South Africa: Construction companies and contractors can collaborate to curb construction mafia mayhem

At the National Construction Summit this month, South Africa's Public Works & Infrastructure Minister Dean Macpherson said that more than 700 construction-related extortion and intimidation cases had been reported country-wide, with 241 arrests and 176 convictions since November 2024.

Amid positive signs that government action against the ‘construction mafia’ may be ramping up, there is room for the construction industry itself to be more proactive in mitigating the risks of construction-related extortion and disruption.

Through a combination of contractual measures and practical steps, it should be possible to prevent, or at least mitigate, the damage and disruption of construction sites and projects.

Up to now, contractual remedies aimed at managing the risk of disruptions from the construction mafia have been reactive and almost fatalistic, limited largely to the granting of time relief under force majeure clauses. In some instances, there is no relief at all where conservative employers and lenders in large infrastructure projects fail to appreciate the multi-faceted nature of this challenge. #

There has been little focus on measures that require contractors to take pre-emptive action to address and mitigate the risks.

Employers and contractors should be less reactive and more collaborative, which would include contractors agreeing to take on certain contractual obligations around risk assessment, mitigation planning, reporting, insurance, security, community engagement and emergency preparedness, among others.

These obligations need not be spelt out in precise detail in the contract, but should rather be broadly framed – with some minimum requirements and standards – because the construction mafia and their operations are opportunistic, constantly shifting and evolving to gain maximum advantage.

Good planning can mitigate construction mafia risks

A cornerstone of contractors’ contractual obligations would be a community unrest mitigation plan (CUMP). This should include an initial risk assessment; an analysis of the potential impact of disruption on the project’s timelines, budgets and overall success; the form and frequency of engagement between the contractor and employer on risks; a private security strategy; an emergency response plan to deal with significant disruption or security breaches; and, crucially, a community engagement plan.

While all these measures are key components of a sound CUMP, the importance of effective community engagement cannot be overstated.

The 2017 Preferential Procurement Regulations provide for 30% of the value of contracts advertised for public tender to be subcontracted to certain designated groups, including exempted micro and small enterprises wholly owned by black people classified as youth, women or military veterans. Construction mafia have often exploited or misused this 30% provision by operating under the guise of local ‘community forums’ or ‘business forums’ claiming to represent the interests of designated groups.

It is vital to know what the legitimate community structures are and to cooperate with them to ensure credible local procurement of materials and labour, address any community concerns, mediate disputes, and keep the community informed about project progress – and prevent the construction mafia from getting a foot in the door.

Credible local intelligence, coupled with a knowledge of historic data on construction mafia in the area, can make all the difference when conducting a risk assessment or, should worse come to worst, lodging an effective urgent interdict application.

Urgent interdict preparedness

Knowing the leadership and dynamics in a particular community can make it easier to identify the individuals behind construction site disruption. One of the reasons why urgent interdict applications can be ineffective in the context of construction mafia threats, violence or work disruptions is that identifying the respondents can be challenging if they are not easily identifiable or operate under aliases.

Serving applications and court orders on respondents can also be problematic, especially if they are elusive or local law enforcement is uncooperative.

Given these potential hurdles, urgent interdict preparedness should be a fundamental part of the contractor’s emergency response plan within the CUMP, which means proactively assembling a rapid-response legal team and being ready early on with a streamlined process to gather and document evidence of disruption or threats.

These and related steps to address and mitigate construction mafia disruption are not quick fixes that can be put into place at a moment’s notice. They will take time and effort to establish, test and perfect, but putting in the effort as early on as possible is preferable by far to being caught off guard and suffering project delays, overruns and financial losses.

Further, the Department of Public Works and Infrastructure's Construction Industry Development Board is collaborating with the Private Security Industry Regulatory Authority to address the problem of extortionists posing as private security firms. Construction-related regulations to the Public Procurement Act are also in progress.

The threat that the construction mafia presents to the industry and the economy is urgent and severe but with the government signalling the will to act and employers and contractors being proactive and practical, there is light at the end of the tunnel.

Alessandra Pardini is Head of Projects, Energy and Infrastructure in Bowmans’ Johannesburg office. Wihan Meintjes is a partner whose primary practice area is international arbitration, particularly within the built environment. Simonne Heunis is a partner with experience in a wide range of commercial and corporate transactions in the infrastructure space. Candidate Legal Practitioner Sarah Longdon also contributed to this article.