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Fri Sep 30 20:38:46 SAST 2016

South Africa drowning in graft

DAVE CHAMBERS | 23 September, 2016 06:19
Part of the crowd that marched to Pretoria’s Union Buildings against corruption. File photo.
Image by: SIMPHIWE NKWALI

Corruption is flourishing thanks to "the tone at the top", says a forensic lawyer who blew the whistle yesterday on South Africa's deteriorating public and corporate morality.

"The tone at the top is my biggest concern," Steven Powell told The Times. The worsening of corruption was particularly evident in:

  • The issuing of permits by the Department of Home Affairs;
  • The insertion by state departments of middle men, who did nothing other than take a slice of the money, as a condition of the awarding of government contracts; and
  • The prevalence of government officials demanding a bribe simply to do their job.

"Corruption is becoming more [common] and our clients are experiencing more bribery requests," said Powell, director of forensic investigations at law firm ENSafrica.

For the third year Powell's team has published an anti-corruption and bribery survey. It names South Africa as one of eight African corruption hot spots. The others are Mozambique, Kenya, Namibia, Ghana, Tanzania, the DRC and Uganda.

Eighty percent of the survey's 132 respondents were in South Africa in the financial services, manufacturing, retail and wholesale sectors.

ENSafrica said: "The survey shows that 39% of respondents experienced bribery or corruption in the past 24 months, and highlights a marked increase in bribery and corruption in South Africa in particular."

Powell said the Companies Act compelled businesses to institute anti-corruption programmes but many organisations only paid lip service to the requirement.

"We are even seeing cases in which company executives and boards are bypassing their own legal and compliance people in order to do deals," he said.

Lawyers were often left to pick up the pieces in these cases - and also when companies ignored legal advice to walk away from deals after due diligence investigations.

"We have to help them fix a situation they could have avoided," said Powell.

Corruption Watch executive director David Lewis said the survey was consistent with the findings of organisations such as the Organisation for Economic Co-operation and Development, and Transparency International.

"It has a lot to do with the fact that people at the top - in both public and corporate life - are seen to be getting away with corruption," he said.

Minister of Public Service and Administration Ngoako Ramatlhodi revealed yesterday that, in the 12 years since the national anti-corruption hotline was launched, 3570 officials had been found guilty of misconduct as a result of calls to the hotline.

"The investigation of cases of corruption reported to the hotline resulted in the recovery of R340-million," said Ramatlhodi.

"It is worth noting that all senior managers in the public service are expected to disclose all their financial interests by April 30 of each year. The overall compliance rate by the due date in national and provincial departments was 98% in the 2015-2016 financial year."

Ramatlhodi said a circular had been distributed among public servants warning them that they must disclose any business activities in which they were participants that involved an organ of state.

The Public Affairs Research Institute is drafting a national anti-corruption strategy and implementation plan on behalf of the anti-corruption inter-ministerial committee set up by President Jacob Zuma in July 2014.

Powell has been asked to advise the committee, the formation of which, he said, was one of the factors that suggested that South Africa could win the war on corruption.

Other good news in the fight against corruption was the establishment of a specialist anti-corruption team at the National Prosecuting Authority, the appointment of a chief procurement officer at the Treasury, and the enhanced powers of investigation given to Finance Minister Pravin Gordhan's department.

Essential to effective enforcement, Powell said, would be heavy financial penalties for companies found guilty of corruption.

Powell said he was particularly encouraged by the remarks of business leaders such as AngloGold Ashanti chairman Sipho Pityana and Sibanye Gold CEO Neal Froneman, both of whom have called for Zuma to quit. "Business is becoming vocal," he said.

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