The Compliance Industrial Complex

Whoever has been to South Africa and really engaged up close with the local business world will have some tales to tell. One of them is the multiple, sandwich-like layers of affirmative action that lace everything that goes on in this country.

South Africa tries to right past wrongs and thats why those that were wronged in the past get advantages over others today. Persons of color have access to deals that others don’t have, women have advantages over men, and so on.

This means that whatever business you want to do in South Africa, you better have a woman of color in some important position on board. It’s not necessary to point out that there are those that try to exploit this position for what its worth. 

In a normal world, you would expect the best person to get the job. Affirmative action makes that it’s the one person that happens to be the politically correct instead. 

Now, if you think that this is only South Africa, I must rudely awaken you from your sweet slumber. Because every country on Earth – every single one of all countries on the planet – has those people. A caste of people that exploit quirks in the system to have a good life for little or nothing in exchange. Politicians come to mind but it does not even start to end there.

And even if the South African example is stark and jumps in your face when you see it, it’s by far not the most egregious of all on Earth. I would even say, the more democratic and the more developed a country and a society is, the bigger and more powerful are those forces.

During the last 10 years, I have been helping a fair number of small projects. Some of them on a pro-bono basis as I considered that they served an important local need. And one of the biggest impediments for almost any of those projects were civil servants. Plus an army of consultant soldiers of fortune that wanted a piece of a pie that did not even exist in exchange for their vaporous services.

But those people provide services. Should they not be paid fair and square?

Let’s look at what those services are. But before we do that, let’s identify who is part of the CIC.

Politicians – I will throw all political leanings and party affiliations together in one big jumble. Because no matter where they hail from or what convictions they profess having, they all have one thing in common. They like the good life. And sitting in some legislature or executive function with a fat paycheck on the taxpayer’s dime and access to media and hence public opinion is pretty far from a hard life. 

What do you think? How interested can politicians ever be in resolving any issue they profess having an interest in? Imagine a world with no labor issues. What would a socialist do? Imagine a world with no environmental issues. What would the greenies do? You can play that game for any issue or subject. 

There are exceptions of course. In a politician’s case, they are few and far in between. They are easy to spot. They are universally hated by the establishment. 

But politicians are just the easiest to spot members of the CIC. And believe it or not but they are also the least important ones. So, who else.

The Civil Service – Yes, it’s their job to run our communities from the local to the international levels. And their worst nightmare is the day when taxpayers find out how useless many of them are. So they lay it on thick. They want to show to each and every one how important their mission is. And you will feel that on the money side.

Non Profit Organisations – which are often very profit-oriented in the real world. Just look at the fat paychecks and cozy lives many of their leading figures live. That’s different if the leading figures work pro bono for the organization but you are not going to see that very often. Many such organizations have no better to do that searching for any project that has failed to cover itself on some insignificant formality and they unleash a barrage of legal fireworks. Making sure that NPO’s don’t get in your way will cost you a good chunk of money. 

Pressure Groups – very similar to NPO’s but while NPO’s use the law to make a buck – like protection money rackets – the pressure groups are happy to go outside the law. They block development sites and access points, they will do stunts on infrastructure thats not designed for that and seek to turn a large portion of public opinion against you as a company. You may have all the paperwork in place and have spent a fortune, they will not give a damn and seek to sabotage you in any way possible. 

Consultants – there are many different kinds of consultants. Many are quite useful if they use their expertise to resolve issues or problems the company is not staffed to resolve on its own. But there are also those that resolve imaginary problems. Quite often, those consultants work quite closely with all the above-mentioned groups. Its “Pay me and I will be able to keep those nasty folks off your butt”. Very often they are in cahoots. And they are insatiable. They want their money no matter if you will be able to put a viable project in place or not. 

Your own legal and compliance departments – you are surprised now. Well, your legals and compliance folks might be honestly surprised as well. They understand their work as being essential for the success of the company. And often thats the case. But those are mid-level managers with a career and something to lose so they will have to find problems that they can then resolve in a dramatic manner. Shows how important they are. That may often be rather innocent but it also sinks projects. I have seen that myself. 

Last but not least – Your Own Management – for the same reasons that are true for the legal and compliance folks. But with the added point that it’s them who have to take decisions to move the project forward and they will play CYA or “Cover Your Ass” to the extreme. Their understanding of the job is not to do what needs to be done to get the project going. It’s rather to produce a large number of advance excuses at hand in case something goes wrong. 

Their enemy is failure and they most certainly don’t agree with the motivational speaker Denis Waitley “Failure should be our teacher, not our undertaker. Failure is delay, not defeat. It is a temporary detour, not a dead end. Failure is something we can avoid only by saying nothing, doing nothing, and being nothing.”

An impossibly complex, multi-layered set of regulations that quite often produces contradictory results and puts Political Correctness above real problem solving provide ample fodder to those above. Many of the above CIC members abuse it on purpose. Some just swim with the current. 

The cost of this huge block of uselessness is often gargantuan. Smaller companies cannot afford the huge compliance departments to cover myriads of jurisdictions and often tens of thousands of rules. 

The net result of all the corporate lobbying is not “Smaller is better”. Its the big players that win here giving them hard to attack oligopolies. 

To cover their tracks, CIC members often try to blame the very thing they make their money with. And lobbyists join in by peppering everyone with announcements of complicated and potentially superexpensive legislation to come. This alarms them to unlock funds for stationing those same lobbyists to keep politicians and Civil Service in check. 

The Compliance Industrial Complex has ruined many projects that would have made the lives of ordinary citizens better by saddling them with impossibly high compliance bills for nothing. And those that make it through the morass have to add those big bills onto the price for their goods and services. 

And who pays those?

Time for a dragonslayer to cut them to size.