Corruption turning South Africa into a failed state

Fraud, theft and corruption are some of the worst threats facing the South African economy and one of the surest ways of stopping it in its tracks is to ensure that employees don’t steal their bosses’ blind.

Erna Penning, managing director of iPAC, a Pretoria-based human risk solutions company said the fact that South Africa had slipped significantly lower on Transparency International’s Corruption Perception Index, could have devastating consequences for foreign direct investment and hamper the growth of job creation which was so desperately needed in this country.

“Through many years of screening employees through a variety of means we have long held the view that it is essential to evaluate every aspect of an employee’s character and to have an integrated holistic view of the person and their competencies. Psychometric testing can compliment this process when gender, bias and cultural fair testing is integrated with thorough background screening. This results in a far more accurate and predictive method of determining whether there is a likelihood of an employee going rogue, be dysfunctional and becoming a career thief.”

Nigel Payne, the chairman of the Mr Price Group South Africa echoed Penning’s sentiments saying that the country had experienced a “precipitous slide” in the Index since 2007 and faced the prospect of becoming one of the world’s most corrupt nations.

Unleashing a scathing attack on corruption in the government at a gathering of about 1 300 delegates at the SA Council of Shopping Centres annual congress in Durban, he said it was time for South Africans to become angry about corruption. He said it was crippling the country, and firm leadership was needed to stop it from getting worse.

“The declining trend in the Transparency International index does not look great,” said Payne. “In fact, it is scary for SA and almost extreme. The index has a 10-point scoring system. SA dropped from a rating of 4.5 in 2010 to 4.1 in 2011. In 2007, we had a rating of 5.1, and this is a precipitous slide for any country to have.”

He said this was SA’s lowest rating since the index was started 17 years ago. Once the rating went below four, SA was heading for “failed state” status where corruption was part of daily life and resulted in more civil protests.

“We can’t afford to let that happen because things can deteriorate rapidly into an ‘Arab Spring’ or failed state.”

Penning said SA had always been rated in the four-to-six zone of the index – the zone of “uncertainty” into which most countries fell. Countries rated above six were in the so-called “premier league”, where “society squeezes out corruption”, and which SA should aspire to join.

She said corruption and corporate theft and fraud was no longer someone else’s problem.

“Every single person in South Africa needs to take stand against fraud, theft and corruption and to that end, employees should be encouraged to be whistle blowers to report their colleagues who were defrauding and stealing from their companies.

“We have now reached the point where a predictive and preventative process should be applied in the risk assessment of all new employees in South Africa.

“Merely checking that a new appointee had a valid drivers’ licence and ID was not nearly enough. As important as it is to verify degrees and diplomas, it is far more important to evaluate the person’s overall integrity and that can only be accomplished through the holistic evaluation of the individual.”

Payne concluded his address to his distinguished audience by saying: “We need an intervention to salvage a future for SA. It is time we get peeved off about corruption. We must put away the race card. This is about (all) our people. We must create an environment hostile to corruption.”