuting Authority has undertaken five high level but effective actions:
Firstly, the NPA has created the Anti-Money Laundering (AML) Desk, comprising of representatives from various Business Units in the institution.
Secondly, the International Cooperation Unit’s processes have been improved in respect of referrals relating to foreign predicate offences, by prioritizing, managing, and monitoring such cases. Staff capacity has been increased at head office to deal with these cases and training has also been rolled out to sharpen skills of officials.
Thirdly, mutual legal assistance requests on State capture investigations were made to several countries in 2018.
These countries include the USA, the UAE, India, Canada, the Netherlands, and China. In respect of State Capture matters relating to the UAE and India, the requests have been prioritized as enormous amounts of money and persons of interest are reported to be in these countries.
Fourthly, the NPA is pursuing seven foreign bribery matters wherein MLAs were sent to foreign Authorities (outgoing requests). Although it is unknown at this stage as to whether money laundering charges would be preferred as the matters are still under investigation, the NPA’s action shows a willingness to pursue such matters through ongoing communication with foreign jurisdictions.
Lastly, the Asset Forfeiture Unit has since 19 November 2019, pursued cases of foreign predicate offending relating to charges of fraud, which is one of the focus areas in terms of SA’s risk assessment. The AFU has obtained eight Preservations in seven matters to the value of R40.3 million and eleven forfeitures in ten cases to the value of R31.8 million.
The National Prosecuting Authority, in terms of the recommendations, has finalised several cases since 2019 to date in its various focus areas. High-end/complex Money Laundering, Professional enablers, Third-party launderers, and proceeds from foreign predicate offences; Serious corruption; Tax, Narcotics and State Capture are being recovered. Various initiatives have been implemented to ensure the effective investigations and prosecution of Money Laundering cases.
Interventions on Mutual Legal Assistance:
A tripartite agreement was concluded amongst the National Prosecuting Authority, Financial Intelligence Centre & the Directorate for Priority Crime Investigative Unit (Hawks) to fast-track criminal and financial investigations in money laundering matters.
This forum has six cases in its radar, three of which are MLA’s containing a Money Laundering element. These cases have been included in the top ten committee’s priority list and are being closely monitored.
The Organized Crime Unit continues to participate in multidisciplinary stakeholder initiatives focusing on investigation and prosecution.
Six organised crime cases are enrolled, inter alia relating to the smuggling of gold across the borders of South Africa, the dealing in gold to the value of R775 million in which a second-hand jeweller, dealer, a gold dealer, a refinery, and companies are prosecuted. In addition, several project investigations are being conducted in this sphere.
In relation to the tax prosecutions involving money laundering, nine cases were finalised. In three of the cases, direct imprisonment was imposed.
The National Prosecuting Authority Anti-Money Laundering Desk has formulated an Anti-Money Laundering Desk Strategy which covers both the investigation and prosecution of money laundering and terrorist financing.
The strategy is aimed at dealing with money laundering in all its forms, but it is particularly focused on money laundering as a critical enabler of serious and organised crime, corruption, and terrorism by the National Prosecuting Authority through the work of its anti-money laundering desk.
Strategic legislative amendments to improve Anti-Money Laundering Laws
Cabinet has approved the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Bill [B18-2022] in Parliament.
Parliament on 25 August 2022, confirmed that the Bill has been submitted to the Standing Committee on Finance and the Select Committee on Finance.
The Amendment Bill seeks to address deficiencies in at least fourteen of the twenty Recommendations, including an appropriate enhancement of powers and procedures for regulatory authorities.
A separate Bill, the Protection of Constitutional Democracy against Terrorist and Related Activities Amendment Bill, 2022, deals with two further (and core) Recommendations.
The outstanding four deficient Recommendations will be dealt with via policy processes and mechanisms to be developed by October/November 2022. The Amendment Bill proposes to amend the following laws:
We believe that these interventions will provide a material response to the FATF findings.
Distinguished Guests, the Zondo Commission has revealed the depth of corruption in our country.
The central question is this, what have we done to respond to this phenomenon especially on two fronts:
We’re rebuilding the capacity of state institutions like the NPA to enable them to ensure accountability.
The second is what are we doing to ensure that State institutions are immune from capture in future. This is a point I will develop further in the address.
On the question of rebuilding the capacity of the National Prosecuting Authority, we have made progress in three areas.
Firstly: We have affirmed the principle that People are our greatest assets.
There is no organisation that can transform without the right people in place:
Secondly: We take gender parity seriously
Thirdly: A Special Task Force is in place to enable the NPA and other law enforcement institutions to bring prosecutions based on the investigative work of the Zondo Commission:
The NPA established a joint task force with DPCI to coordinate responses and ensure that seminal cases are prioritised for investigation, prosecution and asset recovery.
The task force is delivering on its mandate to drive coordinations and coherence in NPA and DPCI responses to Zondo reports. Resources have been pooled, and well-coordinated approach to prosecution-guided investigations is being implemented.
On the question of ensuring that State institutions are immune from capture in future,
The whole of government will respond to parliament when the President report on the measures to respond to the Zondo Commission’s recommendations, this will involve a variety of legislative changes and institutional review of various institutions.
We are establishing an Office for Ethics and Accountability for the NPA to detect and address any future unethical behaviour. After considering the necessary draft legislation, we should be able to establish this office by the end of this financial year.
We are also in the process of putting in place all the necessary measures to ensure that the investigative directorate becomes a permanent feature of our anti-corruption law enforcement framework.
The other critical work, which is in progress as well, is ensuring that the current investigative framework evolves into a multi-disciplinary anti-corruption law enforcement agency.
By multi-disciplinary agency, we are referring to an agency which has the intelligence capacity, forensic depth, digital forensic capabilities and highly skilled prosecutors.
A number of these skills sit in the private sector, especially forensic accountants, digital forensic skills, etc. At this point in time, the state cannot compete with the financial incentives that private sector provides for such skills.
Ladies and Gentlemen:
I have taken the liberty of providing a detailed progress report on these two areas within the scope of our influence as the Ministry of Justice and Correctional Services, because justice and accountability should be a norm in South Africa and not an exception. The biggest crime deterrent is that who ever commits crime should be aware that the chances of he/she is being arrested, prosecuted and convicted are very high. This is an environment the criminal justice cluster is working to create.
Without the rule of law, our democracy will be derailed and ultimately irretrievably deferred.
There are a number of areas in which progress has been made from the establishment of special commercial crime courts in all our provinces, to the ever-increasing number of civil recoveries in special tribunal of special investigating unit amounting to billions of rands recovered through our Asset forfeiture unit in criminal matters.
We’ve been very clear that the NPA must do their work without any fear or favour and that there will be no political interference from myself or the President.
Section 32 (1) (b) Subject to the Constitution and this Act , no organ of state and no member or employee of an organ of state nor any other person shall improperly interfere with, hinder or obstruct the prosecuting authority or any member thereof in the exercise, carrying out or performance of its, his or her powers, duties and functions.
Section 41 (1) Any person who contravenes the provisions of section 32 (1) (b) shall be guilty of an offence and liable on conviction to a fine or to imprisonment for a period not exceeding 10 years or to both such fine and such imprisonment.
All this progress is crucial to safeguard our democracy.
For our society to develop, the skills and energy of young people must be harness, natured and channelled to the right direction in society. We must see skilled and ethical young people being given responsibilities in your executive teams, boards, and strategic positions. Such young people should reflect the demographics of our country. We must also see black professionals in these positions.
Kofi Annan said it best when he said, “any society that does not succeed in tapping into the energy and creativity of its youth, will be left behind”.
All of us gathered here today should be deeply impatient about the progress we are making or even not making when it comes to confronting structural unemployment, racial inequalities, and gender equality.
We cannot build a society along the same traditions which keep producing these structural outcomes.
Building Inclusive Institutions;
In my work across various sectors of society both as an activist and an attorney, I have noted that our political culture no longer attracts professionals and even young people to the fore.
In my view, it is not a case of apathy, but it is a political culture which has developed over the years. This is a culture which is non-inclusive which also finds expression in the private sector.
The low voter turnout in the last local government elections is a lesson to us that the biggest mobiliser for society to vote is service delivery. Young people also want to see themselves in positions of responsibility where they can effect change.
We are now at a point where our political framework has to be re-engineered to ensure that the best amongst us must lead. We’ve no choice but to subscribe to meritocracy in our elections or selection of leadership in all spheres of society.
Economic institutions must be more inclusive.
It was quite disappointing to read from the Price Water House Coopers on Executive directors: Practices and renumeration trends report, that only seven of the top 100 JSE-listed companies (8%, up from 5% last year) are led by female CEOs, and the representation of female CFOs is 19% (compared to 17% last year).
The report raises simple but telling questions, is female representation being appropriately addressed and is rebalancing gender representation within organisations a genuine priority?
If we ignore gender equality and parity, we exacerbate inequality. And democracy may very well have little meaning for women if they still have to struggle for equal pay and the opportunity to lead the commanding heights of our economy.
The private sector can play a leading role in transforming society and pursuing gender parity and equality. In other words, if we all, both government and the private sector, pursue the goals of our constitution, the fruits of democracy will become a lot more tangible and visible.
Inequality and its Link to High Crime Rates:
Inequality is not a matter for the poor only. It is a matter which affects our security as a nation.
We cannot expect to live in peace and comfort whilst surrounded by a sea of poverty. There is a considerable amount of research which shows that where there is high inequality, there are also high crime rates.
The Journal of Urban Economics published a study by two economists from the University of New York. These two economists conducted a study on the effects of violent crime on economic mobility.
The economists found that those places within the USA with higher levels of intergenerational social mobility also have lower crime rates.
Their account also found that where there is a presence of crime, particularly violent crime, upward mobility is inhibited. Most interestingly, the study suggests that where there is a decline in the violent crime rates, the prevalence of high school dropouts is also reduced.
We must also begin to collectively and comprehensively respond to concerns that we have now gotten to a point where we can have high corporate profits, and business can be doing so well, but the workers do not necessarily share in prosperity.
The message is clear, let’s work together to creat a safer and a prosperous South Africa.I thank you for your kind attention and wish you well in your engagements.