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Sep 04, 2012

‘Dramatic’ increase in white-collar crime in SA

Africa|Environment|Nortons Inc|Africa|South Africa|Law|David Lewis|John Oxenham|Willie Hofmeyr
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White-collar crime was on the rise in South Africa, with a “dramatic increase” seen in the number of cases in recent years, law firm Nortons Inc director John Oxenham said on Tuesday.

Speaking at the White Collar Crime and Corruption seminar, which Nortons and the South African Chamber of Commerce and Industry hosted, he said fraud and corruption in the public and private sectors were widely regarded as two of the biggest threats to the South African economy, its ability to attract foreign investment and achieve economic growth.

South Africa is now ranked 64th out of 182 countries on Transparency International’s corruption index. “We have been sliding for a number of years owing to the rampant corruption involving business and government,” Oxenham said.

He pointed out that many companies did not have proper internal controls, which would bring to a halt corrupt activities. “Unfortunately in today’s economic environment, the first element to be cut for cost saving is internal control, which is often problematic. In international legislation, having adequate internal control is actually a significant mitigating factor against the imposition of sanctions itself,” he said.

Oxenham added that whistleblowers also had to be properly incentivised and protected.

Corruption Watch director David Lewis agreed, stating that public participation was key to combatting corruption and anticompetitive collusion.

“We need to encourage the public to resist corruption and we need to create an environment that is less conducive to such activities, by advocating for policies and legislation that facilitate whistleblowing, effective policing and consequences for those who are found to be guilty of such crimes,” he noted.

Lewis, who is the former chairperson of the Competition Tribunal, pointed out that corruption bred deep mistrust on the part of the public regarding both the business and governmental sectors. “Corruption slows economic growth and job creation, and disproportionately affected the poor.”

Meanwhile, he said that it was relatively easy to understand that handing over a proverbial brown envelope in exchange for example, a government contract was corrupt. But Lewis said that grey areas, such as conflict of interest; and the nature, purpose and outcome of nepotism in appointments were harder to grasp.

Asset Forfeiture Unit of the National Prosecuting Authority head Willie Hofmeyr said that the work done by government's anti-corruption task team (ACTT) was encouraging. He explained that the ACTT was an inter-agency task team that focused on the so-called “big fish” with income from corrupt activities in excess of R5-million.

The ACTT had already frozen assets to the tune of R550-million and had charged and convicted 16 criminals in the past two years.

Lewis added that Corruption Watch has, in the past six months, received over 2 200 reports of alleged corruption, many of which are currently being investigated.

The consensus of the seminar was that the tone for proper conduct had to be set by leadership in business, government and labour in order to fight corruption, otherwise the existing legislation aimed at fighting corruption would prove largely ineffectual.

Edited by: Mariaan Webb
Creamer Media Senior Researcher and Deputy Editor Online
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