Corruption, misuse of state resources, compliance and ethics: Is the law retreating?

• Jurisdiction: South Africa
• Published date: 16 August 2019
• Author: Kana, A.A.
• Date: 16 August 2019
• Pages: 47-81
• Citation: (2018) 4(1) JCCL&P 47

47

CORRUPTION, MISUSE OF STATE

RESOURCES, COMPLIANCE AND

ETHICS: IS THE LAW RETREATING?*

ABDULKARIM ABUBAKAR KANA†

Associate Professor, the Honourable Attorney General, Commissioner for

Justice, Nasarawa State, Dean Emeritus of the Faculty of Law,

Nasarawa State University

ABSTRACT

Like ignorance, poverty, terrorism and environmental degradation,

corruption is a great enemy of development. The past few years have

seen growing public discussion of the problem; today, terrorism,

climate change and corruption are successfully competing for the

attention of both the media and policymakers. Corruption and

business are strange bedfellows, but always remain travel mates. This

is because the ultimate aim of every business is to maximise profit

while adopting any means possible to defeat competitors, including

unethical options, to secure advantage. The same applies to the

public sector in the utilisation of state resources, where weak policy

frameworks and compliance mechanisms are the prominent vectors

of corruption. But, the question whether law and punishment are

enough to curb corruption in both the public and private sectors

remains unresolved. This paper sets the stage for discussion and further

research emphasising internal control and compliance mechanisms

synchronised with social welfare elements, while the penological

approach remains the final and ultimate option. The paper proposes

a more acceptable definition of corruption, its possible causes and

negative impacts and an integrated solution to curtailing corruption,

misuse of state resources, unethical practices and the enhancement

of compliance capabilities of institutions.

I INTRODUCTION

Corruption is a manifestation, an end product or outcome of a

multiplicity of actions that are debilitative to society. Most non-

violent crimes perpetrated with the aim of gaining private or personal

* Keynote Address at the Annual Conference on Law and Business (ACLB) at

Monash South Africa, 19 to 21 July 2018.

†LLB, LLM, PhD.

(2018) 4(1) JCCL&P 47

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(2018) 4 (1) JOURNAL OF CORPORATE AND COMMERCIAL LAW & PRACTICE

advantage to an individual or particular group of persons as against

the interest of the generality of a group or the society are literally

considered to be corruption. Sometimes even moral turpitude is

classified as corruption.1

However, corruption becomes a worrisome issue when it goes a

step further, beyond moral misdemeanours, to real infringement of

existing legislation or law. In other words, corruption is a crime, but

a more dangerous crime because of its cankerworm nature and the

tendency to be tolerated as normal while it gradually eats up the fabric

of the polity. Corruption is unlike violent crimes such as robbery and

burglary generally condemned by the public, and the perpetrators

detested as wicked criminals because of the violent nature of such

crimes, despite the fact that such violent crimes cannot match up to

corruption in terms of the capital and colossal assets that are lost.2

Corruption is a crime of opportunity; it flourishes where chances

of escape from the law outweigh the possibility of being caught. In

a situation like that, no matter the stringency of the punishment,

subjects will opt to try their luck. This is why jurisdictions with the

most severe punishments for corruption in their statute books still

record high incidences of corruption, while states with advanced

internal control mechanisms appear to be dealing with the situation

better. Furthermore my nearly twenty years of research in the area

of corruption has left me with no option other than to reach the

conclusion that there are two motivations for corruption, compulsive

and impulsive. This is because while social and economic conditions

compounded by low wages and poor working conditions are found

to have contributed to breeding corruption in certain establishments,

there are also many other cases of corruption actuated by outright

greed, vanity and covetousness. Common in both situations is the

fact that the perpetrators are encouraged by weak or absolute lack of

control and compliance mechanisms in the system.

Administrators and policymakers should now be more concerned

about understanding the thin line between legitimate and illegitimate

incomes and benefits, intricacies of the peculiar establishment,

existing regulations, consequence of indifference to infractions,

and building or adopting an effective scientific and technologically

based control mechanism and compliance enforcement framework.

These cannot be attained unless the policymaker, the employer and

the employee understand the jurisprudential and criminological

perspective to the subject of corruption as a crime. Corruption, which

1 In certain societies moral delinquency may be generally regarded as corruption

even when there are no specific penal provisions, for instance addiction, lying,

fornication, smoking etc.

2 See Abdulkarim A Kana Corruption, Development and the Law in Nigeria (2014).

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CORRUPTION, MISUSE OF STATE RESOURCES, COMPLIANCE AND ETHICS:

IS THE LAW RETREATING?

is basically an avocational crime,3 is committed by public officers in

public or government corporations or by judicial officers in courts or

corporate workers in the private sector. The crime is committed by a

person in the course of performing his legitimate duty, and then the

officer embarks on a frolic of his own violating laws governing the

legitimate duty and breaching the compliance standards.

Research on the links between corruption, development and

stability as revealed by Pieter Bottelier, a Senior Adviser in the East

Asia and Pacific region, showed that corruption invariably increases

transaction costs and uncertainty in an economy while lowering

efficiency. It leads to misallocation of scarce resources while distorting

investment priorities and technology choice. Corruption reduces

the transparency of economic transactions by both state owned

(government) and private sector firms while undercutting the state’s

ability to raise revenues. Corruption is therefore often associated

with fiscal weakness which in turn may force the state to levy ever-

higher tax rates on fewer tax payers, while reducing its ability to

provide essential public goods and services.4

Corruption weakens the state and its ability to promote

development and social justice. It is regressive in the sense that its

cost and negative economic impact tend to fall more heavily on

small enterprises and on individuals in a weak economic position.

Corruption is double jeopardy for the poor and unprotected. They

pay high bribes in order to evade taxes or to secure their legitimate

social rights; while they are continually deprived of such essential

government services. Corruption undermines the state’s legitimacy

and, in extreme cases, may render a country ungovernable and lead

to political instability and a total breakdown of law and order, as

experienced in many developing countries.

Corruption undermines the soundness of financial institutions

and contributes to systemic crises. It is often associated with poor

accounting standards, weak supervision of financial institutions,

cronyism and nepotism. An example is that of the collapse of Enron

in the United States of America as a consequence of poor accounting

standards and weak supervision by the relevant bodies in the course

of the company’s transactions and compromise of compliance

consultants.5

3 See generally Gilbert Geize ‘Avocational crime’ in Daniel Glaser (ed) Handbook of

Criminology (1974) 292.

4 Pieter Bottelier ‘Corruption and development’, speech delivered at the International

Symposium on the Prevention and Control of Financial Fraud (Beijing; October 19,

1998).

5 The collapse of Enron led to the de facto dissolution of Arthur Andersen auditing

firm. I am afraid that this type of reputational challenge now faces KPMG South

Africa.

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