The recommendations of the Zondo state capture commission offer an opportunity for a review and strengthening of the state machinery. But they should not be implemented without a thorough assessment of their viability and possible negative effects.
There would be changes to the entire state machinery. That is because the state functions like an ecosystem. Changes in one corner can have an impact, often negative, elsewhere in the system. Negative effects within the area where they are being implemented might not show immediately, and as the benefit of hindsight shows in the case of the SA Revenue Service, a solution to today’s most pressing problem may open the door for a worse problem to walk through tomorrow.
Importing ideas that have worked elsewhere requires a good understanding of why they have worked in other countries. A good example is acting chief justice Raymond Zondo’s recommendation of deferred prosecution agreements, which entail a company agreeing to change its behaviour over a specified period in return for its prosecution being deferred pending its successful implementation of remedial actions.
The commission has recommended these agreements on the basis that they have been effective in the US and UK. But why have they have been effective in the US and UK? Upon closer examination it may turn out that they have not been effective in themselves, but because of the high probability that an errant corporation will face the full might of the law in those countries. Deferred prosecutions may therefore not be as effective in SA given the country’s poor history of prosecuting corporations.
That is why it is important for the recommendations to be considered carefully. However, taking time to think through Zondo’s recommendations will complicate President Cyril Ramaphosa’s life, partly because of his reputation as someone who wanders around the bathtub when he must decide on an issue. If he takes his time he will simply be seen to be running true to form.
Ramaphosa has already indicated that he will table a plan of action on the Zondo commission recommendations in parliament. In developing this plan the government should bear in mind a couple of issues. The first is that the commission’s recommendations have limitations. Zondo had a small window into the function, or dysfunction, of the state machinery. There is therefore a risk that the recommendations come with unintended bias.
Those familiar with the history of World War 2 might remember the story of Hungarian-born mathematician Abraham Wald, who stepped in at a critical moment to save the US Air Force from a costly error, one that arose from what has become known as survivor’s bias.
Looking to armour plate as many planes as possible to reduce the risk of their being shot down, the air force examined the bullet holes on returning aircraft. Armour plating must be done selectively because it can increase the weight of the aircraft, reducing its manoeuvrability and increasing its fuel consumption, making them less effective.
The evidence before the air force was that most bullet holes were in the fuselage of aircraft, and not so many in the engine area. The air force took this to indicate that the fuselage needed armour plating. Wald stepped in, pointing out that aircraft whose engines had been shot out simply were not returning, so it was in fact the engines that needed most protection.
Similarly, Zondo’s recommendations are necessarily based on the evidence that was put before the commission. Those in the government must therefore review the commission’s recommendations with an eye on unavoidable bias and its potential unintended consequences.
Talking of unintended consequences, the history of the SA Revenue Service offers some lessons. When it was created by merging customs and tax collection the commissioner was appointed by the finance minister. The legislation was later amended to make the president the appointing authority. Whatever pressure was exerted to cause this change, we know with the benefit of hindsight that it made Jacob Zuma’s job easier. Had that change not been made he would first have had to replace the finance minister with a pliable individual before installing Tom Moyane as commissioner.
Zuma did change finance ministers during his tenure, but found this a frustrating business because of the added disciplinary effect of the financial markets. Hence David van Rooyen’s weekend tenure as finance minister.
So, as thought-provoking as some of Zondo’s assessments and recommendations are, Ramaphosa must think them through carefully before implementing them.
• Sikhakhane, a former spokesperson for the finance minister, Treasury and SA Reserve Bank, is editor of The Conversation Africa. He writes in his personal capacity.
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