‘Not just government’ affected by corruption

2011-10-21 14:11

Corruption is not only an issue for government, but for business and civil society as well, business advocacy grouping Busa president Futhi Mtoba said today.

“As we know, corruption is a systemic problem and is not only a huge issue for government, but also for the business community and members of civil society,” she said in a speech prepared for delivery at Busa’s third yearly anti-corruption forum.

“In business cycles, corruption manifests in various ways... for instance, through collusion and price-fixing. Business must be committed to putting its house in order,” she said.

South Africa would not reach its growth targets if it did not address issues of corruption. How South Africa dealt with corruption would affect the country.

Even though it was bad for business, individual companies received a short-term advantage through corruption, so it was important to establish a system that made it hard for companies to be corrupt.

“Corporate governance is one of the antidotes. If governance is effective, it is hard for companies to offer bribes or other company resources to government officials,” Mtoba said.

There were indications in the international community that the tide of public opinion was turning and that the public no longer tolerated corruption.

Institutions such as the National Anti-Corruption Forum (NACF) helped prevent corruption, build integrity and raise awareness, she said. Business had decided to base its anti-corruption strategy on collective action.

Mtoba suggested the introduction of transaction-based agreements, such as “integrity pacts” to ensure that individual transactions were free of corruption.

Devised by Transparency International, the pact is an agreement between a government or government departments and all bidders for a public contract.

It stipulates rights and obligations to the effect that neither side will pay, offer, demand or accept bribes; collude with competitors to obtain the contract; or, engage in such abuses while executing the contract.

Mtoba said the NACF was in the process of identifying upcoming big procurement projects in South Africa where the integrity pacts could be used.

Government had to also create the legal and institutional framework that prosecuted corruption, encouraged capacity building and established the correct balance between punishing wrongdoing and offering incentives for compliant behaviour.

The support of professional bodies was critical for this to succeed. She said the country must be thankful for a vigilant media and civil society for bringing misdemeanours to the attention of the public.

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