Government’s blacklisting of 52 construction companies for poor performance, fraud and contract failures has put the spotlight back on a deeper problem: a widespread culture of non-compliance running through South Africa’s building industry.
That is the view of the Building Industry Bargaining Council (BIBC), which says the issue goes far beyond a handful of bad actors.
A pattern that repeats
Many of the 52 contractors have been barred from government work until 2029 for offences including falsified broad-based black economic empowerment (B-BBEE) certificates and billing for work that was never done. But the BIBC says blacklisting is really a symptom, not the root cause.
“What we are seeing is a pattern where non-compliance in one area is almost always mirrored across others. It is rarely isolated to non-compliance with the BIBC only,” says Danie Hattingh, spokesperson for business at the BIBC.
By checking publicly available data, the BIBC identified 68 construction-related companies linked to the blacklist. Of these, only 12 were registered with the BIBC — and all 12 were found to be non-compliant at the time of assessment.
“This directly supports our contention that non-compliance with one regulation strongly indicates non-compliance everywhere else,” Hattingh explains. “Whether it is labour obligations, tax compliance, or contractual delivery, the same patterns repeat.”
The consequences are wide-ranging. Non-compliance leads to poor workmanship, project delays, site failures and safety risks. It also allows some contractors to undercut compliant firms by exploiting workers, creating an uneven playing field.
Changing names to dodge the rules
The problem is made worse by a system that can allow repeat offenders to re-enter the market. Non-compliant contractors often deregister, rename or set up new companies — sometimes using family members or associates as directors — to avoid detection.
“The trend towards ‘fronting’ companies is widespread and complex,” says Hattingh. “Even if a new entity has no record of non-compliance, it can still be the same operators making it difficult for clients and procurement officials to know who they’re really dealing with.”
This is especially problematic in large-scale public procurement, where the volume of contracts makes tracking difficult. As a result, problem contractors can keep reappearing under new names, repeating the same cycle of poor delivery and rule-breaking.
Procurement as the weak link
The BIBC says procurement processes are both a critical tool for change and a current point of weakness. Loose or inconsistently applied tender requirements can allow non-compliant contractors to slip through undetected.
“The role of ‘givers of work’ (government, municipalities, SOEs and private clients) is central,” says Hattingh. “From tender design to contract monitoring, procurement decisions either strengthen compliance or undermine it.”
Where proper checks are in place, the risk of appointing unsuitable contractors drops significantly. But where oversight is weak and processes are unclear, there is room for abuse.
Steps are being taken to address this. The BIBC is working with the City of Cape Town and the Western Cape Department of Infrastructure to build compliance requirements into tender processes and strengthen oversight. The focus includes embedding BIBC registration and compliance in tenders, tightening supply chain controls, and aligning labour allocation systems — including on Expanded Public Works Programmes (EPWP).
A crisis for workers too
The impact on workers is equally severe. “Tender processes face many challenges that undermine efficiency and fairness,” says Luyanda Mgqamqo, BIBC labour spokesperson. “These include retaliation against whistleblowers, political interference and weak pricing skills.”
The bigger picture
The BIBC warns that the 52 blacklisted contractors are not outliers — they are part of a much wider trend. Over five years, several BIBC-registered firms appeared on the blacklist at different times, showing just how persistent the problem is.
If left unchecked, the risks go well beyond individual projects. Economic losses, weakened institutions, falling investor confidence and growing public distrust are all possible outcomes of ongoing non-compliance.
“Cutting corners for short-term profits creates long-term systemic risk,” warns Hattingh. “It undermines infrastructure quality and the credibility and sustainability of the entire industry.”
What needs to happen
The BIBC says lasting change will require a collective shift towards accountability at every level of the industry.
For clients, developers and public sector bodies, this means verifying contractor registration, insisting on compliance certification and building these checks into procurement decisions.
For workers, it means confirming that their employer is registered, checking payslips for contributions such as pension and leave pay, and contacting the BIBC directly where needed.
The council’s message is clear: fixing this crisis requires more than enforcement alone. It demands a culture of compliance built into every stage of the building industry.
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