Concourt: CPS contract to be extended, Dlamini must cough up explanation or pay

The Constitutional Court has ordered that the South African Social Security Agency (Sassa) and Cash Paymaster Service (CPS) extend its contract by 12 months to pay grants. The court also said that Social Development Minister Bathabile Dlamini will have to pay costs out of her own pocket unless she files an affidavit by March 31 giving a reasonable defence.

The judgment, which was written by Justice Johan Froneman, was unanimously agreed upon by all justices of the Concourt.

CPS had hoped for a new contract to pay grants, but instead Froneman ordered Sassa and CPS to extend the existing contract on the same terms.

Froneman said that Sassa and CPS have a constitutional obligation to deliver grants. In a prior judgement in 2014, Froneman had declared CPS’s contract with Sassa invalid, but had suspended the declaration of invalidity to allow grants payment to continue without interruption.

The Constitutional Court discharged Sassa from its supervision in 2015 after the agency told the court it would pay grants itself. Froneman said today that at the time, “there was no reason for the court not to accept the assurance of an organ of the state”.


But that has now changed.

In the judgment, Froneman spoke of the “extraordniary conduct” of Sassa and Dlamini and their failure to exercise their duties in securing the delivery of grants.

In an indictment on the minister, Froneman said that Dlamini would now be ordered to join the Black Sash’s application in her personal capacity. She would also be held liable for the costs of the matter – out of her own personal funding – unless she could provide a strong argument on affidavit to the court by March 31.

“The minister bears primary responsibility to ensure that Sassa fulfills its functions. She appoints the CEO. There is little the CEO can do without her direction,” Froneman read from the judgement.

Clamping down on CPS benefits
Froneman has also said that the personal data of beneficiaries must remain private and must not be distributed for any marketing purposes. The Black Sash argued in its application that the company use personal data from beneficiaries, such as fingerprints, to sell products to them from Net1 subsidiaries. Net1 is the company that owns CPS.

The court also said in its judgment that “no party has any claim to profit from the threatened invasion of people’s rights”. Last Wednesday, Serge Belamant said that CPS was looking to make an at least 18% profit from its deal with Sassa. But with Froneman saying that CPS must contract with Sassa on the same terms and conditions as the original 2012 contract, these expectations are unlikely to be met.

Within 30 days of a contract being signed, the court ordered that CPS must provide an audit of its costs and that Sassa should file an independent audit of CPS.

Preventing another crisis
The court has now also set up a structural framework to keep Sassa in check. From today, Sassa must deliver reports to the Concourt every three months with details on time frames, projections and steps taken to procure an alternative mechanism to deliver grants.

Froneman said that if there are any changes in these projections or plans, Dlamini and Sassa must file explanations on an affidavit.

The auditor general has also been ordered by the court to evaluate Sassa’s bidding process for a new contract. The AG must then file reports on affidavit every three months or in shorter intervals if necessary on the evaluations, the results of the evaluations, and any recommendations it can make.

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Raeesa Pather
Raeesa Pather
Ra’eesa Pather is a Cape Town-based general news and features journalist.

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