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Johannesburg - This week the court heard how the Public Protector failed to “apply her mind” during the Bankorp-CIEX investigation and how her conduct possibly amounted to a breach of the Constitution.
The matter was heard over three days at the North Guateng High Court, before a full bench of judges who included Judge Cynthia Pretorius, Judge Dawie Fourie and Judge Nomonde Mngqibisa-Thusi.
It relates to a report Public Protector Busisiwe Mkhwebane released in June, where her findings called for ABSA to repay R1.125bn for a lifeboat provided to Bankorp by the South African Reserve Bank (SARB) during the apartheid era.
Both the SARB and ABSA filed applications for the court to review the report and set it aside, while the SARB sought a declaratory order from the court that Mkhwebane abused her power.
Judgment has been reserved and the court will endeavor to deliver a decision in early 2018.
The legal counsel of applicants ABSA, the SARB and the finance minister all slated Mkhwebane for her lack of impartiality and for not abiding to procedural fairness. Mkhwebane’s counsel in turn defended her position, at one point even saying that even if she was wrong, she did not intend to abuse the powers of her office.
Fin24 presents a wrap-up of the top 10 quotes heard in the case, some harsh, others awkward but certainly illustrative of the severity of the matter before the courts.
1. “Even God himself did not sentence on Adam before he could be called upon to make his defence.”
– Gilbert Marcus SC for ABSA, who spoke on Mkhwebane’s failure to adhere to procedural fairness. Mkhwebane had refused ABSA’s request meet with her prior to the publication of the final report.
2. “What transpires is that the Public Protector was prepared to engage with an adversary to ABSA (Black First Land First) but not with ABSA itself.”
– Marcus for ABSA, who reiterated the lack of procedural fairness by the Public Protector during the investigation. He indicated that she met with Black First Land First (BLF), which was a strong opponent of ABSA and took the stance that ABSA should repay the debt.
3. “She has elevated the CIEX report and agreement into a binding instrument as though it is an act of Parliament.”
- Advocate Tembeka Ngcukaitobi for the minister of finance. He was speaking on the Public Protector’s misunderstanding of the contractual agreement between government and its service provider, CIEX. He argued that government was not bound to comply with the CIEX reported as Mkhwebane interpreted it.
4. “The recovery of R1.125bn will not make sins of apartheid vanish or disappear.”
- Ngcukaitobi for the minister of finance. He was speaking on the Public Protector’s finding of maladministration of funds that could have been used for the socio-economic benefit of South Africans. He argued that government has a constitutional obligation to work on the reconstruction of society, but pointed out that short-term interventions do not help to address the structural problems the economy faces.
5. “We submit it is constitutionally improper for a Chapter Nine Institution to compel the executive to interfere with the operations of an independent constitutional body… The Public Protector failed to have regard for the constitutional independence of the Reserve Bank.”
- Ngcukaitobi for the minister of finance. He defended the ministry of finance, given the Public Protector’s criticism of government’s rationale in not recovering the lifeboat the SARB made to Bankorp. Any interference by the ministry would have been “unconstitutional interference” as it would override the SARB's constitutional independence, Ngcukaitobi explained.
6. “The court is being used to prepare the ground for the removal of the person who occupies the office of the Public Protector.
“What is particularly serious and concerning - it is an institute of state (SARB) itself which is required to be impartial - is reacting in a partisan, unjustified manner by attacking another important institute of state (Public Protector).”
- Paul Kennedy SC for the Public Protector. He stated that the declaratory order was a personal attack by the SARB on Mkhwebane’s integrity and appealed to the courts not to be part of the SARB’s strategy. He argued that a declarator that the Public Protector abused her powers would have serious consequences for the public’s confidence in her office.
7. “Even if she acted inappropriately by meeting the Presidency or the SSA (State Security Agency), it does not justify the finding that she acted out of bad faith.”
- Kennedy for the Public Protector. He was speaking on the Public Protector’s meetings with the Presidency and SSA, which she had not initially disclosed. The counsels of ABSA and SARB took issue with the fact that no reasonable explanation was given for the meetings, but Kennedy in turn argued that even if the explanation provided was not adequate, it did not fall within the ambit of abuse of power.
8. “There is grave concern that something occurred in that meeting and a frank account has not been given.”
- David Unterhalter SC for the SARB, who spoke on the meeting between the Public Protector and the Presidency. This meeting was raised several times throughout the hearing as a cause for concern and possibly evidence that the Public Protector abused her powers. ABSA’s legal counsel pointed out that the meeting with the president reflected a lack of independence on the Public Protector’s part.
9. “By calling into question the role of the Reserve Bank as lender of last resort, she has been a source of instability in the financial system.”
- Unterhalter for the SARB, who spoke on how the Public Protector’s remedial action created the harm it sought to prevent. During his delivery, Unterhalter explained the role of the SARB as a lender of last resort, a standard adopted by central banks around the world. He explained that because of the Public Protector’s misunderstanding of the role, she imposed the unlawful remedy to have the constitutional mandate of the Reserve Bank changed.
10. “The declarator will vindicate the Constitution. It is a remedy that recognises that the office is bigger than the person who occupies it.
“The Public Protector’s conduct warrants the declaratory order sought by the Reserve Bank, and the Constitution demands it be granted.”
- Advocate Kate Hofmeyr for the SARB, who defended its position in seeking the declaratory order. Hofmeyr contended that the SARB was not acting maliciously by seeking a declaratory order, but rather that it was necessary to vindicate the Constitution and the office of the Public Protector which she claimed had come under “peril”.
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