By Monaheng Seeiso Rasekoai

The legal fraternity has had a mouthful to chew within the past half-decade.  There were many laws passed by the legislature which impacted tremendously on the commercial landscape.

A few live examples include the Pension Funds Act, the Financial Consumer Protection Act, the Insolvency Act; the Administration of Estates and Inherittance Act; the Labour Act and most significantly, the Public Procurement Act No. 3 of 2023 which shall become the subject of debate in my proposed effort to critique and to analyze it.

My critique shall first strive to illustrate the geopolitics that inform the commercial landscape within the country. Unlike some countries, the state is both the regulator and source of corporate life. The idea of the ‘private sector’ is illusory.

Some affluent members in this country who flaunt Central Business district’s 4-Kilometre Kingsway Road have built their wealth on state tenders born mainly out of illicit relationships between suppliers, Cabinet ministers and state functionaries who play a part in the procurement processes.

Public Procurement is often at times not a business venture but a well-calculated scheme of schemers who have been given the adage of ‘tenderpreneurs’ when, in reality, they are (without fear of contradiction) downright thieves and rapists of the state fiscus. These schemers drive public procurement opportunities to their allies, cronies and to some extent their kith and kin.  

In this context, corruption is not only a legal crime but a moral crime and for a small enclave Kingdom more needs to be said to deplore it.  The legal regulation of public procurement becomes a very important issue for debate in Lesotho’s context mainly because both the first and second coalition governments arguably have their fair share of public tender scandals which are most likely to recur if there are no measures to combat this honk of decay and the strict adherence to the prescripts of the law is not given effect to by both government bureaucrats and politicians at the helm of state institutions and by extension, the law enforcement agencies (both the DCEO and LMPS).

Measures must be put in place to combat this pandemic of well-coordinated commercial cancer the effect of which is to rape the state of the limited resources at its disposal. The move to create a comprehensive code for public procurement is clearly welcome and may play a part in helping the country to grow but more still needs to be done.

Public tenders became a source of debate when the police uniform saga led to a decision by the Court of Appeal in 2015 and Justice Farlam concluded that the establishment of an administrative tribunal for adjudication of tender disputes does not in itself serve as a bar for courts’ intervention. Courts of law clearly have a meaningful role to play and well-informed citizens who play a part in the commercial landscape must be ready to exercise their rights meaningfully.

The growth of the private sector aligned to public procurement must not be contingent upon corrupt relationships but a product of a transparent and accountable procurement process.

The second case that almost immediately comes to mind as well, is the fleet services contract which has been commonly referred to in media platforms as the Lebelonyane saga.  These live examples create a platform for both debate and reflection on where this country has come from and where it is headed if the issue of regulation and oversight of public tenders is not handled with care and administrators are trained adequately to protect the state from savages who have since earned the adage of ‘tenderpreneurs’.

The indisputable fact is that the current government is flanked by prominent businesspersons and one of the most important tools that must be employed to censure and to coordinate proper allocation and distribution of state funds through tenders is by having a well-structured legal regime that guards against the inherent risks of the businessmen cum politicians – cum administrators and governors of the state overstepping the line for self-serving ends.

The failure to guard against these risks may yield sophisticated corruption which is well orchestrated without censure by the top echelons in government.  This risk is an inescapable reality and an effort shall be made to analyze the newly promulgated legislation within the context of that paradigm amongst others.

Both the Financial intelligence Unit (FIU) and the DCEO play an instrumental role in combating commercial crimes but the innovative efforts which date as far back as 2008 which gave rise to the latter as an anti-money laundering agency must be lauded. The DCEO for the past sixteen years has been recognized by law to exercise specified powers not only under the criminal justice system but via the instrumentality of seizure and consequent forfeiture to the state of all gains born out of illicit deals both in the private sector and public sector.

The distinction between public and private sector corruption is an imaginary one and clearly akin to drawing the line in the wavering sand and this is more so in the commercial landscape of the impoverished Kingdom where the state is both the source and regulator of commercial enterprise as already indicated.

The need to curb unethical conduct by procurement officers and the placement of tools to make them subjected to the rigors of the law to the letter have since been observed when some few days back the head of the DCEO – Adv. Knorx Molelle – a well-trained law enforcement officer with ample experience in sophisticated economic crimes published a memo demanding the disclosure of assets by the procurement officers under the employ of the state.

Whilst this initiative must be commended, the main downside with the disclosure of assets by these functionaries is that it is not open to public scrutiny and the procurement officers in this jurisdiction are not characterized as politically exposed persons when in reality they are instrumental drivers of the economy and right at the heart of illicit dealings staged by public administrators, be it principal secretaries or ministers and their sponsoring suppliers.

The Procurement Act falls short of a code of conduct that informs the conduct of principal secretaries who are mainly political appointees driving political interests of administrative heads of ministries and the vested interests of savage tenderers aligned to political functionaries.

The inescapable reality is that procurement crimes can take the form of public, private or auto-corruption. Public corruption is an oscillation from the supplier to the public official responsible for decisions on procurement. This avenue manifests itself in the form of bribes or other non-monetary inducements given to the public official in order to influence the exercise of his discretion on public procurement.

A public functionary may improperly exercise his discretion in, for example, deciding to which tenderer to award the contract, or in deciding which tenderer to invite for tender, or by emphasizing or designing contract evaluation criteria to favour a preferred supplier or even prejudicing a misaligned tenderer to his interests.

Improper exercises of public power may also occur where a procurement officer decides to split a large contract into several small contracts that fall below thresholds for complying with certain procedural requirements for self-serving ends.

Other benefits that a savage tenderer may corruptly seek include the avoidance of a government-imposed cost or requirement such as fees, taxes, or production of documents, and lax enforcement of contractual clauses in order to supply sub-standard products, to avoid complying with requirements preceding payment under the contract or to get away with unjustified delays.

These examples have been experienced in this jurisdiction and there are live cases pending before courts of law pointing to this. But the most disturbing one is the one of single-sourcing where public functionaries design a tender to favour their allies for below-the radar incentives.

The High Court has recently concluded that one supplier has no locus standi to challenge an initiative of single-sourcing because the supplier did not participate in the relevant single-sourcing measure employed by design by government officials to prejudice the open tenderers. There are several live examples which the Kingdom has experienced in these spheres. They require deep-seated introspection and reflection in order to curb the bleeding fiscus of the fragile Kingdom.

The second type of corruption occurring in public procurement is private corruption in the shape of collusion, price-fixing, maintenance of cartels (inclusive of corporate agencies) or other uncompetitive practices engaged in by tenderers to the detriment of the government.

The often less-debated fact is that even corporate companies embark on a well-coordinated measure of illicitly inducing state functionaries to tailor specified business opportunities to them through subtle but downrightly corrupt measures by maintaining a relationship of close proximity to the Principal Secretaries, directors and specified decision-makers in the public sphere who have the legal authority or discretion to anchor deals for them.

Thirdly, auto-corruption occurs when a public official wrongly secures for himself or an associate privilege rightly belonging to the public, by by-passing or manipulating the formal procedures necessary for the award of these privileges. This might manifest itself where conflicts of interest cause an official corruptly to favour the company in which he is interested, or where an official uses a dummy corporation to hide awards involving personal interest.  This is the common feature in this jurisdiction which must be studied with a roving eye by law enforcement agencies.

The significant inroads heralded by the Money Laundering and Proceeds of Crime Act are worth commending because law enforcement agencies need not prove beyond reasonable doubt that savage tenderers and public officials who have played a part in an illicit award of the tender and hence stolen from the state can recover illicit gains through the instrumentality of first seizure and then forfeiture of all assets which are products of theft of state resources.

This much was expressed three years ago by His Lordship Mr. Justice Mokhesi in an incisive judgement where he clearly reinforced the prescripts of Section 98 (4) of the Money Laundering and Proceeds of Crime Act which has since endowed the DCEO with full powers to initiate civil proceedings against savage tenderers who have attained illicit gains from the state.  

The legal regulation of public procurement in the Kingdom of Lesotho has been a source of elaborate litigation following the Lebelonyane saga and immediately after the collapse of the first coalition government. It remains a contested debate with high-level bribes and creation of government expense with identified beneficiaries in the form of well-designed and anchored tenders.  

A trail of litigations on tender disputes emerged but most of them were focused on the Finance Act of 1988 which bore subordinate legislation in the form of Public Procurement Regulations of 2009. The trail of litigations which aimed to interpret and to analyze the law in issue can be traced in law reports from the years between 2012 – 2015 or thereabout.  The legislature explicitly mentions under Section 3 that the Act is meant to promote integrity, transparency, proficiency, accountability, fairness and equitable treatment in a public procurement process in order to increase public confidence in a procurement system.

The Act is a commendable effort it must be said because it aims to specifically address some of the shortcomings of the almost half-a-century old plenary legislation and the almost two-decades old regulations which were not dynamic enough to address the evanescent trends of the public procurement, public finance management and did not contain flexible innovations of public-private partnerships in the public trading spectrum.

An example that quickly comes to mind is that of the development of an e-procurement system for the purpose of providing for a dissemination of tender document and a receipt of tender through electronic means under Section 10 (1).

There is yet another unwanted element to the newly promulgated Act in that it introduced another trench of obstacles to access to justice by decreeing a contingent non-refundable fee under Schedule 3 that is tied to the value of a tender that must be paid by an aggrieved tenderer before they could lodge an appeal to the Procurement Tribunal.

Such a fee could run into millions of Maloti depending on the value of the tender as determined by the relevant department that advertised the tender. This dynamic attracts constitutional issues in that these provisions are a clear and deliberate design to obstruct access to justice by an aggrieved tenderer who is unable to afford such a humongous sum of money. There are obvious reasons why these substantial fees may be criticised.

It needs to be emphasised that a tenderer that approaches the Procurement Tribunal is not seeking monetary award but simply exercising their right to a perceived illegality in the conduct of the tender and, by so doing, ensuring that the relevant government department exercises its powers within the prescripts of the enabling law.  

This being the case, demanding the payment of such an indeterminate sum as a condition for the exercise of a right of appeal would certainly deter the prospective tenderers from approaching the Procurement Tribunal, with the arduous consequence that many wrongdoings in tender awards by government departments will escape the scrutiny of the relevant administrative Tribunal.

Prescribing a contingent fee tied to the value of a tender for an appeal to the Procurement Tribunal may attract a melodramatic conclusion that this is none other the state’s measure of commercialisation of justice. The payment of such fee by the appellant and not equally by the respondent defeats the essence of equal access to justice as guaranteed by section 19 of the Constitution.

Are there measures to combat this pandemic of public procurement corruption?

It must be accepted that laws are in place and they adequately endeavour to curb these illicit activities in public procurement. There are administrative, regulatory and social measures which may be employed to curb the pandemic. What remains missing is the fact that there is minimal will on the part of politicians to adequately capacitate the institutions which are tasked with the legal mandate of curbing corruption.

 If one was to make a somewhat flippant comment, one may say that savage tenderers or tenderpreneurs flaunt wealth and status and they undermine the criminal justice system owing to their connections with the political elite and senior government bureaucrats who play a part in all spheres of government and law enforcement. They steal from the state and sponsor the same vile politicians.

Tony intellectuals when invited to make a comment on the theme contend that administrative and regulatory measures will frequently overlap, and in some cases administrative measures may arise as a result of the implementation of regulatory measures.

Ordinary, hardworking and honest Basotho including the fourth estate and ‘honest policymakers’ must employ social measures against public procurement corruption and their scorn towards corruption, including the shame, ridicule and disgrace that should normally follow the exposition of corrupt activity…in the meantime we need to seriously reflect on this theme and become agitators for the instigators of public procurement plundering….