Illicit Business Forums in South Africa: A Survey

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Trish Armstrong
Jacqui Meyer


Extortion is broadly understood as taking from another patrimonial or non-patrimonial advantage by intentionally and unlawfully
subjecting that party to pressure which induces them to submit to the taking of the bribe. Extortion is not an unfamiliar concept
in South Africa, including, but not limited to, the construction industry. The expansion and maintenance sites mandated with
the installation of critical infrastructure and construction sites throughout South Africa are being invaded by the ‘construction
mafia’. It is reported by the South African Forum of Civil Engineering Contractors that in 2019 alone over 180 infrastructure and
construction projects were victims of these illegal practices. These groups call themselves ‘local business forums’. They demand
employment, money or a share in all new project sites where development takes place. These intentional and unlawful acts
resonate under organized and systemic extortion. The business forums often mislead construction companies by demanding
30%of the value of the contract by deceitfully referring to the stipulations in the Preferential Procurement Policy Framework
Act 5 of 2000 and subsequent Preferential Procurement Regulation, 2017 (PPPFA).
If their demands are not met the business forums resort to violence and site activities become stationary by mass action, rioting,
damage of vehicles, hostage taking or even in the worst cases, murder. The problem is growing and has been extended to
normal operating businesses.
The South African Forum of Civil Engineering Contractors R40bn nationally reported the costs due to losses in 2019 alone. The
much-needed construction of the Mtentu Bridge-R1.5bn development project in the Eastern Cape was abandoned by Strabag
International, a German-based engineering company after work was stopped at the development site for over 80 days by armed
business forum members demanding 30% of the project value, for example. Staff were threatened at gunpoint and the site
was made inaccessible to any of the workforces. Strabag International canceled the investment and their involvement in the
project, describing the condition at the site as worse than the Afghanistan or Iran war zone. Strabag conducted development
construction in both of these areas.
The business forums justify their actions as radical transformations. This view is supported by local politicians who often
actively encourage the activities through the forums or are involved for financial or political gain. President Cyril Ramaphosa
called for a halt to these practices, but law enforcement is not yet in control of the situation. The growth of these activities can
be linked to poor response from law enforcement often not understanding the extent of the problem, lack of knowledge of
legislation or the nature of the crime taking place. The purpose of this paper is to first, determine which unlawful actions are
committed by these business forums; what the possible negative effect of these actions has on the construction industry and
South Africa’s economy; determine if South African law enforcement understands these actions resonate under extortion and
not labor matters, finally showing there is indeed need for amendment of the PPPFA where it concerns which, the workforce
should be allowed to be called upon for the 30% requirement as is found in PPPFA. Ultimately it will be shown that PPPFA
requires amendments to better equip the South African construction industry with legal recourses and assist law enforcement
with a better understanding of these crimes.

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How to Cite
Armstrong, T., & Meyer, J. (2023). Illicit Business Forums in South Africa: A Survey. INTERNATIONAL JOURNAL OF ETHICS, TRAUMA & VICTIMOLOGY, 9(01), 9-28. Retrieved from
Research Article