PPE contracts, ethics, morality and the law

November 1st, 2020

The popular Latin maxim fiat justitia, ruat caelum guides lawyers to an understanding that we should endeavour to see justice being done, even if it means that the heavens must fall. The pursuit for justice is not always an easy path, because, at times, what is just is not necessarily popular with all sections of society or with a particular interest group. This is often on account of strongly held moral convictions and ethical considerations.

The recent scandalous allegations relating to the procurement of personal protective equipment (PPE) in response to the COVID-19 pandemicpersonal protective equipment, has revived the debate about the relationship between ethics, morality and the law (Lulama Matya ‘Parliament to debate scandals around COVID-19 related tenders’ (www.sabcnews.com, accesses 13-10-2020)). It has been reported that millions of Rands in PPE tenders have been awarded to companies and individuals with relationships to provincial and national political figures.

This article does not concern itself with the alleged criminality, which is now a subject of investigation by multiples sections of law enforcement agencies, but the commotion resulting from allegations that these PPE tenders have also benefitted friends and relatives of some political leaders.

In his own words, President Cyril Ramaphosa has said that ‘while not all business between the state and the family members or friends of politicians was corrupt, it undermined public confidence and created a perception of nepotism and abuse’ (Lizeka Thandwa ‘Politicians’ friends, family doing business with the state undermines public confidence – Ramaphosa’ (www.news24.com, accessed 13-10-2020)). The question for legal practitioners would be as to whether these family members and friends of politicians should be elbowed out of business with the state, merely because some people they know or are related to, are in the business of politics? Would such an expectation pass the test of legal fairness?

Section 217(1) of the Constitution provides that: ‘When an organ of state in the national, provincial or local sphere of government, or any other institution identified in national legislation, contracts for goods or services, it must do so in accordance with a system which is fair, equitable, transparent, competitive and cost-effective’ (my italics). Section 217(1) elevates five fundamental principles, namely –

  • fairness;
  • equity;
  • transparency;
  • competitiveness; and
  • cost-effectiveness.

These principles have pillared the foundation of the Public Finance Management Act 1 of 1999 and the Local Government: Municipal Finance Management Act 56 of 2003.

The question now becomes, should we add ethics and morality to the principles above? Knowing the difference and the relationship between ethics, morality and legal principles is of vital significance, particularly because of the thin lines between the three. Many times, it happens that an action or conduct conflicts with personal ethics or moral values, but such an action or conduct does not necessarily violate the law.

Much of the brouhaha about the PPE procurement has been that companies associated with family members, relatives and friends of political leaders have benefitted.

An individual seated alone may consider it to be inappropriate for them to do business with government under particular circumstances, as Andile Ramaphosa, the son of our sitting President, echoes:

‘We respect my father’s position as president of this country and as a family, we spoke a long time ago about PPEs, how do we need to govern ourselves? Not getting involved in government contracts, and just being reasonable, despite there being no rulebook’ (Barbara Friedman ‘No business with government if family involved in government – Andile Ramaphosa’) (www.capetalk.co.za, accessed 13-10-2020)). This is a classic case of an ethical consideration. Ethics are concerned with an individual and his appreciation of wrong and right.

Andile Ramaphosa continued: ‘It is unreasonable to be doing business with government when members of your family are involved with government’.

The concept of family and relative combined becomes very broad, it would include a father, mother, children, siblings, uncle, aunt, nephew, cousin, mother-in-law, father-in-law, brother-in-law, sister-in-law, stepfather, stepchildren, half-brother or half-sister. The list becomes even broader with the addition of friends.

While it may be ethically sound and morally correct for a person with connections to political leadership to adopt a posture that says ‘I will not do business with government’, the question for the law arises as to whether such a posture should legally be enforced?

In his response to the outrage emanating from revelations that PPE tenders benefitted wives, children, relatives and friends of some political leaders, African National Congress Secretary-General, Ace Magashule, said nothing in law stops relatives and friends of political leaders from doing business with government (Marianne Merten ‘Ace Magashule claims nothing in law stops politicians’ families from doing business with government: Not so fast, SG’ (www.dailymaverick.co.za, accessed 13-10-2020)). Mr Magashule is correct; there is no law that bans relatives and friends of political leaders from doing business with government. It is not even a lacuna that such a law does not exist.

In the Bill of Rights, s 22 states that: ‘Every citizen has the right to choose their trade, occupation or profession freely’. Of course the general limitation prevails even in this case, while the internal limitation states that the practice of such a trade, occupation or profession may be regulated by the law.

Currently, the limitations above are found in the Executive Members’ Ethics Act 82 of 1998, the Public Finance Management Act and the Local Government: Municipal Systems Act 32 of 2000. The Executive Members’ Ethics Act directs that members of Cabinet, including Members of Provincial Executives must at all time ‘act in good faith and in the best interest of good governance’. The Public Finance Management Act has banned public servants from doing business with the state. The Municipal Systems Act requires that councillors disclose their financial interests and those of their spouses, close family members and business partners, councillors are also banned from benefitting from doing business with their municipalities. It is trite that public officials may not appoint or advocate for the appointment of companies or entities in which they are serving, have interest in or are connected to individuals related to them, either as family or friends.

These restrictions are rational, reasonable and in line with the spirit of the general limitation clause. What cannot be rational and reasonable, however, is to impose such restrictions on people who are neither public representatives nor public servants.

Richardt Ramashia LLB (UL) LLM Corporate Law (UNISA) is an advocate in Polokwane.

This article was first published in De Rebus in 2020 (Nov) DR 46.

South African COVID-19 Coronavirus. Access the latest information on: www.sacoronavirus.co.za