10 March 2017

South Africa: Sassa Fiasco - Dlamini Has Shown No Remorse, Says Black Sash

Minister has "failed in her constitutional obligation", Constitutional Court told

The Black Sash has accused Minister of Social Development Bathabile Dlamini of failing in her constitutional obligations and showing "no remorse" for her failures.

On 15 March, the Constitutional Court is to hear argument from the Black Sash asking the Court to take back oversight of social grant payments to 17 million beneficiaries when the current SA Social Security Agency (SASSA) contract with Cash Paymaster Services (CPS) expires on 31 March. SASSA was to take over the contract before this deadline, but the agency has acknowledged that it will not be able to do so and it will have to negotiate a new contract with CPS.

In its Heads of Argument filed to the Court on 10 March, the Black Sash said: "The Minister has demonstrably failed to exercise effective oversight over SASSA, which is her constitutional obligation."

"SASSA has inexplicably failed promptly to inform the Court and the public when it failed to do what it had said it would do."

"The Minister and SASSA have even now... failed to explain why they acted as they did. There is a nominal admission of error, and no indication of remorse."

"Further failure is potentially catastrophic for the most vulnerable people in our society."

SASSA, says the Black Sash, "has created a crisis" by failing to make arrangements to take over grant payments before the expiry of the CPS contract, and by failing to notify the Court of this until last week.

Arguing that the Court should take back oversight of payments, possibly with an independent monitor, the Black Sash says SASSA "has demonstrated its inability to do what it has said it will do" and both SASSA and Dlamini have shown that "they cannot be relied upon to make accurate and timely disclosure to the Court and to the public".

The Court should impose conditions on the new contract with CPS, the Black Sash says. Specifically, the personal information of grant beneficiaries should be protected to prevent abuse.

As a subsidiary of Net1, CPS has a "patent conflict of interest" says the Black Sash: under the SASSA Act CPS has to protect the private details of beneficiaries, but at the same time CPS has an interest in helping Net1's other subsidiaries (such as loan company Moneyline and insurer Smartlife) get this information for the purposes of selling airtime, electricity and funeral insurance and issuing loans.

In his own papers to the court filed earlier this week, Net1 CEO Serge Belamant rejected the Black Sash arguments about conflicts of interest.

"I have stated repeatedly under oath and affirm again that CPS does not share the beneficiary data that it captures during beneficiary enrolment or receives from SASSA with any third parties - including Net1 subsidiaries," he said.

Meanwhile Corruption Watch has asked the Constitutional Court for permission to intervene in next week's hearing.

In documents also submitted to the Court today, Corruption Watch asks to be admitted as "amicus curiae" (friend of the court) in support of the Black Sash application.

Executive Director David Lewis says that although it is essential that the grant beneficiaries continue to receive their grants, regardless of what happens in court, this does not mean that the grant payment should be immune from judicial scrutiny.

"Corruption Watch's position is that, considering the circumstances in which the contract was apparently concluded, the contract must be scrutinised."

Lewis says if Corruption Watch is admitted, the organisation will make submissions on the "apparent illegality" of the new contract with CPS, and on possible action to be taken.

Freedom Under Law has also applied to the Court for permission to intervene in the case, arguing that CPS must not be allowed to make any profit from a new contract. This is based on statements by the Court itself in 2013 and 2014 that CPS must not profit from the 2012-2017 contract, which the Court ruled unlawful.

The Court has given SASSA until Monday to respond to several questions issued earlier this week about its failure to take over the payment of social grants next month. The Court has also ordered the agency to provide details of any new contract with CPS.

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