On Friday 17 March, the Constitutional Court ruled that the invalid South African Social Security Agency (Sassa) contract with Cash Paymaster Services (CPS) will be extended by one year with strict controls. The ruling also stated that the two parties are under a constitutional obligation to ensure the social grants are paid out to recipients.
The judgment, which was handed down by Justice Johann Froneman, ruled that the outsourced CPS cannot use the personal information of Sassa recipients to market its other products. The invalidity of the contract was also suspended for one year. The case was brought to the court by a human rights advocacy group, the Black Sash Trust, and Freedom Under Law.
Two great victories for 17 mill ppl + @black_sash
*PRIVATE data remains private
*CPS continues for max 12 mts BUT on SAME terms/conditions
— Fatima Hassan (@_HassanF) March 17, 2017
Sassa and the minister will need to file reports in the form of affidavits to the Court every three months. These affidavits must set out how both parties plan to ensure the payment of social grants after year is up, what steps they have taken to ensure this, and when they will take these steps. The auditor-general will also evaluate the implementation of the interim contract.
An expert team of technical and legal experts will report to the court along with the Minister and #SASSA every 3 months.
— Right2Know (@r2kcampaign) March 17, 2017
BREAKING: Concourt orders CPS to provide detailed account of its finances. #SASSA must appoint auditors to evaluate CPS finances.
— Karyn Maughan (@karynmaughan) March 17, 2017
Minister of Social Development, Bathabile Dlamini, has until 31 March to give the ConCourt reasons why she should not pay for the costs of the Sassa court application from her own pocket.
Froneman: Minister is called upon before 31 March to tell court why she should not pay cost for application from her own pocket #SASSA
— Pierre de Vos (@pierredevos) March 17, 2017
The South African Post Office (SAPO) has offered to step in as a replacement for CPS to deliver grants to recipients. This is because part of the ConCourt ruling is that CPS has to fulfil its contractual obligation until Sassa finds another company to fulfil it. SAPO said it has been doing a lot of work in the past couple months to avail itself for the job.
Speaking to eNCA, the CEO of the SAPO, Mark Barnes said: “We came here to try and present the court with the option that there is an alternative in the shortest space of time so I think moving from two years to one year is plenty of time for this to be solved inside of the government.”
— eNCA (@eNCA) March 17, 2017
The Constitutional Court on Wednesday heard an application from Black Sash for an order that the Court should exercise supervisory jurisdiction over any new contract to pay social grants and its implementation.
At the hearing on Wednesday, Chief Justice Mogoeng Mogoeng was particularly angry at Dlamini’s lack of explanation as to why she had let the situation get to the point where there is no other company able to take over the paying out of the grants. “How does it happen? How do you get to this level of what can be characterised as absolute incompetence?” he asked.
President Jacob Zuma faced Parliament on Thursday afternoon where he defended Dlamini, saying there was no crisis with social grants. There have been calls from many opposition MPs to fire Dlamini. When Zuma was asked about firing Dlamini, he said it was premature to do that and he would only consider that after 1 April – the deadline for grant payments.
Zuma said regarding the matter: “I thought the date we are talking about has not arrived, the 1st of April. This is another kind of democracy that if you suspect that somebody is going to fail or make a mistake you must punish that person before it happens; it’s a funny democracy,”
On Tuesday, Finance Minister, Pravin Gordhan told Parliament’s public accounts committee that the government would have to sign off the illegal tender with CPS because it was their duty to ensure that social grants were distributed. However, he said his department would agree to the deal with CPS, if the ConCourt agreed to the deal.
The issue started as a result of a 2012 contract between Sassa and CPS to distribute 17 million social grants to 10 million beneficiaries which the Constitutional Court declared that contract, invalid.
In 2015, Sassa told the court it would not award a new contract but would take over payment responsibilities from April this year. However, when the agency was unable to do this, they wanted to contract CPS to do the job again. The minister also did not have a plan in place for a replacement company as the contract with CPS was due to expire at the end of March 2017.