South Africa’s construction mafia uses violence, extortion, and sabotage

Members of South Africa’s construction mafia are willing to kill, extort, and economically cripple projects and businesses should they not get what they want. This has seen the country lose billions.

Sentebale Makara, Cliffe Dekker Hofmeyer’s director in dispute resolution practice and the construction and engineering sector, shared this information in the firm’s latest webcast.

Makara explained that the construction mafia refers to groups, sometimes called ‘business forums’ or ‘local community interest groups’, who operate by asking various demands at construction sites.

These demands are often made through intimidation and sometimes disguised as job opportunities sought by communities at local construction sites.

Makara explained that these groups are a byproduct of the misinterpretation or the opportunistic interpretation of the Preferential Procurement Policy Framework Act.

This Act provides for 30% community involvement or benefits from construction projects that must be invested in local communities. 

“This has been the so-called loophole that some of these so-called business forums or mafia operatives have used to extort projects but, more importantly, also hold ransom many of the projects that have been plagued by such disruptions,” he said.

This has come at a great cost to construction companies and South Africa in general.

Since 2019, about 180 projects have been affected by this problem, which has cumulated in excess of R60 billion that has been lost due to extortion, violence and sabotage.

He further explained that people often comply with the mafia’s demands because “they’re willing to kill, we’ve seen that they are willing to extort and also economically crippled projects should they not get what they wish”.

The modus operandi typically begins with interference from local youth groups or business forums. 

This interference often starts with a formal letter requesting a meeting with the project manager or key personnel on a construction site. 

These forums frequently cite the 30% preferential procurement provisions as their justification, but Makara said their actions often go beyond lawful engagement.

Initially, these groups may seek subcontracting opportunities. However, their broader aim often involves bypassing established procurement protocols, disregarding requests for proposals (RFPs), and forcing their way into projects. 

They exploit existing laws on community engagement, misinterpreting or opportunistically interpreting them to assert influence over the project.

Site managers often become the direct targets of these demands. In some cases, these groups recruit residents from the geographical area where the project is based, creating an appearance of community involvement. 

However, Makara said there’s also evidence of political interference and opportunism, particularly around election periods. 

Therefore, South Africa’s 2024 elections mean construction problems have been riddled with this problem.

Makara said that there has been a surge in vulnerable projects in the lead-up to this year’s elections.

The elections provided fertile ground for such activities, with political dynamics like transitions between political leaders further complicating enforcement.

One of the biggest challenges in addressing these disruptions has been identifying the culprits. 

Legal interdicts are often hindered by the revolving nature of those involved – new individuals or groups frequently step in to replace those previously identified. 

In some cases, individuals are brought in from outside the community to escalate disruptions, ultimately forcing site closures or compelling contractors to negotiate with the disruptors to continue their work.

As this problem has grown in prevalence, there has been some government response to address it.

Makara said the government has responded by introducing new policies and legislation, such as the Public Procurement and Regulatory Act (PPRA) and the Prevention and Combating of Corrupt Activities Act (PRECCA). 

However, he said enforcement remains problematic. 

For example, arrests are often for tangential issues, such as unlawful possession of firearms, rather than addressing the core problem of extortion. 

Makara said this gap highlights the need for more robust legislative frameworks and better training for law enforcement to understand the broader conspiracy and operational tactics of the construction mafia.

He cited a community-centric approach as an effective strategy for mitigating these issues. 

Construction companies must engage with communities at all stages of the project, involving community leaders, community liaison officers, and corporate social investment (CSI) initiatives. 

In addition, maintaining comprehensive records of incidents and reporting them promptly can prevent extortionists from thriving in an environment of silence and fear.

Ultimately, Makara said protecting construction projects requires active community involvement and transparency, ensuring that these developments benefit the communities they are meant to serve rather than falling prey to criminal elements.