In South Africa, the police reports corruption under the broad category of ‘commercial crimes.’ This frustrates efforts to monitor and identify trends in specific cases of corruption.
According to the 2011/2012 crime statistics report, in the decade preceding that period the number of commercial crime cases opened with the police had increased by 63,8%, or by an additional 35 700 cases. In the 2012/2013 financial year, these crimes continued their upward trajectory, increasing by 4% to a total of 91 569 cases reported that financial year.
Between 2012/2013 and 2013/2014 commercial crime incidents decreased by 13,6% (a reduction of 12 460 cases) to a total of 79 109 incidents. Unfortunately, we do not know the nature of commercial crimes behind this decrease.
Since ‘commercial crime’ refers to a large spectrum of crimes – including white-collar crimes such as insider trading; banking crimes such as cheque fraud, deposit slip scams and credit card fraud; as well as public procurement fraud and private sector corruption – it is not possible to determine whether one specific type of crime is driving the fluctuating numbers of cases reported.
The police must make available detailed statistics for each of these crimes
If we are to monitor trends in specific types of commercial crimes, and corruption in particular, the police must make available detailed statistics for each of the crimes that fall into this broad category.
In the 2013/2014 annual police report there are some statistics on crimes such as credit card fraud and counterfeiting, as well as statistics regarding the legal acts under which those arrested were charged. However, this does not give a sense of the whole spectrum of crimes in this category. Given the scourge of corruption in South Africa, it is critical to provide detailed statistics.
This is done elsewhere. For example, the Federal Bureau of Investigation (FBI) in the United States reports money laundering, mortgage, corporate and insurance fraud, and securities and commodities fraud: crimes that in South Africa would be reported under the broad category of commercial crimes. In New Zealand’s Serious Fraud Office investigates investment fraud, embezzlement, mortgage funding fraud, bribery and other forms corruption.
In South Africa there are several laws that seek to curb corruption in the public and private sector. These include the Prevention and Combating of Corrupt Activities Act, the Public Finance Management Act and the Public Service Act. In addition, the Public Administration Bill – which was adopted by Parliament in March 2014 but still awaits approval by the president – seeks to ban civil servants from conducting business with the state and compel them to disclose financial matters such as private business interests.
Most of the reports made to Corruption Watch came from public sector employees
Statistics from the Public Service Commission show that public sector fraud cost the government close to R1 billion rand in 2011/2012: an increase from an estimated R130,6 million in the 2006/2007 financial year. Estimates by the former head of the Special Investigation Unit (SIU) before Parliament in 2011 suggested that the real amount was much higher, amounting to some R30 billion annually.
Based on this estimate, the Institute for Accountability stated in 2012 that the South African economy had lost some R675 billion as a result of corruption since 1994. This is a significant amount of money that would have been diverted away from government services and into the pockets of corrupt politicians, officials, their associates and private business people.
Reports of alleged corruption made to Corruption Watch increased by 40% from 2 262 in 2012 to 5 485 in 2013. The number of cases representing actual corruption – which the organisation defines as the abuse of public power and resources for personal gain – increased from 38% to 58% over that period.
Individuals employed in the public sector made most of the reports to Corruption Watch. According to the organisation, some 53% of those who made reports said that although they had reported their cases to national and provincial governments, the police and other relevant institutions, they had not received the assistance they had expected. Despite perceptions that South Africa’s public sector is replete with corrupt employees, this suggests another side to the story: that there are many employees in this sector who believe in serving the people of South Africa, and who are committed to upholding the highest ethical standards and the law.
The poor suffer from the effects of corruption – such as when public servants require bribes to perform duties that are an inherent part of their jobs; when private companies collude to fix bread and maize meal prices; or when incompetent and inexperienced private companies pay bribes to government officials to be awarded public contracts.
If the police reported more detailed statistics on the various crimes that make up the catch-all ‘commercial crime’ category, South Africans would be better placed to understand emerging trends, changes and patterns of fraud and corruption. Such knowledge is necessary if we are to find ways to better counter these crimes.
When business owners and the public are better informed about specific types of corruption and related crimes, they can better shield themselves from the consequences of such crimes. A clearer picture of the particular types of fraudulent or corrupt practices in a specific sector, say banking or retailing, means that these actors would be better able to develop targeted initiatives to counter them. The government would subsequently be in a better position to understand how these emerging financial crimes and corruption impact on the loss of public funds.
The constitution gives all South Africans a right to information that affects their fundamental rights, including those of life, dignity and property. Crime statistics should therefore be seen for what they are: information that can assist all people in South Africa to mitigate the potential impact of safety threats, and to improve their overall security.
Only when the police regularly provide detailed statistics will they become a valuable tool to craft appropriate responses. The manner in which ‘commercial crimes’ are currently reported only impedes efforts to identify and monitor specific trends in corruption, consequently hampering efforts to tackle this scourge.
Hamadziripi Tamukamoyo, Researcher, Governance, Crime and Justice Division, ISS Pretoria
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