BarnOwl

Not on my watch – making ethical business personal

15 February 2018

The signs all suggest that the world is now entering a time of disclosure, exposure, revolution and hopefully, an uncovering of the truth. The last five years in particular have seen massive global scandals being brought to light revealing massive corruption and mismanagement across organizations, public and private, knowing no borders and seemingly unstoppable. The International Monetary Fund (IMF) estimates that corruption costs the global economy $2trillion a year, with the South African GDP suffering to the tune of approximately R27billion annually. The knock-on effect on the SA job market is hard to quantify, but it’s not unreasonable to estimate around 80,000 jobs were not created as a result.

It’s been around 4 years since the Petroleo Brasileiro scandal festered open in Brazil, and Operation Car Wash (Lava Jato) was launched to investigate top officials at Petrobras, as well as high ranking government officials, who have been found to have conspired with groups of other companies to overcharge Petrobras in exchange for bribes. A plane crash which lead to the death of Judge Teori Zavascki ending up having far-reaching consequences for the perpetrators of the scandal, in what seemed to be a clear, murderous attempt at covering their own rear ends. The investigation is by no means over, with more high-level arrests anticipated. The net has been widened to include organisations such as construction firm Odebrecht, JBS (one of the world’s largest meat-packing firms), Rolls-Royce, and even the Soccer World Cup and Olympics have been pulled down into the swamp. The investigation is visibly shaking political and economic life in Brazil, but hope remains that, for once justice will prevail, and that even the wealthy and powerful will not escape punishment.

JBS’s humiliation didn’t stop there either. In May of 2016, Joesley Batista, who owns the company with his brother Wesley acknowledged paying out more than $192million in bribes to almost 2,000 politicians in an attempt to gain favours for the company. During the investigation, Batista handed over information on a conversation he had with President Michel Temer, who appeared to approve the payment of money to Eduardo Cunha, a former congressman in exchange for his silence. This plea deal saw the brothers avoid jail time, with a fine of $35million each, and a $3.3billion fine paid by the holding company J&F. Just when they thought they were in the clear, an audio recording surfaced where Batista insinuates that he got the plea deal by arranging a job for the former prosecutor Marcelo Miller at a law firm used by JBS. The case continues, with the prospect of further prosecutions on the horizon.

The Malabu scandal in Nigeria saw Royal Dutch Shell and ENI admit to paying the Petroleum Minister, Dan Etete’s company Malabu as much as $1.3billion for the rights to an offshore oil bloc. More revelations seem to entangle former president Goodluck Jonathan in the web of deceit, claiming he received $200million as proceeds from the oil deal. A new development has seen a UK court rule in favour of the Nigerian government with the return of around $85million in proceeds of the sale with the potential return of another $100million still frozen in Swiss bank accounts. Italian courts have now ordered Shell and Eni (an Italian multinational oil and gas company also implicated) to face trial on charges of aggravated international corruption for their role in the incident, charges the companies and their executives continue to refute.

South Africa has certainly not lagged behind in the corruption revelation stakes. Eskom, SAA, PRASA, SARS, SAPS, Transnet – all of these organisations have a cloud hanging over them. And the private sector is by no means exempt, and, in fact, if some commentators are to be believed, is in a far worse state and one only has to think of SAP, KPMG, McKinsey, and more recently MultiChoice and Steinhoff to start formulating a picture of a public and private sector environment both rotting from the head down. State Capture is on everyone’s lips, with the change in ANC leadership seemingly ushering in a new attitude towards uncovering and dealing with corruption at multiple levels. Of course, as we know, the proof is in the pudding, and actions will need to prove that this new attitude isn’t simply nervous electioneering with a view to preventing anticipated losses at the ballot box in 2019, and actually signifies real intent to stop the decay that has become so deeply ingrained.

The sheer scope of the examples I’ve given makes it seem as if there is no stopping an outrage such as those committed in the Petrobras, JBS or Malabu scandals. What can I do to stop something so far-reaching? What difference can I make when company directors, government ministers, and even presidents are malevolently plotting to erode the wealth society has created in order to further line their own pockets? It is entirely reasonable to feel helpless in this situation, but are we?

To some it may seem that humanity has slipped further and further into a cesspool of dishonesty, greed, self-interest and egotism. To some it may seem that things are worse now than they ever have been. To some it may seem that there is no light at the end of the tunnel. To those some, I propose a different observation. To those some I say things have never been better.

Human beings have more access to information than ever before, enabling me, the simple man on the street to gain insight into proceedings that would previously have been shrouded from me. We have the opportunity to educate ourselves about the rule of law, becoming the informed citizenry that the state needs in order for society to thrive to the benefit of all. We’ve had many examples in South Africa over the last few years that show the power of the people to hold the executive to account – the EFF’s constant badgering of Jacob Zuma to “Pay back the money”, organizations such as OUTA and Corruption Watch initiating proceedings against corrupt groups and individuals, and the protests on the streets of Ennerdale, and more recently Mogale City to force the police to take action against criminal elements in these communities. We should all be supporting this fight by teaching our children the value of integrity. By doing this, we go a long way to ensuring that those same children, our future public authorities, act in accordance with the law, and for the public good.

Perhaps the most important way we can fight the scourge of corruption is through the promotion of justice, by reporting incidences of corruption to the authorities. This has proven to be the age of the whistle-blower, those fearless individuals and groups that have brought attention to the exploitation meted out by governments and large corporations. There have been more recognized whistle-blowers since 2000, than in all the years preceding that point. From Samuel Shaw in 1777, who along with a fellow naval officer blew the whistle on the torturing of British POW’s by their commander-in-chief, a case which lead to the first whistle-blower protection law in 1778, right through to the famous (or infamous, depending on your viewpoint) stool pigeons such as Julian Assange, Edward Snowden and Chelsea Manning, and even the unconfirmed, for instance Seth Rich, a member of the Democratic National Committee (DNC) in the USA who was fatally shot after allegedly leaking documents to WikiLeaks, a large number of these whistle-blowers were fired from their jobs or prosecuted in the process of illuminating the dark corners. In South Africa we’ve had heroes like Jimmy Mohlala, speaker of the Mbombela Municipality in Nelspruit, who was allegedly assassinated after accusing a colleague of involvement in construction tender fraud tied to the 2010 World Cup, and Councillor Moss Phakwe, assassinated after exposing corruption in the Rustenburg Municipality. We’ve also had the fairly recent case of Bianca Goodson, ex-CEO of the Gupta-linked Trillian Management Consulting who, in early 2015 leaked a gold mine of information which Trillian of course denied showed any evidence of corruption, an assertion that has since proved to be some distance from the truth. And of course it would be remiss of me not to mention the brave person or people who leaked the “Gupta e-mails”, or the KPMG report into the rogue unit at SARS.

Not everybody is brave enough to stand up to “the man”, especially as it often comes with the very real threat of harm to themselves and their families. More needs to be done to protect the plight of the whistle-blower. Governments need to create an environment where the rule of law triumphs all. Citizens and businesses need the assurance that legal institutions have the ability to address issues raised in a fair and honest manner, with protection for the person or institution reporting the crime. Civil society can assist by enlightening the public as to the responsibility to be “corruption free”, encouraging equal and fair justice for all. The media also has a huge role to play in the protection of journalists who report on these cases. By highlighting the predicament of the whistle-blower, large numbers of people can be informed, thus ensuring some level of protection through celebrity. The private sector should continue to promote justice through the education of employees, and the ratification of internal policies to protect whistle-blowers. But, most importantly of all, it is up to you and I, Joe Public, to report these incidents, thereby not only standing against corruption, but, far more significantly, standing up for the community we live and work in, our families, and our friends.

“Not on my watch” should be our common, personal motto going forward. The fight against this curse tormenting our society starts with you. If you refuse to allow corruption to creep into your life, the opportunity for the corrupt to carry out their nefarious deeds just does not present itself. And in the field of risk management, we have more power than most to ensure that this becomes a standard operating procedure for the organization we serve, as well as within the personal lives we live.

“It is not power that corrupts but fear. Fear of losing power corrupts those who wield it and fear of the scourge of power corrupts those who are subject to it…” – Aung San Suu Kyi – Freedom from Fear

  • Does your organization have a whistle-blower policy?
  • Does your organization consider this a key risk response to preventing and detecting fraud and corruption?
  • Do you endeavour to educate others on the value of integrity and honesty?
  • Do you have the courage to do whatever it takes to say – “NOT ON MY WATCH!”?

Author – Paul van der Struys

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