CORRUPTION: STRONG GOVERNMENTS AND ETHICAL LEADERS BRING SUSTAINABILITY (2015-04-29)

April 29, 2015  12451  12451   

Article by Terrance M. Booysen and peer reviewed by Megan Grindell (Director: Carter DGF)

The United Nations Convention Against Corruption in New York stated in October 2003 that “corruption is an insidious plague that has a wide range of corrosive effects on societies and it undermines democracy and the rule of law.”  But while leaders across the world eloquently continue to (re)define corruption, markets are being distorted and human rights are being seriously violated through its abhorrent practices.  In its simplest of term, corruption is any illegal act performed between two or more parties with the objective of producing results which would otherwise not have been possible.  Considering the broadness of such an act, it is quite plausible to suggest that many so-called ‘innocent’ transactions between engaging parties falling within this loose definition may in effect be corrupt and therefore illegal.  Acts of corruption have become so widespread and are deeply rooted in the fabric of society, to the point that it is deceptively harder to detect and unravel.  As compared to a by-gone era where corruption was an act of abusive and selfish power enjoyed by a handful of the political and or business elite, today a far bigger group of individuals have the means and motive to participate in its sordid affairs, causing immeasurable damage to businesses and civil society.  Corruption is a problem that affects every country and it occurs in nearly every workplace.

Expectedly, governments are appointed by its citizens on the basis that they will protect the people of their country through the proper establishment of legal and social structures.  In this respect, it is critical that a society is assured by its government that it will institute and maintain the necessary frameworks to effectively manage and deal with all forms of corruption.  That being said, given the knowledge and assurances that such frameworks exist -- and that they are driven by fair and legal processes -- it is equally important for the civilians of a country to know that all perpetrators of corruption, irrespective of their standing, will be treated in the harshest of terms.  Anything less of a hefty sanction against the perpetrators of corruption simply makes a mockery of the structures which are supposed to govern a society

There are a number of international and regional conventions aimed at fighting corruption, and these include the United Nations Anti-Corruption Convention, the African Union Convention on Preventing and Combatting Corruption, the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, and the Southern African Development Community Protocol against Corruption.  

Allied to these conventions, there are also a number of business initiatives aimed at eliminating corruption, including the United Nations Global Compact which is a voluntary initiative that seeks to align business operations and strategies with ten principles, including the principle that “businesses should work against corruption in all its forms, including extortion and bribery”.  But although South Africa is a stakeholder to these conventions, and in spite of our own world-class legal and regulatory frameworks to fight corruption, our country continues to demonstrate ineptitude in combatting and effectively managing this terrible scourge.

Transparency International (TI) is a well-recognised international non-governmental organisation and is devoted to combating corruption across the world.  As part of their work, each year they produce a Corruption Perceptions Index (CPI) Report on the perceptions attached to public corruption for a number of participating countries, and South Africa is included in this report.  The index ranks countries based on how corrupt their public sector is perceived to be.  The score indicates the perceived level of public sector corruption on a scale of 0 (highly corrupt) to 100 (very clean) and a country's rank indicates its position relative to other countries in the index.  To this extent, given the recent spate of corruption allegations brought against various prominent government and business leaders in South Africa, it is hardly surprising that South Africa’s CPI score in 2014 was 44 (a score below 50 indicates a significant corruption problem).  Even more damaging to the brand of South Africa, is the fact that our TI ranking stands at 67th out of 174 countries and this position has become worse over the years.  Understanding that the best ranking is 1, which is currently held by Denmark with a score of 92, South Africa is placed in 67th position and in the same league as Kuwait, Brazil and Bulgaria.  Perceptions of public sector corruption in South Africa have certainly deteriorated over the past years, and our country has been a regular contender within TI’s bottom league players.  This is hardly surprising, considering the former head of the  Special Investigation Unit -- Willie Hofmeyer -- who reported before parliament in 2011 that between R25 billion and R30 billion was lost to the government procurement budget each year due to corruption.  Furthermore in 2012, the Institute for Accountability estimated that the South African economy may have lost approximately R675 billion as a result of corruption since 1994.

Transparency International also produce a Bribe Payer’s Index (BPI) Report where business executives across the globe are surveyed regarding their respective views on the extent to which companies engage in bribery when conducting business abroad.  Again a score is used where a maximum score of 10 corresponds with the view that companies from that country will never pay a bribe.  Conversely, a score of zero indicates that the country in which the company operates will always pay a bribe.  According to the most recent BPI Report, South African companies appear to be doing reasonably well with a score of 7.6; and while our ranking of 15 out of 28 countries is fair, there certainly is room for improvement.

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