Will SA con­tinue to rot un­der rule of cor­rup­tion?

Pretoria News - - FOCUS - Alec Er­win is a di­rec­tor of Ubu In­vest­ment Hold­ings and mem­ber of the Naa­cam Show stake­holder ref­er­ence group.

IN EARLY Fe­bru­ary, the em­bassies of Ger­many, the UK, the US, the Nether­lands and Switzer­land sent a joint memo to Pres­i­dent Cyril Ramaphosa not­ing their con­cern about South Africa’s stance on cor­rup­tion, among other is­sues.

The re­sponse from the Depart­ment of In­ter­na­tional Re­la­tions was puz­zling, to say the least. In­stead of out­lin­ing a course of ac­tion for rid­ding the coun­try of this rot, it lashed out against the coun­tries in ques­tion, call­ing out their “holier than thou” tone and call­ing them im­pe­ri­al­ists.

It did, how­ever, state that “South Africa has em­barked upon the process of rid­ding our coun­try of state cap­ture and re­lated cor­rup­tion. We are us­ing our in­sti­tu­tions and con­sti­tu­tional obli­ga­tion to do so.”

A lit­tle more clar­ity in this would be widely wel­comed.

On the one hand, nary a day passes with­out men­tion of the State Cap­ture hear­ings, so we know that this is at least a high pri­or­ity on the coun­try’s agenda.

Pres­i­dent Cyril Ramaphosa also gave the is­sue of cor­rup­tion its due in his re­cent State of the Na­tion Ad­dress (Sona) speech.

With cor­rup­tion so firmly en­trenched on the radar of all South Africans, it’s highly un­likely that the of­fend­ers will be able to get away with­out repa­ra­tions of some sort. The re­cent ap­point­ment of Shamila Ba­tohi as the new na­tional di­rec­tor of pub­lic pros­e­cu­tions ap­pears to bode well in this re­gard.

Ba­tohi has given ev­ery in­di­ca­tion of view­ing her job in the most se­ri­ous light, and un­der­stands the im­por­tance area of mov­ing swiftly to make pros­e­cu­tions in the State Cap­ture, and other high-pro­file mat­ters.

On the other hand, we do not have a sound record of bring­ing those re­spon­si­ble for cor­rup­tion to task.

Last year, it ap­peared that Tom Moy­ane would be made to pay the price for bring­ing the SA Rev­enue Ser­vice to its knees – but we’re still wait­ing for this to hap­pen. Sim­i­larly, the great­est chal­lenge fac­ing Ja­cob Zuma in re­cent months seems to be the can­cel­la­tion of his record deal.

This is the mi­lieu into which An­gelo Agrizzi, with his ex­plo­sive rev­e­la­tions, has stepped, giv­ing us pause to ask: Well, what hap­pens next? Are we sim­ply go­ing to cover our mouths in shock, tut about the ghast­li­ness of it all, and do noth­ing? Or is some­one fi­nally go­ing to make sure that those who have tainted our sys­tems and set fire to pub­lic trust are ac­tu­ally treated like the crim­i­nals they are?

It’s heart­en­ing to see that dur­ing his early days as pres­i­dent, Ramaphosa quickly took ac­tion to change the reg­u­la­tions for the Zondo Com­mis­sion of In­quiry into State Cap­ture gazetted by his pre­de­ces­sor, mak­ing it pos­si­ble to use any tes­ti­mony given by in­di­vid­u­als un­der prose­cu­tion dur­ing the in­quiry to be used in crim­i­nal pro­ceed­ings. This is re­as­sur­ing, be­cause it means that come what may, those guilty of cor­rup­tion can be made to pay.

We need to see this hap­pen. South African so­ci­ety has been rent by cor­rup­tion. Our so­ci­ety is floun­der­ing. When it seems that peo­ple are above the law, each per­son be­comes a law unto him­self.

Is it pos­si­ble to undo the dam­age? My an­swer, judg­ing by the ac­tion taken by other coun­tries, is yes.

Al­most two years ago, in Novem­ber 2017, Fi­nancier World­wide pub­lished an ed­i­to­rial lament­ing the fact that “de­spite its grav­ity, white-col­lar crime of­ten goes un­pun­ished. In the UK, this has his­tor­i­cally been the case, with au­thor­i­ties more in­clined to avoid pros­e­cut­ing cor­po­rate en­ti­ties in favour of a set­tle­ment, an ap­proach that was es­pe­cially com­mon in the af­ter­math of the fi­nan­cial crash.”

The ar­ti­cle fur­ther noted that the prose­cu­tion of white col­lar crimes had fallen by 12 per­cent in the 12 months be­tween 2016 and 2017, and called on the Se­ri­ous Fraud Of­fice to take a stronger stance – or risk dis­band­ment.

Clearly, this warn­ing did not go un­heeded. Just a few months later, in May 2018, Glob­al­in­ves­ti­ga­tion­sre­view.com com­mended the Se­ri­ous Fraud Of­fice for its hard work.

“Anti-cor­rup­tion in­ves­ti­ga­tions and en­force­ment ac­tions in the UK have con­tin­ued to gather pace over the past 12 months. The com­mence­ment and pur­suit of nu­mer­ous high-pro­file in­ves­ti­ga­tions and pros­e­cu­tions by the Se­ri­ous Fraud Of­fice, as well as the UK’s other in­ves­tiga­tive, reg­u­la­tory and pros­e­cu­to­rial bod­ies, cou­pled with the ce­ment­ing of de­ferred prose­cu­tion agree­ments in the cen­tre of the UK’s en­force­ment land­scape, have con­tin­ued to lend weight to the ar­gu­ment that the UK is now at the fore­front of the global anti-cor­rup­tion move­ment.”

The US is also tak­ing an in­creas­ingly hard line against cor­rupt prac­tices.

Rolls-Royce, for ex­am­ple, has been made to pay a $800 mil­lion (R11.1 bil­lion) global res­o­lu­tion af­ter be­ing found guilty of brib­ing gov­ern­ment of­fi­cials in ex­change for lu­cra­tive gov­ern­ment con­tracts.

Pana­sonic Avion­ics Cor­po­ra­tion, a di­vi­sion of Pana­sonic, was caught in an equally dirty deal, ac­cused of “re­tain­ing con­sul­tants and con­ceal­ing pay­ments to third party agents,” ac­cord­ing to www.jus­tice.gov, and now has to pay a crim­i­nal penalty to­talling $137.4m.

In ad­di­tion to th­ese sig­nif­i­cant fines, there is the rep­u­ta­tional dam­age that may well end up cost­ing the com­pa­nies a great deal more; par­tic­u­larly given the cur­rent em­pha­sis on re­spon­si­ble and con­scious con­sumerism. Will buy­ers con­tinue to sup­port busi­nesses they know to be cor­rupt? Most likely not.

Is South Africa ready to take strong a stand? We wait and see. as

David Lox­ton heads up Africa Foren­sics & Cy­ber, spe­cial­ists in fraud, on­line and white col­lar crime. He is also the chief ex­ec­u­tive of Lox­ton At­tor­neys.

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