Organised crime – cash flow (Photo credit: Wikipedia)
Written by Khalil Goga (1)
It is argued that in an increasingly borderless world, transnational criminal groups have developed the ability to manoeuvre, prosper and become a dangerous threat to the world system. Increasing levels of transnational criminality in a post-Cold War world and a focus on linkages between organised criminal groups and terrorist groups have brought attention to the effects of organised crime across the globe.
Within South Africa, crime in general has become a national concern since the demise of apartheid. High murder rates and significant property crime rates have led to South Africa being referred to as “the crime capital of the world” with some comparative justification.(2) While the focus on crime in South Africa has often been on the extraordinary levels of violent crime; global, regional and domestic factors have contributed to a growing awareness of the implications of transnational organised crime. A recent estimate by State Security Minister, Siyabonga Cwele, approximated that South Africa lost 10% of its gross domestic product (GDP), estimated at ZAR 178 billion (US$ 21 billion) a year, to the “illicit economy.”(3)
Globalisation has often been cited as a major cause of increasing transnational organised crime.(4) The compression of time and space (5) is seen to facilitate the exchanges of goods, people and finance across borders at a faster rate than ever before, which, in turn, facilitates illicit exchanges. Simultaneously, globalisation has also benefited states in their ability to prohibit and prosecute transnational criminals, and there have been a growing number of cooperative regional and international efforts by states to combat transnational organised crime.(6)
This paper, therefore, critically engages with the relationship between globalisation and transnational organised crime in South Africa.
Defining organised crime
Given the conflation of terminology related to both organised crime and globalisation, there is a clear definition related to the subject matter. When using the term ‘organised crime’, the focus has often been on organised criminal groups such as the Mafia or Japanese Yakuza. Moreover, the focus on these criminal groups has often been one of a hierarchal structure with a ‘godfather’ type personality who controls the organisation.(7) Whilst this has been the dominant paradigm on which organised crime literature has been built, there is increasing evidence of a smaller, more network-orientated approach by organised criminals with more fluid networks, providing criminal organisations with “diversity, flexibility, low visibility, and longevity.”(8)
Organised crime has also been used to refer to “activities.”(9) Thus, a group of criminals engaging in a criminal activity falls under an ‘activity’ and, therefore, constitutes an organised crime. In this paper, the focus is on activities rather than organised crime groups given the changing nature of organised crime groups. Furthermore, focusing on organised crime groups as a differentiation between what is perceived as organised crime and white collar/commercial crime, has been particularly misleading to researchers, because this differentiation (between white collar and organised crime) has been focused on the separation between the ‘respectable classes’ and the ‘criminal classes’ without a proper basis.(10) Often the criminal network is made up of a variety of ‘shady’ and ‘not so shady’ (11) characters, which could include members of the respectable classes (such as lawyers, accountants, politicians). Thus, a focus on organised criminal activities would provide a more critical and focused approach to a study.
It is claimed that the process of globalisation facilitates transnational crime as well as the networks between organised crime syndicates. This is referred to as the “dark side of globalisation.”(12) In simple terms, “the very patterns and dynamics that make globalisation possible and effective as a positive force in the world also give rise to the ‘collateral’ negative; that is criminal, consequences and facilitate the spawning and rapid growth of transnational crimes.”(13) There is, however, an alternative view, proponents of which believe that the severity of transnational crime is greatly exaggerated, as Andreas states:
“There are inherent limits to how much states can deter and interdict illicit cross-border economic activities, especially if they wish to maintain open societies and keep borders open for legitimate crossborder flows. But the sky is not falling. Prominent accounts of illicit globalisation that suggest otherwise are overstated and overblown. Nevertheless, these accounts continue to dominate the public debate with a seductively simple and attention-grabbing story line.”(14)
Bearing in mind these two alternative views, there is the need to critically engage with the relationship between transnational organised crime in a globalised world as the relationship between crime and globalisation is complex with aspects that are both positive and negative.
Factors that influence the relationship between globalisation and transnational crime
Factor 1: Increased trade and increasing cross-border activity stimulates transnational organised crime.
Part of the globalisation process is the increase in trade across borders and an increasing interdependence between states. It is argued that this increased trade provides an environment that is highly conducive to the activities of transnational organised criminal groups. This is because the opportunities to embed illicit goods in licit transactions have multiplied and are continuing to increase, while problems of inspection and monitoring have become even more formidable.(15) However, Naylor argues to the contrary, stating:
“…while it is doubtless true that there is more economic crime across borders today, there is also much more legal business, and no proof that the proportion of illegality is increasing faster. Indeed, to the extent that exchanges are becoming liberalised, flows more transparent, taxes cut and regulations relaxed, illicit traffic across borders is more likely to be shrinking relative to total economic transactions.”(16)
Within South Africa, the opening up of the borders post-apartheid resulted in a massive increase in transnational organised crime. Local criminals began exporting and collaborating with foreign nationals and many foreign nationals began using South Africa as a home base of operations. South Africa also became a target market for illicit goods.(17) The largest economy in Africa and a member of the BRICS, South Africa also has large, busy ports and is heavily tied to the international economy. South Africa’s involvement in the world economy provides a better cover for illicit goods than other African states. For example, it is easier to hide contraband in one container if there are another 1,000 containers to be checked instead of just 100. At the same time, the inability of the country to check all the containers would help the criminals involved.(18) However, whilst South Africa’s involvement in the Global Political Economy (GPE) has grown, it is difficult to prove that transnational crime has accelerated at the same pace in the last few years.(19) Moreover, continued apprehension of suspects in transnational crimes could also be a sign of a more efficient police force rather than a lack of capacity.(20)
Factor 2: The use of technology
It is argued that the rise of transnational organised crime groups is spurred on by technological innovations, especially advances in telecommunications and the use of computers in business. Central to this process are innovations in satellite technology, fiber-optic cables, and the miniaturisation of computers, all of which facilitate operations across frontiers.(21) One of the more noticeable developments is the use of technology to commit ‘cybercrime’. Hacking and fraudulent activities using computers make it possible to commit crimes across borders. The notorious 419 scam of advanced fee fraud developed from a letter-based operation into an electronic version I which e-mails were sent to a far bigger audience with a quicker response in terms of electronic deposits. Within South Africa, a “report released by the Southern African Banking Risk Information Centre (SABRIC) in 2010 ranks South Africa as the 3rd most victimised country, after the US and UK, with regards to online banking manipulation or phishing.”(22) Importantly, while some of this crime develops within South Africa, Nigeria is considered the source of most malicious Internet activity in Africa.(23)
Factor 3: Finance
A major part of the globalising process is that money and finance can easily be moved and transferred across the globe with increased speed. This has, in turn, made money laundering a more global endeavour for many criminals. The licit and illicit are so interwoven, and the profits from illicit markets across the globe have become so immense that in 2009 Antonio Maria Costa, head of the United Nations Office on Drugs and Crime (UNODC), made the startling statement that globalised illicit finance had become so imbedded in the global financial system that during the 2008 financial crisis, it was drug money that kept the financial system and many banks afloat.(24) While this statement errs on the side of the dramatic, illicit money coming from commercial, organised and, occasionally street crime, must be ‘cleaned’ by financial institutions.
It is, however, argued that despite the challenges, it is now harder to move and launder money than before.(25) Whilst South Africa’s advanced financial sector has been seen as a place to both clean and ‘unclean’ money, there is increasingly tough legislation and increased capacity emanating from within the country and from global pressures such as the Financial Action Task Force (FATF). Anecdotal evidence points out that more stringent requirements for financial transactions have resulted in many criminals not being able to move their money.(26)
Factor 4: Networks
It is also argued that due to the time-space compression, it is easier to create and maintain criminal networks. These include multiple actors and groups in the supply chain of transnational drug trafficking and although the ‘Pax Mafioso’ (27) seems premature, an important driver of networking is increased migration. Some of these networks can be associated with ethnicity. An example of globalised network is illustrated by what the Federal Bureau of Investigation (FBI) terms Nigerian criminal enterprises.(28) The FBI believes that Nigerians use large ethnic populations across the globe to access and distribute drugs across the world.(29) Evidence within South Africa suggests a link between immigrants and transnational organised crime. There are also a number of created networks where local and international criminals have worked together to commit crime.
Global prohibition and prevention
Yet, at the same time, whilst the state remains integral to the limitation and prohibition of transnational organised crime, there is the influence of ‘globalising forces’ on the state sovereignty. What this means is that more geo-politically powerful states often set the agenda of international policy and, in turn, prohibition. Often what is criminalised is done so as a result of lobbying based on moral, political or economic reasons, and this has a disproportionate impact on minorities and geo-politically weaker states.(30) One of the most striking examples is in the United States, where demand for illegal drugs has had a devastating impact across Central and South American countries despite leaders of South American countries attesting to the failure of the war on drugs.
Whilst international powers set the agenda for prohibition, globalisation has resulted in more co-ordinated efforts by many countries to enforce laws and has led to a harmonisation and creation of a number of legislative and law enforcement tools to combat transnational crime. These include UN efforts against drug trafficking, organised crime, human trafficking, money laundering and extradition agreements. Within South Africa, globalisation has led to increased and easier cooperation and coordination of anti-crime efforts by, for example, creating Interpol or, more continentally, the African Union’s ‘Revised AU Plan of Action on Drug Control and Crime Prevention (2007-2012)’ and, regionally, the growing concern among regional police agencies over the epic proportions of cross-border crime led to the formation of the Southern African Police Chiefs Cooperation Organisation (SARPCCO) in 1995. Harmonised and global efforts to stop crimes such as piracy and slavery in the past have proved fruitful and it is possible that such efforts (alongside new approaches) could hold the key to stemming transnational organised crime.
In conclusion, it should be noted that the relationship between globalisation and transnational crime is not unidirectional. Whilst sensationalist accounts, both globally and within the country, have portrayed transnational crime as an unstoppable force, there is evidence to show that efficient national and multinational efforts can stabilise and reduce transnational crime. The globalising process need not be a lost cause in terms of transnational crime as the opening of relationships in terms of finances, immigration, extradition and joint enforcement can pose a greater threat to transnational criminal enterprises than previously thought. Within South Africa, the end of isolation brought with it an opening of borders to an unprepared and changing police force, which led to an increase in transnational crime. However, with the correct policies, efficient management and multilateral efforts, there is no reason why transnational organised crime should not be limited and reduced.
(1) Contact Khalil Goga through Consultancy Africa Intelligence’s Conflict and Terrorism unit ( conflict.terrorism.@consultancyafrica.com).
(2) Masuku, S., 2001. South Africa, World Crime Capital? Nedbank ISS Crime Index 5(1,. http://www.iss.co.za.
(3) Hartley, W., ‘SA loses 10% of GDP to illicit economy’, Business day, 3 June 2011, http://www.businessday.co.za.
(4) Naim, M., 2005. Illicit: How smugglers, traffickers and copycats are hijacking the global economy. Doubleday: New York.
(5) Harvey, D., 1990. The condition of postmodernity: An enquiry into the origins of cultural change. Blackwell: Cambridge, MA.
(6) Andreas, P. and Nadelmann, E., 2006. Policing the globe: Criminalisation and crime control in international relations. Oxford University Press: Oxford.
(7) Standing, A., 2003. Rival views of organised crime. ISS monograph series, 77. http://www.iss.co.za.
(8) ‘The Globalisation of Crime’, United Nations Office on Drugs and Crime, 2010, http://www.unodc.org.
(9) Hagan, F., 2006. ‘“Organised Crime” and “organised crime”: Indeterminate problems of definitions. Trends in Organised Crime, 9(4), pp. 127-137.
(10) Woodwiss, M., 2000. Organised crime – The dumbing of discourse. British Society of Criminology. The British Criminology Conference: Selected Proceedings, 3.
(11) Mandel, R., 2011. Dark logic: Transnational criminal tactics and global security. Stanford University Press: Stanford.
(12) Naim, M., 2005. Illicit: How smugglers, traffickers and copycats are hijacking the global economy. Doubleday: New York. ; Mandel, R., 2011. Dark logic: Transnational criminal tactics and global security. Stanford University Press: Stanford.
(13) Viano, E., 2009. Globalisation, transnational crime and state power: The need for a new criminology. Rivista di Criminologia, Vittimologia e Sicurezza, 3(4), pp. 63-85.
(14) Andreas, P., 2011. Illicit globalisation: Myths, misconceptions, and historical lessons. Political Science Quarterly, 126 (3), pp. 63-64. Also, importantly, transnational crime ‘facts’ and statistics are often misleading and incorrect due to a variety of methodological issues and political engineering. For more information, see Andreas, P., 2010. Sex, Drugs and Body Counts. Cornell University Press: New York.
(15) ‘The Globalisation of Crime’, United Nations Office on Drugs and Crime, 2010, http://www.unodc.org.
(16) Naylor, R.T,. ‘Malboro Men’. London Review of Books, 29(6), March 2007.
(17) Hübschle, A., Organised crime in Southern Africa: First annual review, Institute for Security Studies, 2010, http://www.iss.co.za.
(18) Patrick, S,. 2011. Weak links: Fragile states, global threats, and international security. Oxford University Press: Oxford.
(19) The post apartheid-period (1990) and for at least five years after there was a steady, noticeable increase in transnational crime.
(20) Andreas, P., 2010. Sex, drugs and body counts. Cornell University Press: New York.
(21) Mittelman, J and Johnston, R,. 1999. The globalisation of organised crime, the courtesan state, and the corruption of civil Society. Global Governance, (5), pp. 103-126.
(22) Hubschle, A., ‘The dark side of the Internet: Cybercrime’, Institute for Scurity Studies, 1 March 2011, http://www.iss.co.za.
(24) Syal, R., ‘Drug money saved banks in global crisis, claims UN advisor’, The Observer, 13 December 2009, http://www.guardian.co.uk.
(25) Naylor, R.T., 2002. Wages of crime: Black markets, illegal finance, and the underworld economy. Cornell University Press: Ithaca.
(26) Mthembu-Salter, G., 2006. “Money laundering in the South African real estate market today”, in Goredema, C. (ed.). Money laundering experiences. ISS monograph series 124.
(27) The term ‘Pax Mafioso’ was coined by Claire Sterling (1994) when she hypothesised that large criminal enterprises were colluding to form a global crime network.
(28) It should be noted that African criminals often get labelled as part of Nigerian organised crime despite not being Nigerian.
(29) ‘African Criminal Enterprises’, The Federal Bureau of Investigation, http://www.fbi.gov.
(30) Andreas, P. and Nadelmann, E., 2006. Policing the globe: Criminalisation and crime control in international relations. Oxford University Press: Oxford.
Monday, 04 June 2012 08:12