As fraud and corruption in the ICT industry reach endemic proportions, there are calls for an independent body to bring stakeholders together in a bid to chart how widespread the problem is, and to thrash out a solution.
That corruption is a problem is, sadly, beyond doubt – and industry leaders believe it may be so much a part of the ICT industry’s culture that we are close to the point of no return.
Ken Jarvis, MD of Jika Africa and previously in ICT leadership positions at the South African Revenue Service (SARS) and Nedbank, believes the industry has dug itself so deeply into a culture of corruption that a solution may be hard to find.
“No-one with half a brain can think that corruption is not taking place in the ICT industry,” he says.
What is really shocking, he believes, is the extent to which it has permeated all levels of the industry. And it’s not only the public sector that is a hotbed for corruption: the rot has spread to the private sector as well, becoming almost the norm when big deals are on the table.
“It’s not as bad as the public sector,” says Jarvis. “But it is there in the private sector.”
In his opinion, corruption across the board in the ICT industry has worsened over the past three to four years. “It’s not even subtle anymore, but quite blatant. Previously, one in about 20 conversations would raise corruption – nowadays it’s one in two.”
Jarvis has extensive experience in both the public and private sectors and is in a privileged position of being able to participate in conversations with all ICT industry stakeholders.
Relating encounters that paint the industry in the worst possible light, he shares the view of a listed company leader that the South Africa ICT industry is arguably the most corrupt industry in South Africa.
This is echoed by the CEO of an international ICT supplier, who believes his company may be left with no choice but to pull out of South Africa as it refuses to tender bribes and is thus excluded from doing business here.
“When leaders at that level hold those opinions, you have to acknowledge that corruption in this market is endemic,” Jarvis says.
These views are borne out by a recent PricewaterhouseCoopers (PwC) survey, which revealed that 69% of South Africa companies had been victims of economic crime, way above the 37% global average. Bribery and corruption was one of the most common economic crimes encountered, with 52% of organisations reporting it.
According to Corruption Watch, bribery and corruption is the fastest-growing economic crime category in South Africa.
The perpetrators of economic crime in South Africa are overwhelmingly likely to be in management positions, with many of them in senior or C-suite positions.
Despite the endemic corruption, Jarvis believes that most individuals are not inherently corrupt and the majority of companies would prefer to do business without bribes being the norm.
“The dilemma that many companies face is that if they wish to participate in a large percentage of the ICT deals they will have to pay someone off – so they have the choice of doing so or walking away from the business.
“And it’s not just South Africa companies: some large international players are implicated in corrupt deals.”
Suggestions on how to combat fraud and corruption vary from legalising it – with the proviso that it’s reported – to cracking down on offenders with the full force of the law.
But Jarvis believes it’s no good waiting for external elements to clean up the trade, and that the ICT industry needs to take itself in hand and take responsibility for its own ethical behaviour.
While end-users and deal facilitators may still ask for backhanders, he says, if every supplier, distributor and reseller in the ICT industry refuses to pay them they will soon have to stop.
To this end, he is throwing his weight behind Collaborative Stakeholder Movement (CSM), an independent and non-aligned discussion forum.
The group is inviting ICT industry stakeholders to take part in a frank and open discussion on the issue of fraud and corruption.
The discussions will be driven by CSM founder Martin Humphries and panelled by Jarvis and Chris Hart, chief strategist and economist at Investment Solutions.
The aim is to obtain input from executives and convert discussions into actions that culminate in positive outcomes. This will benefit the individual’s organisation, their economic sector and the South African economy as a whole. The discussion will be facilitated in an independent, neutral and unbiased environment.
The aim of the discussion on fraud and corruption in the ICT industry, says Humphries, is to identify how widespread the problem is, and to facilitate a solution undertaken by the industry itself.
The forum is not meant as a witch hunt, he adds, but a place where the ICT industry can draw a line, beyond which it cleans up its act.
“The goal of the forum is to give people the opportunity to talk, find common ground and act,” says Humphries. “The slogan of ELCAD – engage, listen, collaborate, act and deliver – says it all.
“This is not a talk shop. It’s something that the ICT industry owns and where it can change its own destiny. We are there as an independent facilitator, with no axe to grind, to help make it happen.”
It is hoped that an ICT forum on fraud and corruption would come up with a code of ethics or similar document that stakeholders in the ICT industry – from suppliers to resellers and into organisations’ internal structures – could hold themselves accountable to.
“The majority of people want to be clean,” Jarvis reiterates. “Most people wish the problem of fraud and corruption would go away – and we are giving them a platform to make that happen.”
Companies or individuals who wish to be involved in CSM’s ICT forum on fraud and corruption should contact Humphries on 083 282-3874 or martin@martin-humphries.com.
