OPINION

DAFF responds to Public Protector's "Docked vessels" report

Dept welcomes the acknowledgement that the cancellation of the tender was proper

Department of Agriculture, Forestry and Fisheries docked vessels

12 Dec 2013

The Department of Agriculture, Forestry and Fisheries has spent the past two years improving the internal auditing systems and procurement processes of its Fisheries Branch. In 2012, a forensic investigation into the financial systems of the Fisheries Branch revealed several weaknesses. 

On 5 December 2013, the Public Protector announced the findings of a Report entitled "Docked Vessels". While the report criticised the department for administrative errors, the Public Protector also commended the department for withdrawing a tender that had been found to be irregularly awarded. After carefully studying the Report of the Public Protector, the department wishes to comment on issues raised and also on its planned corrective actions, where necessary, on the key findings of the Public Protector.

Background

In 2012, the Department of Agriculture, Forestry and Fisheries undertook a review of its procurement processes. This exercise uncovered areas of concern. For example, it identified a company that benefited from a multi-year contract from 2000 to 2012.

Government entered into a five year contract with a company to maintain and manage its fleet of patrol and research vessels from 2000 to 2005. A subsequent arrangement continued after the expiry of the first contract, with the same company. Since 2010, the contract was extended on an annual basis with the same company.

Recurrent extensions of the initial contract allegedly afforded this company an unfair advantage which cost the state in excess of R500 million per year without a tender or competitive bidding process. This allegedly constituted a contravention of the Public Finance Management Act, No 1 of 1999 as amended, which requires that all contracts must be advertised when they expire.

As the suspicion of possible irregularity pertaining to this contract was known to the department, it could not be condoned any longer. The contract terminated as a result of the expiry of the contractual period. The department decided not renew or extend the contract further, in compliance with the requirements of the PFMA.

Following this, a new tender was advertised. The department realised that regrettably, the bid process might have been flawed. In the interest of good governance, the tender was thus withdrawn. There were no cost implications to the department for this withdrawal.

The department thus welcomes the acknowledgement by the Public Protector that the cancellation of the tender was proper, and thus the Public Protector commended this action.

The fleet of patrol and research vessels render an essential service to the fishing industry. Thus, the withdrawal of the tender necessitated interim measures to provide the essential service. The department handed over the vessels to the South African Navy for a limited period until the issues around the tender could be resolved. As such, a new tender through competitive bidding was initiated to identify a service provider who would take the vessels from the SA Navy.

The suggestion that the industry has lost confidence is incorrect. The department works closely with the entire fishing industry. And as such, the department was able to commission a vessel from the sector to conclude vital research expeditions. The suggestion that fish stocks have been "allegedly decimated" is pure speculation and without any scientific basis. It should be noted that the scientific community is best placed to provide an expert view on the status of fish stocks. It must be noted that Marine Stewardship Council has recently re-accredited South Africa for its fisheries management capabilities.

The Public Protector believes that some of the above actions constitute improper conduct and maladministration. While acknowledging some internal weaknesses, the Department stands by its view that cancelling the tender demonstrates its commitment to good governance.

Statement issued by P Tsotso Sehoole, Acting DDG: Stakeholder Relations, Communications and Legal Services, Department of Agriculture, Forestry and Fisheries, December 13 2013

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