2010 World Cup stadium construction price-fixers yet to face the music

Nearly two years after the criminalisation of cartels, South Africa is yet to witness arrests and imprisonment of the main players in collusion, according to a report carried by The New Age newspaper today.

The criminalisation of cartels was introduced in 2016 by Economic Development Minister Ebrahim Patel with the aim of putting directors of company managers in jail for colluding with other companies in price-fixing, rigging and other infractions.

Experts and critics are arguing that the legislation was passed without providing the necessary capabilities that the Competition Commission needed to bring this vision to life. They underscored that companies have continued settling and paying fines for the cartel behaviour, and the fines are said to have had no bearing on how they act later.

In a special report by Thelma Ngoma, Competition Commission spokesperson Sipho Ngwema is reported as saying South African will soon begin to hear about the regulator taking action in conjunction with the police, as they have already started identifying cases to be prosecuted.

Gomolemo Kekesi, a partner at law firm Bowman Gilfillan, warned that the scourge of collusion was rife, with many multinational corporations and local companies undeterred by the fines imposed on them. Kekesi is said to have also emphasised that corruption and collusion were two sides of the same coin.

“Cartel behaviour was always deemed a red flag – one of the worst you could find – and the worst penalty in years back was an administrative fine. However, there was no personal liability for the individuals themselves. Largely due to the US, Australia and Brazil introducing jail sentences for complicit participants of cartel conduct, South Africa followed suit. SA also formed an ambitious extension to deter collusion,” said Kekesi.

Cosatu spokesperson Sizwe Pamla told the publication that “collusion is corruption and corruption is collusion”, and as such, any person seeking to differentiate between the two wanted to pacify the private sector over wrongdoing using semantics. He said it was also a feeble attempt at allowing the private sector “to run amok, exploiting the poor through collusion and price-fixing”.

“Time is up, and we are running out of patience. There is no excuse why people are not being [made] accountable for cartel behaviour. It is easy for the government to say fining companies 10% of their annual turnover will deter companies from colluding, but it does not.

“The ANC government must deal decisively with this. This is a big deal. We cannot allow the poor to be affected … there are consequences,” Pamla said.

General secretary of the Federation of Trade Unions of South Africa (Fedusa) Dennis George was equally concerned, and said they would be pressurising the authorities to take decisive action against perpetrators in future.

“We want a Competition Commission that is proactive. These crimes are premeditated, and when it happens in the public sector, arrests are made. We will demand that the minister of economic development explains to us exactly what is happening,” said George.