Calls to charge construction bosses
AFTER the corrupt dealings of South Africa’s construction industry were laid bare at the recent Competition Tribunal hearings, an outraged public has been calling for these CEOs to “not pass go, and go directly to jail”.
Individuals implicated included former Concor MD John Wilmot, former WBHO CEO Mike Wylie, WBHO’s former MD Duncan Barry, former Stefanutti civil engineering boss Richard Saxby and former Grinaker-LTA MD Hylton Macdonald.
Though many of them have since quit these companies with handsome bonuses, they still work in the sector.
Saxby is a construction industry consultant, while Macdonald still works for Aveng and Wylie is chairman of WBHO.
However, bringing these individuals to book would be extremely difficult, according to Routledge Modise director Ian Jacobsberg. He said many of these individuals had left the country to retire, or work with different companies.
“To get these guys back into the country, South Africa would have to satisfy foreign authorities that it has a case to make,” he said.
Unlike places such as the US and Europe, where individuals are subject to criminal sanctions under their competition laws, no one has been convicted in South Africa.
“South Africa has not yet introduced criminal sanctions against directors and managers who participated in cartel conduct — even though this has been on the cards since 2009,” said Jacobsberg.
The alternative would be to prosecute executives under the Prevention and Combating of Corrupt Activities Act, said Corruption Watch director David Lewis.
The National Prosecuting Authority is considering doing exactly that.
“One might even have to prove the existence of this cartel all over again,” said Lewis.
Although South Africa has robust anti-corruption laws, it has been notable for its nonenforcement, Lewis said.
The Competition Commission linked 21 construction companies to price-fixing, inflating profit margins and cover-bidding on 300 infrastructure projects. Damages are estimated to be close to R50-billion over the period investigated, from 2006 to 2010.
Lewis said it would be easier for institutions and municipalities to pursue civil claims rather than pursue i ndividual prosecutions.
“Civil claims will be quite a bit easier as institutions that have suffered damages can go to the high court and present their case,” he said. Evidence and information gathered from the tribunal process could be used.
The South African Roads Agency said it would seek to recover damages it suffered thanks to the bid rigging in all 24 projects relating to road upgrades and rehabilitation.
Lance Joel of the South African Local Government Association said the association was speaking to members about claiming for damages. “We have a meeting with the competition authorities on Monday, after which we will start to quantify the claims,” said Joel.