This is how corporates can help fight crime syndicates

Organisations should start by setting a culture of zero tolerance for fraudulent conduct from the top down.

It seems as if you can hardly open a SA news website nowadays without finding out about some or other new criminal syndicate. They have infiltrated almost every sector of the economy, from mining to construction and transport. It’s becoming apparent that many of these syndicates have international reach. 

These syndicates have a hugely detrimental impact on the economy. Illegal miners alone are estimated to cost that sector R7bn a year. That is to say nothing of the costs to the environment (through poaching syndicates, for example) and human life (according to the Institute For Security Studies, organised crime has played a significant role in SA’s increased murder rate in recent years).

On the face of it, it would seem that SA faces an uphill battle regarding tackling organised crime syndicates. Winning that battle will mean active participation from a broad cross-section of society, including big corporates. 

To understand how SA corporates can help in the fight against organised crime syndicates, it’s important to look at how those syndicates infiltrate businesses. 

While there have been instances of big corporates participating directly in fraud and corruption, as was revealed during the Zondo state capture commission, organised crime syndicates typically take a less direct approach regarding infiltrating organisations. One of the most common ways is to use companies as a conduit for money laundering.

A poaching syndicate, for example, might have buyers offering them much money for rhino horn or lion bones. But to be able to use that money without raising suspicion from local and international authorities, they need to first launder it through a legitimate business. 

That is typically where large financial institutions and other businesses come into play. One way they would do so is by infiltrating a business, usually through one or more existing employees. Sometimes that is through a mix of coercion and bribery, but even a negligent employee who doesn’t properly adhere to an organisation’s antifraud and corruption practices can be used as an infiltration point. It can be as simple as processing certain documents and overlooking specific procedures, allowing them to get away with the laundering.

Act ethically

While junior employees are an obvious target on this front, the more senior the employee is the more a syndicate is likely to get away with. That is because senior employees are less likely to have their work checked. 

To avoid those kinds of scenarios organisations should set a culture of zero tolerance for fraudulent conduct from the top down. Senior managers and directors therefore don’t just have to act ethically, they also have to be seen to do so. 

Any incident of fraud, no matter how small, should not be brushed under the carpet. No matter how junior or senior employees are they should know that if fraud is uncovered it will be investigated and prosecuted. 

A culture of active whistle-blowing should be created within the organisation so that employees feel comfortable and safe raising issues. There have been far too many instances in which whistle-blowers have been left to hang out to dry by the state and their employer for doing something that everyone should in the face of fraud and corruption. In the most extreme instances this can leave them having to flee the country or face being killed, as happened to former Gauteng provincial department of health worker Babita Deokaran. 

That doesn’t just mean not shunning an employee who acts as a whistle-blower either. Organisations must take active steps to protect whistle-blowing employees from any threats and dangers they might face. After all, if employees have been put under duress by a crime syndicate and come forward, they are actively protecting the organisation. It also makes it much easier for the organisation to proactively manage the crisis than if the employee didn’t feel satisfied and went to the media instead. 

More protection

Organisations should furthermore conduct regular lifestyle audits on employees and ensure that it knows what red flags to look out for. Taking that kind of action is especially important now, at a time of economic difficulty, when the temptation to take financial assistance is higher than it otherwise might be. Of course, if employees are suddenly driving cars they couldn’t possibly afford on their salary, it doesn’t necessarily mean they are engaged in fraudulent activities but it is still a red flag worth keeping an eye on.

Ultimately, SA corporates cannot afford to simply sit back and hope that authorities will eventually deal with the organised crime syndicates that represent such an existential threat to the economy. The more organisations increase their mitigation measures against this threat, the more difficult they make it for crime syndicates to infiltrate their organisations and the more protection they provide to people who blow the whistle on any infiltration attempts. 

This isn’t a problem with any single solution. But because corporates represent such an important conduit, any efforts they make at breaking the back of organised crime syndicates will be vital.