The Competition Tribunal has commenced hearings into a high-profile case of alleged tender collusion within the mining industry, centering on a cancelled R83 million contract for a tailings dam in Rustenburg.
The case involves two companies, Fraser Alexander and Paragon Tailings, which are accused of collaborating to fix prices for a tender issued by mining giant Sibanye-Stillwater in October 2020. The project was for the construction of a tailings dam, a critical structure designed to safely store mining waste. Sibanye-Stillwater cancelled the tender before any work began after allegations of collusion surfaced.
The Competition Commission alleges that the two companies shared information and coordinated their bids before submission. In opening arguments, a representative for the Commission stated, “The evidence will show that Fraser and Paragon cooperated or coordinated their responses to the bid through their direct or indirect contact.”
The Commission further argued that Paragon was aware that a Fraser Alexander employee, Mr. Wade Leaf, was a senior general manager responsible for construction-related work, implying this relationship was central to the alleged coordination.
Key testimony came from a former Fraser Alexander employee, Peter Cook, who participated virtually from New Zealand. Cook, who worked as an estimator on the tender, told the tribunal he was instructed to alter profit margins and logos on the bidding documents during the process. Cook explained that during the COVID-19 pandemic, amid widespread job losses and his own impending retrenchment, he complied with the requests.
“I did not want to burn any bridges,” Cook testified. “I’ve got this new opportunity to go overseas and so I just did what was asked of me.”
A significant development in the case is that Fraser Alexander has applied for leniency from the Tribunal. The company is seeking to avoid punishment on the grounds that it was the first to report the wrongdoing. A legal representative for Fraser Alexander argued that the company “did the right thing” and had even opened a police case against its former project manager, Wade Leaf, who allegedly attempted to personally benefit by becoming a subcontractor on the same project.
The representative warned that penalizing Fraser Alexander despite its cooperation would have a “chilling effect” on other corporations considering blowing the whistle on illegal activities.
In contrast, legal counsel for Paragon Tailings argued that both companies should be cleared of the charges, contending that “one company can’t collude on its own.”
The Tribunal has allocated 10 hours for the hearings, which are scheduled to conclude on Friday, October 31. A final ruling, which could include substantial fines for the companies found liable, is expected at a later date.