eThekwini Metropolitan Municipality is in disarray, says SIU report

THE eThekwini Metropolitan Municipality has become notorious for being one of the worst-run and corrupt local governments in the country. How else can one explain why the Special Investigating Unit (SIU) has investigated this metro on more than one occasion?

The SIU is an independent statutory body that was established in terms of the Special Investigating Units and Special Tribunals Act, Act No. 74 of 1996 (SIU Act).

Its primary mandate is to investigate serious allegations of corruption, malpractice, and maladministration in the administration of State institutions, State assets, and public money, as well as any conduct which may seriously harm the interests of the public, and to recover any financial losses suffered by State institutions through civil litigation.

While the SIU has been doing its job of investigating corruption, the question remains as to whether its recommendations are implemented. It is now an open secret in South Africa that there is widespread corruption in the public sector and that mismanagement of state resources remains common.

One of the main reasons why maladministration is so common in South Africa is that suspected culprits continue to get away with wrongdoing and breaking the law. Even when the law takes its course, it appears to target small fish while the big fish almost always evade accountability and the full might of the law.

Of all the three spheres of government, mismanagement and corruption appear to be common in local government and have severely affected the delivery of services. Even the delivery of basic services such as water supply and collection of trash is no longer guaranteed, while cities and towns are left bankrupt.

As the sphere of government that happens to be closest to the people, local government is generally perceived to be unresponsive and unaccountable to the people it is supposed to serve, with officials seen to be enriching themselves by fleecing the state.

The SIU has conducted a number of investigations into maladministration in the affairs of the eThekwini Metropolitan Municipality. In 2023, it released a report into findings that painted a very bleak picture of maladministration in this metro.

The 2021 SIU investigation emanated from a complaint received in October 2019 from an anonymous whistleblower. This whistleblower provided the SIU with details of 29 sites in the Phoenix area that were questionable. At the core of the 2021 SIU investigation was the disposal or alienation of immovable property for the provision of housing through the Municipality’s Infill Housing Programme (IHP).

The objectives of the investigation were as follows:

1. To establish if the municipality had disposed or alienated immovable property of the municipality in a proper manner
2. To establish if the transfer or sale of vacant properties by developers was in breach of the developers’ contractual obligations
3. To identify any unlawful or improper conduct by the officials of the municipality and any other person or entity
4. Review compliance with the prescribed legislation, policies, etc; and
5. Collect lawfully admissible evidence to institute civil proceedings.

The scope of the investigation covered:

1. Maladministration in the affairs of the municipality contrary to manuals, policies, procedures, prescripts, instructions or practices.
2. Payments made in respect of the allegations set out in paragraph I of the Schedule in a manner that was (a) not fair, competitive, transparent, equitable or cost-effective; and,
3. Any unlawful and improper conduct by (a) officials or employees of the municipality; (b) developers in question.

On June 7, 2022, the SIU submitted four disciplinary referrals to the eThekwini Municipality for financial misconduct against Ms Nene-Mntungwa for failure to comply with the procedures, thus constituting misconduct.

Mr Sibisi, Ms Mphakathi, and Mr Petersen were also cited for failure to comply with procedures.

On August 2, 2022, the SIU further submitted to the National Prosecutions Authority (NPA) criminal referrals of corruption in terms of section 4 (a) (b) of the Prevention and Combating of Corrupt Activities Act No. 12 of 2004 (PACOCA). The SIU also referred the matter for civil litigation in the Special Tribunal and the South African Revenue Service (SARS) for non-disclosure of income in the case of Ms Nene-Mntungwa.

In the case of Ms Mphakathi, the SIU report found that she failed to comply with the Municipal Finance Management Act No. 58 of 2003 (MFMA), Municipal Systems Act No. 32 of 2000 (MSA), Supply Chain Management (SCM) Regulations, and SCM policy as set out. She also allocated sites to service provider(s) without due SCM processes being followed, resulting in irregular processes and/or expenditure and therefore constituting misconduct.

The SIU report flagged Mr Petersen for failure to comply with proper SCM processes as required in the SCM policy when he made an improper and/or unlawful recommendation to the BEC. In addition, the report blamed Mr Petersen for failure to comply with the Municipal Financial Management Act,  Municipal Systems Act, Supply Chain Management (SCM) regulations, and SCM Policy. 

However, the report findings do not point a finger at the big fish, such as the politicians. All the names mentioned above are those of small fish.

The report indicates that officials of the eThekwini Municipality do not always follow procedure and are often non-compliant in matters pertaining to their duties. Clearly, this is happening because accountability mechanisms are ineffective and not adequately functioning.

Another factor is the hiring of unqualified candidates, usually through the deployment of ANC cadres, friends, and relatives of politicians. No wonder the report flags financial mismanagement as a serious issue that needs to be addressed.

During the course of the investigation, the SIU evaluated the system of internal controls and found that the eThekwini Municipality lacks controls in certain crucial aspects. On this basis, the SIU made the following systemic recommendations.

In 2017, the council took a resolution to stop Developers from developing in Phoenix under the IHP. The SIU investigation confirmed that the said resolution was never implemented by the council.

One of the recommendations is that the Municipality must ensure that Council resolutions are implemented and adhered to in order to ensure lawfulness and compliance with all legislation, principally section 151(2) of the Constitution of the Republic of South Africa (Act No 108 of 1996.

In terms of the allocation of sites, the report noted that sites were allocated to developers who were never awarded the tender by the municipality. The SIU recommended that the municipality must (a) allocate sites in terms of the agreements signed with service providers; (b) sites must be properly identified and cited in the agreements; and (c) site descriptions must be properly identified in the agreements (both Erf numbers and street addresses.

While disciplinary and criminal referrals have been made, and the SIU has recommended the blacklisting of four companies/service providers and their directors, there appears to be no political will to effectively implement the SIU recommendations.

The fact that no high-profile arrests have been made suggests that the wheels of justice may be moving very slowly when it comes to sending a message that corruption does not pay.

All in all, the SIU report showed that the eThekwini Metropolitan Municipality is in disarray, like other municipalities across the country. The deployment of unqualified cadres in the eThekwini Municipality, together with the unwillingness of council members to comply with the rules, deprives citizens of a world-class metropolitan they deserve.

As South Africa prepares to hold local government elections in 2026, the million-dollar question is whether the SIU report is going to influence how the citizens of the eThekwini Municipality vote.

Knowing how South Africans vote, it is highly unlikely that the SIU report will influence the outcome of the election results. Our elections in South Africa still amount to a popularity contest rather than a mechanism for voters to hold their representatives accountable.

If the Zondo Commission of Inquiry is anything to go by, one would not raise any hopes that the SIU report is going to influence how the people of eThekwini are going to vote. The 2024 general elections were held after the Zondo commission had just revealed massive corruption by the ANC-led government during the Zuma administration.

Despite these revelations, the people still voted for the ANC, and Zuma’s new political party, the MKP, surprisingly became the third largest party in the country while claiming the number one spot in KwaZulu-Natal, albeit without an outright majority.

Zakhele Collison Ndlovu is a political analyst at the University of KwaZulu-Natal.

** The views expressed do not necessarily reflect the views of IOL or Independent Media. 

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