Why Sars had to apologise to former employees and compensate them

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FIFI PETERS: It’s never too late to apologise if the latest action by the South African Revenue Service is anything to go by. Sars last week issued a public apology and also financial compensation for former Sars employees, many of whom suffered humiliation and pain and loss of income because of state capture that happened at Sars.

We’ve got the commissioner of the revenue service, Edward Kieswetter, for more details. Sir, thanks so much for your time. Why was it important for Sars to apologise?

EDWARD KIESWETTER: Well, I think firstly we have to go back to the genesis of the series of events that started at the time when the former commissioner was appointed, and a series of events that followed that, including these groups of individuals.

Specifically we made two sets of apologies publicly.

The one was to a group of former employees, and the second was to a group of internal employees who [are] still there.

There can be no doubt that what happened at Sars in 2014, if you go to the Nugent Commission findings, was driven by corrupt intent.

And therefore part of this was identifying individuals who were against, or would [have been] non-compliant with this corrupt intent and the actions.

They were doubtless included in this group of individuals, about 16 of them, whom we considered after following the Nugent recommendation that their reputation had been damaged, that they had suffered emotional trauma, that many of them lost their employment and became unemployable.

Their families were affected, and it was public humiliation.

So what the organisation did after following this extensive process included appointing an independent panel led by advocate Thuli Madonsela and Justice Froneman to take representation from each of these individuals and to then consider the extent of the harm and loss they had suffered, and then respond.

We responded in a number of ways, and each case was based on individual merits.

But among other things individuals would have received, when it was necessary, some compensation for loss of income. Secondly, there would’ve been compensation for emotional damage and trauma and reputational harm that people suffered.

We [also] covered certain of the legal cost that was verifiable.

And then in addition every individual received a personal apology.

What you experienced last week was Sars issuing a public apology, which hopefully will bring this long drawn-out, unfortunate but deliberate process to a close, and will help those individuals affected to begin a healing process. This was part of the restorative justice approach that we decided to follow.

There can be no doubt that what took place had casualties, and these individuals were caught and counted among those casualties.

FIFI PETERS: Are you able to share what the total compensation bill that Sars paid was?

EDWARD KIESWETTER: At this stage, no – for a number of reasons. The individual amounts are subject to a confidential agreement. If individuals choose to disclose what they want, Sars will honour its part of the agreement.

But more importantly, we also are still busy with seeking recourse and recovery of these amounts from parties who may have contributed towards the series of events.

And secondly, it is very typical that organisations such as Sars and other organisations have what you call a directors and officers policy with insurers.

The insurers are playing hard to get at this point in time, but we are clear that we have a case against them, which we will pursue to recover some of the amounts as well.

So hopefully in the end the cost to Sars and the taxpayers will be very minimal. But we have to separate firstly addressing the loss suffered by the individuals, and then the recovery of the cost in the normal recourse that is available to Sars.

FIFI PETERS: I imagine that the apology and also the attempts to try and repay for the damage as a result of the loss of the reputation and the inability to find new work because of the loss of reputation at the time has been welcomed or warmly received. But I’d just like to know if everyone is okay, particularly those individuals whose reputation was so damaged that they could not find further employment. Are they okay? And what next? Is there an option, perhaps, for them to return to the revenue service again?

EDWARD KIESWETTER: You know, Fifi, every case is treated on merit. Secondly, remember that Sars as an institution was equally damaged in this process. We saw how, according to the commission’s findings, Sars had suffered a loss of governance and integrity. And we saw, as a result of that, a decline in revenue performance, a decline in the morale and trust that Sars had, that staff had in leadership, and an overall loss of public confidence.

So Sars is in the interesting role that it is both a party that suffered damage as well as the party who has to compensate for the impact on individuals.

In my role as the commissioner, I have the fiduciary accountability to balance the interest of the organisation with the interests of individuals. So this makes this a high-risk and very complex process that we followed.

Secondly, we chose not to follow a litigious process.

We could have said to each of the individuals if you have a case against Sars, then sue us, follow the legal routes. That would’ve had winners and losers – and I don’t think that would’ve been the best way to deal with it in a country that is already so broken, so rife with corruption and the aftermath of the impact on the lives of innocent people.

So we chose a process of restorative and reparative justice, which meant that we appointed two eminent persons in the persons of Advocate Madonsela and Justice Froneman to provide a level of independence, a level of integrity because these are people who are generally trusted by each of the individuals, but also have a reputation in the public domain.

They then took representation from each of the individuals, made a set of recommendations, and the commissioner, being myself, then applied my mind to these recommendations and ultimately has taken accountability for the decisions that Sars then implemented.

FIFI PETERS: All right. Mr Kieswetter, thanks so much for your time in giving us the full detail on the story. That’s the Sars commissioner, Mr Edward Kieswetter.

Read:
Bain, Zuma and Moyane colluded to seize and restructure Sars
Bain’s role in dismantling Sars
State capture scorecard: R500bn looted, zero assets recovered

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