South Africa lost R4 billion to irregular expenditure in the water sector between 2014 and 2018 alone. This is according to a report published earlier this year by the Berlin-based Water Integrity Network, an NGO that fights corruption in water sectors worldwide.
Carl Haycock – CEO of South African-based water and wastewater solutions company Talbot – isn’t surprised having had to bat off more than his fair share of attempts to engage in dirty dealings.
“Like any other sector, water is open to maladministration, but in our business, it’s sadly the most vulnerable who bear the brunt of corruption, bribery and poor contract management,” he says.
Haycock explains that it is this lack of integrity that exacerbates an already desperate situation. Water is scarce and it is getting worse.
South Africa is one of few countries to have enshrined the basic right to sufficient water in its constitution, yet only 64% of households have access to a reliable supply. Added to this, demand is set to outstrip supply by a considerable margin by 2035 – a challenge that can only be met by improving water governance and managing the resource responsibly.
“Poor governance inflates capital infrastructure costs and diminishes access where people need it most. Added to this, water management is a highly technical domain, which means that sub-standard delivery and management comes with its own costs and associated health and environmental impacts,” says Haycock.
A personal ‘financial motivation’
As CEO of a business that delivers public and private water projects, he’s no stranger to unsolicited attempts to engage in dishonest practices.
“We’re implacably opposed to any form of bribery and corruption and it’s our business integrity policies that have steered us out of some pretty awkward conversations.”
Scenarios to have cropped up at Talbot include an invitation to partner with a company on a more than R200 million government contract for which the tender documentation was presented eight weeks before the tender had formally been issued. The relationship with this partner was terminated immediately.
The company was also approached by a municipal official advising that if it cooperated with a ‘specific company’, it would be guaranteed an order for a large water recovery plant.
“When we looked into the matter, it became apparent that the company belonged to the official’s brother and that he himself was a shareholder. Again, we walked away.”
Most recently, a Talbot employee received a call from an official who – firstly – asked whether the conversation was being recorded and then offered up a multi-million rand tender in return for a ‘personal financial motivation’.
“We politely declined the offer and wished him good day.”
A glimmer of hope?
“One positive outcome is that we’ve shared these experiences across our business, using them as real-world examples for in-house training. What’s interesting to me is that it has always been our policies that have helped us through these thorny encounters.
“The difficulty isn’t in saying ‘no’ to the solicitation of a bribe. It is how to do it professionally,” he says.
Talbot feels obliged to report any potentially corrupt encounter to the relevant fraud hotline. Unfortunately, he says, in the past multiple attempts have yielded absolutely no response.
“This time, our call was answered by a top global auditing firm, a reference number issued and a commitment for feedback within a specific timeframe made.”
Could this be a small step forward in the right direction? Haycock hopes it is.
“We see integrity as a big differentiator, even if it means losing business to companies that don’t hold themselves to the same ethical standards.”
Working for a number of blue-chip companies that comply with international bribery and corruption legislation, trust has to be the default position and integrity a conversation that Talbot constantly revisits.