Rude awakening for construction mafias in South Africa

The government is beginning to crack down on construction mafias, with the Department of Public Works launching independent investigations into extortion at project sites across South Africa.

Construction mafias emerged after 2010, following the boom in construction in the buildup to the FIFA World Cup in South Africa.

Criminal syndicates sought to leverage legislation mandating that 30% of public sector projects be subcontracted to local participants.

Thus, organisations claiming to be ‘local business forums’ began to go to construction sites and extort money from contractors and developers under this pretext.

This allowed these mafias to thrive, where they now cost the country R68 billion and delayed numerous building projects and infrastructure developments.

The mafias have also expanded their operations into Gauteng, the country’s economic hub, from their traditional hunting grounds in KwaZulu-Natal.

Minister of Public Works Dean Macpherson explained to Biznews how the construction mafias operate and the department’s plans to crack down on criminality.

Aside from leveraging provisions with legislation that mandate local participation in projects, these mafias use violence and intimidation to ensure they receive a share of the profits.

In some cases, businesses pay off the mafias to avoid physical harm and go through demanding legal processes, which delay the construction of various projects.

“It’s incredibly destabilising for the province of KZN and also for the investment climate in South Africa. Investors do not want to put their money into projects that are going to be delayed or cancelled,” Macpherson said.

Roelof Viljoen, project manager at Businesses Against Crime, said someone always has to pay the price tag for criminal activity, and in this case, local communities are paying the price in terms of declining economic activity.

Macpherson echoed this by saying that local communities suffer from a lack of infrastructure, and these criminal organisations prevent these projects from being built.

Crackdown coming

Macpherson said his department would begin launching independent investigations regarding specific extortion cases at construction sites across the country.

“It’s not something we take lightly, but we want to confront it head-on. I’ve said that there’s no room for negotiation. There’s no room for talks. We just need to get on with the job of building infrastructure across South Africa.”

This hard stance has resulted in Macpherson being targeted with death threats alongside members of his department.

“But you know, what we can’t do is go and hide in a corner just because they’re making these threats. We need to ensure that law enforcement meets these people head-on.”

“That’s why I’ve said there’s no negotiating because the only negotiating that we should be doing is the length of prison sentences that they should be serving for perpetrating crimes against the state. This is state money. These are state projects.”

“We are being held hostage by a bunch of thugs and thieves. So, we’re very clear on what needs to take place.”

“And I think, in some instances, we’ve started to see law enforcement make their move in opposition to these people.

In a separate interview with Newzroom Afrika, Viljoen noted that there have been some success stories in the fight against the construction mafia.

Companies have begun cooperating with local law enforcement to conduct covert operations to arrest mafia members when they come on-site to demand a share of the profits.

However, he cautioned that this is heavily reliant on people doing the right thing and being able to follow through with the relevant legal processes.

If these processes were more efficient and effective, companies would be more willing to report criminal activity rather than paying off extortionists to ensure their projects are not delayed.

Thus, Business Against Crime has moved beyond channelling private-sector expertise into law enforcement agencies to also encouraging businesses to report criminal activity and avoid paying off criminals.

Viljoen explained that this exacerbates the problem by making extortion a viable income stream for criminals.

This article was first published by Daily Investor and is reproduced with permission.