26 May 2006: ISS Today: Debarring Corrupt Businesses and Individuals in South Africa

26 MAY 2006: DEBARRING CORRUPT BUSINESSES AND INDIVIDUALS IN SOUTH AFRICA
IRIN NEWS

 

Debarment of corrupt businesses and individuals involved in public procurement in South Africa was the topic of a lively roundtable discussion at the Emperor’s Palace in Gauteng on Wednesday 24 May. Members of The National Anti-Corruption Forum including those from civil society, business and government converged to engage in the debates. A key focus within the discussions was the value and use of government and common databases of those debarred.

 

Commentary

 

The devastating impact of corruption in public procurement on South African service delivery is an undisputed fact. As Hassen Lorgat, a representative from civil society at the NACF Roundtable on the Prohibition of Corrupt Businesses and Individuals says “no creative accounting or lawyers will get around the fact that corruption impacts on poor people.” The challenge for the state is to deal appropriately and effectively with this type of corruption both on the side of government, where officials take bribes, and in the private sector, where bribes are offered to manipulate the tender process in one’s favour.

 

The Prevention and Combating of Corrupt Activities Act 12 of 2004 provides the South African state with a tool with which to address this corruption challenge. In particular, the Act provides for the establishment and endorsement of a Register that regulates the activities of the private sector. A key draft resolution at the Second NACF Summit in March 2005 (1) acknowledges the Register - in the form of a database – and further called for support in the creation of a common database for blacklisting across sectors that would be a tool for information sharing. It was this latter point that precipitated the roundtable.

 

Prof de Koker of the University of Pretoria comments that although the Register was established shortly after the Act came into force, that there are as yet no listings on it remains a point of contention. Furthermore, he argues from a legal perspective that loopholes within the Act leave the system open to abuse by offending parties. For instance, the debarment sentences of between 5-10 years means that companies could potentially drag out court cases, wasting state resources.

 

The Public Service Commission’s (PSC) (2) N.V. Maharaj points out that there appears to be a reluctance on the part of the private sector to launch the register and a common database ; this is linked not to a lack of expertise but rather to a lack of courage. Furthermore, there are only a “miniscule” number of businesses that have been prosecuted despite the ease with which such a tool could be used.

 

A curious aspect of the discussions was the liberal use of the term “blacklisting” – this concept is reminiscent of Apartheid regime’s banning of struggle activities -- instead of the currently preferred “debarment” or “prohibition”. Ultimately, the roundtable marks a progressive joint step in the regulation of public procurement activities. Simon Roberts from the Special Investigation’s Unity (SIU) succinctly encapsulates the challenges of such databases including the verification of the integrity of information on the database and the sharing and co-ordination of sharing of information, all of which will perhaps be on the agenda for forthcoming discussions.

 

Trusha Reddy