Second National Stakeholders Conference on Competition Topic

Second National Stakeholders Conference on Competition Topic Corruption and Competition by Barney Rustle Masupe from Directorate on Corruption and Economic Crime Corruption and Competition at GICC 14/03/2013 B. R. Masupe. DCEC.

Introduction The Botswana Government established the Directorate on Corruption and Economic Crime (DCEC) under the Corruption and Economic Crime Act (CECA) of 1994. DCEC exists to fight corruption through the three pronged strategy of:- Investigation Prevention Education Corruption and Competition at GICC 14/03/2013 B. R. Masupe. DCEC.

Overview INVESTIGATION:- Investigates cases of corrupt activities or practices and encourages ethical conduct in the work place. PREVENTION:- Conducts assignment studies and systems audits on processes such as Human Resource; Finance Administration; Procurement and etc EDUCATION:- Educates the public on the evils of corruption in the society and solicits support of the public in the fight against corruption. Corruption and Competition at GICC 14/03/2013 B. R. Masupe. DCEC.

Definition of Corruption In broad terms corruption can be referred to as: The use of public office for private gain, The use of official position for personal benefit. . Corruption and Competition at GICC 14/03/2013 B. R. Masupe. DCEC.

Explanation of Corruption There is no universal definition for corruption. However, Section 23 of Botswana CECA of 1994 does not define corruption but, Provides a list of activities that equate to corrupt practices. Corruption and Competition at GICC 14/03/2013 B. R. Masupe. DCEC.

Corrupt Practice Activities Soliciting, offering, receiving or promising to offer valuable consideration Doing or acting on what you are supposed to do for personal gain Failing to do or omitting what you are supposed to do for a reward Corruption and Competition at GICC 14/03/2013 B. R. Masupe. DCEC.

Examples of Corruption The following are examples, but not limited to:Bribery Extortion Fraud Embezzlement Nepotism Insider trading Corruption and Competition at GICC 14/03/2013 B. R. Masupe. DCEC.

Corruption and the Private Sector Corruption does not belong to the public sphere only. The employees of a private company who violates their contract with the employer or shareholders in order to pursue thier own gain can also be considered corrupt Corruption and Competition at GICC 14/03/2013 B. R. Masupe. DCEC.

Conflict of Interest Corruption also includes revolving-door agreements, whereby officials end up as employees or consultants in companies and industries with respect to which they had previously played a public role. Corruption and Competition at GICC 14/03/2013 B. R. Masupe. DCEC.

Corruption and Competition Companies may be involved in various schemes of obtaining market advantage, Some companies expect to pay a bribe, and normally some officials will gladly accept. Another issue of corruption is to facilitate collusion in price between companies Corruption and Competition at GICC 14/03/2013 B. R. Masupe. DCEC.

Corruption and Competition 1. A mechanical effect of corruption is to increase the contract price by an amount corresponding to the anticipated bribe. 2. The result is usually higher prices for consumers, 3. or there will be reduced quality of goods and 4. There will be poor service delivery. Corruption and Competition at GICC 14/03/2013 B. R. Masupe. DCEC.

Corruption and Competition Market power has adverse effects on industrial development, because incentives to operate competitively are reduced. When competition among suppliers increases as a consequence of the increase of their number, corruption may increase. Corruption and Competition at GICC 14/03/2013 B. R. Masupe. DCEC.

Impact of Corruption From an anti-corruption perspective it is therefore critically important to be able to distinguish between welfare-improving decisions, and those that are made to the benefit of individual companies and at the cost of welfare for the population at large. . Corruption and Competition at GICC 14/03/2013 B. R. Masupe. DCEC.

Impact of Corruption on Competition 1. Corruption is an anti-competition practice brought about by materialistic mentality, 2. This is as result of people who are greedy and have no regard for promotion of public good. 3. Such individuals compete for power, positions and resources available. 4. This competition leads to a state of individualism and perpetrators become egocentric. Corruption and Competition at GICC 14/03/2013 B. R. Masupe. DCEC.

Corruption as a Trend 1. Corruption is a pervasive and persistent problem, and takes on many different forms. 2. Corruption has many damaging effects in any economy, 3. This includes the distortion of incentives and misallocation of resources. Corruption and Competition at GICC 14/03/2013 B. R. Masupe. DCEC.

Conclusion. Corruption on Competition does the following: 1. It erodes social moral fabric 2. It brings about poor work ethic 3. It increases social inequality 4. Leads to poor or no public service delivery Corruption and Competition at GICC 14/03/2013 B. R. Masupe. DCEC.

Way Forward DCEC and other organization have signed or are currently working on Memorandum of Understanding. 1. Parastatals Institutions: e.g. Public Procurement and Asset Disposal Board and Competition Authority 2. Private Companies:- e.g. Business against Corruption ; BOCCIM. 3. Non-Governmental Organizations e.g. Junior Achievement Botswana and Botswana Institute of Directors. Corruption and Competition at GICC 14/03/2013 B. R. Masupe. DCEC.

Thank you Corruption and Competition at GICC 14/03/2013 B. R. Masupe. DCEC.

CECA 1994 PART IV Offences (ss23-38) For the purpose of this part, “valuable consideration “meansa) Any gift, benefit, loan, fee, reward or commission consisting of money or of any valuable security or of other property or interest in property of any description; b) Any office, employment or contract; c) Any payment, release, discharge or liquidation of any loan, obligation or other liability, whether in whole or in part; d) Any other service, or favour including protection from any penalty or disability incurrent or apprehended or from any action or proceedings of a disciplinary, civil or criminal nature, whether or not already instituted; e) The exercise or forbearance from the exercise of any right or any power or duty, and f) Any offer, undertaking or promise whether conditional or unconditional, of any valuable consideration within the meaning of the provisions of any of the preceeding paragraphs. Corruption and Competition at GICC 14/03/2013 B. R. Masupe. DCEC.