Construction mafia remains a major problem, warns MBA North

The problem posed by the construction mafia on the ground remains a major stumbling block in the recovery of the construction industry, and especially its ability to create more jobs, says Master Builders Association (MBA) North executive director Mohau Mphomela.

“The construction mafia remains an ever-present threat to projects in both the public and private sectors – but there’s a limit to what the industry can do.

“We need to see a joined-up approach from the State, which includes the justice cluster, to ensure that these malefactors are brought to book and construction sites are protected. Criminals need to be held accountable.”

MBA North VP and W3O CEO Gavin Morrow agrees that government must take a consolidated approach.

He says the activities of illegal ‘business forums’ are driving up the cost of doing business and reducing the construction industry’s margins.

“Our margins are already paper thin, and when a construction site is captured by these criminals, the full cost of the stoppage is borne by the contractor.

“In some cases, it pushes businesses into distress.

“These events are often also very violent, and may be the final straw that convinces the owner that it is no longer worthwhile to keep the doors open.”

Morrow adds that the lack of policy clarity only serves as oxygen for the construction mafia.

He says the current Preferential Procurement Policy (PPP) does not clearly define the 30% participation requirement, and is used by so-called ‘community organisations’ to demand 30% of the total project value, rather than 30% of the work that falls within the remit of the main contractor.

In addition, the 30% figure is applied to private projects, but the PPP pertains to public contracts only.

Morrow says his firm encounters these dynamics at varying levels of intensity on the majority of the projects it undertakes.

Tiber Construction MD Jose Correia agrees that this form of extortion is prevalent – and getting worse.

“The challenge is also that expectations within the community are worlds apart from the reality of delivering work against tight deadlines and budgets.

“And it seems there is always a new business forum claiming it is entitled to the work, but there is never enough work to service all these extortionists.”

According to the MBA North, it is now broadly accepted that in order to minimise the risk posed by the construction mafia, contractors have to adopt a proactive approach by liaising with the South African Police Service (Saps) from the get-go, while also appointing a community liaison officer to ensure good communication with the local community.

All stakeholders should be shown the building and site plans, and a WhatsApp group can be created as a continuous line of communication.

Entry to the site should be strictly controlled, with detailed records kept of everybody who enters.

It is also regarded as good practice to erect an information board at the entrance detailing what actions were taken to include the local community in the project.

Business Against Crime South Africa national project manager Roelof Viljoen says that by following its guidelines, companies stand a better chance of minimising disruption.

“Saps has an obligation to protect against extortion, as with any other crime, so it makes sense to do everything possible to get them on board from the beginning.

“The purpose of a pre-meeting with the Saps is to prepare for all possible crime risks related to the work, and to establish an agreed communication protocol in case of any crime related to the construction site.

“But, if they fail to respond appropriately, although duly informed of the crime committed, it’s worth knowing that the company has a service delivery claim against the Saps.

“However, the claim needs to be made before the end of the contract and witnesses must be available.”

“It’s worth remembering that the local police station might itself be infiltrated by the business forum – one should be ready to escalate if they are not doing what they should,” adds Viljoen.

“Saps Provincial Organised Crime Investigations coordinates law enforcement activity against extortion. Visible policing would be the most effective deterrent, but unfortunately resources are limited.”