Minister Mmamoloko Kubayi: Opening Ceremony of the 15th Commonwealth Regional Conference for Heads of Anti-Corruption Agencies in Africa

Programme director: Dr Roger Koranteng, Commonwealth Secretariat, UK
Adv. Andy Mothibi, Chief Executive and Head Special Investigating Unit S. Africa
His Excellency David Martinon, French Ambassador to the Republic of S. Africa
Hon. Sherley Ayorkor Botchwey, Secretary-General Commonwealth Secretariat
Chairperson, Association of Anti-Corruption Agencies in Commonwealth Africa &
Executive Director. EOCO. Ghana
Distinguished guests
Ladies and Gentlemen

Good morning

Thank you for inviting me to join on this important gathering that is focused on developing effective and efficient ways to prevent and combat corruption.

This conference provides a platform for us to send a strong message that corruption will not be tolerated and anybody who thinks they can be corrupt and get away with it must think again. I am confident that your discussions in the next three days will come out with a firm answer to the question: what is it that we are going to do as commonwealth countries, working together, to ensure that those who get involved in corruption return the ill-gotten wealth, get arrested and receive long jail sentences? We now live in a world that is globalized and globalizing. Though when we speak about globalization we mostly speak about the interconnectedness of the economies characterized by multinational business, we seldom speak about how at the same time corruption has also globalized. The development of the internet and other digital technologies that facilitate exchange of near real-time information between people in different parts of the globe has created a virtual world with no borders.

All these developments mean that preventing and combating corruption has become a very complex exercise. Our experience in South Africa with the largescale corruption such as we witnessed under State Capture taught us that corruption, regardless of its complexity, has enablers. Fundamentally for corruption to happen it requires the corruptor and the corrupted. For efficiency and effectiveness, the anti-corruption mechanisms we device to prevent and combat corruption have to focus on these two sides of the corruption coin. As with the state capture, if corruption is enabled at the highest echelons of the state it becomes difficult to make a distinction between the corruptor and the corrupted. Once this happens rent-seeking and value destruction is taken to the extreme. Huge amounts of monies are taken out of state coffers with no services being rendered or goods being delivered. In the case of state-owned enterprises, they get repurposed from delivering services for public consumption to becoming sources and centres of corruption.

The repurposing starts with the destruction of corporate governance by deploying people who are unscrupulous and unethical to the boards of these enterprises. Over time governance structures are weakened such that they lack transparency and accountability. In collusion with private sector players whose pursuit for profit maximization get seduced by corruption, prices of goods and services get inflated, poor quality services rendered, infrastructure projects get delayed and cost more than they should and in the end these enterprises collapse. In fear of being held accountable and getting arrested for their crimes, the perpetrators of these corrupt practices target law enforcement agencies and institutions with the aim of weakening them. To this end, they weaken the capacity to investigate, the capacity to prosecute and in some cases they even go as far as corrupting the judiciary.

Effectively, skilled people are hounded out of institutions and processes and mechanisms of fighting crime are either destroyed or rendered toothless. In the case of the South African Revenue Services a commission of inquiry which looked into Tax administration and governance found the following amongst other things: “The restructuring of the organisation displaced some 200 managerial employees from their jobs, many of whom ended up in positions that had no content or even job description, and in exasperation skilled professionals left. Others remain in supernumerary posts with their skills and experience going to waste. Customs was adversely affected, …. Measures to counter criminality were rendered ineffective and those who trade illicitly in commodities like cigarettes operate with little constraint.” It is clear in the case of SARS that the intention was to weaken its capacity to collect revenue and to detect tax evaders and illicit flow of corruption monies. Looking at the extent of the damage which corruption inflicted in our institutions, I believe that the country was pulled from the brink of total collapse.

Had state capture continued unabated our country would have been reduced to a failed. Academics at Wits, UJ, and Stellenbosch universities, who did research about that period concluded that if not stopped: “The ultimate prize was control of the National Treasury to gain control of the Financial Intelligence Centre (which monitors illicit flows of finance), the Chief Procurement Office (which regulates procurement and activates legal action against corrupt practices), the Public Investment Corporation (the second largest shareholder on the Johannesburg Securities Exchange), the boards of key development governance institutions, and the guarantee system (which is not only essential for making the nuclear deal work, but with a guarantee state entities can borrow from private lenders/banks without parliamentary oversight).” By destroying institutions and redirecting public resources, corruption undermines democracy and render states, especially small ones, vulnerable to instability, civil wars and terrorism.

Corruption can destroy institutions within a country so that it becomes very costly for citizens to attain services that they entitled to as citizens. Corruption undermines business confidence and chases away investment placing the country in a perpetual low growth trajectory and end up in economic crisis. If not prevented and combated, corruption can become a window through which organized crime organizations entrench themselves within a country and its institutions. As we all know, organized criminal organizations, especially international drug dealers, have the funds to corrupt many players, including and especially in governments, and even to “capture” weak states. My focus of public corruption must not be misconstrued to mean that corruption only happens in the public sector. In fact, public sector corruption is also enabled by so-called reputable large private sector companies.

The case of Steinhof in recent memory is a classic case of private sector corruption. According to the report on Illicit Financial Flows (IFF) in Africa, amount lost annually by Africa through IFFs is likely to exceed $50 billion by a significant amount. The report also found that that corrupt practices in Africa are facilitating these outflows, apart from and in addition to the related problem of weak governance capacity. Large companies engage in IFFs through abusive transfer pricing, trade misinvoicing, misinvoicing of services and intangibles and use of unequal contracts. They exploit information gaps and limited capacity in government agencies to engage in base erosion and profit-shifting activities. It is for this reason that the need for strengthening the capacity to prevent and combat corruption cannot be overemphasized.

As a mentioned before we now live a world in which the tools which perpetrators of corruption use have also evolved with technological developments. This has made corrupt activities much more difficult to detect and unravel through old methods of investigation. It is therefore important that the methods of preventing and combating corruption should be infused with modern technological tools such as artificial intelligence. Through artificial intelligence vast amounts of data can be easily analysed and patterns can be detected much faster. By using sophisticated algorithms, AI systems are trained to identify and recognize patterns of suspicious spending, detect sudden shifts in financial behaviour, and highlight inconsistent behavior that may indicate bribery, fraud, or money laundering, while also significantly increasing positive detections.

AI tools can mine the internet and social media through which much of the display of ill-gotten wealth takes, and provide investigators with good leads for finding the perpetrators of corruption. In this connection I welcome the soon to be launched The Special Investigating Unit Anti-Corruption and Cyber Academy which is aimed at building the necessary capacity to combat corruption, financial crime, and cybercrime effectively. I am also pleased that the academy will promote partnerships, collaboration, and sharing of expertise domestically, regionally, within the continent, and globally. A collaborative effort is required effectively to fight corruption.

You have convened this conference under the theme “Enhancing an inclusive participation of state and non-state actors to Prevent and Combat Corruption”. This is a call to action for all societal stakeholders to work together to rid society of the corrosive scourge of corruption. Our experience here in South Africa with state capture taught us that it takes courageous men and women to stand up and expose corruption. In this regard, in your discussions in the next three days you should also discuss the important issue of the effective protection of whistleblowers because without most of the corruption that happens in dark corners will remain hidden.

Fighting corruption also requires civil society organisations that are willing to fight for the widening of democratic practices that include transparency and accountability. CSOs have the expertise to help to drive policy reform, generate evidence, provide technical skills and capacity building and be involved in the investigation and enforcement of transnational corruption cases. Now that we live in a borderless world in which corruption knows no boundaries it is also important for countries to collaborate.

Section 4 of article 5 of the United Nations’ Convention Against Corruption says that: “States Parties shall, as appropriate and in accordance with the fundamental principles of their legal system, collaborate with each other and with relevant international and regional organizations in promoting and developing the measures to [prevent and combat corruption]. That collaboration may include participation in international programmes and projects aimed at the prevention of corruption.”

Guided by the UN convention against corruption, commonwealth countries must strengthen their collaborative efforts, share expertise and build capacity to fight corruption within our countries. The one way we can make the dream of building a better Africa a reality is by effectively fighting corruption.

I thank you

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