THE Department of Trade and Industry has neither the mandate nor any policy to cover the issuance of letters of support to South African companies doing business abroad, a forensic investigation has found.
Trade and Industry Minister Rob Davies ordered the probe earlier this year when it was revealed that issuing such letters to an aviation company last year to do business in Iran placed SA at risk of violating United Nations (UN) Security Council sanctions.
In 2008 and 2011 letters of support were given to 360 Aviation to export US-manufactured Bell helicopters and spare parts to Iran, potentially making the South African government complicit in sanctions busting.
In 2010 the Security Council adopted a resolution imposing an arms embargo on Iran, which included "dual use" material which could have military as well as civilian applications.
Early news reports tied Deputy President Kgalema Motlanthe and his partner Gugu Mtshali to a kickback of millions to facilitate a deal with Iran. Mr Motlanthe himself referred the matter to Public Protector Thuli Madonsela but she has yet to report on it.
The Grant Thornton forensic report says "the issuing of letters of support to private individuals or organisations is not a core (department) function or service and therefore there is no policy or standard operating procedure for the issuing of such letters. The (department) would normally refrain from issuing such letters and follow a policy of neutrality as far as practically possible.
"In terms of the UN resolution there is a ban on all countries providing military vehicles, aircraft or warships and missiles or missile systems and related materiel to Iran. SA can thus be banned if found to be violating its UN obligation."
Democratic Alliance (DA) MP David Maynier, who gained access to the report through a Promotion of Access to Information Act application, said yesterday Mr Davies "should be complimented for ordering a forensic investigation into the provision of so-called letters of support by the (department) to 360 Aviation".
Mr Maynier said the final forensic report found (then acting deputy director-general) Riaan le Roux who provided a letter of support to 360 Aviation on April 12 2011, was "grossly negligent".
"The report recommends that: Riaan le Roux be subject to a disciplinary inquiry and be held accountable for bringing the (department) into disrepute. ; the public protector and the National Conventional Arms Control Committee should be informed about the outcome of the investigation; and a proper policy and standard operating procedure should be implemented in respect of letters of support."
The DA would write to Mr Davies to ask him to extend the scope of the forensic investigation to include an investigation into all letters of support provided to private companies between 2009 and 2012; and to devise a departmental policy, not just on the provision of letters of support, but on how the department monitors trade with countries under sanctions regimes.
Spokesman for the department, Sidwell Medupe said: "We are implementing the recommendations of the Grant Thornton report regarding Mr Riaan le Roux, and we will also have a new system where all letters of support must be signed off by the director-general and minister. ."
hartleyw@bdfm.co.za
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