Office for Serious Economic Offences

1. I have studied the Bill, and hereby submit my comments and proposals. I have not repeated those of my comments of 29 November 1996 which are still applicable, but attach a copy of same.

2. The Office of the National Director (Section 6)
2.1 The proposed structure of a National Director with two or three Directors and one or more Deputy Directors, seems to be too expensive and top heavy. Whereas the normal management structure is in the form of a pyramid, this proposed structure seems to be an inverted pyramid.

2.2 In my view, one Director should be sufficient, with a number of Deputy Directors depending on the requirements of the office.

3. Qualifications of the National Director and Directors (Section 8 and 12)
3.1 It is recommended that the acting National Director should, like the National Director, be "an appropriately qualified, fit and proper person", and a South African citizen, as required by Section 8(1) and (2). If this requirement is not included in section 8(10), it means that by reason of the adage inclusio unius exclusio alterius an inappropriately qualified, unfit and improper foreigner may be appointed as acting National Director; and

3.2 It is further recommended that, as in the case of the National Director, Directors should also be required to be South African citizens. Section 12(2) should therefore be supplemented by including what is stated in section 8(2).

4. The Powers of the National Director (Section 10)
In order to foster close liaison and co-operation with Directors, and to prevent possible allegations of intervention by the National Director on political grounds, it is recommended that section 10(1)(b) should contain a requirement of prior consultation with the relevant Director before the National Director brings proceedings in the former's area of jurisdiction.

5. The Powers of the National Director (Section 11)
Section 11(4) seems to be a general power, not limited to the subject-matter of the rest of section 11. Whereas it seems advisable that the National Director should have the power to centralise prosecutions, it is not clear if he/she should be given such powers in respect of investigations, without even having to consult the South African Police Service.

6. Terms of Office and Suspension of the National Director or Directors (Sections 9 and 13)
6.1 It is recommended that it should be specified in sections 9(2) and 13(2) that reappointment of the National Director or a Director may only take place with his or her consent.

6.2 The provision that the National Director or Directors may receive no salary for the duration of a suspension (sections 9(6)(e) and 13(3)), seems to be potentially unfair. If it is found that no grounds exist(ed) for his/her removal from office or even suspension, and he/she is restored to his/her office, he/she should clearly be entitled to his/her salary. It is recommended that such provision should be made.

6.3 Section 9(5) should also, in view of the reference in it to subsection 8, contain a reference to vacation of office.

7. Appointment of extra Directors (Section 12(1)(d))
The provision for the appointment of one or more Directors to carry out special duties, is supported. This creates the possibility of establishing e.g. an Anti-Corruption Unit, headed by a Director, on the same basis as the Office for Serious Economic Offences.

8. The Powers of Directors (Section 15)
The provision in section 15(2)(c)(i) that Directors may give written directions or furnish guidelines to any other person who within his or her area of jurisdiction conducts investigations in relation to offences, seems to be too wide.

8.1 Firstly, it is unacceptable and unnecessary that such Director should be able to give such directions to his or her equal, i.e. the Director of the Office for Serious Economic Offences. It may also create conflict, as the National Director is also legally empowered to give directions to the Director of the Office for Serious Economic Offences.

8.2 Secondly, it in effect means that directions may also be given to persons or institutions who derive powers to conduct investigations in relation to offences from statutes, e.g:

8.2.1 The Public Protector, who in terms of the Constitution of the Republic of South Africa and the Public Protector Act, 23 of 1994, has the power to investigate any state, public administration or government conduct alleged or suspected to be improper or to result in prejudice (section 182(1) of the Constitution); improper or unlawful enrichment or the receipt of any improper advantage by a person in connection with acts or omissions in connection with the affairs of specified institutions; or acts or omissions by persons employed by such institutions, which result in unlawful prejudice (section 6(4) of the Public Protector Act). From the wording of these sections it is clear that the Public Protector may conduct investigations in relation to offences, e.g. fraud, theft, forgery and uttering or corruption; and

8.2.2 Commissions of Inquiry (e.g. the Nel Commission that investigated Masterbond).

8.3 Thirdly, it means that the National Director will be able to give directions to private investigators who are either self-employed or employed by corporations, which does not seem to be necessary or practical.

9. Engagement of persons to perform services in specific cases (Section 25)
The procedure whereby a Director will have to consult with the National Director and Minister before outside appointments can be made, seems unnecessarily cumbersome, and will cause much delay.

At present OSEO appoints accountants with the mere concurrence of the Director-General: Justice, and, if required, the State Tender Board. This type of procedure seems more logical and speedy: the Director-General can in any event approach the Minister if he deems it necessary in a particular instance.

Section 25(2) furthermore seems to disregard the tender procedure of the State Tender Board, in terms of which persons (e.g. accountants) are appointed in terms of a tender submitted.

10. Transitional arrangements (Section 29)
10.1 There seems to be a conflict between the English and Afrikaans texts of section 29(2)(b). If the idea is to take into account only the period served in a particular office (kantoor), and not in the office (amp) of attorney-general, it should be stated more clearly.

10.2 The reference to section 2(c) in section 29(1)(a), should apparently be a reference to section 6(b).

10.3 There seems to be no provision as to what happens to an attorney-general once his period of office expires (and this may happen with and shortly after the promulgation of the Act; depending on when promulgation takes place some attorney-general may immediately find themselves in a position where their terms of office have expired). It is submitted that specific provision should be made in the Bill regarding what Directors are entitled to when they have to vacate their offices. This should not be left to negotiations, which may cause uncertainty and long delays.

10.4 Section 29(1)(a) does not make provision for the present Director of OSEO, as he cannot become "a Director under this Act at an Office contemplated in section 2(c) (sic) or 12(1)(a), (b) or (c), which Office shall be determined by the President"; it is accordingly recommended that after the word "President" should be included the words: "or at the Office for Serious Economic Offences" and that subsection (b) should be amended similarly.

10.5 A further problem regarding section 29 is dealt with below in paragraph 11.2.4.

11. Further matters affecting the Office for Serious Economic Offences specifically
11.1 The concept of including OSEO in the national prosecuting authority, is supported. The Investigation of Serious Economic Offences Act, 1991, was amended recently by the Judicial Matters Amendment Act, 104 of 1996, to give OSEO certain powers of prosecution (see section 6A), and, should OSEO's staff situation improve, it is only logical that it should prosecute some of its own cases to prevent the delays caused by handing cases over to the Attorney-general.

11.2 Likewise the amendment of the Investigation of Serious Economic Offences Act to place the Director of OSEO under the National Director, is supported. Certain sections in the Bill, however, create problems:

11.2.1 Section 3(c) is too wide in that it would include "outsiders" as well, e.g. police officials seconded to OSEO in terms of section 3(4)(a)(ii) of Act 117 of 1991, and experts appointed in terms of section 3(4)(a)(iv) of the Act. It is therefore recommended that the words "an officer or a person appointed or designated under section 3(2), (3) and (4) of that Act", should be qualified by limiting it to "an officer or a person appointed or designated under section 3(2), (3) and (4)(a)(i) of that Act" (my underlining).

11.2.2 OSEO should for obvious reasons be excluded from section 7. This can be done by inserting the words "excluding the Office for Serious Economic Offences" in brackets after the words "prosecuting authority" in section 7(1)(a).

11.2.3 Insofar as the proviso to section 15(9) is concerned, it should clearly only refer to subsection 1(a)(b)(c) and (d), and not to (e) and (f). The Director of OSEO can clearly not be expected to consult with other Directors about OSEO's specific investigations (except when really necessary, and this does not require statutory regulation), and about carrying out his or her functions etc. in terms of the Investigation of Serious Economic Offences Act.

11.2.4 The position of OSEO's professional staff, is not entirely clear:

The Director of OSEO is an attorney-general, and becomes a Director of Public Prosecutions. New appointees are specifically appointed as Directors in terms of section 12(1)(d).
The deputy attorneys-general of OSEO become Deputy Directors in terms of section 29(3)(a), and new Deputy Directors may be appointed as such in terms of section 14.
However, the present (senior) state advocates of OSEO will not become prosecutors like their counterparts in the offices of the Attorneys-general, as they have not been "delegated in terms of the Attorney-General Act (Act no., 92 of 1992), to institute criminal proceedings and to conduct any prosecution in criminal proceedings on behalf of the state" as required by section 29(3)(b).
New appointees will not necessarily come from the ranks of prosecutors, and in any event do not require to hold such delegations, and will therefore also not qualify to be regarded as prosecutors in terms of section 16. The only delegation a member of OSEO will require, is one for a specific prosecution in terms of section 6A of Act 117 of 1991. Section 16(4) therefore does not solve the problem.
The problem also arises as far as the taking of the oath before commencing duties, is concerned. See in this regard section 5(2)(b)(ii).

The problem is therefore the prerequisite of a delegation in terms of the Act, which is not a requirement in terms of the Investigation of Serious Economic Offences Act or in terms of the work done by OSEO. Whereas I support the idea of including OSEO's advocates in the concept of prosecutors, an exception will have to be made as far as the delegation requirement is concerned.

11.3 Since the Investigation of Serious Economic Offences Act has to be amended in terms of the Bill, it is recommended that the following problem be addressed at the same time: section 5(1)(b) of the Investigation of Serious Economic Offences Act, as it now stands and as it will read after the proposed amendment, allows the Director of OSEO no discretion when the Minister (or as proposed the National Director) refers a matter to him or her: he or she then has to hold an inquiry. It is recommended that the Director be allowed to decide whether a preparatory investigation in terms of section 5(13) should not rather be held. Consequently it is proposed that the section should state that "the Director shall hold an inquiry or a preparatory investigation on that matter".