The Building Industry Bargaining Council says procurement processes remain a critical vulnerability, particularly where due diligence and contractor vetting are weak or inconsistently applied.
Image: Leon Lestrade/ Independent Newspapers
The Building Industry Bargaining Council (BIBC) has raised concerns that the blacklisting of 52 construction companies shows a wider culture of non-compliance in South Africa’s building industry.
In a statement released to the media, the BIBC said its analysis suggests that many of the affected firms are not only failing on specific contracts, but are also non-compliant across labour, tax, and other regulatory requirements.
“What we are seeing is a pattern where non-compliance in one area is almost always mirrored across others. It is rarely isolated to non-compliance with the BIBC only,” Danie Hattingh, spokesperson for business at the BIBC, said.
The BIBC said it identified 68 construction-related companies linked to the blacklist. Of these, only 12 were registered with the council, and all 12 were found to be non-compliant at the time of assessment.
“This directly supports our contention that non-compliance with one regulation strongly indicates non-compliance everywhere else,” Hattingh said.
“Whether it is labour obligations, tax compliance, or contractual delivery, the same patterns repeat.”
He said the implications are serious, warning that poor compliance drives substandard work, adding "that the problem is compounded by a system that can enable repeat offenders to re-enter the market".
BIBC said non-compliant contractors often deregister, rename or re-establish entities, sometimes using associates and family members as the directors of new companies, to avoid detection.
“The trend towards ‘fronting’ companies is widespread and complex,” says Hattingh. Even if a new entity has no record of non-compliance, it can still be the same operators making it difficult for clients and procurement officials to know who they’re really dealing with.”
The BIBC said procurement processes are a key vulnerability, with weak or inconsistent tender requirements allowing non-compliant contractors to slip through.
“The role of ‘givers of work’ (government, municipalities, SOEs and private clients) is central,” says Hattingh.
“From tender design to contract monitoring, procurement decisions either strengthen compliance or undermine it.”
mthobisi.nozulela@iol.co.za
IOL Business