1. INTRODUCTION
The Zondo Commission, officially known as the Judicial Commission of Inquiry into Allegations of State Capture, was established in South Africa in 2018 to investigate allegations of widespread corruption and state capture during the presidency of Jacob Zuma. The Commission was led by Deputy Chief Justice Raymond Zondo.

2. DEFINING “STATE CAPTURE”
State capture refers to the systematic manipulation of state institutions and resources by private individuals or entities for personal gain. There was no formal definition of state capture in the South African legal framework. Ultimately, it was left to the Commission to both define the concept and determine whether state capture took place. The Commission found that: State capture in the South African context evolved as a project by which a relatively small group of actors, together with their network of collaborators inside and outside of the state, conspired systematically (criminally and in defiance of the Constitution) to redirect resources from the state for their gain. This was facilitated by a deliberate effort to exploit or weaken key state institutions and public entities, including law enforcement institutions and the intelligence services. To a large extent, this occurred through strategic appointments and dismissals at public entities and a reorganisation of procurement processes. The process involved the undermining of oversight mechanisms and the manipulation of the public narrative in favour of those who sought to capture the state.

2.1. KEY ELEMENTS OF STATE CAPTURE
The Commission also identified several key elements present in a project of state capture, namely:
i) The allocation and distribution of state power and resources, directed not for the public good but for private and corrupt advantage;
ii) a network of persons outside and inside government acting illegally and unethically in furtherance of state capture;
iii) improper influence over appointments and removals;
iv) the manipulation of the rules and procedures of decision-making in government to facilitate corrupt advantage;
v) a deliberate effort to undermine or render ineffectual oversight bodies and to exploit regulatory weaknesses to avoid accountability for wrongdoing;
vi) a deliberate effort to subvert and weaken law enforcement and intelligence agencies at the commanding levels to shield and sustain illicit activities, avoid accountability and disempower opponents;
vii) support and acquiescence by powerful actors in the political sphere, including members of the ruling party;
viii) the assistance of professional service providers in the private sphere, such as advisers, auditors, and legal and consulting firms, in masking the corrupt nature of the project and protecting and even supporting illicit gains; and
ix) the use of disinformation and propaganda to manipulate the public discourse, divert attention away from their wrongdoing and discredit opponents.

The Commission concluded that the evidence established that all of these elements were present in South Africa during the period under review.

3. BROAD FINDINGS OF THE ZONDO REPORT
The evidence about the Gupta enterprise showed that their network had substantial influence over key appointments. Once in positions of power, those people ensured that certain companies were awarded substantial tenders. The Commission showed the various ways these officials undermined procurement processes and circumvented the rules – or, in some cases, simply ignored them. These companies then paid kickbacks to the Gupta enterprise in exchange for their assistance in securing the contracts. Some of these companies also brought on Gupta-linked companies as subcontractors or development partners – allowing them to directly benefit from government work, often without participating in the procurement process at all.

This inevitably ended up drastically inflating the costs of the contracts, as everyone involved tried to get a bigger piece of the pie. Without proper, competitive procurement processes functioning, there was no way to rein in these excesses. Even worse, in many cases, the state ended up with poor quality services and products – if any part of the contract was delivered. Outside of procurement, complicit state officials abused their powers to benefit the Guptas – and others – in more direct ways, such as the irregular granting of visas, the processing of mining licenses and granting permission for the use of the Waterkloof airbase.

The Commission presented evidence on how all of this money was laundered through various jurisdictions, allowing the Gupta enterprise to hide the sources and ultimate beneficiaries of these funds. The reports also show significant evidence that oversight bodies were inhibited or undermined to prevent them from effectively detecting and deterring corruption and that law enforcement and intelligence agencies had been similarly weakened or ‘captured’.

Actors in the private sector were also scrutinised by the Commission. Many well-respected and highly successful companies were willing to enter into kickback agreements to secure lucrative contracts. Professionals such as auditors, bankers, lawyers and consultants were also implicated. The best of these companies failed to conduct proper due diligence; the worst were actively complicit in capturing the state for their private benefit.

It was estimated that the total amount of money spent by the state, which was ‘tainted’ by state capture, was around R57 billion. More than 97% of the R57 billion came from Transnet and Eskom. Out of these funds, the Gupta enterprise received at least R15 billion. The total loss to the state is difficult to quantify, but would far exceed R15 billion.

3.1. SUMMARY OF THE FINDINGS
The key findings of the Zondo Report are:

a) Capture of key institutions
The report revealed how state capture infiltrated crucial institutions such as the executive, legislature, judiciary, law enforcement agencies, and state-owned enterprises. It highlighted how corrupt networks operated to exert influence over appointments, policy decisions, and resource allocation, further exacerbating corruption and mismanagement.
b) Role of private interests
Private individuals and companies played a significant role in state capture, often collaborating with government officials to secure lucrative contracts, manipulate procurement processes, and exploit public resources. The report identified several prominent individuals and entities involved in such illicit activities.
c) Weakening of regulatory frameworks
State capture thrived due to weak regulatory frameworks and inadequate oversight mechanisms. The report points out the failures within regulatory bodies, highlighting the need for reforms to prevent future instances of corruption.
d) Socio-economic impact
The adverse effects of state capture on South Africa’s economy and society are extensive. The report emphasised the detrimental impact on public service delivery, job creation, investment, and social cohesion. The misallocation of resources further deepened the socio-economic divide, perpetuating inequality and hindering development.

4. RECOMMENDATIONS BY THE ZONDO COMMISSION
Judge Zondo’s report includes a set of recommendations aimed at addressing the systemic issues and preventing future instances of state capture.

The Commission recommended that:
a. Various implicated individuals be investigated further and possibly prosecuted for their involvement in state capture, mostly concerning charges of fraud, corruption, money laundering, contravention of the Public Finance Management Act (PFMA), the Prevention and Combating of Corrupt Activities Act (PRECCA) and Prevention of Organised Crime Act (POCA), and racketeering.
b. Some SOEs and the National Prosecuting Authority’s (NPA) Asset Forfeiture Unit should take steps to recover amounts paid to implicated parties as part of irregular and unlawful contracts.
c. Some of the more ambitious recommendations made by the Chairperson concern public procurement, including the publication of a national charter against corruption in procurement, with a binding code of conduct; the creation of an independent agency against corruption in procurement which includes a council, an inspectorate, a litigation unit, a tribunal and a court; the creation of a procurement officer professional body; and various other changes to public procurement legislation and regulations.
d. Protection for whistleblowers should be enhanced.
e. A body tasked with identifying, recruiting and selecting SOE board members, Chief Executive Officers and Chief Financial Officers be established.
f. Various reforms should be considered by Parliament, including the establishment of an oversight committee on the Presidency, the introduction of a constituency-based electoral system, and various interventions to improve the effectiveness of oversight committees.
g. The government consider the creation of a statutory offence making it a criminal offence for any person vested with public power to intentionally use that power in any way other than ‘in good faith for a proper purpose’ (this is a reference to the Companies Act, section 76(3)).
h. A permanent commission be established to investigate, and publicly expose acts of state capture and corruption in the way that this Commission did over the past four years, and to make findings and recommendations to the President.
i. Consideration should be given to changing South Africa’s electoral system to allow for the President to be directly elected by the people.

4.1. SUMMARY OF THE RECOMMENDATIONS
The recommendations can be categorised as follows:

a) Strengthening of institutions and accountability
To restore public trust and ensure the integrity of state institutions, the report suggests the implementation of robust measures to enhance accountability, transparency, and ethics. This includes reforms in procurement processes, oversight mechanisms, and the appointment of qualified, independent individuals to key positions.
b) Judicial and law enforcement reforms
The report highlights the need for reforms within the judiciary and law enforcement agencies to bolster their independence, professionalism, and capacity to combat corruption effectively. It emphasises the importance of adequate resources, training, and protection for whistleblowers.
c) Regulatory and legislative reforms
Recognising the deficiencies within regulatory bodies, the report calls for comprehensive reforms to strengthen their independence, effectiveness, and ability to curb corruption. It recommends reviewing existing legislation, enhancing coordination among regulatory bodies, and ensuring that regulatory frameworks are robust and adaptive.
d) Civil society engagement
The report emphasises the critical role of civil society organisations in promoting transparency, accountability, and public participation. It recommends the establishment of platforms for engagement between civil society and the government to facilitate ongoing dialogue and monitoring of progress.
e) Education and awareness
Judge Zondo emphasises the importance of educating citizens about corruption, ethics, and the role of civil society in holding public officials accountable. The report recommends incorporating anti-corruption education into school curricula and launching awareness campaigns to foster a culture of integrity and good governance.

5. CONCLUSION
The Zondo Report represents a pivotal moment in South Africa’s fight against state capture. It reveals the depth of corruption and its detrimental impact on the country’s institutions and society. However, the recommendations are not binding, and so it is up to President Ramaphosa to decide how to respond to the report. Some state institutions may decide to implement certain recommendations of their own volition – or to act on the report’s findings in other ways. The NPA, for example, established a task force to coordinate its response to the report and to expedite the investigation and prosecution of the matters highlighted by the Commission. Eskom has similarly set up a team to deal with the report’s recommendations. Ultimately, the implementation of the Commission’s recommendations – and, indeed, any response to the Commission’s findings depends on the will and capacity of those in power. The report is nevertheless a valuable tool for civil society groups and activist citizens seeking accountability from the government. The massive amount of information made available by the Commission is itself a rich resource.

Resource: Devi Pillay at the Public Affairs Research Institute (PARI), August 2022.
Further information and analysis relevant to the Zondo Commission can be found on PARI’s website:
www.pari.org.za.