A speech delivered by DPSA Minister Richard M Baloyi at an anti-corruption summit at the Sandton Convention Center 28 OCTOBER 2010

This is a speech delivered by DPSA Minister Richard M Baloyi at an anti-corruption summit at the Sandton Convention Center in Johannesburg. The CEO of the Thinc Foundation was then Special Advisor to the Minister. 

In the light of corruption rearing its head to higher levels, as it was then, we though we should share with the Thinc community. 

Programme Director;

President of Business Unity South Africa, Ms Futhi Mthoba;

All business leaders present here;
Government and civil society representatives;
Distinguished guests;

Ladies and gentlemen;

All protocols observed;

 

It is my pleasure to address you on the subject corruption.

I must first start by congratulating BUSA for occupying the space of anti-corruption discourse in our country and continent.

The Anti-Corruption Business Forum remains one of the rare opportunities that our business community has to reflect on issues of;

what is this corruption, how does it manifest itself in society, who is the corruptor, who is the corruptee, who should deal with this problem and how should we deal with the challenge as well as what is available for us as a society to decisively uproot corruption and what environmental factors support it.

In our quest to find answers to these questions we are reminded of the great Chinese proverb that “the beginning of wisdom is to name things right”.

As a former teacher, I have always believed that the first stop to make in understanding any word or concept is the dictionary.

Corruption as an English word is defined to include the following

“the impairment of integrity, virtue, or moral principle”; “inducement to wrong by improper or unlawful means (as bribery). Some dictionaries even go to an extent of saying it is a “loss of purity”.

Notwithstanding the above dictionary definitions, there is still no internationally accepted definition of what is corruption.

In this drive to find a definition the international community agreed not to define it but list what constitutes corruption.

The most heartening news is that there is emerging consensus on how it manifests itself, thus providing not only a policy firmament but co-ordinates for anti-corruption practice.

Chairperson; the United Nations Convention on Anti-Corruption explains corruption as;

“a complex social, political and economic phenomenon that affects all countries. Corruption undermines democratic institutions, slows economic development and contributes to governmental instability. Corruption attacks the foundation of democratic institutions by distorting electoral processes, perverting the rule of law and creating bureaucratic quagmires whose only reason for existing is the soliciting of bribes. Economic development is stunted because foreign direct investment is discouraged and small businesses within the country often find it impossible to overcome the "start-up costs" required because of corruption”

This convention and many other international conventions have further concretised agreement on how corruption manifests itself in society.

 

The most common manifestations of corruption have been classified as being but not limited to;

Bribery; Embezzlement, theft and fraud; Extortion; Abuse of discretion; Favouritism, nepotism and clientelism; Conflict of interest; and Improper political contributions.

Chairperson, maybe and for obvious reasons, let me clarify this last manifestation of improper political contributions.

The difficulties of making a distinction between legitimate contributions to political organizations and payments made in an attempt to unduly influence present and future activities by party members once they are in power explain this categorisation. I am sure I am understood on this matter.

As you would all know, these manifestations remain a contested terrain in the anti-corruption debates and yet they form the core of where society would normally categorise corruption.

These manifestations form the body of core criteria used in the design of the various indices. Bribery has actually been developed to a level where it commands its own index independent of other variables to the whole basket of manifestations.

Chairperson, it is through these manifestations that a country is measured in comparison to others.

The natural disposition of human and therefore societies to judge one another in terms of how they compare on a particular matter has now become a science with which an array of decisions are made.

The sovereignty of individual decision-making in areas such as investment, co-operate relocations, voluntary migrations, tourism, and diplomatic relations has been consistently influenced by results from surveys using these indices.

Chairperson, The Transparency International 2010 Corruption Perception Index ranks us 54^th out of 178 Countries. In the same index we are ranked fifth in the African Continent with Botswana occupying first position and yet 33^rd in the world.

The index also indicates that our score of 4.5 dropped from the 4.7 we managed in 2007. The below 5 score indicates, and according to the survey, that we have a growing corruption problem.

Chairperson, the Bribe Payers Index, which measures the likelihood of 22 top exporting countries to bribe abroad, ranks South Africa 14 out of 22 countries with a score of 7.5 out of ten.

Although this study was last undertaken in 2008 it was an improvement from 24 out of 30 countries and an improvement from 5.61 in 2006.

Another important index is the Global Integrity Index that assesses the existence, effectiveness and citizen access to key anti-corruption mechanisms at the national level in a country.

Whilst this provides some data to understand the corruption or corruptionable environment, it does not measure corruption per se.

The integrity of this index is based on its reliance on emperical on the ground research as opposed to reliance on third party data or information by the other indices.

According to this index South Africa has strong to moderate measures to combat corruption; the 2008 survey concludes that South Africa is moderately capable to provide access.

The emerging pattern out of these indices is that South Africa has a strong input infrastructure to combat corruption but societal perception is that we are not performing as our infrastructure allows.  

In this pattern we also find that in those indices where private sector bottom-line issues are at stake there is marked improvement.

The BPI index indicates that our exporting private sector is either extremely ethical when abroad or they have a dual business ethics personality that is related to the passport stamp.

The most important lesson in this particular pattern is that we have a business community that understands the importance of not having impaired integrity.

Chairperson, this corruption that I am referring to has catastrophic consequences to the manner in which our country and society is or will be viewed both within and beyond its borders.

Corruption has the propensity to collapse an economy in ways that are realised only when the economy has in fact collapsed.

The recent stories about company ‘high jacking’, irrespective of whether these are true or false, create a perception driven cloud of mistrust on our company registration systems.

The more salient impact of corruption includes but is not limited to;

private sector distrust of the country’s governance systems; increased cost of international borrowing as a result of perception based ratings that influence investors; high costs of service delivery in order to accommodate ‘the hidden costs’ of ‘business facilitation and incentivisation’; the development of a business practice culture that erodes a national value system and resulting in a ‘materialist’ business development cohort that will ultimately reduce our BPI ratings.

As a society we should be worried about corruption as it is the single most threat to good governance. Left unabated, it will develop to a state where access to both public and private services is based on the degree to which you are able to manipulate delivery, even if these are supposed to be freely given.

Chairperson, corruption is as much a team effort as anti-corruption, notwithstanding that the former’s teaming characteristics resembles those of a gangster.

Coruption is fast developing the biotic properties of those involved in its perpetuation. It is becoming organic and therefore calling for organic solutions.

In the triangle of corruption the axis of the corruptor, corruptee and the environment are a given reality. It is this reality that propels the organic nature of corruption.

Our preoccupation, and justifiably so, with the external manifestations of corruption rather than its mechanisms ultimately serves to reinforce it. It is the interrelationships between the axis of the triangle that create the reinforcement of the manifestations.

Chairperson I have to indicate that contrary to what the world wants us to believe, the bulk of private sector business is in one way or the other linked to government spending; directly or indirectly.

The influence of government spending and planning on private sector progress should not be underrated.

It is this context that creates within the private sector a community of corruptors. It is this context that also creates within aspirant and would-be entrepreneurs a community of corruptors.

It is this context that creates within government a community of willing corruptees and corruptors of your otherwise innocent business practitioners

It is this context that creates within society a community of corruptors even within innocent and literate learners that are perpetually bombarded with confirmations of ‘success based on ill-gained proceeds’.

Chairperson the corruption triangle provides us with a model within which we should create a context on how to fight corruption. At the centre of this triangle is money, greed, materialism, patronage and entrepreneurial bully-ness.

The struggle to the centre of the triangle is propelled by the players occupying the three axis points.

The corruptee’s vulnerability to the corruptor and an  enabling environment creates in the corruptee a security of continuity to an extent where people even develop ‘own corruption lingua franca’ that makes their activities legitimate.

The magic question is therefore what business, as a sector, should do to either dismember the triangle or create a new triangle with new player at the axis points.

Chairperson, let me hasten to say that this is not a matter for business alone, it is and must be a partnership engagement that must be so organic that it isolates corruption with its protagonists.

Government as a partner has embarked on a number of policy instruments that are designed to make it difficult for corruption to thrive.

As I indicated, government as the biggest spender by any proportions should lead in the creation of an environment that kills corruption.

It is not surprising that the Global Integrity Index ranks us as moving along the points of moderate to strong in terms of anti-corruption mechanisms because;

o  Government has introduced a number of legislations to contract and/or remove the space for corruption to occur.

These are; The Public Service Code of Conduct issued in terms of the Public Service Act; The Public Service Regulations; The PFMA; The Promotion of Access to Information Act; The Promotion of Administrative Justice Act; The Protected Disclosures Act; The Prevention and Combating of Corrupt Activities Act

o  Included in this policy mix was the ratification of international conventions dealing with corruption.

This we did because we understood our role in the globalising world and Africa in particular.

The following conventions were thus signed; SADC Protocol against corruption; African Union Convention on Preventing Corruption; African Peer Review Mechanism; United Nations Convention against Corruption; and The OECD Convention on Combating Bribery of Foreign Officials in International Business Transactions.

Chairperson, I also want to be the first to acknowledge that in as much as we have put the policy instruments in place we still have challenges of making sure that these instruments attain what they were set to achieve.

In order to deal with this we are strengthening these policies. To date government has developed a Public Sector Integrity Management Framework. This framework regulates gifts, financial interests, post employment and remunerative work outside the public service. It institutionalises ethics officers in the public service and minimum conduct requirements.

Government is establishing a Special-Anti Corruption Unit that will be responsible for investigating corruption cases involving senior managers that are not yet in the formal criminal justice system.

 

 

The unit will in the main investigate senior officials;

·     with undeclared business interests

·     doing business with government and yet have not disclosed their business interest

·     performing remunerative work outside the public service without permission

·     who solicit and/or receive bribes in return for performing or not performing official duties

·     who are receiving some grant or benefits unlawfully

The unit will be located within the MPSA portfolio.

In addition to these national initiatives, government has created a provision in its budget to support the continent in its drive to be corruption free.

We have thus far contributed to the establishment of the AU Advisory Board envisaged in the AU convention.

We have facilitated an Anti-Corruption Strategy for the Democratic Republic of Congo and this was handed over to the Deputy Prime Minister of the DRC on Tuesday, October 26^th 2010.

Chairperson, it would interest you to note that this conference occurs at a time when South Africa is due to present its second APRM report in January 2011 at Addis- Ababa.

Through the APRM South Africa was able to develop a National programme of Action that identifies corruption as a business risk.

In this reporting period we have built into our process a consultation mechanism that brings on board community intitutional memory that will guide service delivery interventions.

Chairperson, critical to this partnership between us is the degree to which we involve organs of civil society. The defining feature of a maturing democracy is the extent to which it civil society influences policy and politics.

I want to stress that civil society is a priority stakeholder in the rearrangement of the corruption triangle. If we ignore it, we have broken the backbone of corruption. What matters is breaking this leg of corruption.

Meetings alone will not combat corruption. Strategies will not combat corruption. Awareness drives will not combat corruption.

All these are instruments to facilitate the real fight. We should adopt a zero-tolerance stance against corruption. We must get civil society, Government and the business community to say no in real terms.

Ours remains a civil society friendly democracy and we should thus partner to reflect this innate character of being South African.

As I indicated before the casualties of corruption are or can be generational. The extent to which we deal with corruption requires from us an approach that seeks to embed in society an anti-corruption culture that is taught from kindergarten to institutions of higher learning.

We must create in our society a value system that also serves as an immune system to combat any emergence of corruption. In this instance we should be reading that BUSA has created a number of research chairs on anti-corruption at South African Universities.

As we recurriculate the content of our national curriculum statement, we should as business and anti-corruption beneficiaries begin to influence how prescribed books are supportive of creating the value system we want.

We should interact with the Council For Higher Education and demand from them a campaign that is examinable to inculcate in our graduates an anti-corruption value system.

We should and in a massifying manner creates a public awareness programme that makes it un-South African to be corrupt and unethical.

As government we have noted some of the subtle and yet behaviour altering mechanisms business has introduced to get community enrolment onto in-company anti-corruption practices.

Your ‘phone this number to report bad driving stickers’ should now be extended into the public service and read ‘phone this number if any of our sales person bribes you or your colleague’; that will be customer involvement at its best.

Chairperson, the path that we are now taking should be an irreversible one. We should go into it as a business necessity more than a public relations exercise. 

Our interaction with BUSA and business generally has yielded the establishment of the National Anti-Corruption Forum.

This forum is the foremost platform within which issues of anti-corruption receive national attention by critical stakeholders. The impact of Business in the anti-corruption drive should thus be seen in this light.

It is our expectation as government that business should over and above its inherent civil society character, develop bottom-line linked programmes to shift the frontier of corruption.

The denial of business opportunity to a law abiding entrepreneur is a denial of an employment opportunity for a would-be employee of that business.

The voluntary character and yet legally enforceable nature of some of the governance instruments employed by the private sector should be crafted in such a manner that they become societal values.

Business should therefore make it a requirement for peers to comply with certain anti-corruption standards before they can be accepted in the community.

We probably need to come up with a business driven charter of anti-corruption best practice. We should create aspirational prizes for business to participate in the anti-corruption drive.

As we introduce the green company aspirational and yet business branding mechanisms, we must think of anti-corruption equivalents.

We may want to create a process to declare a company the most ethically managed company and via moral persuasion create an environment where this certificate is elevated to a ‘BEE’ type certificate in procurement related adjudications.

It is in the character and operations of a country’s business community that rules of doing business will be written.

If there is an expectation that rules of doing business will be determined by those that are not in business it will be business that suffers.

Democratisation of society should not exclude the democratisation of business. If democracy remains the arrangements that society makes to co-exist and govern each other, then business democracy is about how to exist within those arrangements.

Since corruption corrodes these arrangements and undermines the rule of law, good governance and public accountability; it is incumbent of business to join other defenders of democracy by increasing the frequency of their engagement in anti-corruption activities.

For this endeavour to succeed, we also need a redefined set of professionals and individuals that are going to have the following attributes.

·     Breaking new ground through innovations for solutions;

·     inspiring success through self motivation and motivating others

·     raising standards to world-class level

·     introducing turnaround strategies to salvage situations

·     making a difference in the lives of the people through running an extra mile and sacrifice for others

·     ensuring success through collective leadership

·     on board and own processes and initiatives

·     international exposure and open for influence.

 

The make-up of this cadre should work with a model that not only deploys the best amongst the ruling elite but create an army of would-be enterpretors of all known challenges and opportunities, and translate them into workable solutions to combat corruption.

As I conclude I want to invoke the wisdom of Former President Nelson Mandela in his now published manuscript written in prison

“the presence in one organisation (read nation) of various classes and social groups with conflicting (competing) long term interests that may collide at critical moments brings its own train of conflicts (contestations)”

The Mandela lesson here presents questions that we should answer as we navigate this conference.

I think Mandela is also asking us if we really know and understand the nature of the interests defining the environment within which corruption occurs.

I also think he is interrogating us and particularly business if we know and understand the various carriages of the trains of contestations he is referring to.

These questions should be able to say to us that corruption, as a complex social phenomenon, it can be defeated through a complex social strategy.

Like Mandela we must say; and I paraphrase

During our lifetime we will also dedicate ourselves to this ideal of a corruption free South Africa. We will fight against domination by corruptors, and we will fight against corruptee domination. As we cherish the ideal of a democratic and corruption free society in which all persons do business in harmony and with equal opportunities, we shall create a condition repelling corruption in all forms of manifestation. This ideal we hope to live for and to achieve. But if needs be, it is an ideal for which we are prepared not to give up.

Long live BUSA

I thank you