The offset deals, worth R104-billion and concluded by the government with foreign powers as quid pro quo for the controversial R43-billion arms procurement agreements, are completely unenforceable, according to Judge Willem Heath. 

"According to standing committee reports, these offset contracts are unenforceable as the foreign countries, with which they were concluded, have the discretion to continue with these contracts," he told an Econometrix conference on the Budget. 

Judge Willem Heath, whose special investigative unit was controversially excluded from the investigation into the R43-billion arms procurement deal recently by President Thabo Mbeki, earlier addressed the conference at Montecasino in Johannesburg on the economic impact of corruption. 

It would have been able to investigate the implementation of these offset deals 

Heath explained that as foreign nations retained the discretion to invest in South Africa through these offset deals, there was no guaranteed investment and none of the watchdog bodies given mandates to investigate the arms deal had the power to look at this implementation gap. 

These offset deals were publicly touted by the government as securing billions of rand in inward investment for South Africa in return for the R43-billion - R30-billion initially - being spent on buying arms and military equipment from foreign nations. 

These offsets deals were concluded with a number of foreign powers including Germany and Britain. Heath explained that if his unit had been involved, it would have been able to investigate the implementation of these offset deals. 

'The offset deals aren't a problem at all' 

"Had we found these offset deals not to be in the interests of the country, we would have been able to recommend the cancellation of aspects of the deal," he said. 

Crucially, the organisations Mbeki has allowed to continue with the investigation do not have any power to examine these contracts. 

"Neither the public protector, the auditor-general nor the director of public prosecutions can examine the implementation or enforcement of the contracts relating to the R43-billion arms deal, nor whether these contracts will be of benefit to South Africa," he explained. 

Heath said that the investigating bodies were hamstrung as they could not scrutinise the implementation or enforcement of the contracts, nor did they have any power to interfere if this was found not to be in the interests of the country. 

"The special investigative unit could have looked at this unenforceability and decided that, given the fact that the offsets were uncertain, it would not be in South Africa's interest to continue with the deals," he said. 

Consequently, Heath said, even if these arms contracts were found to be invalid for any reason, they still would stand, because none of the investigating bodies had any power to interfere. 

With the focus on the R43-billion arms procurement deals, government had made little reference to these offset deals. 

Before Heath's exclusion from the probe was announced, Trade and Industry Minister Alec Erwin said the offset deals were "not an issue". 

"The offset deals aren't a problem at all. These are all going ahead rather well in fact," he commented. 

With acknowledgement to INet Bridge and Rob Rose.