Bribery, corruption a high risk when conducting business in SA - lawyer

2016-09-22 13:54

Money. (Duncan Alfreds)

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Johannesburg - Doing business in South Africa comes with a high risk of being drawn into corrupt activities, including bribery, law firm ENS Africa said on Thursday.

This was according to a 2016 anti-bribery and corruption survey conducted by the firm.

According to the firm's forensics lawyer, Steven Powell, being classified as a high risk jurisdiction meant that any international companies wanting to do business in South Africa had to have "stronger than normal anti-corruption processes" in place.

The survey included 132 respondents from SA, Mozambique, Kenya, Namibia, Ghana, Tanzania, the Democratic Republic of Congo, and Uganda.

The survey showed that, over the last two years, 39% of the respondents experienced incidents of bribery and corruption. Of that group, 18% experienced three or more incidents, while 20% experienced five or more incidents.

A total of 79% of the incidents were recorded in SA. However, the fact that 80% of the respondents were geographically located in SA may have had a bearing on the result, Powell said.

'Say no to bribe request'

Despite this, Powell warned that South African civil society, government and the corporate industry needed to improve its commitment to anti-corruption compliance.

"We have to say no to bribe requests, whether it is in our personal capacity or corporate environment. Corruption in Africa is increasing and the only way to manage it is to say ‘no’, and having robust policies and programmes in place to prevent the corruption," he said.

In his work with companies throughout the continent, he said one of the main contributing factors to bribery and corruption was the presence of middlemen, agents, lobbyists and business partners.

Government officials also contributed to the scourge of corruption within the public service sector, he said.

"A lot of the corruption that happens is because government officials solicit bribes and they receive bribes."

Government departments, both at the local and national level, needed to enhance their commitment to implementing anti-corruption programmes, he said.

Incompetent business partners

"They need to shift the focus beyond fraud because corruption is a much bigger risk that impacts us."

Powell emphasised the need for government departments to do their homework when it came to the business partners they appointed.

"A lot of these appointments to government are given to people that don't have the competence, they don't have the expertise and they get the contracts through corruption, through bribes, and it ends with poor service delivery.

"So what government should be doing is really doing homework on the business partners that get appointed to the contracts, to make sure that we only appoint clean people and people that can really deliver."

Another danger was fronting. Due to government's procurement policy of using black-owned businesses, there was a serious problem with fronting.

"A lot of companies pretend to be black owned, whereas just a little bit of probity and checks, you can quickly establish that they are actually just window dressing," Powell said.

Read more on:    corruption

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