White Collar Crime in South Africa

Although white collar crime is a worldwide phenomenon, in South Africa it tends to stand out as being particularly prevalent. White collar crime is a growing menace to businesses in and around South Africa. More and more senior managers are being involved in fraudulent schemes and activities. In addition, the sophistication and complexity in the way white collar crimes are carried out are on the rise.

One of the major catalysts of white collar crime in South Africa is that the perpetrators know that they are unlikely to be caught. The lack of investigation and prosecution is a concern to businesses in South Africa. How much protection will they receive if they do fall victim to white collar crime? Investigators of white collar crime attempt to put together dockets, with their attorneys’ assistance, which are then submitted to the National Prosecuting Authority. However, there is a lack of resources to facilitate prosecuting services in dealing with such complex crimes.

The South African criminal legal system tends to punish more visible, violent crimes whereas white collar crimes are dealt with in a more administrative fashion. An example, although not traditionally considered a white collar crime, is the infamous collusion that occurred between South African construction companies. A number of these companies were prosecuted and fined for their collusion but to date no individuals involved have been prosecuted for what was essentially fraud.

The rise in white collar crime is having a serious effect on South Africa’s economy. The Association of Certified Fraud Examiners’ 2014 Report to the Nations on Occupational Fraud and Abuse estimates that businesses lose 5% of revenue to fraud each year, a huge distress for businesses. Tackling white collar crime is vital to South Africa as it is directly linked to inbound foreign investment.

South African Businesses Must Think Ahead

Despite the additional cost involved, due to the lack of assistance from the state, businesses operating in South Africa must take measures to reduce their own risk of falling victim to white collar crime. These include:

  • implementing in-house risk assessments
  • conducting surveys of staff
  • allowing for anonymous reporting

In order to combat South Africa’s white collar crime, prosecution services need more resources such as highly skilled professionals to investigate and initiate enforcement action. Until such time, white collar crime will continue to be prevalent in the corporate sector.

Resources

“White collar crime thrusts corporates and SA’s economy into turbulent waters” Business News 26 August 2015, retrieved from http://www.cbn.co.za/news/

“White collar crime in S.Africa on the rise” CNBC Africa 12 February 2015 retrieved from http://www.cnbcafrica.com/news/southern-africa/

Naicker, Katherine “White Collar Crime in South Africa” University of Johannesburg, 2006.

Nic Roodt

Nic Roodt