Commercial Crime:

Addressing the Inefficiencies

Published in Nedbank ISS Crime Index
Volume 2 1998
Number 5, September - October



Faced with the more immediate challenges of controlling violent crime, efforts to address commercial crime in South Africa have largely been invisible. However, in the light of renewed calls to tackle the culture of corruption — with a national summit planned — the effectiveness of the Commercial Crime Branch of the police, in particular, to increase the risk of being caught, is crucial.

Progress is being made to prevent these corrupting and costly crimes, largely through the work of the Business Against Crime Working Group on Commercial Crime, which comprises relevant stakeholders from the police, justice, business and civil society. Established in January 1996 with the objective to monitor, support, co-ordinate and facilitate the unblocking of the criminal justice system in addressing commercial crime, it is only now that some of the Working Group’s plans — with the necessary financial and political support — look likely to succeed.

Problems and responses

During 1997 a comprehensive report1 identified significant blockages and deficiencies influencing the efficiency of the criminal justice system in addressing commercial crime. The main obstacles identified, and around which projects were developed, are:
  • Structure and policy
  • Human resources
  • Specialised commercial crime courts
  • Case backlog
  • Training
  • Database and reporting systems
  • Legislation and policy

Structure and policy

There is a critical need to develop policy that will clarify the objectives of the detective service’s policy with reference to the specific needs of the Commercial Crime Branch. Addressing the policy and structure of this branch is a first priority as the other initiatives are dependent on the acceptance by the South African Police Service (SAPS) senior management of a viable management structure.

Therefore a project was started which, following wide consultation, is drafting a policy document. Once accepted by the SAPS executive, it will acknowledge the status and authority of the Commercial Crime Branch to act independently under certain circumstances and provide a structure for consultation with the national head of the commercial crime branch.



Figure 1 Cases under investigation (1994-97)

Source: Business Agianst Crime/South African Police Service

Human resources

In part, the Commercial Crime Branch’s poor performance in controlling crime is the result of a number of human resource factors including: shortage of skills; work overload; lack of planning; random changes in priority; reallocation of resources to other policing duties; and conflicts of interest between national objectives and local operations.

Investigators are also leaving the police because of work overload; few incentives to achievement recognition; no career path; loss of moral; and to take up positions in the private sector which offer better salary packages, work environments and career opportunities.

A closer look at the situation highlights the urgency. Generally 25 cases per qualified investigator is considered the upper limit for effective policing. In South Africa during 1997 more than 58000 cases were reported to the 860 investigators in the commercial branch (an average of more than 60 cases per investigator). Of these investigators, 240 have no investigative training and only 41 have had commercial training (see Figure 2). There is also a significant imbalance in the deployment of staff across various regions. For instance while Gauteng has the most reported cases of commercial crime only 11 investigators have been allocated to deal with 700 commercial crime cases.



Figure 2 Training of commerical crime investigators

Source: Business Against Crime/South African Police Service

This project is reviewing the existing situation and making recommendations based on a pilot initiative. In addition active recruitment policies to attract university graduates with legal and economics backgrounds as well as other qualified individuals are being mooted.

Specialised commercial crime courts

Recognising the specialised and often highly complex nature of commercial crimes, the objective of this initiative is to enable the criminal justice system to adjudicate commercial cases more quickly and effectively. Should funding be approved, the proposed 4-court pilot project will comprise of 4 magistrates, 10 prosecutors and 25 investigators working in multi-disciplinary teams to address the backlog of cases. While the initial funding will be from the private sector, in order to be a sustainable project both the Department of Justice and SAPS budgets will need to accommodate this initiative.

Case backlog

The criminal justice system is faced with a massive backlog of corruption cases pending adjudication (see Figure 1). Addressing the backlog of commercial cases effectively through the proposed specialised courts will illustrate to offenders and prospective offenders that their chances of escaping the legal consequences of their illegal acts are slim. It is envisaged that ten specialists (retired magistrates/prosecutors/investigators) will be appointed. They will review cases and make decisions as to whether or not to continue an investigation. While a business plan has been drawn up, its execution is dependent on finding sufficient funds.

Training

Currently only 41 of the 863 investigators in the Commercial Crime Branch have passed the Commercial Crime Course (Figure 2). Course material has been found to be outdated and insufficient. The envisaged course material, which will include training in new legislation and investigative techniques will enhance the crime combating capacity of the branch. In particular, skills will be improved in a number of areas including methods to combat money laundering, corruption and computer crime. Professionally trained investigators will be better equipped to co-operate with international law enforcement agencies.

Database and reporting system

The lack of expertise in the utilisation of the SAPS information systems has resulted in poor management and lack of information to the Commercial Crime Branch. Investigators have had little training and are not able to use the system effectively and this negative effect is compounded by a lack of equipment in offices. The project aims to provide for the development and implementation of training material as well as the enhancement of existing software packages.

Legislation and policy

The current legislation regulating business is inadequate for the Commercial Branch to do its job properly. For example, legislation is needed that can give the police powers to obtain information from the banks in a much easier way than the current procedure (given confidentiality between banks and their clients). At the moment this project is supporting the proposed amendment to the Proceeds of Crime Act (S13) pointed to in the Money Laundering Control Bill. In relation to a bank’s reporting obligations relating to suspicious transactions, the recommendation is supported that banks are allowed to bypass the constraint of client confidentiality and make substantiating evidence and other documentation available to the police.

Funding has been secured for some of these projects, however the challenge remains for relevant government departments to realign their budgets to accommodate projects focused at combating commercial crime. While short-term support from the private sector and international donors has been found, it is ultimately the duty of the state to provide the necessary resources to control commercial crime.

Lala Camerer,
Institute for Security Studies