Prof Deon Rossouw, Chief Executive Officer of The Ethics Institute, describes the three critical qualities that organisations ‘tainted’ by state capture must demonstrate to regain the trust of society.
 
Ethics is a precondition for safe, just, and prosperous societies. If ethics is not embedded in society and in organisations, the inevitable result is a breakdown not only of prosperity, justice and safety, but also of trust. We saw this happening to South Africa under Apartheid, and we are seeing it now again with state capture.
 
In the private sector, we have already witnessed the voluntary or forced departure of persons accused of abetting state capture in companies such as KPMG, Alexander Forbes, SAP, Bell Pottinger and others. Furthermore, in the public sector, senior executives have started to vacate their positions in state-owned enterprises such as Eskom, Transnet, Prasa, and SABC, and others are likely to follow soon. There is no doubt in my mind that this implosion in both the private and public sectors will come to its logical end, and the country will step into a new era.
 
At the dawn of this new era, organisations in both the public and private sectors that lost their reputation, as a consequence of their involvement in state capture, will have to start the long and arduous journey of regaining their legitimacy. This will require them to demonstrate three main qualities: openness, competence, and integrity.
 
Firstly, organisations that were implicated in state capture must come clean. They will only be able to regain trust if they are open about what went wrong. Sweeping under the carpet things that have gone wrong will not do the trick. The leadership of affected organisations will have to admit to their stakeholders and society at large that there were serious ethical failures that took place on their watch.
Secondly, organisations must demonstrate that they are competent in delivering their mandate to society. The trust of society in the affected organisations has been depleted because these organisations failed to deliver on their mandates – and thus broke their promise to stakeholders. Being ethical is not enough to restore trust. Ethics has to be complemented with competence.
 
Thirdly, organisations must display integrity. That means that they must commit themselves to well-articulated ethical standards, and must be seen to adhere to these standards. People only trust other people and organisations who predictably adhere to clear ethical standards. Unethical conduct alienates people who are affected by such conduct, and it fuels suspicion and mistrust. For organisations to restore trust in their integrity, they will have to demonstrate that ‘what we say’ is the same as ‘what we do’.
Trust can be lost quickly and easily. Restoring trust is a long process that requires patience in the process of slowly recovering lost ground. But above all, restoring trust requires committed and courageous ethical leadership.
 
For the full article go to https://www.tei.org.za/index.php/resources/articles/ethics-opinions/7438-restoring-trust-beyond-state-capture
 
ENDS
​

The second South African Citizen’s Bribery Survey, conducted by The Ethics Institute and sponsored by Massmart, asked among other things whether respondents had ever said no to paying a bribe.  The results show that half of respondents have never been asked for a bribe, while 60% of those who have been asked have declined to pay at some point – mostly for moral or religious reasons.  

Other key findings include:
•    1 in 5 people know someone who paid a bribe in the last year;
•    Over half of bribes are for road related matters (i.e. traffic fines + drivers’ licences). Reducing these could have an impact on road deaths;
•    The poor find it more difficult to get through everyday life without paying bribes than the wealthy, and are significantly more targeted to pay bribes for employment; and
•    Bribery for employment and contracts occur almost equally in the private and public sectors.

These figures paint a picture of citizens that are familiar with the phenomenon of bribery, but the fact that so many people decline to pay bribes also show that there is hope.  
“As organisations across the country observe International Anti-corruption Day on 9 December, it is worth celebrating the ordinary heroes who choose to take a personal stand against corruption,” says Professor Deon Rossouw, CEO of The Ethics Institute. “The research findings show that South Africans do have a moral compass, and those who pay bribes are still in the minority.” 

According to survey respondents the top five reasons for resorting to bribery are to avoid traffic offences (36%); to secure a job (18%); to obtain a driver’s licence (15%); to receive unauthorised discounts from businesses (7%); and to get a tender 4%.

Professor Rossouw says “It is clear that there are those who pay bribes to exploit the system for their own benefit, but there are also vulnerable people who are exploited by unscrupulous individuals.  We found that South Africans with lower income find it significantly more difficult to get through everyday life without paying a bribe, particularly with respect to bribes to secure jobs. There is a certain injustice in the fact that those who have the least resources are most vulnerable to being targeted.”

Massmart Anti-Corruption Compliance Executive, Johann Stander says “At Massmart we are committed to doing business the right way and have invested significantly in promoting a culture of integrity within our organisation. We also believe that we should play a broader anti-corruption role in our society because bribery increases the cost of living for all of us and undermines the rule of law and the values of our democracy. It is not good for social cohesion nor is it good for business, hence our sponsorship of the South African Citizens’ Bribery Survey.”

The survey findings were based on interviews with more than 4553 South Africans from urban centres in Gauteng, Limpopo Kwazulu-Natal, Free State and the Western Cape. The objective of the survey is to gain insight into the everyday experience of ordinary South Africans in relation to their perceptions of bribery, the extent of bribery in the country as well as the socio-economic factors that influence it. Some of the questions asked included; “how frequently are people asked for bribes? What are these bribes for? How much do people pay for bribes? How willing are they to do something about bribery? What were the reasons for paying or refusing to pay a bribe?’’

About the South African Citizens’ Bribery Survey 2016
Conducted by The Ethics Institute and sponsored by Massmart, this is the first survey to examine bribery as perceived and experienced by ordinary South African citizens. It is the second year the survey is being conducted.  The survey was conducted in a wide range of Massmart stores in Kwazulu-Natal, Gauteng, Free State, Western Cape and Limpopo. The 4553 South Africans who participated in the survey come from various income levels.

​ENDS

MEDIA CONTACT: Cathlen Fourie, 082 222 9198, [email protected], www.atthatpoint.co.za  
 
For more information on The Ethics Institute please visit:
Website: www.tei.org
Twitter: @EthicsInst
LinkedIn: The Ethics Institute
Facebook: Ethics Institute of South Africa

Social and Ethics Committees (SECs) are provided for in Section 72 (4-10) of the Companies Act, 2008 (Act No. 71 of 2008). But the uptake of these committees in companies is proving to be a challenge when, in fact, it should be seen as an opportunity for companies to build relationships with the communities and consumers they deal with daily. As some companies have discovered, having an SEC becomes more than a “check-box” exercise, and meaningful application has resulted in benefits in terms of strategy, risk management and turnover. SECs should be used to develop a more responsible culture of doing business in a sustainable manner.

Perhaps the biggest achievement of having an SEC is that the issue of sustainability has become a regular agenda item at board meetings. Most SECs have settled into a rhythm of meeting prior to scheduled board meetings and their reports are tabled at subsequent board meetings. As a result, sustainability has become a regular subject for top-level discussion and scrutiny. As sustainability becomes part of the business-as-usual agenda, it becomes incorporated into companies’ operational DNA. Hence, the long-term impact of normalising social and ethical issues in businesses cannot be underestimated.

Another related achievement is that because these issues are being thought about and reported on regularly, sustainability and integrated reports are becoming more credible and useful. Whereas previously, many of these reports were compiled in a hurry and did not necessarily reflect the truth, management now has to report regularly on these issues. So the content for these reports is generated by means of institutional processes and thus better reflects the truth. 

However, it should be noted that there remain a number of challenges.

First, inexact and incomplete legislation and regulations continue to create confusion. Legally, the position is that SECs only have a social mandate. Leading companies have used King III as their guide and have incorporated ethics, but this is purely on a voluntary basis. This omission is something that legislators need to rectify soon. A structural challenge is the fact that the mandate of SECs can overlap with those of other board committees such as audit, HR and remuneration. This needs to be addressed to prevent “turf wars” from developing.
​
A more difficult challenge is that most companies are still grappling with how to produce the right content and quality for SEC reports. Committee members tend to be nonexecutive, so do not have the inside knowledge to be able to assess the reporting, whereas managers are often uncertain about what needs to be reported on. A contributing factor is surely the lack of performance indicators for social and ethics issues, which makes it difficult for all parties to move beyond compliance and towards assessing the real impact of social and ethics performance. This expectation gap causes frustration.

Based on The Ethics Institute’s interaction with hundreds of companies at various training sessions, our overwhelming conclusion is that the key factor of success is an SEC whose agenda is closely aligned with company strategy. This breathes energy into the committee’s operations because members can see the strategic importance of what they are doing, and the board and executive management can see that the company is deriving real value from the work done by the SEC. For example, as we have seen, a mine’s long-term sustainability is dependent on its relationship with the surrounding community and its employees, exactly the area for which the SEC takes responsibility.

To paraphrase, don’t ask what you can do for your SEC, but what it can do for you. If the committee is seen to be delivering value, it will continue to improve and create a genuine virtuous cycle.

This article first appeared in The Regulatory Debates Edition 3
​
ENDS

MEDIA CONTACT: Cathlen Fourie, 082 222 9198, [email protected], www.atthatpoint.co.za  
 
For more information on The Ethics Institute please visit:
Website: www.tei.org
Twitter: @EthicsInst
LinkedIn: The Ethics Institute
Facebook: Ethics Institute of South Africa

 By
Liezl Groenewald, Manager: Organisational Ethics Development
The Ethics Institute​

Canada’s Ontario Securities Commission recently announced that it would begin paying incentives to whistle-blowers. The scheme allows for payments of up to $1.5 million, or more if high amounts are collected. The US Securities and Exchange Commission (SEC) is the flag-bearer for this approach, paying famously high rewards to those uncovering corporate wrongdoing. 

Should South Africa, with its high levels of corruption, be considering a similar approach?
This approach has generated results for the United States. Complex frauds have been uncovered, and the pay-outs help to compensate whistle-blowers for the fact that many lose their jobs or find their careers in free-fall after coming forward. For example, former Enron Vice-President Sherron Watkins, who helped uncover accounting irregularities at the company 14 years ago, has been unable to obtain a corporate job since. 

However, British regulators decided not to go this route. They argue that only a small number of whistle-blowers—perhaps as low as 1 percent—actually qualify for a pay-out; no such protection is afforded to those whose information does not result in a concrete outcome, but who may still suffer negative consequences. The introduction of financial incentives has not only created the need for complex and expensive governance frameworks, but it could also undermine existing corporate whistle-blowing mechanisms. 

Exemplary protection
South Africa is generally credited with an exemplary protection framework for whistle-blowers, anchored by the Protected Disclosures Act. However, The Ethics Institute’s South African Business Ethics Survey 2016 shows a decline in the number of South African employees who report observed misconduct. In 2016, only 48 percent of those who observed misconduct reported it, down from 64 percent in 2013 and 66 percent in 2009. The most prominent reasons for not reporting misconduct are a fear of victimisation at work (36 percent) and a belief that the company would take no action (32 percent). 

Locally, there have been a number of high-profile instances where whistle-blowers have suffered severe consequences or even death. One such was Moss Phakoe, a councillor in Rustenburg who was gunned down after giving evidence of municipal corruption. Another is Mpumalanga politician Jimmy Mohlala, who was shot dead after blowing the whistle on corruption linked to the building of a 2010 Fifa World Cup Soccer venue, the Mbombela stadium in Nelspruit. 

Another factor for the decline in reporting misconduct could be that the profile of perpetrators has shifted, with 41 percent categorised as senior managers, up from 17 percent in 2009, according to PwC. It seems that employees are less willing to blow the whistle on their seniors, despite the protection afforded by internal whistle-blowing policies and the Protected Disclosures Act, and the fact that most corporates have a hotline run by a third party where reports can be made anonymously. 

This could be justification for considering some sort of incentive to encourage whistle-blowing. At the same time, though, care must be taken to craft the approach lest it undercut efforts to build an ethical culture in our businesses and more generally. 

Changing the ethical culture
That said, an incentive scheme could play a valuable role in foregrounding ethical behaviour, and promoting the concept that ethical actions yield positive results. It may also help to reverse implicit cultures that prioritise loyalty to fellow workers above loyalty to the organisation.

Based on international experience as well as the requirements of the Protected Disclosures Act, it’s important to emphasise that whistle-blowers should only be allowed to contact regulators, other authorities or the media after having exhausted internal reporting avenues.  Not only could it strengthen the ethical culture within corporates, but employees will be protected by the Act. As important, companies should make concerted efforts to praise those who act ethically by blowing the whistle, and should be meticulous about reporting on what actions they have taken on each reported misconduct. 

The key to halting corruption is to create a situation in which acting ethically is the default behaviour pattern. Clearly, as a business community and a nation, we are far from reaching that goal—some form of incentive for whistle-blowers might therefore have a role to play.

​​ENDS

MEDIA CONTACT: Cathlen Fourie, 082 222 9198, [email protected], www.atthatpoint.co.za  
 
For more information on The Ethics Institute please visit:
Website: www.tei.org
Twitter: @EthicsInst
LinkedIn: The Ethics Institute
Facebook: Ethics Institute of South Africa

Unethical business practices pose a significant risk to businesses and until now we have lacked a solid framework for managing that risk.
 
“Ethics risk is real, and it can and must be managed like any other risk. Here, for the first time, is a detailed guide on how to do it,” says Dr Leon van Vuuren, Executive: Business and Professional Ethics at The Ethics Institute. “Our newly published Ethics Risk Handbook is all about moving the management of ethics risk into the organisation’s operational processes, and thus making it concrete.”
 
“We have seen a steady increase in the demand for ethics risk assessments over the last five years,” says Dr van Vuuren.
 
One can speculate on the reasons underlying this increase in demand. Amongst the prominent reasons for this increase are the introduction of Social and Ethics Committees through the new Companies Act and the introduction of the Integrity Management Framework in the public sector. Both of these governance reforms have placed the strategic oversight of the ethics performance of organisations on the radar of governance bodies and executive management. “It is simply not possible to exercise the governance duty of strategic oversight of ethics management without organisations conducting proper ethics risk assessments.”
 
The Ethics Risk Handbook closes this gap by providing guidelines for integrating an organisation’s ethics risk into its existing risk management programme. “Traditional risk management tends to focus on operational, legal, HR, IT and governance risk but, given its potential downside, ethics risk has to be approached as rigorously.”
 
Collaboration between ethics and risk
The Ethics Risk Handbook is the result of a group effort between staff and members of The Ethics Institute and the Institute of Risk Management South Africa (IRMSA). It recommends that once ethics risk is identified by the ethics officer, or other person nominated to handle ethics, the risk is assessed jointly with the risk manager and entered onto the organisation’s formal risk register. It would then be managed by the ethics officer and the relevant risk owner.
For example, ethics risk relating to sexual harassment would be jointly managed with HR, while ethics risk relating to regulatory compliance would be jointly managed with Legal. The ethics officer would retain responsibility for monitoring progress and reporting, and the whole process would be covered by the internal audit.
 
To download The Ethics Risk Handbook, click on http://bit.ly/EthicsRiskHandbook

ENDS

MEDIA CONTACT: Cathlen Fourie, 082 222 9198, [email protected], www.atthatpoint.co.za  
 
For more information on The Ethics Institute please visit:
Website: www.tei.org
Twitter: @EthicsInst
LinkedIn: The Ethics Institute
Facebook: Ethics Institute of South Africa

While awareness of corporate ethics codes has increased, there has been a drop in the number of persons reporting ethical misconduct. This is probably because South African companies are investing fewer resources in improving their ethics performance and, as a result, ethical business practices are still not well-embedded into the organisational culture of corporate South Africa.

That is one of the key findings of the fourth South African Business Ethics Survey, just released by The Ethics Institute at the 6th Annual Ethics Conference. Amongst others, Public Protector of South Africa, Adv. Thuli Madonsela and Auditor General of South Africa, Mr. Thembekile Kimi Makwetu will share personal reflections on ethical courage. King IV Project Lead, Ansie Ramalho, will also discuss the King IV vision of ethical organisations at the conference”.

The main culprits behind these results are probably the global economic situation and the poor performance of the local economy, says Professor Deon Rossouw, CEO of The Ethics Institute.

“Organisations have ethics codes in place, and people know about them, but the pressure to meet unrealistic financial targets is probably to blame for many unethical actions,” he says. “At the same time, it seems as though weak trading conditions are reducing budgets for ‘non-essential’ programmes like strengthening formal ethics programmes aimed at embedding ethics in organisational culture.”

The 11% increase since the previous survey in 2013 in the number of employees who observed misconduct (to 25%) may also be related to the country’s weak economy, which is reducing disposable incomes and increasing the financial burden on everybody. However, the main reasons that people do not report misconduct are a belief that the company would not take action and a fear of victimisation. 42% of those who did not report observed misconduct were motivated by fear of victimisation at work. 

This increase in observed misconduct, combined with the fact that 16% fewer employees are reporting it than in 2013, is extremely worrying, Professor Rossouw argues. Organisations can only respond to unethical behaviour if they know about it. “Above all, organisations should guard against giving the perception that unethical behaviour, especially in pursuit of financial or other organisational targets, is acceptable,” he says. 

Key findings of the Survey include: 
•    Awareness of formal interventions aimed at promoting ethical business practices remains constant, and employees generally (79%) find that corporate values are a useful and clear guide to behaviour. 
•    However, only two-thirds of employees consistently consider corporate values when making decisions, and only 35% indicated that employees consistently adhere to them. 
•    Insufficient attention is paid to how employees reach their targets or fulfil their roles. The Ethics Institute recommends that alongside measuring what employees do, companies begin to measure how they do it. Otherwise, the Survey notes, employees might receive a bonus for achieving an unrealistic financial target despite the fact that they did so by transgressing organisational ethical standards. 
•    The percentage of employees who agree that their companies expect its employees to do what is right for clients/customers (customer service) has decreased significantly by 30% from 2013 and 34% from 2009. It seems as if companies do not yet understand the impact of unethical behaviour on customer service, and thus on customer loyalty and brand equity. 

The full report can be accessed on the website of The Ethics Institute www.tei.org.za.

Perhaps one of the most disturbing central conclusions of the research is that a significant proportion of corporate South Africa is still not serious about integrating ethical behaviour into its culture, and that the focus remains merely on compliance with laws. 

“In other words, it seems as though companies’ real focus remains the short term financial bottom line, instead of sustainable value creation,” concludes Professor Rossouw. “We must hope that the forthcoming launch of the Fourth King Report on Corporate Governance (King IV) will strengthen efforts to embed ethics into the way we do business, and make the correlation between sustainability, which is founded on ethics, and financial performance much clearer.”

ENDS

MEDIA CONTACT: Cathlen Fourie, 082 222 9198, [email protected], www.atthatpoint.co.za  
 
For more information on The Ethics Institute please visit:
Website: www.tei.org
Twitter: @EthicsInst
LinkedIn: The Ethics Institute
Facebook: Ethics Institute of South Africa

In welcoming the historic ruling by the Constitutional Court in the Nkandla matter, the Ethics Institute of South Africa (EthicsSA) says that the damage caused to the country will only be repaired if leaders admit they erred, and recommit themselves to the foundational values of the Constitution.

The Constitutional Court made it very clear in its ruling that South Africa’s constitutional democracy is founded on three core values – accountability, the rule of law and the supremacy of the Constitution, comments Prof Deon Rossouw, CEO of EthicsSA. “As the Chief Justice made very clear in a unanimous judgement by the Court, the President’s failure to uphold these values hinged on his breach of the ethics codes created to give substance to his constitutional obligations, the Executive Members’ Ethics Act and the Executive Ethics Code. The Nkandla scandal is primarily an ethical one, and it will require an ethical solution to resolve it fully.”

The Executive Members’ Ethics Act and the Executive Ethics Code specifically require the executive to use its powers in the best interests of the public, and to avoid conflicts of interest. It explicitly calls on members of the Executive to not abuse their positions for private gain.

In terms of the judgement, the President has been set time limits within which he must comply with the remedies stipulated by the Public Protector. However, argues Professor Rossouw, to prevent the shadow of Nkandla to continue falling across South African public life, it is essential for leaders to publicly recommit to the foundational values of the Constitution, and admit that they erred.

“As we have seen in the cases of Vytjie Mentor and Mcebisi Jonas, bold action of this nature could cause an individual some short-term harm, but the long-term gains for our democracy, for the calibre of our public life and, I would predict, for the individuals concerned would be immense,” Rossouw says. “The credibility of both Parliament and the Executive has been dented by this affair, and this type of courageous ethical leadership will help to restore it. More important still, it will help to underscore the fact that ethics underpin how all of us, including our leaders, act.”

“If the necessary ethical courage is not found, we can expect the saga of Nkandla to drag on, with grave consequences for the country.”

ENDS

MEDIA CONTACT: Cathlen Fourie, 082 222 9198, [email protected], www.atthatpoint.co.za 

For more information on EthicsSA please visit:
Website: www.ethicssa.org 
LinkedIn: Ethics Institute of South Africa
Facebook: Ethics Institute of South Africa

The Transparency International Corruption Perception Index (CPI) was first released in 1995 and has played an important part in focusing global attention on corruption issues.

The CPI gives an annual indication of perceptions of public sector corruption in a list of countries which numbered 168 in the latest survey which was released on 27 January 2016.

Here are some quick facts about the CPI to place South Africa’s performance in context:
• The CPI scores countries based on perceived levels of corruption, with 0 being negative (very corrupt) and 100 being positive (no corruption). 
• South Africa’s CPI score has remained the same as last year at 44.
• Our relative ranking has however improved from 67 to 61 (out of 168 countries) indicating that some countries have deteriorated relative to SA. 
• South Africa is ranked number 10 out of the 52 African countries that were included in the 2015 study. Countries that were ranked better than SA include our neighbours Botswana, Namibia and Lesotho, as well as Rwanda, Ghana and Senegal. 
• South Africa (with a score of 44) is the best performing BRICS country, followed by Brazil and India (38), China (37) and Russia (29).
• Looking at the data over a ten year period from 2005 to 2015, South Africa’s CPI has declined only one percentage point from 45 in 2005 to 44 in 2015.
• Our relative position has however declined more dramatically. In 2005 we were in the top 29% of countries, and in 2015 we are in the top 36%. 
• This shows that other countries are improving at a higher rate than we are. Analysing the CPI data from 2005 to 2015 we found that 98 countries have improved over this period, 8 have stayed the same and 49 have declined. 
• Significant improvement on the index is possible as is shown by the three biggest improvers from 2005 to 2015. Georgia improved by 29 per cent, Poland by 28 per cent, and Rwanda by 23 per cent.

ENDS

MEDIA CONTACT: Cathlen Fourie, 082 222 9198, [email protected], www.atthatpoint.co.za 

For more information on EthicsSA please visit:
Website: www.ethicssa.org 
LinkedIn: Ethics Institute of South Africa
Facebook: Ethics Institute of South Africa
​

The current social media storm on racism demonstrates yet again how dangerous stereotypes are, and how easily they can become self-fulfilling prophecies. To prevent these inaccurate but powerful stories from setting the national agenda, South Africans must consciously tell a different story - backed up by the facts.
​
“The reaction to recent racist tweets has shown the power of stereotypes to influence the way a whole nation sees itself, spreading negativity that affects not only individuals but the national mood itself. These tweets seem to confirm stereotypes so they spread easily, but they are simply not borne out by the facts,” says Professor Deon Rossouw, CEO of the Ethics Institute of South Africa (EthicsSA). “We need to be much more critical of these stereotypes and pay more attention to the goodwill in our society.”

As an example of a stereotype related to corruption in South Africa, Professor Rossouw cites the findings in the recent survey into bribery conducted by EthicsSA and sponsored by Massmart. The survey found that while 78 percent of South Africans believe that bribery is necessary to get through everyday life, only 20 percent know somebody who has actually paid a bribe. In other words, even though the “received wisdom” is that bribery is both common and necessary, the vast majority of South Africans act differently.
“Despite that finding, it was interesting that most of the headlines reporting on the survey incorrectly focused on the stereotype—‘Most South Africans pay bribes’—while the reality is that most do not,” says Professor Rossouw. “We need to discard inaccurate stereotypes consciously, or we risk feeding them and letting them become true.”

Another example of how stereotyping masks, and can overpower, reality is evident in the racism debate currently underway, he continues. The spate of racist tweets and reactions to them can seem to confirm stereotypes that everybody is racist, thus creating the impression that reconciliation and nation-building have failed and are no longer worth pursuing. In fact, the opposite is true as the SA Reconciliation Barometer 2015 shows. Published late last year by The Institute for Justice and Reconciliation, the survey provides factual evidence that the vast majority of South Africans are committed to reconciliation and nation-building: 75.5 percent favour an inclusive South African identity, and 71 percent believe it is important to have a united South African nation.

“This is astonishing given the fact that a majority (61.4 percent) also believe that race relations have stayed the same or worsened since democracy. So yes, the challenges remain daunting and not enough progress is being made, but the reality is that most of us want the South African project to succeed. You would never guess that from the dominant narrative in social (and other) media, though it’s apparent in work places and other places where people mingle,” Professor Rossouw argues. “We must tap into this reality, and use them to create a positive frame for the important national conversations that must take place. If we do not, we risk letting the stereotypes—the dangerous and inaccurate myths—dominate our reality. We must not let that happen.”

ENDS

MEDIA CONTACT: Cathlen Fourie, 082 222 9198, [email protected], www.atthatpoint.co.za 

For more information on EthicsSA please visit:
Website: www.ethicssa.org 
LinkedIn: Ethics Institute of South Africa
Facebook: Ethics Institute of South Africa

​The Ethics Institute of South Africa (EthicsSA) has released a booklet designed to help businesses understand the municipal procurement process, and what their rights are if they suspect irregularities. 

Kris Dobie, Manager: Organisational Ethics Development at EthicsSA, who co-authored ‘Understanding the municipal procurement process: A guide for businesses’ with Namhla Xinwa, says the booklet aims to simplify the procurement procedures and to make businesses aware of the regulations that are intended to foster transparency and accountability in the process. “If businesses know their rights they can hold municipalities accountable to follow the procedures correctly.” 

Municipalities spend billions of rands every year in procuring products and services from companies both large and small. Many companies find themselves at a disadvantage because they do not fully understand the often-complex tender processes, or how to question what they see as irregularities in the awarding of tenders. 

Dobie points out that there is strong evidence of irregularities in the municipal procurement process, as shown by the persistently high number of qualified audit reports for municipalities issued by the Auditor General. As a result, government has introduced numerous checks and balances to help prevent corruption, but these also introduce complexity into the tender process. The EthicsSA booklet provides a clear guide to each step in the process, and how to raise questions.  

One practical example of how a business can keep track of the process is to be present when the tender box is opened. That way, it will have first-hand knowledge of submitted bids and what their value was. Armed with this knowledge, it is then easy to check that the eventual award of the tender dovetails with the original bids. 

It’s also very important to recognise that many companies are unaware of their obligations in terms of keeping the tender process fair and above board, and the booklet also spells out businesses’ responsibilities. These include avoiding anti-competitive business practices, BEE fronting and conflicts of interest.  It also deals with the ever-present topic of gifts and entertainment.  Dobie warns that even relatively low-cost gifts or entertainment could be construed as bribes. 

“We would like to see the booklet become a reference document for all businesses doing work with municipalities and have made it available for free download on our website.  We encourage business chambers and other business bodies to distribute the booklet to their members.”

“Creating an ethical tender system that is fair to all depends on strong mutual accountability, something this booklet will advance if used correctly,” Dobie ends. “We aim to empower business by making it aware not only of how the process should work and what to do if it suspects irregularities, but also by pinpointing its own responsibilities.” 

To download the booklet, click here.

ENDS

MEDIA CONTACT: Cathlen Fourie, 082 222 9198, [email protected], www.atthatpoint.co.za 

For more information on EthicsSA please visit:
Website: www.ethicssa.org 
LinkedIn: Ethics Institute of South Africa
Facebook: Ethics Institute of South Africa