The Public Protector v Mail & Guardian Ltd and Others (2011 (4) SA 420 (SCA)) [2011] ZASCA 108; 422/10 (1 June 2011)

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[2011] ZASCA 108
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The Public Protector v Mail & Guardian Ltd and Others (2011 (4) SA 420 (SCA)) [2011] ZASCA 108; 422/10 (1 June 2011)

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THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case No: 422/10
Of precedential significance only in parts
In the matter between:
THE PUBLIC PROTECTOR
................................................................
Appellant
and
MAIL & GUARDIAN LIMITED
.............................................
First
Respondent
FERIAL HAFFAJEE
.............................................................
Second
Respondent
STEFAANS BRÜMMER
.........................................................
Third
Respondent
SAM SOLE
..............................................................................
Fourth
Respondent
Neutral citation:
The Public Protector v Mail &
Guardian Ltd
(422/10)
[2011] ZASCA 108
(1 JUNE 2011)
Coram:
NUGENT, PONNAN, SNYDERS and TSHIQI JJA and PLASKET AJA
Heard:
12 MAY 2011
Delivered: 1 JUNE 2011
Summary: Public Protector – investigation and report –
whether properly conducted – set aside on review
_______________________________________________________________
ORDER
_______________________________________________________________
On appeal from: North Gauteng High Court, Pretoria (Poswa J sitting
as court of first instance):
Paragraphs 2 and 3 of the order of the court below are set aside.
Save for that, the appeal is dismissed with costs.
________________________________________________________________
JUDGMENT
________________________________________________________________
NUGENT JA (PONNAN, SNYDERS and TSHIQI JJA and PLASKET AJA concurring)
[1] About six years ago a series of articles was published, over some
weeks, in a national weekly newspaper known as the Mail &

Guardian (M&G). The series revealed various transactions and
events that the newspaper called ‘Oilgate’. The articles

were written in collaboration between two journalists employed by the
newspaper, Mr S Brümmer (the third respondent) and Mr
S Sole
(the fourth respondent), in some cases also with the collaboration of
Mr Wisani wa ka Ngobeni (who is not a party to these
proceedings).
There can be no gainsaying that the revelations that were made in the
articles raised matters of profound public
importance if they were
true. When the first article appeared the matter was raised in the
National Assembly and a member of that
body asked the Public
Protector to conduct an investigation. As the story unfolded over the
following weeks the leader of the official
opposition in parliament
asked the Public Protector on two occasions to expand his
investigation to include the further revelations.
The Public
Protector acceded to the requests and produced a report within a
short time. He called a press conference when he released
the report,
which he said had been necessitated by the importance and enormity of
the matter. A spokesman in his office expressed
the opinion that it
had been the second most important investigation that had been
conducted by the Public Protector. The report
was tabled in the
National Assembly, where it evoked some debate, and it was adopted by
a majority of its members.
[2] At the time that is relevant to this appeal the incumbent of the
office of the Public Protector was Adv M Mushwana. He was
assisted in
his investigation by the head of special investigations in his
office, Adv C Fourie. Although Adv Fourie undertook
much of the work,
both say that he did so in close consultation with Adv Mushwana, who
properly accepts responsibility for the
report.
[3] Promptitude by public functionaries is ordinarily meritorious,
but not where that is at the cost of neglecting the task. The

promptitude in this case is explained by the paucity of the
investigation. A large part of the report was taken up with
explaining
why much of what had been placed before the Public
Protector fell outside his investigatory mandate, and what remained
after that
had been excised was decidedly narrow. The approach to the
investigation narrowed it even more, and the investigation of the
remnants
was undertaken as little more than a formality. The Public
Protector nonetheless concluded that there had been no impropriety on

the part of any of the various functionaries and entities concerned
and that is what he reported.
[4] The proprietor of the M&G (Mail & Guardian Limited, the
first respondent), its then editor (Ms F Haffajee, the second

respondent), and the two journalists, brought review proceedings
against the Public Protector in the North Gauteng High Court.
They
asked for orders setting aside the report and ordering the Public
Protector to investigate and report afresh. The orders were
granted
by Poswa J and the Public Protector now appeals against them with the
leave of the learned judge.
[5] The Constitution
1
upon which the nation is founded is a grave and
solemn promise to all its citizens. It includes a promise of
representative and
accountable government functioning within the
framework of pockets of independence that are provided by various
independent institutions.
One of those independent institutions is
the office of the Public Protector.
[6] The office of the Public Protector is an important institution.
It provides what will often be a last defence against bureaucratic

oppression, and against corruption and malfeasance in public office
that is capable of insidiously destroying the nation. If that

institution falters, or finds itself undermined, the nation loses an
indispensable constitutional guarantee.
[7] The constitutional mandate and duty of the Public Protector is
stated by implication in the powers that are recited in s 182
of the
Constitution:
‘
(1) The Public Protector has
the power, as regulated by national legislation –
to investigate any conduct in state affairs, or in the
public administration in any sphere of government, that is alleged
or suspected
to be improper or to result in any impropriety or
prejudice;
to report on that conduct; and
to take appropriate remedial action.
(2) The Public Protector has the additional powers and
functions prescribed by national legislation.’
[8] The office of the Public Protector is declared
by the Constitution to be one that is independent and impartial, and
the Constitution
demands that its powers must be exercised ‘without
fear, favour or prejudice’.
2
Those words are not mere material for rhetoric, as
words of that kind are often used. The words mean what they say.
Fulfilling their
demands will call for courage at times, but it will
always call for vigilance and conviction of purpose.
[9] The national legislation that is referred to
in s 182 is the
Public Protector Act 23 of 1994
. The Act makes it
clear that while the functions of the Public Protector include those
that are ordinarily associated with an ombudsman
3
they also go much beyond that. The Public
Protector is not a passive adjudicator between citizens and the
state, relying upon evidence
that is placed before him or her before
acting. His or her mandate is an investigatory one, requiring
pro-action in appropriate
circumstances. Although the Public
Protector may act upon complaints that are made, he or she may also
take the initiative to commence
an enquiry, and on no more than
‘information that has come to his or her knowledge’ of
maladministration, malfeasance
or impropriety in public life.
4
[10] The Act repeats in greater detail the
constitutional jurisdiction of the Public Protector over public
bodies and functionaries
and it also extends that jurisdiction to
include other persons and entities in certain circumstances. In broad
terms, the Public
Protector may investigate, amongst other things,
any alleged improper or dishonest conduct with respect to public
money,
5
any alleged offence created by specified sections
of the
Prevention and Combating of Corrupt Activities Act 12 of 2004
with respect to public money,
6
and any alleged improper or unlawful receipt of
improper advantage by a person as a result of conduct by various
public entities
or functionaries.
7
[11] But although the conduct that may be
investigated is circumscribed I think it is important to bear in mind
that there is no
circumscription of the persons from whom and the
bodies from which information may be sought in the course of an
investigation.
The Act confers upon the Public Protector sweeping
powers to discover information from any person at all. He or she may
call for
explanations, on oath or otherwise, from any person, he or
she may require any person to appear for examination, he or she may
call for the production of documents by any person,
8
and premises may be searched and material seized
upon a warrant issued by a judicial officer.
9
Those powers emphasise once again that the Public
Protector has a pro-active function. He or she is expected not to sit
back and
wait for proof where there are allegations of malfeasance
but is enjoined to actively discover the truth.
[12] There are a number of important observations that I need to make
at the outset concerning matters upon which there must be
no
misunderstanding.
[13] The first is that we are not called upon to make findings on the
matters that were placed before the Public Protector for

investigation, or on the veracity or authenticity of material that
might have been relevant to his enquiry, and I do not purport
in this
judgment to do so. We are concerned only with the extent to which
that material casts light upon the adequacy or otherwise
of the
investigation. It needs to be borne in mind that organisations and
persons to which the material might relate are not parties
to these
proceedings and we have not heard what they might have to say. There
might be ready answers to or explanations for what
the material
reveals at first sight, there might be other facts not before us that
would impact upon inferences that might otherwise
be drawn, and it
might be that documents are not authentic or that statements in
documents or otherwise are untrue. Those are all
matters upon which
we are not called upon to pronounce, and I do not purport to do so.
So far as I relate what that material shows
as if it is fact, I have
done so only for convenience of narration.
[14] Following upon that is the approach that is to be taken to the
evidence. Courts will generally not rely upon reported statements
by
persons who do not give evidence (hearsay) for the truth of their
contents. Because that is not acceptable evidence upon which
the
court will rely for factual findings such statements are not
admissible in trial proceedings and are liable to be struck out
from
affidavits in application proceedings. But there are cases in which
the relevance of the statement lies in the fact that it
was made,
irrespective of the truth of the statement. In those cases the
statement is not hearsay and is admissible to prove the
fact that it
was made. In this case many such reported statements, mainly in
documents, have been placed before us. What is relevant
to this case
is that the document exists or that the statement was made and for
that purpose those documents and statements are
admissible evidence.
[15] I need to deal specifically with one form of such evidence. In
his founding affidavit Mr Brümmer has at times conveyed

information that he says was imparted to him by an undisclosed
source. The appellant applied to strike out those portions of his

evidence but for the reasons I have given that application is
misconceived. What is relevant for present purposes is that the
reported statements were made, and not that the reported statements
are true, and the allegations in the affidavit are admissible
proof
of that fact.
[16] There is another context in which statements by undisclosed
sources play a role in this case. In the various newspaper articles

that I refer to later in this judgment the authors have at times
again attributed information to undisclosed sources. A theme that

runs throughout the answering affidavits is disdain for that
information and at times taunting challenges to the respondents to

reveal those sources. The disdain that the Public Protector displays
is unfortunate because it is misconceived.
[17] The fact that the source of information is not disclosed does
not mean that the information is untrue. And the question whether
or
not it is true will usually be capable of being verified even without
resort to the undisclosed source. If it is reported by
an undisclosed
source that a document is in the possession of A, the Public
Protector is quite capable of establishing whether
it exists by
asking A for the document, and if necessary by searching for it under
a warrant. If it is reported that an undisclosed
source said that
something was done by B, then the Public Protector is quite capable
of asking B and others who may have knowledge
of the matter, whether
that is true, if necessary under compulsion to answer. It is often in
cases of the most important kind that
there will be people who fear
reprisals if their identities become known. It is precisely in cases
of that kind that the arsenal
of investigatory tools at the disposal
of the Public Protector becomes particularly important. The Public
Protector has no place
summarily dismissing any information. His or
her function is to weigh the importance or otherwise of the
information and if appropriate
to take steps that are necessary to
determine its truth. I repeat that the Public Protector is an
investigator and not a mere adjudicator
of verified information that
must be sought out and placed before him or her by others.
[18] The affidavits filed on his behalf are also replete with
challenges to the respondents to demonstrate that what has been said

is untrue, and with protestations against the need for corroboration,
but I think, once again, that those challenges and protestations
are
misconceived.
[19] The Public Protector must not only discover the truth but must
also inspire confidence that the truth has been discovered.
It is no
less important for the public to be assured that there has been no
malfeasance or impropriety in public life, if there
has not been, as
it is for malfeasance and impropriety to be exposed where it exists.
There is no justification for saying to the
public that it must
simply accept that there has not been conduct of that kind only
because evidence has not been advanced that
proves the contrary.
Before the Public Protector assures the public that there has not
been such conduct he or she must be sure
that it has not occurred.
And if corroboration is required before he or she can be sure then
corroboration must necessarily be
found. The function of the Public
Protector is as much about public confidence that the truth has been
discovered as it is about
discovering the truth.
[20] The second important observation I need to make is that we are
not called upon to direct the Public Protector as to the manner
in
which an investigation is to be conducted and I do not purport to do
so in this judgment. A proper investigation might take
as many forms
as there are proper investigators. It is for the Public Protector to
decide what is appropriate to each case and
not for this court to
supplant that function. To the extent that I have suggested what
might have been done in this case it is
only to assess what might be
expected in the proper performance of the functions of the Public
Protector so as to determine the
adequacy or otherwise of his
investigation.
[21] There is no dispute in this case that an investigation and
report of the Public Protector is subject to review by a court.
I do
not find it necessary to pronounce upon the threshold that will need
to be overcome before the work of the Public Protector
will be set
aside on review. It would be invidious for a court to mark the work
of the Public Protector as if it was marking an
academic essay. But I
think there is nonetheless at least one feature of an investigation
that must always exist – because
it is one that is universal
and indispensable to an investigation of any kind – which is
that the investigation must have
been conducted with an open and
enquiring mind. An investigation that is not conducted with an open
and enquiring mind is no investigation
at all. That is the benchmark
against which I have assessed the investigation in this case.
[22] I think that it is necessary to say something about what I mean
by an open and enquiring mind. That state of mind is one that
is open
to all possibilities and reflects upon whether the truth has been
told. It is not one that is unduly suspicious but it
is also not one
that is unduly believing. It asks whether the pieces that have been
presented fit into place. If at first they
do not then it asks
questions and seeks out information until they do. It is also not a
state of mind that remains static. If the
pieces remain out of place
after further enquiry then it might progress to being a suspicious
mind. And if the pieces still do
not fit then it might progress to
conviction that there is deceit. How it progresses will vary with the
exigencies of the particular
case. One question might lead to
another, and that question to yet another, and so it might go on. But
whatever the state of mind
that is finally reached, it must always
start out as one that is open and enquiring.
The Standing of the Parties
[23] The Public Protector is there to inspire confidence that all is
well in public life. In those circumstances I think it is
unfortunate
that he should have chosen to challenge the right of the respondents
to submit his report to scrutiny. But he has done
so and I must
perforce deal with that objection at once.
[24] In the founding affidavit, which was deposed to by Mr Brümmer
and confirmed by the other respondents, it was said that
they had
brought the application ‘in the public interest as well as in
their own interests’. Their own interest in
the matter stems
from a curious feature of the report.
[25] Apart from exonerating the public entities and functionaries
that were investigated Adv Mushwana discredited the newspaper,
saying
that ‘much’ that had been published ‘was factually
incorrect, based on incomplete information and documentation,
and
comprised unsubstantiated suggestions and unjustified speculation’.
That finding is curious because it is inconsistent
with his careful
exposition of why much of what had been published could not be and
was not investigated. The finding features
prominently in the report.
It was repeated by Adv Mushwana in a press statement that he issued
when he released the report. Hansard’s
report of proceedings in
the National Assembly when the report was tabled records one member
asking of an opposing political party,
on the basis of that finding,
and to applause, what kind of party it was that relied upon newspaper
reports of the M&G for
its political interventions. Another
described the M&G as ‘the choirmaster in the chorus of
unsubstantiated allegations’.
Yet another said that the report
should ‘caution us to be ready for what we read in the papers
and the credibility of relying
on such material as [being] accurate
and dependable’.
[26] The newspaper and the journalists say that they have an
established reputation for the credibility of their journalism and

that the finding of the Public Protector undermines that reputation
to their detriment. I think that the remarks made in the National

Assembly are ample testimony to that, but in any event it must be
correct. A newspaper that publishes a series of articles on matters

of great public concern can only be seriously damaged by a finding
that much of what was published is not correct or cannot be

substantiated.
[27] On the other ground that the respondents relied upon for their
right to bring the application their counsel pointed out that
the
Constitution guarantees the protection of the office of the Public
Protector to all inhabitants of the country. Once again
that must be
correct. He submitted that in those circumstances, when it comes to
matters that concern its inhabitants at large,
every one of them must
be entitled to vindicate that promised protection.
[28] The traditional approach to standing that was taken at common
law has seen some expansion in cases that have been founded
on the
vindication of constitutional rights. I have said that it is not in
dispute that the work of the Public Protector is subject
to review.
The source of that power was not addressed in argument before us, and
I express no view on the matter. But for present
purposes I will
assume, in favour of the Public Protector, that a person who applies
for such review must meet the more conservative
test of the common
law.
[29] The common law has no fixed rule that
determines whether a party has standing to bring litigation and the
courts have always
taken a flexible and practical approach. The right
to bring litigation before the courts is restricted for various
reasons: the
courts are not there to pronounce upon academic issues;
they are not there to pronounce upon matters that have no significant
consequences
for the initiating party; they are not there for the
benefit of busybodies who wish to harass others; and so on. Thus the
courts
have always required that an initiating litigant should have
an interest in the matter. The interest that is required has been
expressed in various forms that are collected in
Cabinet
of the Transitional Government for the territory of South West Africa
v Eins.
10
It has been expressed as ‘an interest in the
subject matter of the dispute [that] must be a direct interest’,
and as
‘an interest that is not too remote’, and as ‘some
direct interest in the subject-matter of the litigation or
some
grievance special to himself’, and as ‘a direct interest
in the matter and not merely the interest which all citizens
have’.
The finding by the Public Protector discrediting the respondents is
manifestly damaging. I am in no doubt that the
interest that the
respondents have in protecting their reputation is sufficient to have
entitled them to commence these proceedings
for review and I need not
deal with whether they were also entitled to do so in the public
interest.
[30] With that disposed of I turn to the merits of this appeal.
The Requests to Investigate
[31] The requests for an investigation to be made have been referred
to often in these papers as ‘complaints’ but that
is a
misnomer. In each case it was in truth no more than a request for an
investigation into alleged conduct that was rightly considered
to be
of public concern. Nonetheless, I have used those terms
interchangeably in this judgment.
[32] The politicians who made the requests had no independent
knowledge of the matters to which the requests related. They were

prompted to do so by concern at information that had been published
by the M&G. The form in which the requests were made merely

highlighted what was of particular concern. In the court below Poswa
J rightly pointed out that a complaint or request must not
be
scrutinised as if it is a pleading, which serves to define and
circumscribe the issues. What is needed is to extract the substance

of the complaint or request. It needs to be kept in mind that the
Public Protector is not restricted to investigating what has
been
placed before him or her. The Act expressly empowers the Public
Protector to investigate on his or her own initiative, and
on no more
than information that comes to his or her knowledge, however that may
occur.
[33] For ease of narration it is as well at the outset to describe
the principal protagonists. The first is Imvume Management (Pty)
Ltd
(Imvume). That was a dormant company that was acquired and renamed by
Mr Majali in about April or May 2001. The shares in the
company were
allotted in September 2001. The only shareholders were three newly
formed trusts. Each of the trusts had three trustees
and in each case
Mr Majali was one of the trustees. The objects of the trust in each
case were expressed in broad and imprecise
terms but they were
essentially to engage in social and development programmes of various
kinds. From the events that occurred
I think it is clear that Mr
Majali exercised full control over the company.
[34] The second is The Petroleum Oil and Gas
Corporation of South Africa (Pty) Ltd (PetroSA). The report of the
Public Protector
records that ‘PetroSA was formed in July 2000
out of a merger of the business of Mossgas and Soekor as well as
parts of the
business undertaken by the Strategic Oil Fund, in order
to effectively explore, develop, manufacture and trade the crude oil
and
gaseous hydrocarbon resources of South Africa’. It was
wholly owned by CEF (Pty) Ltd,
11
which was a ‘Major Public Entity’
listed in schedule 2 of the
Public Finance Management Act 1 of 1999
.
[35] The third protagonist is the SFF
12
Association, an incorporated association that is
described in one of the documents as a subsidiary of CEF (Pty) Ltd.
[36] The information that was disclosed in the articles is
inter-related and should properly be seen in the context of the
articles
as a whole. Nonetheless, the report deals with the various
requests in isolation of one another and for convenience I will also

do so.
The First Request
[37] In the issue of the M&G published on 20 May 2005 an article
appeared that had been written jointly by Mr Brümmer,
Mr Sole
and Mr Wisani wa ka Ngobeni under the heading ‘The ANC’s
Oilgate’. The tenor of the article appears from
its opening
paragraphs, which are expanded on in the remainder of the article:
‘
A
Mail
and Guardian
investigation
into covert party funding has revealed how R11-million of public
money was diverted to African National Congress coffers
ahead of the
2004 election.
In what may be the biggest political funding scandal
since 1994 the M&G has established that South Africa’s
state oil
company, PetroSA, irregularly paid R15-million to Imvume
Management – a company closely tied to the ANC – at a
time
when the party was desperate for funds to fight elections.
The
M&G
possesses bank statements and has
seen other forensic evidence proving that Imvume transferred the
lion’s share of this to
the ANC within days. PetroSA this week
said it was unaware of this. The ANC denied impropriety and said it
was not obliged to discuss
its funders’
[38] A further article was prepared for publication the following
week. Imvume obtained an interdict against its publication but
the
interdict was lifted the week after and the article was published in
the edition that appeared on 10 June 2005. Written under
the heading
‘The Scandal Spreads’ the tenor of the article appears
once again from the opening paragraph:
‘
When Sandi Majali wrote
cheques after getting a multimillion-rand advance from the state oil
company, two of the first recipients
were relatives of Cabinet
members.
The ministers – Phumzile Mlambo-Ngcuka of Minerals
and Energy and Zola Skweyiya of Social Development – regulate
fields
in which Majali’s companies operated.’
[39] The articles reveal and expand upon facts that are to be found
in various documents that are disclosed in the affidavits,
more
particularly a report of the Auditor General, documents submitted to
the Public Protector by PetroSA, and various original
documents. I
will relate those facts with reference to the documents rather than
with reference to the article itself.
[40] That material discloses that in about October 2002 a written
contract was concluded between Imvume and PetroSA under which
Imvume
undertook to deliver to PetroSA cargoes of oil condensate from time
to time. The condensate was to be sourced by Imvume
from Glencore
International AG (Glencore), a Swiss based commodity trader. The
contract provided that PetroSA would pay the price
of each cargo
direct to the bank account of Glencore within 30 days of the date of
the bill of lading. The inference from the evidence
is that Imvume
would receive a fee from Glencore for each cargo.
[41] Cargoes were duly acquired by Imvume from Glencore and delivered
to PetroSA from time to time. On 6 December 2003 the ninth
cargo of
314 598 barrels of condensate was loaded for delivery. The cost of
the cargo was approximately US$10.2 million. The ordinary
terms of
payment required the full price to be paid to Glencore by no later
than 5 January 2004.
[42] On 18 December 2003 Imvume asked PetroSA to make an ‘advance’
payment to it of R15 million (approximately US$2.3
million) and it
gave PetroSA an invoice to that effect. The invoice recorded that the
payment was to constitute ‘advance
payment invoice of North
West Shelf condensate (light crude) loaded per vessel Selendang Sari
at Dampier, Australia, Bill of Lading
dated 06 December 2003’.
According to PetroSA the advance was paid to Imvume on the same day.
[43] I pause for a moment to say that it seems odd on the face of it
that Imvume asked for an ‘advance’ on the price
of the
cargo, bearing in mind that its supply contract provided that PetroSA
would pay Glencore direct. I have found no explanation
for that in
the documents but it is a question that the Public Protector might
have asked. Nonetheless, I think I must infer that
the parties had
come to a new arrangement that PetroSA would pay Imvume and Imvume
would pay Glencore. If that was so then I must
also infer from what
happened that the due date for payment to Imvume and the due date for
payment to Glencore coincided.
[44] The cargo was received by PetroSA on 22 December 2003. On 5
January 2004 – the date that the price of the cargo became

payable to Glencore – PetroSA paid to Imvume the balance of the
price, which amounted to US$7.9 million. For reasons that
are not
explained Imvume returned the sum of US$7.4 million to PetroSA on 15
January 2004, retaining the sum of $500 000. On 2
February 2004
PetroSA again paid to Imvume the sum of US$7.4 million, which Imvume
paid to Glencore. That left a shortfall that
was owing to Glencore of
$2.8 million. The shortfall had by then already been paid by PetroSA
to Imvume (the advance of $2.3 million
plus $500 000 that had been
incorporated in the first payment to Imvume of $7.9 million and had
not been returned).
[45] The cargo was discharged on 22 December 2003. On 28 January 2004
Glencore invoiced PetroSA for the full amount of the cargo.
Glencore
told PetroSA that the shortfall had not been paid to it by Imvume,
which Imvume admitted to PetroSA. At that stage the
next cargo was in
transit and Glencore threatened to withhold delivery unless it was
paid the shortfall. PetroSA then paid to Glencore
the outstanding
amount of $2.8 million. The explanation that was given by PetroSA to
the Public Protector for paying the debt was
that production at its
refinery would have been interrupted at substantial cost had the
subsequent cargo been withheld.
[46] The net result of those transactions was that PetroSA paid $13
million for the cargo when its purchase price was only $10.2
million.
The excess represented the ‘advance’ of $2.3 million (R15
million) that had been paid to Imvume but not paid
over to Glencore,
plus the sum of $500 000 that had been withheld by Imvume when it
repaid to PetroSA the moneys that it first
received.
[47] The ‘scandal’ that was referred to in the article
concerned the fate of part of the advance of R15 million that
had
been paid to Imvume. It was alleged in the article that within days
of the R15 million advance having been made to Imvume,
Imvume
paid R11 million to the governing political party, the African
National Congress (ANC). The documents do not disclose the
fate of
the balance of R4 million that remained in the hands of Imvume, nor
the fate of the $500 000 that was retained, but that
is not directly
relevant to the present case.
[48] The payments that were the subject of the second article were
two payments that were alleged to have been made by Imvume on
19
December 2003 (the day after the advance had been received from
PetroSA). One was a payment of R50 000 to a company called Uluntu

Investments, which was owned by Mr B Mlambo, the brother of the then
Minister of Minerals and Energy, Ms P Mlambo-Ngcuka. The other
was a
payment of R65 000 to Hartkon Construction as part of its price for
renovating the private residence of Mr Z Skweyiya, then
the Minister
of Social Development, and his wife.
[49] For completeness it is convenient to set out briefly what
PetroSA did to recover the R15 million ‘advance’ that
it
had made to Imvume. PetroSA told the Public Protector that the
decision to pay Glencore was taken on the basis that PetroSA
would
immediately take steps to recover the money from Imvume. On 19
February 2004 an acknowledgement of debt was signed by Mr
Majali on
behalf of Imvume, in which Imvume acknowledged itself to be indebted
to PetroSA for the amount of $2.8 million plus interest,
which it
undertook to pay within 90 days. Imvume failed to pay and, after
demand for payment had been made, PetroSA issued summons
for recovery
of the debt. Imvume defended the action and PetroSA applied for
summary judgment for approximately R18 million on
20 Augst 2004.
Imvume opposed the application on spurious grounds. Meanwhile, the
parties had entered into settlement negotiations.
In August 2004
Imvume paid R1 million and proposed terms for payment of the balance.
By August 2005 an amount of approximately
R18 million was still
outstanding and the parties concluded a written agreement for payment
of that amount plus interest in instalments
of R500 000 per
month. Whether and to what extent that balance had been repaid at the
time the Public Protector investigated
the matter is not disclosed.
[50] On 3 June 2005 a member of the National Assembly for the Freedom
Front Plus, Mr W Spies, asked the Public Protector to investigate
the
information that had been disclosed in the two articles. It seems
that he must have had wind of the second article because
at that time
it had not yet been published. I set out the letter in full:
‘
COMPLAINT AGAINST PETROSA AND
TWO CABINET MINISTERS
With reference to the above, we hereby give notice of –
our formal complaint against the
state-controlled petrochemical corporation, PetroSA, for improper
conduct and maladministration,
in that it used the company Imvume
Investments
13
as a conduit to transfer public
money to the ANC, as well as
a request for an investigation into the exact nature of
certain business relationships between close relatives of the
Minister
of Minerals and Energy and the Minister of Social
Development and the company known as Imvume Investments.
Backround to the complaint
We request you to investigate whether the alleged
unindebted and unsecured payment of R15 million made by PetroSA to
Imvume Investments
on 18 December 2003, constituted improper conduct
and maladministration by the management of PetroSA.
In particular, given the fact that a further R15 million
had to be paid by PetroSA to Glencore International (a Swiss-based
resource
trader) on 19 February 2004, as a result of Imvume
Investments’ non-performance in terms of its obligations
towards Glencore
International, we submit that
prima facie
,
Imvume Investments was merely used by PetroSA as a conduit to
transfer money to the ANC during December 2003.
Kindly also investigate the exact nature of the
following alleged payments by Imvume Investments or its CEO, Mr Sandi
Majali to
the persons and/or entities referred to below:
R50 000 paid to the company Uluntu Investments o[r] Mr
Bonga Mlambo on 19 December 2003;
R65 000 paid with regard to improvements by the
construction company Hartkon to the private residence of the
Minister of Social
Development on 19 December 2003; and
R11 million paid to the ANC in tranches of R2 million
(twice), R3 million and R4 million respectively, on 23 December
2003.’
It is our respectful submission that,
if found to be true and causally related, one or more of the
transactions set out above, not
only constitute an improper prejudice
caused to the
fiscus,
but also amounts to
dishonesty and/or improper dealings with respect to public money.’
The Second Request
[51] In its edition published on 25 June 2005 the M&G published
two articles as part of what it called ‘Oilgate: A special

report’. Both were written by Mr Brümmer and Mr Sole. One
article was headed ‘An ANC front’ and once again
I quote
the opening paragraph as being descriptive of its tenor:
‘
The African National Congress
has misled the nation on the Oilgate scandal. Documents in the
possession of the
Mail
& Guardian
make
it clear that Imvume Management – the company that channeled
R11-million in state oil money to the ANC before the 2004
election –
was effectively a front for the ruling party.’
Another longer article appeared under the heading ‘Trading
principle for profit. How the ANC hawked foreign policy for oil’.

Here are the opening paragraphs:
‘
This is the story of how South
Africa’s ruling party offered solidarity to Saddam Hussein in
exchange for crude oil –
and how state resources were used to
help the party in this ambitious fundraising project.
Two years of effort resulted in little, if any,
financial gain for the African National Congress. But the story is
important for
it reveals not only how the party subordinated
principle to profit, but also how it engaged in business through what
was effectively
a front company’.
[52] The bare facts that were revealed, and expanded upon, in those
articles appear from various documents that were in the possession
of
the M&G. The documents that I refer to were freely available from
the M&G’s website and readers were invited to
download
them. Once again I relate what the story was about with reference to
those documents.
[53] The events that led to the disclosure of ‘Oilgate’
can be traced to the imposition of sanctions upon Iraq by the
United
Nations Security Council in 1990 following upon Iraq’s invasion
of Kuwait. In 1995 the sanctions were partially lifted
so as to allow
oil to be purchased from Iraq for the purpose of generating funds to
meet the humanitarian needs of the people of
that country under a
scheme that was to be monitored by the United Nations (the
‘Food-for-Oil’ programme). Allocations
of oil were to be
made by the Iraqi authorities but payment was to be made to an
account monitored by the United Nations.
[54] In October 2005 an Independent Inquiry Committee (IIC)
established by the United Nations released a report titled
‘Manipulation
of the Oil-for-Food Programme by the Iraqi
Regime’ that disclosed abuses of the scheme. That report was
naturally not available
to the Public Protector at the time he wrote
his report but I nonetheless refer to it to provide the background
against which subsequent
events occurred.
[55] The committee reported that numerous individuals and
organisations around the world received allocations of oil in return

for political influence that they promised to Iraq to have sanctions
lifted, and in return for ‘surcharges’ (a euphemism
for
‘kickbacks’) that were paid to members of the Iraq
regime. Two South African companies were listed in the report
as
having participated in those abuses – Montego Trading (Pty) Ltd
and Imvume.
[56] The IIC report recorded that in December 2000 Montego concluded
a contract with the State Oil Marketing Organisation of Iraq
(SOMO)
for the supply to it of 2 million barrels of crude oil for delivery
during the period December 2000 to March 2001. The contract
was
concluded on behalf of Montego by Mr Majali, who described himself as
a director. The IIC report contains a copy of a letter
from the ‘Oil
Minister’ of Iraq recording approval of the contract by SOMO,
which refers to Mr Majali as ‘[a]dvisor
to the President of
South Africa’. It records that the ‘[a]mount of
surcharge’ was to be paid during the month
after delivery. A
due diligence review of Imvume that was conducted by Deloitte &
Touche, which I return to later in this judgment,
confirmed the
transaction in general but not its details. The writer of the due
diligence report recorded having been told that
Montego was used to
secure a crude oil allocation while Imvume was still being
‘conceptualised’. He said that Montego
had secured one
allocation of oil and had then become dormant, and that thereafter Mr
Majali pursued his oil interests through
Imvume.
[57] I need not deal with the fate of the transaction. It is
sufficient to say that matters apparently did not turn out as planned

by Montego with the result that it was left with a debt for the
‘surcharge’. I turn now to the documents that were
in the
possession of the M&G when it published its articles
[58] On 30 July 2001 Mr Majali wrote a letter on behalf of ‘Imvume
SAOE’ to SFF offering to supply about 6 million
barrels of
Basrah Light (a category of crude oil that emanates from Iraq) for
delivery between August and September 2001. The letter
recorded that
if required by SFF, Imvume was ‘in a position to facilitate a
direct crude oil Purchase Agreement between SFF
and SOMO’. What
happened to that offer is not disclosed in the documentation.
[59] By September 2001 an organisation called the South African
Business Council for Economic Transformation (SABCET) had been

established with Mr Majali as its chairman. The nature of the
organisation was described under the hand of Mr Majali in the
executive
summary of a proposal that was to be submitted under the
name of the organisation to the government of Iraq. The document was
marked
‘TOP SECRET’. It recorded that SABCET had been
established ‘to facilitate strategic partnership for economic
advancement at a political level’ and had made an ‘unequivocal
commitment to open relevant channels and advance the
socio-economic
support programmes geared towards establishing long lasting relations
between South African leadership, the Baath
Party and the Iraq
Government’. It went on to record that
‘
South Africa has made an
unequivocal commitment to advancing the cause of the people of Iraq
at various levels. Such commitment
has been demonstrated by a number
of actions taken by South Africa as a country, to express its support
for that cause’.
It said that SABCET
‘
has the blessing of the South
African leadership with its brief being to facilitate and advance
economic programmes that are geared
towards supporting the ANC’s
political programmes sourcing finance to fund such programmes’.
[60] A letter that was subsequently written by Mr
Majali under the name of SABCET
14
to the director of the Foreign Relations Bureau of
the Arab Ba’ath Socialist Party in Baghdad, expressing
appreciation for
its hospitality on a visit that Mr Majali and others
had made to Iraq (of which more later), recorded the following:
‘
Allow me to, once again,
re-affirm our commitment to support the people of Iraq in their
struggle against the economic sanctions,
embargo and the proposed
smart sanctions by the West.
Please be advised that I have already
briefed the leadership of the ANC, through the Secretary-General and
the Treasurer-General
regarding our visit to Baghdad and discussions
with yourselves. They, in turn have undertaken to provide a full
briefing to the
President of the ANC. Be assured that the ANC remains
committed to the co-operation agreement with the Arab Ba’ath
Socialist
Party. We therefore propose a signing of a Protocol to
formalise the relations between our respective parties during your
visit
to South Africa between the 10
th
and 20
th
of October 2001.’
It went on to say:
‘
I am further pleased to inform
you that I have conveyed the invitation by yourselves to the ANC to
join the International Conference
that will take place in Baghdad on
12 November 2001 and they have welcomed the invitation. The
Secretary-General of the ANC will
respond as soon as he receives a
formal invitation in this regard.’
[61] Another document, said to have been a speech prepared for
delivery by the Secretary General of the ANC, described SABCET as
‘an
agent of change duly mandated by the ANC to implement its programmes’
and said that it reported to the Secretary
General of the ANC.
[62] Mr Majali was also instrumental in
establishing an organisation called the South Africa-Iraq Friendship
Association. The nature
of that organisation is to be pieced together
from various documents. A letter purporting to have been written by
Mr Majali, under
the name of that organisation, to the chairperson of
the Iraq Friendship Association, headed ‘TOP SECRET’,
records
that ‘[i]t is our desire to finalise discussions on the
Iraq-South Africa Friendship Association as a vehicle towards the

promotion of socio-economic and political relations between the two
countries.’ A protocol that purports to have been concluded

between the Iraqi-South African Friendship Associations of South
Africa
15
and Iraq, establishing an organisation bearing
that name, records that ‘the Protocol between the Arab Ba’ath
Socialist
Party and the African National Congress which entered into
force constitutes the basis for this protocol’. A letter
written
by the Secretary General of the ANC to the Chairperson of the
Iraq Friendship Association commended Mr Majali to them in the
following
terms:
‘
His position, therefore, as
the Chairperson of the South Africa-Iraq Friendship Association has
our full approval and full blessing’.
[63] I think that it can fairly be inferred from those documents,
absent facts or explanations to the contrary that might come
to
light, that SABCET and the South African Iraq Association were
organisations that were established to further the interests
of the
ANC.
[64] I return to the proposal that I referred to earlier. The
proposal was prepared in September 2001 under the name of SABCET
and
was marked ‘TOP SECRET’. The proposal recorded that it
was being made by ‘Mr Sandi Majali (“the Proposer”),

a director of Imvume Management (Proprietary) Ltd’ to ‘His
Excellency the Deputy Prime Minister of Iraq, Mr Tariq Aziz’.

It proposed an agreement between Imvume and SOMO for the sale and
delivery to Imvume of crude oil. It described its shareholder-trusts

and recorded that:
‘
[t]he proceeds from the sale
of the crude oil by the Company will be channeled, in addition to the
abovementioned trusts, to the
South African Business Council for
Economic Transformation (“SABCET”) and the South Africa
Iraq Friendship Association
(“SAIFA”) in … amounts
to be agreed between the parties’.
[65] In the same month Mr Majali travelled to Iraq in the company of
the Director-General of the Department of Minerals and Energy
(Adv S
Nogxina), the International Liaison Officer of that department (Mr T
Mafoko), the Assistant to the Minister of Minerals
and Energy (Mr A
Nkuhlu), and a member of the board of directors of SFF (Mr R
Jawooden). The visit was approved by the Minister
and the expenses of
the government officials were paid by the department. I think it is
clear that the proposal I have referred
to was prepared for
presentation in the course of that visit.
[66] In preparation for the visit Mr Majali, writing as chairperson
of the South Africa-Iraq Friendship Association, wrote to his

counterpart in Baghdad on 10 September 2004, requesting his
assistance to host the visit. He described himself as ‘Head of

Implementation of ANC Economic Transformation programmes and leader
of the delegation’. After providing the ‘credentials
of
our delegation’ (naming the four officials I have mentioned) he
proposed the following programme:
‘
THURSDAY, 13 SEPTEMBER 2001
Presentation of a message from the
leadership of the ANC by Sandi Majali to His Excellency, Mr T Aziz.
16
Sandi Majali meets with the Chairperson of the Iraq
Friendship Association to discuss possible friendship with the
African National
Congress (ANC).
Discussions between the Director-General of Minerals
and Energy (South Africa) and his delegation with his counterpart
from the
Ministry of Oil (Iraq) regarding government to government
relations in relation to oil trade.’
FRIDAY, 14 SEPTEMBER 2001
Site visits by the South African delegation to areas
affected by the sanctions and ravaged by the war, including
hospitals.
SATURDAY, 15 SEPTEMBER 2001.
Meeting with the leadership of the Baath Party to
discuss political relations and practical programmes to tighten
these.’
[67] I referred earlier to a letter written by the Secretary General
of the ANC to the Chairperson of the Iraq Friendship Association
on
10 September 2001, which commended Mr Majali to them in the following
terms:
‘
As a gesture of our desire to
take the programmes agreed to between our respective parties forward,
I wish to confirm the ANC’s
approval of Sandi Majali as a
designated person to lead the implementation processes arising out of
our economic development programmes.
As a leader of this process he
is expected to develop and implement a comprehensive Programme of
Action aimed at achieving the
socio-economic objectives agreed to
between our parties and to report to my office on the progress and
developments at regular
intervals. His position, therefore, as the
Chairperson of the South Africa-Iraq Friendship Association has our
approval and full
blessing.’
[68] Subsequent to the visit, on 20 September 2001, Mr Majali wrote a
series of letters that were all marked ‘TOP SECRET’.
One
was written in the name of Imvume to the Deputy Minister of Oil for
Iraq. Mr Majali thanked the Deputy Minister for his hospitality
to
the delegation and recorded what was said to have been discussed at a
meeting between them. He said that ‘[o]n the basis
of our
discussions we request you to approve an allocation to us of 12
million barrels of Basrah Light in your Phase 11 allocation
by the
United Nations 661 Committee’. He recorded that ‘[t]he
management and execution of this transaction will be
undertaken by
Imvume Management (Pty) Ltd on behalf of the South African Department
of Minerals and Energy’ and it concluded
as follows:
‘
We further wish to confirm our
visit to finalise our discussions regarding the details of the
lifting as suggested by yourself.
Be advised therefor that, if it
meets your approval, we would like to return to Baghdad on 10
November 2001 and we are also looking
forward to participate in the
International Conference in support of the lifting of sanctions, the
embargo and resisting the proposed
smart sanctions in Baghdad on 12
November 2001. The ANC will be sending a high level delegation to
represent the voice of the people
of South Africa in support of the
freedom of the Iraq people.’
[69] Another was addressed under the name of Imvume to SOMO. It
recorded, amongst other things, that Imvume had been ‘officially

appointed by the South African Department of Minerals and Energy to
source crude oil for the government’s strategic stock’.

Mr Majali said that the required quantity was 12 million barrels of
Basrah Light immediately, and that another 21 million barrels
might
be required by the end of June 2002. He said that discussions had
been held with the Iraq Department of Oil in that regard
and he
sought approval of the request by SOMO.
[70] Another was a letter that I referred to earlier, written by Mr
Majali as chairperson of SABCET to the director of the Foreign

Relations Bureau of the Arab Ba’ath Socialist Party in Baghdad,
expressing appreciation for its hospitality. I have already
recited
the contents of that letter.
[71] Yet another was addressed, for SABCET, to the President of the
Iraq Friendship Association. It recorded:
‘
We believe the discussions we
held were very constructive and progressive and added tremendous
value to our relations. We believe
there is a need to move speedily
towards the implementation of the suggested programmes especially the
implementation of an effective
political program that will result in
an effective strategy geared towards campaigning for the lifting of
sanctions and the embargo
that have inflicted pain and suffering on
the people of Iraq. We fully believe that the people of Iraq do not
deserve to be subjected
to this kind of oppression by the West. We
further believe that a joint effort between the ANC and the Arab
Ba’ath Party
will add a lot value towards achieving the common
political objectives. The programme of action in this regard should
be discussed
and finalised at a top level by the leadership of both
parties. Your visit to South Africa between the 10th and 20th of
October
2001 presents a valuable opportunity to deal with these
issues.’
The letter went on to express appreciation to the organisation if it
would facilitate the transaction referred to in its letter
to SOMO
which was said to be to ‘build financial resources to support
political programmes’. Mr Majali went on to say:
‘
I am convinced that you do
appreciate that such financial resources are crucial for the
long-term sustainability of the political
programmes the parties will
be implementing and to run seminars, workshops in order to develop
effective political development
strategies. On the basis of the
aforegoing, we would like to discuss various plans with yourself
during your visit to South Africa.’
[72] The documents reflect that a delegation of the Arab Ba’ath
Socialist Party visited South Africa in October 2001. Included

amongst the papers is a copy of what is said to be a speech that had
been prepared for presentation to the delegation by the Secretary

General of the ANC. Much of it is taken up with pledging the support
of the ANC for the lifting of sanctions against Iraq. It describes

the Iraq-South Africa Friendship Association as an association
‘brought into being through the Protocol entered into by the

two parties’ which will be ‘empowered to conduct business
in the open market through appropriate vehicles and/or companies
it
sets up or through strategic partners in the private sector’.
As for SABCET it says the following:
‘
South Africa has established a
body known as the South African Business Council for Economic
Transformation (SABCET) as a vehicle
to facilitate and manage all
bilateral and multilateral economic transformation programmes. This
relationship, on the South African
side is therefore driven and
managed by SABCET which reports to the Secretary-General of the ANC …
SABCET is therefore an
agent of change duly mandated by the ANC to
implement its programmes geared towards the economic and
socio-political renewal of
the African continent and the world.’
The speech concludes as follows:
‘
It is therefore on the basis
of the aforegoing that the ANC, through [SABCET] has presented a
proposal to secure a contract for
the lifting of 25 million barrels
of Basrah Light oil per annum over a 10-year period as an initial
measure to foster such political
relations.’
[73] A letter written by Mr Majali, for Imvume, on 17 October 2001,
to the Deputy Minister of Oil of Iraq, confirms discussions
with the
delegation as follows:
‘
Please be advised that we have
received confirmation of your positive response to our correspondence
dated 20 September 2001 regarding
a crude oil allocation through Dr
Monther Abdul Hameed and his delegation during their visit to South
Africa. We are indeed very
pleased with the turn of events in this
regard.’
The letter proceeds to deal with details of the proposed lifting of
oil at various times. It proposed lifting 6 million barrels
in three
tranches during December 2001 and the remainder in tranches during
January 2002.
[74] There are some contradictions in the various documents, and
there are gaps in the narrative, but I think that, when viewed
as a
whole, they tell a tale of Mr Majali, with the support and assistance
of the ANC, attempting to secure allocations of Basrah
Light crude
oil that would be sold to the state. The proposed programme for the
visit to Iraq records that the officials who accompanied
Mr Majali
were there to discuss ‘government to government relations in
relation to oil trade’ but the documents make
it clear that any
oil that was allocated would be supplied to South Africa through the
medium of Imvume, so as to produce income
for the ANC. What was
offered in return for allocations was political support from the ANC
for the lifting of sanctions. Although
it was expressed as being
support from the party, counsel for the respondents submitted, I
think correctly, that political influence
in the United Nations can
be expected to be exerted only by member states, and thus it can be
inferred that the ANC was to exercise
its promised influence through
the medium of the state.
[75] That was the essence of the story that was told in the series of
articles published in the M&G, considerably supplemented
by other
allegations and inferences. I think it will be obvious that the
documents alone, without resort to information from undisclosed

sources, provided a considerable basis for the story that was told.
Whether or not the documents are authentic is another matter,
and is
not material to this case.
[76] The publication of the articles prompted the leader of the
official opposition in parliament, Mr T Leon, to ask the Public

Protector to expand his enquiry. In a letter that was written on 18
July 2005 the request was made as follows:
‘
Request for broadening of
investigation into “Oilgate” to include the state’s
involvement with Imvume.
I am approaching your office with the specific request
that… your office broadens its existing inquiry into the
so-called
“Oilgate affair” (public funds are alleged to
have been deliberately channeled to the ruling party through a BEE
company,
Imvume) by determining the extent to which the state was
involved in funding and supporting Imvume’s Iraqi oil ventures
and
travel related thereto.’
It then summarised allegations that had been made in the newspaper
articles, motivated the request, and concluded as follows:
‘
In light of the above, the
extent of the state's involvement in funding and assisting Imvume’s
oil ventures in Iraq are relevant
to a full exploration of the
Oilgate affair.’
The Third Request
[77] A further article by Mr Brümmer and Mr Sole appeared in the
issue of the M&G that was published on 22 July 2005.
The article
related to a tender that had been awarded to Imvume by SFF. The
headings were ‘Oilgate: The next instalment’
and ‘R1bn
tender was “fixed”’. I quote again the opening
paragraphs:
‘
A R1-billion crude oil tender
– one of South Africa’s largest ever – went to
African National Congress-linked
company Imvume Management after an
extraordinary series of interventions that suggest the tender was
rigged.
This emerges from a
Mail
& Guardian
investigation
of the 2001/02 tender process, which resulted in Imvume supplying the
Strategic Fuel Fund Association (SFF) with four
billion [sic] barrels
of Iraqi oil. The SFF was the state agency that managed the country’s
strategic stocks.’
[78] Once again I relate what that article was about with reference
to documents that are disclosed in the affidavits. The story
that
they tell is that on 5 December 2001 the SFF invited tenders for the
supply of 4 million barrels of Basrah Light, in two cargoes
of 2
million barrels each to be delivered to Saldanha Bay from January
2002. The invitation to tender required the FOB price to
be reflected
as ‘either a discount or a premium of Dated Brent price’
Dated Brent price was described as the ‘mean
of dated Brent
quotations as published in Platts crude oil marketwire’.
[79] Tenders were opened at a meeting held on 3
January 2002. There was an evaluation team of six and Mr Jawooden
(who had accompanied
Mr Majali to Iraq) was one of the members. The
minute of the meeting reflects that there were 14 tenders, one of
which was from
Imvume. Of nine bidders who quoted prices in
accordance with the tender,
17
Imvume’s was the second highest, and a
‘first short list’ placed it eighth in line. The minute
records that the
bidders were invited to re-submit their prices, on
this occasion relative to SOMO prices. A document emanating from SFF
reflects
that bidders were then invited to submit a ‘Revised or
a Reconfirmation’ of prices relative to Dated Brent. At the end

of the process a company referred to as Leokoane Oil topped the list
and it was resolved that it be awarded the contract, subject
to it
furnishing a performance bond, and the satisfactory outcome of a due
diligence review.
[80] The minute of a board meeting of SFF held on 18 January 2002
reflects that Leokoane Oil had not been able to furnish the
guarantee, and that the diligence review disclosed that it was a
company of no substance, and it was accordingly disqualified. The

contract was then awarded to Imvume on the same conditions.
[81] On the same day the Chief Executive Officer of SFF, Dr R.
Mokate, addressed a letter to Mr M Mandela of ‘Imvume
Resources’,
in which she advised that it had been selected as
the preferred bidder, subject to it furnishing a performance bond for
US$1 million,
and to the outcome of a due diligence review. On 28
January 2002 she wrote to him advising that the failure to submit a
performance
bond complying with the terms of the tender by 25 January
2002 had ‘led to an automatic disqualification to the crude oil

procurement process’. Mr Majali must have contested the
disqualification because the following day Dr Mokate wrote to him
and
dealt extensively with various issues that had been raised,
particularly in relation to the performance bond. Whether the
required performance bond was ultimately furnished by Imvume is not
clear.
[82] Dr Mokate was subsequently suspended, and then dismissed, from
SFF on unrelated grounds. She wrote an article that was published
in
Business Day on 30 October 2002 in defence of the conduct that led to
her dismissal, in which she also said that ‘when
I would not
sign an agreement between the SFF and Imvume Management Resources
until all the conditions stipulated in the contract
had been met, [Mr
Damane, the chairman of SFF] accused me of being obstructionist and
threatened to fire me’.
[83] Included in the record of the investigation is a report of a
limited due diligence review of Imvume that was conducted by
Deloitte
& Touche in January 2002. I think it can be inferred that the
review was conducted for purposes of evaluating whether
the contract
should be awarded to Imvume. The report records that the information
that it contained was obtained from attorneys
Bell Dewar and Hall,
and at a meeting attended by two attorneys from that firm, and by Mr
Majali (who was described as the Chairman
of Imvume) and a
representative of an entity referred to as SOPAK. SOPAK was described
as a wholly owned subsidiary of Glencore.
[84] The review revealed that the sole
shareholders of Imvume were the trusts that I referred to earlier,
and that the trusts had
no assets or financial ability, and ‘no
ability to assist Imvume in its contractual obligations’.
Imvume had no employees
or existing infrastructure, it had no
management structure (Deloitte & Touche was told that it had ‘a
full management
team in waiting’ but no details were
furnished), and it was being financed by SOPAK on an undefined ‘grant
basis’.
It had four directors, of whom Mr Majali was one,
18
and was said to have a ‘strategic
relationship’ with SOPAK but the details were not disclosed.
[85] Imvume was awarded the contract. It seems that it fulfilled its
obligations to supply, at least partly, because a document
addressed
to Imvume by Glencore records a contract between them under which
Glencore sold to Imvume 2 million barrels of Basrah
Light for
delivery to SFF on 6 March 2002.
[86] Those facts form the basis of the disclosures that were made by
the M&G, which were filled out in the article. The publication
of
the article prompted yet another request by Mr Leon for the
investigation to be broadened further. He made the request in a

letter that he wrote to the Public Protector on 22 July 2005, which
commenced as follows:
‘
Further to my correspondence
with you on 18 July 2005 regarding the “Oilgate affair”,
I am approaching the Office of
the Public Protector requesting that
the Office further broadens its existing inquiry to include the role
played by the Strategic
Fuel Fund (SFF) in a tender process for Iraqi
crude oil in 2001-2002 in which the bid of Imvume Investment Holdings
(Pty) Ltd
19
was selected in apparent violation of
the law.’
The letter went on to explain the background to the request, and to
set out at some length the irregularities that were alleged
to have
occurred and the legal issues that were said to be relevant, and it
concluded:
‘
In light of the above, the
irregularities in the SFF tender process are relevant to a full
exploration of the Oilgate affair’.
The investigation and report
[87] I will deal with the investigation and the report in the order
in which the requests were made.
Payment by PetroSA to Imvume
[88] The core of the article that prompted the first request was the
allegation that a portion of the money that had been paid
to Imvume
by PetroSA had been ‘diverted’ or ‘channeled’
by Imvume to the ANC. Although the article was
directed at the
‘diversion’ of the money by Imvume, the request by Mr
Spies was directed instead at the conduct of
PetroSA in paying the
money.
[89] Mr Spies wanted to know whether PetroSA had
intended the ANC to receive the money and had used Imvume as the
conduit for that
purpose. That is apparent from his notice of ‘our
formal complaint against … PetroSA, for improper conduct and
maladministration,
in that it used the company [Imvume] as a conduit
to transfer public money to the ANC’. Expanding on that
complaint, he submitted
that ‘
prima
facie
, [Imvume] was merely used by
PetroSA as a conduit to transfer money to the ANC …’.
[90] That request is perfectly plain and the Public Protector was
under no misapprehension as to what was required. In his report
he
recorded the complaint that had been made by Mr Spies as follows:
‘
According to the allegations
and the complaint of [Mr Spies] the advance payment was intended for
the ANC and PetroSA used Imvume
as a conduit to transfer the money…
It is alleged that PetroSA’s conduct was irregular and
constituted maladministration
and misappropriation of public finds.’
He also acknowledged, correctly, that the investigation of that
‘complaint’ fell within his investigatory powers:
‘
As the affairs and conduct of
PetroSA fall under the jurisdiction of the Public Protector and the
conduct complained of is contemplated
by the provisions of
section
6(5)
of the
Public Protector Act, 1994
, the Public Protector has the
power to investigate these allegations.’
[91] There was a subsidiary part to the request that was made by Mr
Spies. He asked the Public Protector to also investigate ‘the

exact nature of the following alleged payments by Imvume Investments
or its CEO, Mr Sandi Majali’, and he referred to one
such
payment as ‘R11 million paid to the ANC in tranches of R2
million (twice), R3 million and R4 million respectively, on
23
December 2003’.
[92] A considerable part of the report is taken up with an analysis
by the Public Protector of what conduct fell within and what
conduct
fell outside his investigatory mandate. I have pointed out that the
mandate of the Public Protector is, in general, confined
to
investigating the conduct of public bodies and functionaries. Adv
Mushwana concluded that Imvume and the ANC were not public
bodies,
and had not been performing a public function, and there can be no
quarrel with that. But the Public Protector may also
investigate the
conduct of other bodies and persons in specified circumstances.
Amongst other things, he or she may investigate
any alleged:
‘
improper or dishonest act, or
omission … with respect to public money’
20
and also any alleged
‘
offences referred to in
Part 1
to
4
, or
section 17
,
20
or
21
(in so far as it relates to the
aforementioned offences) of Chapter 2 of the Prevention of Corrupt
Activities Act, 2004, with respect
to public money’
21
and also any alleged
‘
improper or unlawful
enrichment … by a person as a result of an act or omission in
connection with the affairs of an institution
or entity contemplated
in paragraph (a
).’
22
[93] Two of those provisions confine the conduct
that is subject to investigation to conduct ‘with respect to
public money’.
In his report the Public Protector posed the
question ‘When does public money lose its character and become
private money?’
Relying upon what was said in
South
African Association of Personal Injury Lawyers v Heath,
23
he concluded that once the money came into the
hands of Imvume it ceased to be ‘public money’. As I
understand his analysis
that led him to the view that all conduct by
Imvume and the ANC in relation to the money fell outside his
investigatory mandate,
and he made no investigation of that conduct.
[94] It needs to be borne in mind that
South
African Association of Personal Injury Lawyers,
which
was decided in another context, was not concerned with public money
that had been improperly obtained. It was concerned only
with the
propriety of its distribution thereafter. This is an entirely
different case. The primary complaint in this case was not
concerned
with the propriety of the payment of private money by Imvume to the
ANC. It was concerned with the propriety of its conversion
from
public money into private money in the first place. That step in the
transaction was overlooked altogether in the analysis.
[95] The conversion of public money into private money occurs through
a bilateral transaction of payment and receipt. I would be
most
surprised if the legislation envisaged that one side of that
bilateral transaction of conversion may be investigated but not
the
other. To improperly pay public money, and to improperly receive
public money, each seems to me to be quintessentially an ‘improper

… act … with respect to public money’. I also see
no immediate reason why the improper receipt of public money
is not
‘improper … enrichment’ by a person resulting from
an act in connection with the affairs of the public
body. And if the
act constitutes one of the specified offences under the Prevention of
Corrupt Activities Act it is also not immediately
apparent to me why
that is not an offence ‘with respect to public money’. It
needs to be borne in mind that that is
a broad term that does not
require a direct relationship with the money.
[96] The omission from the analysis of that step in the transaction,
which was the step that was material to the complaint, meant
that no
consideration was given to whether the receipt of the money by
Imvume, and, indeed, by the ANC, fell within the terms of
those
provisions. Whether or not they do was not addressed in argument
before us and I make no findings in that regard. But the
omission of
that step in the analysis, with the resultant failure to consider
those questions, seems to me to have been a material
misdirection.
[97] But that apart, it is not clear to me why the analysis was
required at all, at least as far as the primary complaint was
concerned. That enquiry was directed to the propriety of the
conversion of the money from public to private money. I cannot see

how the circumstances of that conversion could be properly
investigated with consideration to only one side of the transaction,

if only to ensure that the pieces fell into place. If the conduct of
the receiver of the money was indeed beyond the mandate of
the Public
Protector, that did not make the receiver immune from furnishing
information relevant to an investigation of the conduct
of the payer.
To erect a wall between payment and receipt, and investigate only
part of the transaction, which is what the Public
Protector did, was
wholly artificial. Indeed, the artificiality of the wall is
demonstrated by the manner in which the investigation
was conducted.
[98] The investigation of only one side of the transaction led the
Public Protector to conduct the investigation as if the money
had
been paid to a supplier in the ordinary course of business. But that
begged the primary question whether it was indeed paid
in that way,
which was not investigated at all. It is then not surprising that the
report does not purport to answer the question
whether PetroSA
intended the money to reach the ANC, though we are told by Adv
Fourie, opportunistically in my view, that the question
was answered
by inference from a passage that is buried in the body of the report.
Indeed, the question was not even asked of PetroSA.
[99] So the Public Protector examined whether PetroSA was authorised
to advance money to a supplier, whether the payment of such
an
advance fell within the authority of the person who had authorised
it, whether it had adhered to principles of good corporate

governance, and whether it had exercised sound commercial judgment.
In relation to those questions he considered the
Public Finance
Management Act 1999
, the ‘King’ principles of corporate
governance, the terms in which the authority of the board to incur
expenditure
had been delegated, and the procurement policy of PetroSA
particularly so far as it related to black economic empowerment.
[100] Having approached the matter in that way all the findings in
the report are directed towards the propriety of the payment
as if it
had been an ordinary commercial transaction. These were what the
Public Protector called his ‘key findings’:
‘
1. The approval and
authorization on 18 December 2003 by the Acting CEO of PetroSA of an
advance payment of R15-million to Imvume
was lawful, well-founded and
properly considered in terms of the legal vehicle and policy
prescripts that applied to PetroSA;
The decision to approve Imvume’s request, as it
was presented to PetroSA, for an advance was not unreasonable under
the
prevailing circumstances and did not amount to
maladministration, abuse of power or the receipt of any unlawful or
improper advantage;
Imvume’s failure to pay Glencore the full amount
due to it in respect of the cargo concerned could not reasonably
have been
foreseen or expected by PetroSA;
PetroSA’s payment of an amount of USD2,8 million
(plus interest) to Glencore on 23 February 2004 was in the public
interest
and complied with its legal obligations in terms of the
Public Finance Management Act, 1999
;
The subsequent actions taken by PetroSA to recover from
Imvume the amount paid to Glencore was taken without delay and in
compliance
with its legal obligations in terms of the
Public Finance
Management Act, 1999
;
The allegations and suggestions of improper influence
made against Deputy President Mlambo-Ngcuka in relation to the
advance payment
were not substantiated and are without merit ....’
[101] Although that all begged the question whether PetroSA had
indeed paid the money in the belief that it was doing so in the

ordinary course of business, even on its terms the investigation was
so sparse as to be no investigation at all.
[102] The investigation amounted to no more than a written request to
PetroSA for its response to aspects of the article, and formal
follow
up of that response, and a similar written request to the Minister.
The responses that were received were accepted without
question and
formed the basis for the findings.
[103] The request to PetroSA was made in a letter addressed by Adv
Fourie to Mr Mkhize, the CEO of PetroSA, on 10 June 2005. I
set it
out in full:
‘
COMPLAINT: IRREGULAR PAYMENTS
TO IMVUME INVESTMENTS
We have received a complaint from the Freedom Front Plus
in connection with an alleged irregular payment of R15-million that
was
made by PetroSA to Imvume Investments on 18 December 2003. It is
alleged that the payment was made as an advance and that it related

to a shipment of condensate required by PetroSA that was to be
delivered by Glencore International. Instead of complying with its

commitment to Glencore, Imvume apparently paid most of the R15
million to the ANC and relatives of Members of the Cabinet. PetroSA

subsequently made a further payment of R15 million to Glencore to
ensure delivery of the condensate.
As you are aware, this matter has received extensive
media attention in the past weeks. We are of the view that it would
be in the
public interest that we conclude our investigation of the
complaint and report thereon as quickly as possible.
It would be appreciated if you could urgently provide us
with:
Your detailed comments on the allegations to enable us
to determine the merits of the matter;
A copy of the report(s) on the internal investigations
that PetroSA conducted into the matter;
Details of PetroSA’s civil claim against Imvume
Investments and the current status thereof. A copy of the pleadings
filed
would be of assistance to us in regard to the reasons for the
action taken against Imvume and their response thereto; and
Details of any steps that had been taken by PetroSA to
prevent a recurrence of such advance payments, if it was in fact
irregular.
Kindly also advise whether the Minister of Minerals and
Energy was in any way involved in the matter, and if so, to what
extent.’
[104] Mr Mkhize replied to the letter on 23 June 2005, enclosing
various documents. The only relevant enclosures for present purposes

are what were titled ‘comments on the allegations in the media’
and a ‘[r]eport sent to PetroSA Board of directors’.
Mr
Mkhize commented in his letter that ‘Support Initiatives’
(for BEE companies) were allowed by the procurement policy.
[105] The former document recorded that
‘
[a]fter developing a solid
track record through delivery of over 70% of the contractual
supplies, Imvume requested PetroSA for an
advance payment when the
ninth cargo was due. PetroSA considered the request and elected to
grant the advance payment in view of
the fact that:
cargo in question was en route to the Mossel Bay
refinery and that there was no risk that the cargo will not be
delivered.
The advance payment was allowed in terms of the
procurement policy.’
It proceeded to detail what had occurred thereafter and explained why
PetroSA had paid the outstanding balance to Glencore:
‘
PetroSA evaluated the prospect
of standing its ground with Glencore and take legal action against
them, with the minimum delay being
20 days if disturbed production at
the refinery. The cost of disturbing production at the refinery would
be $ 1 million per day
over 20 days, total $ 20 million. This did not
include any start up cost in the event that PetroSA were to shutdown
the refinery
in view of the shortage of the feedstock/raw material
(condensate) required for the operation.’
The report to the board took the matter no further.
[106] What I find to be startling is that PetroSA was not asked
whether it knew the purpose for which the ‘advance’
was
required by Imvume, nor whether PetroSA asked Imvume that question.
Instead Adv Fourie wrote again to Mr Mkhize on 28 June
2005 asking
only for a copy of the request for advance payment, and asking who
had authorised the payment, and raising queries
relating to how the
payment fitted into the support initiatives allowed by PetroSA’s
procurement policy, with no apparent
interest in the purpose for
which the advance had been requested. He went about the investigation
as if it was self-evident that
the advance had been requested for a
legitimate business purpose without ever having asked whether that
was so.
[107] It was only when Mr Mkhize replied that the purpose for which
Mr Majali allegedly said he wanted the advance first emerged,
and
then only by happenstance. Mr Mkhize replied on 6 July 2005. As to
the first query he said:
‘
The request from Imvume for an
advance payment on the basis for part of the money that would be due
to them on delivery of the cargo
was in the form of an invoice,
attached hereto as Annexure A.
However, Mr Majali did explain that Imvume had
[temporary] cash flow problems and wanted to pay their monthly
payment commitments.
He also claimed that Imvume could not delay
these payments because it was December, a holiday month.’(1137)
He also attached a copy of the delegation that had conferred
authority on the acting CEO, Mr Mehlomakulu (who had authorised the

payment), repeated that the advance payment was allowed by the
procurement policy, and provided a short explanation in that regard.
[108] On 11 July Adv Fourie asked Mr Mkhize for a copy of the
delegated authority of the board to the CEO, and for the outstanding

amount of the debt and the prognosis for its recovery, and that
information was provided. That ended the enquiry that was made
of
PetroSA.
[109] On 28 June 2005 Adv Mushwana wrote to the Minister and once
more I find it necessary to set out the letter in full:
‘
COMPLAINT: PetroSA
As you are aware, we are currently investigating a
complaint in connection with an advance payment that was made by
PetroSA to Imvume
Management in December 2003. The payment related to
a contract between the two companies for the procurement of oil
condensate.
It has been alleged that the said advance payment was
intended for the ANC, your brother and the Minister of Social
Development
and that Imvume Management was merely used as a conduit
to transfer the public money concerned. Imvume subsequently failed to
comply
with its commitment relating to the said contract and PetroSA
had to make a further payment to the supplier to ensure uninterrupted

production at its Mossel Bay plant. Media reports suggested that you
had been involved. These suggestions appear to be based on
the
following:
The fact that you were the Minister of Minerals and
Energy at the time when the payment in question was made and were
allegedly
consulted by PetroSA in regard to the said advance;
An amount of R50 000 that was allegedly paid by Imvume
to your brother, Mr B Mlambo, shortly after the advance payment was
made;
Your alleged interference in regard to the appointment
of Mr Mkhize as the CEO of PetroSA, which was made shortly before
the advance
payment to Imvume was effected.
We have noted your reported responses in the media to
these allegations and suggestions. It would however, be appreciated
if you
could provide us with your official response and comments for
the purposes of our investigation and to enable us to conclude this

matter on direct and reliable evidence.’
[110] Ms Mlambo-Ngcuka replied on 29 June 2005. It is not necessary
to recite everything that was said. So far as the issue now
before us
is concerned she said that ‘PetroSA never consulted me in
regard to the advance payment to Imvume when it was requested
and
approved as alleged, as this was an operational matter’. She
continued to say that when it came to whether to pay Glencore
she was
indeed consulted and agreed with the recommendation to pay on the
basis outlined above. That was the end of the enquiry
made of the
Minister.
[111] In various parts of his affidavits Adv Fourie made clear his
disdain for acting upon anything but original evidence from
disclosed
sources. On this occasion he seems to have made an exception. Mr
Mkhize was on leave when the advance was authorised
(thus its
authorisation by the acting CEO) and, on the face of it, had no
direct knowledge of the circumstances in which the advance
was made.
The source of the information that he conveyed was not disclosed in
the documents. Adv Fourie made no enquiry as to who
had provided the
information and, naturally, he made no enquiry of those who had
direct knowledge of what had occurred.
[112] The explanation that was advanced in the documents that were
furnished by Mr Mkhize raises questions for even a mildly enquiring

mind, but one in particular jumps out like a jack-in-the-box. The
money was said to have been asked for as an ‘advance’,

meaning, presumably, an advance of money that would become payable to
Imvume three weeks hence. But PetroSA was well aware that
Imvume
would simultaneously become liable to pay Glencore the full amount of
the cargo. The question that might be expected to
have been asked of
PetroSA is whether it asked Mr Majali how he would pay Glencore the
price of the cargo if part had already been
spent to meet Imvume’s
‘commitments’? And the next question that would arise is
whether it had given thought
to what would happen if Glencore was
indeed not paid? And if Glencore was not paid, and the money had been
spent, how and when
would Imvume repay PetroSA?
[113] PetroSA might also have been asked whether it had queried the
nature of Imvume’s ‘monthly payment commitments’?

Mr Mkhize later told a parliamentary committee that PetroSA had been
‘under the impression that [Imvume] needed to pay its
employees
their end of year remuneration including cash bonuses’. But the
question that then springs to mind is how PetroSA
could have thought
that the monthly payroll of Imvume (even including bonuses) amounted
to R15 million, bearing in mind particularly
that barely a year
earlier Imvume had no employees at all?
[114] And so the questions might go on if an open and enquiring mind
is brought to bear on the matter, because the explanation
that was
given certainly did not bring all the pieces into place. Yet not one
question of that kind was asked in the course of
the investigation.
The explanation found its way into the report and was the sole basis
upon which findings were made. As for the
Minister, she had said no
more than that she had not been consulted on the matter, but it does
not follow that she was unaware
of the purpose to which the ‘advance’
was to be put. She was never pertinently asked that question, nor any
other questions
in that regard.
[115] The explanations that were given, without more, provide no
proper basis for finding that the payment of the advance was ‘well

founded and properly considered’, nor for finding that it was
‘not unreasonable under the prevailing circumstances’
for
the payment to have been made. They also provide no proper basis for
finding that Imvume’s failure to pay Glencore ‘could
not
reasonably have been foreseen or expected’. The only reasonable
findings that could have been made on that scant information
were no
less than that the payment was reckless, and that default by Imvume
was virtually guaranteed.
[116] On this part of the case I think it is clear that there was no
investigation of the primary complaint. So far as the Public

Protector purported to investigate and report on associated matters
the investigation was so scant as not to have been an investigation,

and there was no proper basis for any of the findings that were made.
The Payments to Uluntu and Hartkon Construction
[117] The investigation of these payments can be disposed of briefly.
It was alleged that Imvume had paid R50 000 to Uluntu

Investments, a company owned by Mr B Mlambo, a brother of the
Minister of Minerals and Energy, and had paid R65 000 to Hartkon

Construction towards the cost of renovating the private residence of
Dr Skweyiya and his wife. Mr Spies asked the Public Protector
to
investigate ‘the nature of those transactions’.
[118] I find the conclusions of the Public Protector in that regard
to be rather confusing. He concluded that because Imvume, Uluntu
and
Hartkon were all private bodies, and that the payments did not relate
to state affairs or public money, he could not investigate
their
conduct. He nonetheless purported to investigate what he called
‘suspicions raised of an improper relationship between
Imvume
and Dr Sweyiya’, and whether there had been any impropriety on
the part of the Minister of Minerals and Energy. He
absolved both
ministers of impropriety.
[119] With regard to the alleged payment to Hartkon Construction the
report records that:
‘
Dr Sweyiya referred questions
with regard to the allegations of payment to Hartkon Construction to
his wife. He also denied any
conflict of interest in respect of the
payment concerned. Ms Mazibuko-Sweyiya confirmed the payment, but
explained that it represented
a loan that had already been repaid.
This explanation was also confirmed by the said attorneys of Mr
Majali and Imvume.’
[120] That is all that the investigation entailed. The ‘key
findings’ do not include a finding on the issue but in
the body
of the report the Public Protector said the following:
‘
There was no substantive
allegation or indication that the Minister performed any official
action or omission that could have favoured
Imvume in any way. The
suggested corrupt intent clearly speculates in relation to future
events that might or might not occur,
which obviously cannot be
investigated’.
He went on to say that
‘
the information at the
disposal of the Office of the Public Protector and that could be
considered and verified in terms of its
jurisdiction does not
disclose the commission of any offence, but merely comprise
suspicions and speculations that have not been
substantiated’.
[121] The question that called for an answer was not whether the
money was paid as a gift or a loan. The question was why Imvume
was
paying money for the benefit a minister of state, whether as a loan
or otherwise. There was no investigation of that at all.
It is
apparent from the report that not Imvume, nor the Minister, nor his
wife, nor anyone else for that matter, was even asked
what had
motivated the payment. If it was the understanding of the Public
Protector that he was not entitled to make enquiries
of the persons
concerned, if necessary under compulsion to answer, which is what he
seems to suggest, then he was clearly wrong.
There was no
investigation of the matter at all.
[122] With regard to the payment to Uluntu the Minister of Minerals
and Energy told the Public Protector, in reply to his letter
that I
referred to earlier, that:
‘
[I] am not aware of all
business deals my family members are involved in. I have however,
upon enquiry established that Bonga Mlambo
my brother and Sandi
Majali were at some stage involved in a toursm related business which
tried to bid for a hotel at St Lucia,
KwaZulu Natal. It is in this
context I have been informed, that a sum of R50 000,00 was paid
by Imvume towards the defrayment
of costs incurred in the bidding
process. Such payment had nothing to do with the relationship between
my brother and I on the
one hand, and PetroSA and Imvume on the other
hand.
More importantly the payment between Bonga Mlambo and
Sandi Majali related to a tourism venture, which is evidently outside
the
Mineral and Energy sector, and thus I fail to see any real or
potential conflict of interest.’
[123] The report contains no more on that issue than a summary of
that response. A refrain throughout the affidavit deposed to
by Adv
Fourie is that he was not required to be suspicious of everything he
was told and to look for corroboration, but I have
already said why
that misses the point. The Public Protector is not there to determine
whether an onus has been discharged. He
or she must be satisfied that
the truth has or has not been told. In this case no information was
sought from Imvume or from Mr
Mlambo or from anyone else to clear up
what had motivated Imvume to make the payment. Once again, that was
no investigation at
all.
The Second Request
[124] The Public Protector drew attention in his report to the
separation of party and state, which he correctly called a
‘fundamental
principle of constitutional law and democracy’.
That is precisely what this complaint was about. The story that was
told
in the articles that prompted this request was a story of the
governing party and the state coming together in pursuit of the
financial
interests of the party. It was in that context that the
Public Protector was asked to ‘determine the extent to which
the
state was involved in funding and supporting Imvume’s Iraq
oil ventures and travel related thereto.’
[125] The tale that was told in the articles emerges as much from the
documentation I have referred to, all of which was available
on the
website of the M&G. Yet the only enquiry of any substance was in
a letter written by Adv Fourie to the Director-General
of the
Department of Minerals and Energy on 18 July 2005. He referred the
Director-General to the article that had been published
on 15 July
2005 and said that it ‘appears to allege that you, in your
capacity as the Director General of the Department
of Minerals and
Energy, were improperly involved in dealings between Mr Majali and
the Government of Iraq.’ He went on to
say:
‘
According to the said article,
you and Mr Nkhulu of your department, “accompanied” Mr
Majali in September 2001 to Iraq
: “for talks with Hussein’s
government”. The Minister of Minerals and Energy allegedly
approved your trip. Mr
Jawoodeen of the SFF apparently joined the
“delegation”. An extract of the Minster’s approval,
dated 7 August
2001, was also published.
We have noted your response to these allegations that
was published as part of the said article.
It would be appreciated if you could provide us with
your detailed official response to the allegations referred to above
as well
as any other comments on the contents of the said article
that could be of assistance to us in our investigation. If you in
fact
travelled to Iraq, as alleged, kindly also provide us with a
copy of the memorandum submitted to the Minister for her approval in

this regard.’
[126] The Director-General, Adv Nogxina, replied on 19 July 2005. He
described various contacts that had been made between the
Department
of Foreign Affairs and the government of Iraq and said:
‘
It is against this background
that in September of the same year, we undertook an official trip to
Iraq on a mission to further
strengthen bilateral relations between
the two countries. In particular, we were supposed to explore the
possibility of a government
to government oil supply deal for our
Strategic Stocks….
During our preparations for the visit, a person in the
name of Mr Sandi Majali who is a representative of a black owned
company
called my office requesting to join us, having learned from
the Iraqi Embassy that we would be embarking on the visit. Mr Majali

thought it would be helpful for the delegation to explain the BEE
policy to the Iraqi’s, and thus facilitate his negotiations
for
an oil deal. Mr Majali had had previous dealings with the Iraqi’s
and was at his final stages of negotiations….
I wish to emphasize that it is normal practise for
visits undertaken by Government Departments, to take business
delegations with
them and to assist, in the course of such visits, in
the facilitation of business relationships between the entrepreneurs
of both
countries.’
[127] An internal memo, addressed to the Chief Financial Officer by
the executive assistant to the Director-General, requesting
an
advance of R15 000 for the trip, together with related documents, was
sent to Adv Fourie.
[128] Apart from making some observations upon this country’s
foreign policy towards Iraq, the report does little more than
to
recite in full the response from the Director-General, and then to
paraphrase parts of the letter as findings, in the following
terms:
‘
The visit by the Director
General of Minerals and energy and officials of the department and
the SFF to Iraq, in September 2001,
related directly to the
Government’s expressed commitment to improve trade relations
with Iraq. The then Minister of Minerals
and Energy was properly
informed of the intention of the visit and she approved it
accordingly.
The South African delegation was accompanied by Mr
Majali, at his request. The involvement of representatives of the
South African
business sector in discussions with the Iraqi
Government in connection with the improvement of trade was necessary
and justified
in terms of South Africa’s Foreign Policy.’
[129] The ‘key finding’ on this aspect of the matter was:
‘
The allegations of improper
involvement of senior officials of the Department of Minerals and
Energy and the SFF in the advancement
of business relations between
Imvume and the Iraqi Government … are without merit.’
[130] The letter that was written by Adv Fourie to the
Director-General gives a parsimonious account of what was conveyed in
the
articles. I have pointed out that they told a tale of the state
and its resources being used to secure contracts for Imvume that

would benefit the ANC. The visit to Iraq was an element of the tale
but was not the tale itself. Nor was the tale confined to the

incurring of expenses by the officials on the visit to Iraq. The
gravamen of the tale was that the nation’s stature in the

forums of international affairs was ‘hawked’ in pursuit
of party financial gain. The tenor is apparent from the various

headings under which the ‘special report’ was made:
‘Trading principle for profit’; ‘How the ANC
hawked
foreign policy for oil’; ‘Hawking foreign policy for
oil’.
[131] If he had read the articles, and I must assume that he did, I
cannot see how the Public Protector could have thought that
what
concerned Mr Leon was whether the officials had the permission of the
Minister to visit Iraq, and whether they had completed
the
appropriate forms for subsistence and travel, which is really all
that he queried. Once again, the gravamen of the request
was not
investigated at all.
[132] The reason that an enquiring mind is called for in an
investigation is demonstrable from what occurred in this case. I have

already recited the considerable documentation that supports the
substance of the articles, all of which was freely available on
the
M&G website. Adv Fourie was challenged in the affidavits on why
he had not downloaded them from the M&G website. His
reply was
that ‘the said documents effectively form part of the article
and were considered as such when the allegation referred
to was
investigated’. I think that unusual reply must be taken to mean
that he did not read the documents. Indeed, had he
read the
documents, his report so far as it relates to this issue, would be
astonishing.
[133] He would have seen immediately from the documents that they
painted a picture of the visit to Iraq that was altogether different

to the picture that was painted by the Director-General. They do not
paint a picture of Mr Majali discovering coincidentally from
the
embassy that government officials were planning to visit Iraq. They
do not present a picture of a businessman tagging on to
a government
delegation. They do not present a picture of government-to-government
contracts being negotiated. They present a picture
of Mr Majali
taking charge of a venture to access oil that was to be channeled to
the state through the medium of Imvume. That
contrast would have
presented many questions to an enquiring mind.
[134] I think I need say no more about this aspect of the
investigation. I think it is manifest that the substance of the
request
was not investigated at all.
The Third Request
[135] The third request concerned the contract
that was awarded to Imvume by SFF after tenders had been invited. Mr
Leon asked for
the enquiry to be broadened ‘to include the role
played by the Strategic Fuel Fund (SFF) in a tender process for Iraqi
crude
oil in 2001-2002 in which the bid of Imvume Investment Holdings
(Pty) Ltd
24
was selected in apparent violation of the law’.
[136] In his letter Mr Leon provided the context in which the request
was made. Amongst other things, he said that the award of
the
contract
‘
was allegedly done as part of
an elaborate ANC fundraising scheme … in which Imvume was
established as a front company for
the ANC and would help it raise
money through sales of Iraqi oil obtained in violation of the UN
Oil-For-Food Programme’.
I think that makes it clear that what was being called for was an
investigation of the tender, not in isolation, but in the context

that I have already described. Needless to say, it cannot be said
that the Public Protector investigated the tender in that context,

when he failed to investigate the context at all.
[137] But even when viewed in isolation, certain features of the
tender were highlighted in particular. Those were, in summary,
first,
that Mr Jawoodeen, who had accompanied Mr Majali to Iraq, was on the
evaluation panel; secondly, that on two occasions after
the tenders
had been opened the bidders were invited again to submit prices,
which resulted in Imvume moving up the list; thirdly,
that Leokoane
Oil had been disqualified for not furnishing a performance bond, and
for want of an acceptable due diligence review,
but Imvume had not
been disqualified when it was in the same position; fourthly, that Dr
Mokate had said that pressure had been
brought to bear on her by the
chairperson of SFF and the Minister to award the contract to Imvume;
and fifthly, that the type of
oil that was called for was the type of
oil that Mr Majali had been seeking in Iraq.
[138] The report records that the Public Protector asked SFF to
respond to the contents of the article, and the report reproduced
the
response of the CEO in full. The response did not deal with all the
concerns that the request had raised, and so far as they
were dealt
with, that was done only cursorily. No further enquiry was made, not
even whether Imvume had met the conditions for
award of the contract
that had disqualified Leokokane Oil, yet on that sparse information
alone the ‘key finding’ was
that:
‘
[t]he allegations …
that a crude oil supply contract was improperly awarded to Imvume by
the SFF in March 2002, are without
merit.’
[139] I think that it is manifest that this was no investigation at
all and that there was no proper basis for that finding.
Conclusions
[140] The story that unfolded over the weeks that the articles were
published was a story of alleged impropriety on various related

fronts. The view that the Public Protector took of his investigatory
powers had the effect of disemboweling the complaints right
from the
start. The manner in which he then went about investigating the
remainder narrowed it even further. By the end there was
in truth no
investigation of the substance of the various complaints.
[141] But even so far as the Public Protector purported to
investigate the remnants with which he was left, the investigation
was so scant as not to be an investigation at all. Much of that can
be attributed to the state of mind in which the purported
investigation
was conducted, which is revealed both in the manner in
which the Public Protector went about the task, and in the tone of
the affidavits
deposed to by Adv Fourie. That state of mind is
exemplified by a passage to which we were referred by counsel for the
respondents.
[142] In his supplementary affidavit that was filed after the record
of the investigation was produced Mr Brümmer said that
the
response that Adv Fourie received from the Director-General ‘was
effectively accepted without question by the respondent
and was
conveyed in the Report as the factually correct version’. This
is how Adv Fourie replied:
‘
The deponent does not say why
the Director-General’s explanation had to be corroborated by
others on the trip or by further
documentation. He does not produce
evidence that contradicts [the Director General’s] explanation
and does not indicate why
his response should have been regarded with
suspicion. A Director General of a government department is a person
of high integrity
with expert knowledge and experience of the matters
of his/her department engages in. His views and opinions on matter
cannot be
questioned simply because a certain journalist, for reasons
of their own, might not believe him’.
[143] Truth and deceit know no status or occupation. One expects
integrity from high office but experience shows that at times
it is
not there. And while experience shows that journalists can be
cavalier there are times when they are not. It is the material
that
determines the veracity of the speaker and not the other way round,
and that applies universally across status and occupation.
It is the
hallmark of this investigation that responses were sought from people
in high office and recited without question as
if they were fact. An
investigation that is conducted in that state of mind might just as
well not be conducted at all. The investigator
is then no more than a
spokesman, who adds his or her imprimatur to what has been said,
which is all that really occurred in this
case. I have said before
that an investigation calls for an open and enquiring mind. There is
no evidence of that state of mind
in this investigation.
[144] I have pointed out that the Public Protector made prominent
findings discrediting the respondents and I think I must deal
briefly
with them as well, bearing in mind that I have found that the
respondents were entitled to bring these proceedings to controvert

those findings at least. In this judgment I have related the
essential facts that were revealed in each of the articles with
reference
to outside material and not with reference to the articles
themselves. By doing so I think I have already demonstrated that the

substance of each of the articles was constructed upon an ample base.
There might well be some errors in the various articles,
there might
be some unsupportable inferences, and there might be some unjustified
speculation. But I think it is abundantly clear
from the material
that I have used for relating the substance of each of the articles,
that the Public Protector had no basis for
discrediting the newspaper
as he did. Whether that material is authentic, and whether it is
true, is another matter. That was not
the ground upon which the
newspaper was discredited. Nor could it be discredited on those
grounds, because there was no investigation
in that regard.
[145] I have no doubt that the court below was correct in finding
that there was no proper investigation and in setting aside the

report. But I have some difficulty with the further order that was
made. Before the court below, and before us, it was accepted
on
behalf of the Public Protector that if the report is set aside then
an order directing a fresh investigation should follow,
and the court
below cannot be faulted for having made that order (and an ancillary
order). But I do not think that a court should
make an order, thereby
exposing the litigant to the penalties for contempt if it is not
obeyed, unless the order is clear and unambiguous
as to what is
required. There was no suggestion on behalf of the Public Protector
that the investigation will not be opened afresh
and the views
expressed by Adv Mushwana himself of the enormity and importance of
the matter give every reason to think that that
will indeed occur. It
is not open to us to supplant the Public Protector by directing with
precision what is required for a proper
investigation. That will
inevitably be dictated by the exigencies that might arise. In those
circumstances I do not think those
orders should stand and the Public
Protector must be left to determine what is required in order to
fulfil his or her duty.
[146] Paragraphs 2 and 3 of the order of the court below are
accordingly set aside. Save for that, the appeal is dismissed with

costs.
___________________
R W NUGENT
JUDGE OF APPEAL
APPEARANCES:
For appellant: IV Maleka SC
B Makola
Instructed by:
Edward Nathan Sonnenberg Inc, Sandton
Matsepes Inc, Bloemfontein
For respondent: G M Budlender SC
Instructed by:
Webber Wentzel Attorneys, Johannesburg
Symington & De Kok, Bloemfontein
1
The
Constitution of the Republic of South Africa, 1996.
2
Section
181(2).
3
Concise
Oxford Dictionary: ‘An official appointed to investigate
individuals’ complaints against maladministration,
especially
that of public authorities’.
4
Section
7 (1)(a) of the Act.
5
Section
6(4)(a)(iii).
6
Section
6(4)(a)(iii). The offences are those referred to in ‘Part 1 to
4, or section 17, 20 or 21 (in so far as it relates
to the
aforementioned offences) of Chapter 2’ of the Act.
7
Sections
6(4)(a)(iv) and 6(5)(c).
8
Section
7(4).
9
Section
7A(1
).
10
Cabinet
of the Transitional Government for the territory of South West
Africa v Eins
1988 (3) SA 369
(A) at 388B-I.
11
Formerly
known as Central Energy Fund (Pty) Ltd.
12
An
acronym for the Strategic Fuel Fund.
13
An
erroneous reference to Imvume Management.
14
The
letter was headed ‘SABCETT’ but I think that it must be
taken to have meant SABCET.
15
In
its context I think that the organisation referred to was one and
the same as the South Africa-Iraq Friendship Association.
16
Deputy
Prime Minister of Iraq.
17
Four
bidders submitted prices relative to SOMO prices.
18
The
others were Nomdakazana Tibelo Marion Mbina, Elliot Madela Mahile,
and Mphumzi Mhatu.
19
An
erroneous reference to Imvume Management (Pty) Ltd.
20
Section
6(4)(a)(iii).
21
Section
6(4)(a)(iii).
22
Section
6(5)(c). The institutions and entities referred to in that paragraph
are ‘any institution in which the State is
the majority or
controlling shareholder or of any public entity as defined n section
1 of the Public Finance Management Act,
1999’. It is not
disputed that PetroSA is one such institution.
23
South
African Association of Personal Injury Lawyers v Heath
[2000] ZACC 22
;
2001 (1)
SA 883
(CC).
24
An
erroneous reference to Imvume Management (Pty) Ltd.