‘Blacklist’ the corrupt firms

Collusion theft, says business body

THE Black Business Council in the Built Environment (BBCBE) says that R1.46-billion of fines imposed by the Competition Commission on 15 listed and unlisted companies in the construction sector for anti-competitive behaviour is a “mere slap on the wrist”.

It says the firms‚ including South Africa’s top construction groups‚ should be blacklisted from public sector construction projects‚ having “favoured certain groups of South Africans to the exclusion of others”.

“These companies have effectively stolen money from the. . . fiscus and should be treated as criminals.”

It said the blacklisting of these companies would not negatively affect the construction industry’s capacity to deliver on the government’s R4-trillion infrastructure development programme. This would “naturally gravitate towards companies that will be awarded contracts going forward”‚ with support from banks and suppliers of construction materials.

“We urge the Hawks to investigate and prosecute individuals that were responsible for running the so-called ‘party’,” the BBCBE said.

“The Party” refers to individuals and groups the Competition Commission said were party to past collusive behaviour.

“These people must be held personally responsible for their actions and they must be arrested and prosecuted like any other criminal involved in fraud and corrupt activities‚” the BBCBE said.

Collusion in the construction industry had diverted funds that would have been better used for service delivery. Instead, these funds had “made the rich richer”.

To this end‚ the council would request the National Treasury to ringfence money paid for the fines and channel it to both the National Empowerment Fund and the Industrial Development Corporation to help emerging firms.

The BBCBE also said it was seeking legal advice to bring a possible class action lawsuit against those found guilty. This it would do on behalf of its members and other companies that suffered financially because of the actions of the parties guilty of collusion.

Further‚ the body said it expected the Construction Industry Development Board (CIDB) and the National Home Builders Regulation Council to act against these companies.

The comments came as the CIDB on Tuesday welcomed the Competition Commission settlement. Acting CIDB chief executive Hlengiwe Khumalo said that collusive practices were exclusionary and undermined socioeconomic development and the transformation that was necessary in the construction industry.

“This paves the way for the CIDB to initiate its own process of investigation and inquiry into the firms’ conduct‚ in terms of (construction industry) regulations,” Khumalo said. But it was waiting for the report of the commission and decisions of the Competition Tribunal‚ which were “crucial and pivotal” to its investigation.

Meanwhile‚ Business Unity South Africa (Busa) said on Tuesday it “deplored” any collusive activity that had a negative effect on the country’s economy. A competitive economy was likely to create more jobs in the medium term.

“We also want an open economy that encourages fair participation and entry of emerging businesses‚” Busa chief executive Nomaxabiso Majokweni said.

“In order to promote a culture of integrity and ethical conduct‚ Busa has developed an integrity pact‚ especially for application in infrastructure projects.” — BDLive