Cape Town: The Department of Agriculture, Forestry and Fisheries is to investigate whether any individuals – both inside and outside the department – were involved in corrupt practices in its fisheries division after a preliminary investigation into tender irregularities uncovered a number of concerns in a coastguard contract, the department said on Tuesday.
Briefing media in Parliament on the preliminary findings of an investigation by Ernst & Young which began in April, the department’s acting Director General Sipho Ntombela said the preliminary investigation had found a number of concerns in the contract held by Smit Amandla Marine between 1999 and 2012.
Ntombela stressed that the report had not touched on any individual who may have been involved, but that the next phase of the investigation, now underway, would consider whether anyone inside the department was involved in the alleged corrupt practices.
A separate investigation by the Public Protector into Smit Amandla Marine has also been launched to assess whether any irregularities had taken place in the awarding of the contract to patrol SA waters to the company.
Since April, when the contract with Smit Amandla Marine came to an end, the navy has been manning patrol vessels and carrying out coastguard duties.
Ntombela said the department was seriously concerned with the preliminary findings and added that there was a possible case for collusion between officials in his department and some individuals outside the department.
He said everyone “from the minister down” was concerned about possible corruption in the department as it had a potential effect on service delivery.
He said a date for the submission of the final report – which would also include an investigation of other procurement processes in the department if times allows – depended on the work that still needed to be done.
Ntombela pointed out that as the department’s preliminary report merely looked at the available documents, and because the department did not want to jeopardise investigations, it had not been shared with Smit Amandla Marine or with the Department of Environmental Affairs and Tourism.
The Department of Environmental Affairs and Tourism had originally contracted the company in 1999, before the coastguard function was moved to the Department of Agriculture, Forestry and Fisheries in 2010.
Ntombela said the department’s preliminary investigation found that the extension of the contract agreement with Smit Amandla Marine in 2004 for five years appeared to not have followed any tender process.
In March 2010, the agreement was then extended for a second time to March 31, 2011.
The report also found that when it was extended for a third time last year on 7 March – to 30 September 2011 – the agreement contained an unusual provision that stated that “the department shall pay in addition to any amount detailed in the main agreement a further R56 million”.
The agreement was on 28 September 2011 extended for a fourth time up to 31 March 2012, but the investigation could not find evidence that such an agreement was ever signed.
In the signing of this respective agreement, there was no evidence to suggest that any procurement process was followed, Ntombela said.
The report also revealed a number of concerns around invoices submitted by Smit Amandla Marine to the department, including 65 duplicate invoices worth over R234 million and 292 instances worth more than R1 billion where invoices did not include VAT charges were identified.
A total of 222 instances of invoices worth over R750 million had been identified where invoices were not approved or allocated to a cost centre and would appear to have been processed for payment.
Added to this, a number of invoices were not sequentially numbered to indicate the date when the invoice was submitted and handwritten alterations were made to invoice numbers, including one case where the date had been erased.