Without solid infrastructure, a country cannot retain or attract investors, yet despite multi-sector efforts to remedy South Africa’s infrastructure shortages, criminal rot is hampering progress.
Mafia-style criminal networks continue to destabilise the construction industry through intimidation and threats of death.
The seriousness of the construction mafia, which has been derailing infrastructure projects for the past decade, was highlighted today when the Justice Crime Prevention and Security (JCPS) Cluster released a briefing statement.
It said that while the government is making inroads into destroying criminal syndicates and activities, ‘extortion and protection fees demanded by criminal syndicates’ have become commonplace in some communities.
Several laws are under review to strengthen the capacity of law enforcement agencies to deal with illegal mining and associated crimes, the cluster said.
Specialist private investigator Mike Bolhuis has much to say about the construction mafia. He says the syndicates began to make their presence felt in South Africa in 2013.
“They started with intimidation and threats of violence and proposed hijackings of construction sites if their orders were not adhered to,” he says.
Between 2015 and 2016, ‘prominent businessmen changed this organisation into an extremely successful crime syndicate’. “They gathered all the smaller groups and created consortiums. Each consortium comprises approximately 60 to 70 members, who created between four and 20 companies each per member.”
Bolhuis says that in the ‘intricate landscape of South Africa’s construction industry’, the construction mafia continues to be an ominous presence. “This clandestine network, comprised of organised groups wielding coercive tactics, intimidation, and sometimes violence, has cast a dark cloud over building projects in the nation.
“They employ a range of strategies, from extortion and threats to disrupting labour and engaging in sabotage. These people seek control over construction sites, leaving many companies in a precarious position.”
In its briefing, the JCPS cluster said ‘incidents of violence and extortion at economic sites’ result from the syndicates demanding a ‘30% share in community projects’.
Construction giant Wilson Bayly Holmes-Ovcon (WBHO) recently reiterated that the construction mafia and related crime and corruption challenges are ‘significant deterrents to business and investor confidence’.
In the recently released 2023 integrated report, WBHO chairperson Louwtjie Nel said: “We strongly urge the government to combat the growing tide of criminal extortion and corruption that is affecting South African society, particularly within the construction sector.”
WBHO said that the government seems to be making good on its pledge to fast-track the roll-out of critical infrastructure, ‘with projects worth R134.2b in the procurement phase’.
“For the first time in a while, the construction industry in South Africa has some healthy prospects for the medium term – but this will largely depend on the government’s ability to create a conducive environment for the industry, including curbing the disruptions caused by the ‘construction mafia’.”
Nel said in his report that since 2016, the ‘contribution of the construction sector to South Africa’s GDP has shrunk by approximately 44% by 2022’.
Bolhuis says that the companies established by the construction mafia ensure the consortiums control every aspect of construction, ‘from building materials, trucks, heavy machinery, and even diesel’.
“People from nearby communities are controlled by the syndicates and do as they are ordered because their lives and the lives of their families are threatened if they do not comply.
“The same applies to people in core positions in nearby municipalities who are threatened, intimidated, and extorted to give contracts,” he says.
He says the landlords of the construction sites are forced to employ anyone proposed by the consortium. “If they do not, they are threatened with a complete halt of all activities and forced to close.”
The SAPS are also intimidated, he says. This results in millions being spent on interdicts that are not enforced.
“Often, the consortiums do not pay their sub-contractors or pay these people minimum wages to keep them subdued.
“They do not hesitate to kidnap landlords or their family members and hold these people for ransom for extraordinary amounts of money or until they’ve been granted new tenders in specific areas.
“In recent revelations, a former enforcer for the mafia has shed light on the inner workings of this underworld, exposing the challenges faced by construction companies as they navigate the treacherous terrain of resisting extortion and intimidation.”
According to the JCPS cluster, various threats that negatively impact the economy have been identified. Specific interventions have been taken ‘to ensure a safe and secure environment, conducive to social and economic stability and growth’.
The cluster said that investigative capacity has been increased in all provinces to accelerate the multidisciplinary approach to addressing potential and actual criminal incidents.
It said that from April 2023 to date, 61 extortion suspects have been arrested and that since 2019, 27 people have been convicted and sentenced to a ‘collective 43 years’ direct imprisonment’.
“Since May 2023, the country has adopted a decisive approach to reducing the high levels of crime. It is through Operation Shanela that the SAPS has successfully arrested 213 059 suspects for various crimes, such as cash-in-transit robberies, extortion at construction sites and kidnappings in the past six months. During the same period, 2 657 illegal and unwanted firearms were confiscated.”
WBHO’s Nel said in his report that there is an ‘urgent need for South Africa to prioritise upholding the rule of law. “The adverse effects of not doing so are becoming increasingly obvious.”
Bolhuis agrees, saying a concerted effort to secure the foundations of South Africa’s construction sector is needed.
In his address to the nation on October 30, President Cyril Rampahosa said that the SAPS had established 20 specialised task teams to ‘protect critical infrastructure and tackle the construction mafia’.
His news that the SANDF would be active in combating the syndicates was welcomed. Ramphosa said the employment of 880 members of the SANDF was extended for this purpose.
Yesterday, Deputy President Paul Mashatile said the specialised units will work with businesses, private security and state-owned entities to tackle the construction mafia and other threats to the nation’s economic infrastructure.
“The construction industry often involves a complex network of sub-contractors and suppliers,” says Bolhuis. “Mafias exploit vulnerabilities within this supply chain to exert control and extract payments. Companies may be reluctant to share information about their experiences owing to concerns about reputation damage or fear of further reprisals.”
However, he says several measures can be taken at construction sites to ward off the syndicates, including strict access control, an extensive CCTV surveillance system, and thorough vetting of every worker, employee, sub-contractor, and supplier.
Community engagement is vital, he says. “Foster positive relationships with the local community to encourage co-operation and information sharing and raise awareness about the construction mafia.”
Confidential whistleblower hotlines should be established, he adds.
“Report incidents to law enforcement promptly and cooperate fully with the investigation,” he urges.