Latest news with #economiclosses
Zawya
4 days ago
- Business
- Zawya
South Africa's infrastructure crippled: Can ISO 37001 fight back against the construction mafia?
Criminal syndicates known as the construction mafia have crippled South Africa's infrastructure sector, hijacking more than 180 projects and inflicting an estimated R63bn in economic losses, according to the National Treasury. Operating under the guise of community forums, these groups use intimidation, extortion, and violence to secure a foothold in government tenders and construction contracts. While law enforcement has begun to respond, 745 extortion cases have been reported, and 240 arrests have been made since November 2024. Public Works and Infrastructure Minister Dean Macpherson admits that this is only the beginning. "We are turning the tide," he said recently, but warned that corruption remains deeply entrenched in procurement systems and local government supply chains. Against this backdrop, experts at WWISE (Worldwide Industrial and Systems Engineers) are calling for the widespread adoption of ISO 37001, a tool they believe could play a critical role in fortifying the sector from within. 'This may be South Africa's last line of defence if we want to build infrastructure without bribery or intimidation,' says Muhammad Ali, managing director at WWISE. 'ISO 37001 helps organisations embed ethical conduct into every stage of a project, from procurement to execution, making it harder for criminal networks to manipulate the system.' Global anti-bribery benchmark ISO 37001 is not just a policy; it's a globally recognised standard, or in other words, a formalised, best-practice framework developed by international experts to help organisations detect and prevent bribery. As a standard, ISO 37001 establishes a uniform, auditable benchmark for anti-bribery management across industries, enabling companies and governments to foster transparency, demonstrate accountability, and safeguard their reputations. 'The standard requires top-level leadership commitment, risk assessments, strict financial controls, and confidential reporting systems,' explains Ali. 'It doesn't just help companies avoid corruption, it actively reshapes their culture.' Corruption in the construction industry not only inflates costs but also endangers lives. Ali notes that criminal infiltration has led to shutdowns, missed milestones, and Service Level Agreement (SLA) penalties. 'We've seen cases where construction mafia threats delayed entire projects, with local authorities often turning a blind eye, or worse, getting a cut,' he says. Unchecked hiring hazards Van Zyl Krause, technical specialist at WWISE, warns that companies often feel forced to hire unqualified labour to avoid conflict. 'These so-called 'community contractors' are often unregistered, uninsured, and unsafe,' Krause says. 'That puts the principal contractor and everyone on site at risk, while forcing them to spend even more on private security.' ISO 37001 offers practical safeguards. It ensures that tender documents are traceable and auditable. It enforces ethical vetting of suppliers and enshrines whistleblower protection through encrypted systems. 'You can't bribe your way into a tender process governed by ISO 37001,' says Ali. Yet adoption of the standard remains frustratingly limited. 'Most construction companies in South Africa haven't implemented it,' Krause says. 'The only time we see ISO 37001 considered is when international investors require it.' Ali adds that public-sector resistance is particularly troubling. 'The fear is that ISO 37001 will expose misconduct,' he says. 'But that's the point. The excuses, 'too complex', 'too bureaucratic', don't hold water. This standard can be adapted to any organisation.' He points to a compelling case in Iraq, where a security company under attack from corrupt government officials used ISO 37001 to clear its name. 'The audits exposed the wrongdoing, and the officials were jailed. That's the power of a strong, standardised anti-bribery framework.' For smaller contractors, who are often the most vulnerable to extortion, ISO 37001 can provide an essential shield if supported by law enforcement. 'The problem may not be with the company,' Ali warns, 'but when it needs support, the authorities often fall short.' Standards drive reform WWISE urges companies to begin their journey with a Gap Assessment to identify risk areas, followed by a structured implementation process that includes internal training, documentation development, internal audits, and certification. 'This isn't a checkbox exercise,' says Ali. 'It's a roadmap to ethical business.' With billions at stake and a growing list of sabotaged projects, it's clear that arrests alone won't be enough. As Minister Macpherson rallies law enforcement, experts say South Africa must also rebuild its infrastructure sector from the inside out, with internationally recognised standards, such as ISO 37001, leading the way. 'If we don't change how we build,' says Ali, 'we'll keep rebuilding what criminals destroy.'
Bloomberg
6 days ago
- Business
- Bloomberg
How AI Could Change the Future of Weather Forecasts
Technology Explainer Weather forecasting helps industries avert billions in losses from extreme events, and AI could make predictions faster, cheaper and more accurate. Weather forecasting has gone through incremental but tremendous progress in past decades. By one metric, today's five-day forecast is now as accurate as a three-day forecast was in 2000. Entire ecosystems rely on weather forecasting, and any improvements — particularly as climate change heightens weather volatility — can help not just individuals to better manage risks, but also entire industries to avert billions in economic losses. In the US alone, an estimated one-third of the economy, or about $3 trillion, is sensitive to the weather and climate.
Bloomberg
09-05-2025
- Business
- Bloomberg
Disaster spending hits new highs
Costs rise to 3.3% of GDP, with Carolinas hardest hit Climate-related costs have risen to a record in dollar terms over the past year, but as a percent of GDP the 3.3% is still slightly less than in 2017 (Hurricanes Harvey, Irma) and 2005 (Hurricane Katrina). At the state level, North and South Carolina were particularly hard hit by Hurricane Helene, which caused over $78 billion in economic losses, equivalent to around 8-9% in local GDP terms, according to BI's Climate Damages Tracker. Peril premiums hit $310 billion, but cushion eroding The rise in fires, floods and storms has forced insurers to reprice risk over the past several years, raising rates by as much as 22% in 2023 and pushing total multi-peril premiums (home, fire, commercial, farmer and allied lines) above $300 billion, according to the National Association of Insurance Commissioners. S&P Global expects premiums to rise 6.2% in 2025. The P&C industry has struggled to price these risks in a way that secures a stable stream of returns. Net premium after loss (total premiums less insured payouts) fell below zero in 2017 and approached zero three times in the past few years. The big 2023 rate hikes helped create a buffer for Allstate and other P&C insurers, but the cushion has been eroded in recent months by developments including an estimated $40 billion bill for the LA wildfires. Government spending starting to fade from sight Federal and state governments have provided nearly $1.3 trillion over the past 20 years to local communities to help them recover sooner from fires, floods and storms. Stimulus measures like the IRA and the infrastructure law have provided the most support ($600 billion), followed by FEMA ($320 billion) and the Department of Housing and Urban Development ($180 billion). States contributed $132 billion, largely in the form of matching funds. Though these funds have provided a needed lifeline to states, most of the programs are winding down, with President Donald Trump signaling that he wants states to take more responsibility for recovery efforts. Texas hardest hit by climate followed by California Total climate-related costs in the US have totaled $10 trillion over the past 20 years, according to the BI Climate Damages Tracker. At the state level, Texas has been hardest hit in dollar terms, with$1.1 trillion in costs, followed by California ($938 billion) and Florida ($763 billion). Though these costs are substantial, the overall size of these states' economies ($10.4 trillion combined) means the impacts on a GDP basis are generally lower than for lower-GDP states like Louisiana ($425 billion in damages, with a $327 billion GDP in 2024). How does BI's damages tracker calculate spending? In an effort to capture how climate-related costs flow back into the economy, the BI Damages Tracker assigns different spending curves to different types of costs. For example, insured losses, which are generally paid out over one year, with the majority paid in the first six month, are calculated using a 12-month gamma curve, which skews spending toward the first few months following the event. In this same way, uninsured losses are calculated using a 24-month gamma curve, and government spending is assessed with a 36-month gamma curve, which is based on distributions reviewed in federal spending reports.
