Because fighting corruption is everybody’s fight!

The dictionary defines corruption as ‘dishonest or fraudulent conduct by those in power, typically involving bribery.’

Political ideology says that ‘in general, corruption is a form of dishonesty or criminal activity undertaken by a person or organisation entrusted with a position of authority/trust, often to acquire illicit benefit, or, abuse of entrusted power for one’s private gain’.

In the South African context, according to the Companies Act No 71 of 2008, Duties and Liabilities of Directors (Section 76), a director has to adhere to a standard of conduct and this extends beyond the common law duty of directors to act honestly and in good faith in a manner they reasonably believe to be in the best interest of and for the benefit of their company when acting as a director. 

Section 76(3) states that a director, when acting in the capacity as a director, must exercise and perform the duties of a director:

  1. In good faith;
  2. In the best interest of the company; and
  3. With the degree of care, skill and diligence that may reasonably be expected of a person carrying out the same functions in relation to the company as carried out by that director, and having the general knowledge, skill and experience of that director.

Section 76(4) places an obligation on a director and states that in respect of any matter arising the exercise of their powers or the performance of their duties as a director, a director will have satisfied their obligations as per Sec 76(3) , if the director:

  1. Has taken reasonably, diligent steps to become informed about the matter;
  2. Has made a decision, or supported the decision of a committee or the board with regard to that matter; and
  3. Had a rational basis for believing, and did believe, that the decision was in the best interests of the company.

Inn further compliance of Section 76, the director is required to communicate to the board, at the earliest practicable opportunity, any material information that comes to his/her attention, unless he/she:

  1. Reasonably believes that the information is publically available or known to the other directors; or
  2. Is bound by a legal or ethical obligation of confidentiality.

Director’s Liability

Section 77 prescribes certain statutory liabilities on directors of a company.  In line with this Sec 77(2)(a) a director of a company may be held liable (according to principles of the common law relating to breach of fiduciary duty) for any loss, damages or costs sustained by the company as a consequence of any breach by the director of the duties contemplated, inter alia, in section 76 of the Act.

I know that this was a long and maybe monotonous introduction to corruption, but it is important for us to know that the directors, of especially SOE and parastatals have a duty to conduct themselves in a certain manner.  Because if they don’t, they can be held accountable and can become liable for losses incurred whilst they were directors.

So why should we, the ordinary South African, care about Corruption?


Corruption affects everything in our lives!

Our taxes fund the government.  The government, in turn, support state owned enterprises and parastatals, in other words, our taxes are one of the major income streams of government.

And when the majority of South Africans voted our current government into power, they gave them the mandate to collect taxes from us, the electorate, and to use these taxes to manage the country.

So government have a legal duty to use the taxes to the benefit of the citizens of South Africa.

That is why the Minister of Finance announces this big fancy budget and tells us how they are going to use the ‘income’ of South Africa.  Because the government is accountable to us!  We have to listen and understand the budget.

So the minister informs us that he is allocating such a percentage of the fiscus for education, military, health, roads and infrastructure, etc.

But the same government is also able to make loans on our behalf for things that the country cannot afford to buy/pay for in cash. 

It is pretty much like we, the citizens, have given someone else permission to make a loan on your behalf, but this is just on a bigger scale.

So as you can see the government basically is directed by us, ordinary citizens.

But we have to pay them for their time that they spend running the country on our behalf.  So to underline again, they are the workers and we, the electorate, are the bosses of the government. 

Thus we need not accept everything that they tell us.  In fact the government needs to ask our permission when they want to do certain things. 

And we need not accept the fact that they use ‘our money’ to pay themselves inflated salaries. 

We need not accept the fact that they do not act in the best interest of the companies that they run on our behalf (State Owned Enterprises). 

We can and must hold them accountable!

And how do we hold them accountable? 

With our vote!

We cannot keep voting for people / parties who use our money to enrich themselves.  We cannot vote for people /parties who do not use our money for the benefit of the South Africans.

We instruct government on what to do with our taxes, not the other way around.

When government uses our money for their own benefit, there will not be enough money to pay for education (schools, teachers), healthcare (hospitals, nurses, doctors), welfare (looking after the aged, orphans), infrastructure (maintaining roads, water and sewerage systems, electricity, etc).

And when government does not have enough money, they make loans, on our behalf, and put half of the loan amount, into their own pockets.

And then when we need to repay our loans, sometimes we cannot honour our loans and our ratings go down.  Then we have to pay a higher interest rate because we are a higher risk.   And the reason why we cannot repay our loans is because we have a deficit.  In other words, South Africa’s income is less than our expenses.

So in order to increase government’s income, governments have to raise taxes. 

And how does the government raise taxes and what taxes do they raise?

  1. They raise the tax rates for corporations and companies, and then these corporations and companies have to charge the taxpayer higher prices for their goods.
  2. They increase the price of petrol.  Government takes 50% of the price of petrol as income.  With the other 50%, they purchase the petrol.  So we should be paying a whole lot less for our petrol, if it were not for our government.  Another detrimental effect of higher fuel costs is that we pay more for all our goods due to increased transportation costs.
  3. They increase our personal taxes.
  4. They give municipalities less income, thus forcing municipalities to increase their rates, taxes, car license fees, water and electricity charges, etc.  If municipalities do not increase these service charges, they may not be able to deliver services to us.  However, it must be said that corruption is just as rife at municipalities and more than half of all South African municipalities are bankrupt due to corruption and maladministration.
  5. Government collects taxes on our groceries, etc.   VAT

South Africa is a country with one of the highest tax rates in the world.

But this is not the saddest part yet.

The money that governments give to the various departments and municipalities, even though the money is not enough to perform the functions required by departments and municipalities, are then stolen by government officials by way of corruption.

And how do they do it?

They award contracts, tenders, etc to their friends to supply services or products.  These friends then only supply a minimal amount of services / products in return for this money because they have to give a kickback to these officials.

So for instance if we need hospital beds and we have budget for 1000 beds, because the government employee/s want/s a kickback, they either only buy 800 beds giving us a shortfall of 200 beds or they supply 1000 poor qualitnimsayy beds that do not last for the required time.  But they even go as far as supplying 800 poor quality beds and in some instances, they do not even supply anything at all in return for their payment.

Or for instance, we need to resurface/tar 100 kilometres of road and we have R10 mil budget for it.  The government official/s will give this tender to a friend, who cannot do the work.  This ‘friend’ then appoints somebody else to do the job and keeps maybe a quarter of the money for himself.  So now we have R7,5 mil rand with which to resurface/tar 100kilometres of road.  We either are only going to have 75 kilometres of road, or they will supply 100 kilometres of poor quality of road which will not last for the required time.

And this is how things have been going in this ‘rainbow’ nation of ours since 1994. 

So corruption has caught up with us. 

Our healthcare is in a crisis, so is our education system, so is our police force, the army, Eskom, Denel, etc.  Our municipalities are bankrupt, our jails are not coping, etc.  In fact, nothing is working in South Africa anymore, including the people because we have an unemployment rate of more than 35%.

We have paid a high price for this corruption which is out of control in South Africa.

But what are we going to do about it?

Are we going to keep driving towards Bellville and expect to end up in Cape Town?

I wonder…