Prof Sope Williams-Elegbe presents her inaugural lecture on how blockchain technology could be used to stem corruption | Universiteit Stellenbosch Fakulteit Regsgeleerdheid | University of Stellenbosch Faculty of Law
You Are Here: Home » Nuus / News » Prof Sope Williams-Elegbe presents her inaugural lecture on how blockchain technology could be used to stem corruption
Nuus / News (156)
Studente Nuus / Student News (19)
Prof Sope Williams-Elegbe presents her inaugural lecture on how blockchain technology could be used to stem corruption
Blockchain technology could stem corruption in public procurement
procurement spend is R800 billion – estimated that about 50% of this might be lost to corruption
current safeguards have done little to curb corruption
50% of complaints submitted to Public Protector refer to problems with public procurement process
blockchain technology both a digitised and decentralised public ledger of transactions
Every year South Africa loses billions of rand due to corruption in public procurement. And since current safeguards aren’t really effective, we should perhaps start to look at blockchain technology as a possible solution.
This is the view of Prof Sope Williams-Elegbe from the Department of Mercantile Law in the Faculty of Law at Stellenbosch University. She recently delivered her inaugural lecture on the topic Public procurement, corruption and blockchain technology: A preliminary (legal) inquiry.
Williams-Elegbe says public procurement ̶ the process by which government buys the goods, services and works needed to fulfil its functions and maximise public welfare ̶ has been plagued by corruption and current safeguards have done little to curb it.
“Public procurement is the main conduit for government expenditure, apart from grants and social programmes. In South Africa, the annual procurement spend is R800 billion, and it is estimated that about 50% of this figure might be lost to corruption.”
“In South Africa, 50% of the complaints submitted to the Office of the Public Protector refer to problems with the public procurement process, and recent Auditor-General’s reports have highlighted immense increases in fraudulent expenditure linked to procurement spending.”
Williams-Elegbe says blockchain technology could help to address these problems.
“What makes blockchain technology fascinating, is that it is both a digitised and a decentralised public ledger of transactions.”
“Every copy of the record that is kept by the computers on the network is identical. This means that the record of information or transactions cannot be altered by any of the participating parties, unless it is altered by all.”
“A procurement blockchain platform can improve the process for identifying and verifying potential bidders, simplify contractor registration, provide a shared information repository on contractors’ past performance, and enable real-time reporting.”
Williams-Elegbe adds that “conducting public procurement via a blockchain platform ought not to change the nature of procurement regulation, but may serve to make procurement more efficient, transparent and less likely to result in disputes.”
She points out that blockchain technology was developed to support the virtual or digital cryptocurrency Bitcoin. She says that it is currently being used to register land titles in India, Honduras, Georgia, Sweden, Brazil, Rwanda and Ghana; and Dubai intends to move all government services to a blockchain platform by 2020.
Companies like Walmart, Nestlé and Unilever have already used a blockchain system to track food in their supply chains, says Williams-Elegbe.
She also draws attention to the possibility of using so-called smart contracts in public procurement and said it permits parties to transfer digital assets of value directly, without any institution acting as an exchange intermediary.
“A smart contract is a contract that is formed and performed (often using cryptocurrency) via the blockchain. Contractual terms are converted into a computer code, and this code is uploaded to the blockchain and the system acts in accordance with the code to execute the contract.”
“The use of smart contracts presents many distinct features such as trust, irreversibility, autonomy, and decentralization not inherent in traditional contracts.”
Williams-Elegbe adds that smart contracts could help to alleviate the problems of too many intermediaries and the asymmetry of information in public procurement.
“A blockchain-based procurement contract is attractive for several reasons: The auditability and verifiability of transactions is unparalleled compared with paper and e-procurement systems, which are prone to fraud and manipulation. The transaction record may also provide the data that could be used to uncover anti-competitive practices, which often go unnoticed in the procurement process, and the transparency inherent in the blockchain meets the highest standards for public-sector accountability.”
She says although it may take some time, blockchain platforms will increasingly being used by the public sector.
“Like most new ideas, the adoption of blockchain will have to overcome obstacles, which might include an aversion to new technologies, integration with legacy systems, the cost of adoption, and gaining stakeholder support.”
Blokketting-tegnologie kan korrupsie in openbare verkryging keer
verkrygingsbesteding is R800 miljard – na raming gaan 50% hiervan weens korrupsie verlore
huidige maatreëls het min gedoen om korrupsie te bekamp
50% klagtes by Openbare Beskermer hou verband met openbare verkrygingsproses
blokketting-tegnologie is ’n gedigitaliseerde en gedesentraliseerde openbare register van transaksies
Suid-Afrika verloor jaarliks miljarde rande weens korrupsie in openbare verkrygings. Aangesien huidige maatreëls nie regtig werk nie, moet ons dalk na blokketting-tegnologie begin kyk as ŉ moontlike oplossing.
Só meen prof Sope Williams-Elegbe van die Departement Handelsreg in die Fakulteit Regsgeleerdheid aan die Universiteit Stellenbosch. Sy het onlangs haar intreerede oor die onderwerp Public procurement, corruption and blockchain technology: A preliminary (legal) inquiry gelewer.
Williams-Elegbe sê openbare verkryging ̶ die proses waardeur die regering die goedere, dienste en arbeid koop wat nodig is om sy funksies te vervul en openbare welsyn te bevorder ̶ word deur korrupsie gekenmerk en huidige maatreëls het min gedoen om dit te bekamp.
“Openbare verkryging is die hoofarea van staatsbesteding naas toelaes en maatskaplike programme. In Suid-Afrika is die jaarlikse verkrygingsbesteding R800 miljard en daar word geraam dat ongeveer 50% hiervan weens korrupsie verlore gaan.”
“In Suid-Afrika hou 50% van die klagtes wat by die Kantoor van die Openbare Beskermer ingedien word met probleme rondom die openbare verkrygingsproses verband. Die onlangse verslae van die ouditeur-generaal het grootskaalse toenames in bedrieglike uitgawes wat aan verkrygingsbesteding gekoppel is beklemtoon.”
Williams-Elegbe sê blokketting-tegnologie kan help om hierdie probleme aan te spreek.
“Die fassinerende aan blokketting-tegnologie is dat dit ‘n gedigitaliseerde en gedesentraliseerde openbare register van transaksies is.”
“Elke kopie van die rekord wat deur rekenaars op die netwerk gehou word, is identies. Dit beteken die rekord van inligting of transaksies kan nie deur enige deelnemende partye gewysig word nie, tensy dit deur almal verander word.”
“ ŉ Blokketting-verkrygingsplatvorm kan die proses om potensiële bieërs te identifiseer en te verifieer verbeter, die registrasie van kontrakteurs vereenvoudig, ‘n gedeelde bewaarplek vir inligting oor kontrakteurs se vorige prestasie verskaf, en intydse verslagdoening moontlik maak.”
Williams-Elegbe voeg by dat “die uitvoering van openbare verkryging deur middel van ‘n blokkettingsplatvorm nie die aard van verkrygingsregulering behoort te verander nie, maar verkryging meer doeltreffend en deursigtig kan maak en minder geskille tot gevolg kan hê.”
Sy wys daarop dat blokketting-tegnologie ter ondersteuning van die virtuele of digitale kriptogeldeenheid Bitcoin ontwikkel is. Sy sê die tegnologie word tans gebruik om grondtitels in Indië, Honduras, Georgië, Swede, Brasilië, Rwanda en Ghana te registreer. Dubai beplan om alle regeringsdienste teen 2020 na ‘n blokketingsplatvorm te skuif.
Williams-Elegbe sê maatskappye soos Walmart, Nestle en Unilever maak reeds van ‘n blokketting-stelsel gebruik om voedsel in hul voorsieningskettings na te spoor.
Sy vestig ook die aandag op die gebruik van sogenaamde slim kontrakte (smart contracts) as ŉ vorm van blokketting-tegnologie in openbare verkryging en sê dit stel partye instaat om digitale bates van waarde direk oor te dra, sonder dat enige instelling as tussenganger vir die uitruil hiervan optree.
“ ŉ Slim kontrak is ‘n kontrak wat gevorm en uitgevoer word (dikwels met behulp van ŉ kriptogeldeenheid) via die blokketting. Kontrakbepalings word in ‘n rekenaarkode omskep, en hierdie kode word dan na die blokketting oorgedra en die stelsel funksioneer volgens die kode om uitvoering aan die kontrak te gee.”
“Die gebruik van slim kontrakte maak onder meer vertroue, onherroeplikheid, outonomie en desentralisasie moontlik wat nie eie is aan tradisionele kontrakte nie.”
Williams-Elegbe meen slim kontrakte kan die probleme van te veel tussengangers en die ongelykmatigheid van inligting help oplos.
“ŉ Blokketting-gebaseerde verkrygingskontrak is om verskeie redes aantreklik: Die ouditering en verifiëring van transaksies is ongeëwenaard in vergelyking met papier- en elektroniese verkrygingsisteme waar bedrog en manipulasie aan die orde van die dag is. Die transaksierekord kan ook die data verskaf wat gebruik kan word om nie-mededingende praktyke in die verkrygingsproses te ontbloot, en die deursigtigheid wat eie is aan die blokketting voldoen aan die hoogste standaarde vir openbare verantwoordbaarheid.”
Williams-Elegbe sê hoewel dit nog ŉ tydjie kan duur, sal blokkettingsplatvorms toenemend deur die openbare sektor gebruik word.
“Soos met die meeste nuwe idees, moet blokketting-tegnologie ook struikelblokke oorkom. Dit sluit in ‘n afkeer van nuwe tegnologieë, die integrasie met ouer rekenaarstelsels, die koste van aanwending en die ondersteuning van belanghebbendes.”