Supply Chain Management and the Fight Against Corruption: A South African Case Study

Since 1994, the South African government has many comprehensive legislative and regulatory frameworks regarding supply chain management principles. However, very few municipalities as well as national and provincial departments and entities have achieved clean audits. All of these laws and regulations relating to public procurement are implemented through a large number of independent statutory instruments with some catering for specific procurement practices and others for particular sectors of industries. In some respects such division of the rule is unproblematic and even inevitable. In general, however, this fragmentation of public supply Chain management (SCM) law results in a less-than-ideal regulatory regime. The empirical component of the article will compare five local municipalities, guided by a District Municipality and their supply chain policy implementation that have led to different results, showing conclusively that following SCM regulation is only a part of the problem. The difference lies in the details associated with a combination of factors such as the proliferation of suppliers that are not tax compliant failure to use comprehensive processes for quotations and bids, incorrect use of preference points systems, appointment of bid committee members not aligned with policy requirements insufficient motivation for deviations from SCM procedures, inadequate controls and procedures for handling bids and so forth. The comparative empirical example will pinpoint the existence of continuous poor policy implementation and operational flaws in institutional SCM oversight that open the door to corrupt practices as they are rooted in weaknesses such as the inability of employees to interpret and apply SCM policies and standards. On the other hand the reality of the existence that SCM is carried out within a decentralised legal framework at two distinct levels, operational and regulator will be analysed.