Publication: Business Report Issued: Date: 2003-08-17 Reporter: Lynda Loxton

Arms Deal Fallout Triggers Cooling-Off Debate

 

Publication 

Business Report

Date 2003-08-17

Reporter

Lynda Loxton

Web Link

www.busrep.co.za

 

The continued fallout from the arms procurement deal has prompted calls for a comprehensive and wide-ranging debate on a "cooling-off period", or post-employment restriction, on senior government office bearers to prevent them cashing in on what they have learnt, or who they have got to know, while in the government.

The Mac Maharaj controversy has been pinpointed as a potential catalyst to set the ball rolling.

Maharaj, the former transport minister, this week resigned as a non-executive director of FirstRand despite being cleared of most charges of bribery and corruption connected to the granting of state transport tenders to parties involved in the arms deal.

The background issues involved were highlighted earlier this year when the Political Information and Monitoring Service-SA (Pims-SA) at Idasa, the Cape Town-based think-tank, released a discussion paper on post-employment restrictions following the arms deal investigation and forwarded it to Luwellyn Landers, the chairman of parliament's ethics committee.

Pims-SA examined the experiences of other countries and concluded that more research was needed to take into account South Africa's specific circumstances.

But there did appear to be a strong case for imposing a cooling-off period of at least two years on ministers before they could take up private sector employment.

In the US, however, there was no restriction on when ministers could enter the private sector, but rather on the kind of employment, with a ban on lobbying their former departments.

Pims-SA said, as in the US, shorter periods of about one year could be considered for parliamentary committee chairmen or directors-general of departments but, again, this covered lobbying and not full employment. It would be "inappropriate", however, to include most MPs as they did not get involved in awarding tenders.

The UK follows a minimalist approach. Ministers had to get advice from a special committee about a job they wanted to take up within two years of leaving the government. In France, MPs could take up a job outside of government as long as it was not in a government-subsidised company or one that mainly undertook local or foreign government contracts.

In Italy, ministers had a limit of a year after leaving office.

In Korea the ban was for two years and one year in Mexico.

In Nigeria, one of the few African countries to have looked at the issue, civil servants could not take up more than one paid post outside the government while still receiving a state pension. MPs, however, could.

Landers said on Friday that, although there might be a case for the cooling-off period applying to ministers, it would have to be widely debated to "convince everyone ... as many MPs are still struggling with having to disclose their [financial] interests".

Committee chairmen and ordinary MPs informally canvassed by Landers had been "terribly opposed" to any cooling-off period, claiming they had already made considerable financial sacrifices during the struggle and then when serving as MPs. If they had developed a particular area of expertise in committee work, especially as committee chairmen, they wanted to be able to use it when they left parliament.

Not being allowed to do this would mean they would have to "start from scratch ... grossly unfair given our history", Landers said.

Examples of MPs who have top jobs in the parastatal or private sectors include Saki Macozoma, who went on to Transnet and then New African Investments Limited (Nail), and Nkenke Kekana, who has moved on to Telkom.

Some, however, might welcome a cooling off, despite how hard it might be on them financially, to avoid being accused of using insider knowledge to benefit their new bosses.

Landers said he would like to see the issue widely debated in and out of parliament.

This sentiment was echoed on Thursday by Maharaj - who was against any specified cooling-off period - although he had undertaken not to get involved in the transport sector for six months after he left government; and by Laurie Dippenaar, FirstRand's chief executive, who had to deal with the tricky Maharaj issue while minimising potential damage to his company.

With acknowledgements to Lynda Loxton and the Business Report.