What is the legal framework (legislation/regulations) governing bribery and corruption in your jurisdiction?
The following legislation forms part of South Africa’s legal framework governing bribery and corruption:
- Prevention and Combating of Corrupt Activities Act, 2004;
- Prevention of Organised Crime Act, 1998;
- Protected Disclosures Act, 2000;
- Financial Intelligence Centre Act, 2001;
- Protection of Constitutional Democracy Against Terrorist and Related Activities Act, 2004; and
- Competition Act, 1998.
The Prevention and Combating of Corrupt Activities Act (PRECCA) is South Africa’s main anti-bribery and anti-corruption legislation and is akin to the United Kingdom’s Bribery Act. PRECCA creates a general offence of corruption that is broadly defined. PRECCA also imposes a statutory reporting obligation in instances where suspicion exists that an offence in terms of the Act has been committed (including bribery).
Specifically, Section 34(1) of PRECCA imposes a reporting obligation, in terms of which “persons in a position of authority”, as defined in section 34(3) of the Act are required to report any of the corruption offences such as theft, fraud, extortion, bribery or uttering a forged document, involving an amount of R100,000 or more. It is important to note that this section imposes only a reporting obligation and there is no duty to investigate. The scheme of section 34 is such that it places the duty to investigate upon the investigating authority with the constitutional mandate to investigate crime in South Africa, namely the South African Police Service. However, it is generally advisable to conduct an internal investigation for purposes of understanding the circumstances of the offence and to prepare for the formal South African Police Service investigation. The distinction between reporting in terms of PRECCA and South African legislation dealing with protected disclosures and whistle-blowing is explained in more detail below.
Which authorities have jurisdiction to investigate and prosecute bribery in your jurisdiction?
The South African Police Services (SAPS) is constitutionally mandated to investigate and prosecute criminal conduct along with the National Prosecution Authority (NPA). Within the SAPS and the NPA, there are a number of different branches and divisions focused on investigating and prosecuting corruption and bribery, including the Directorate for Priority Crime Investigation (Hawks) and the NPA’s Anti-Corruption Task Team.
In addition to the SAPS and the NPA, the South African Special Investigating Unit (SIU) is also tasked with investigating corruption and bribery. The SIU is a government department mandated to investigate ‘serious malpractices or maladministration in connection with the administration of state institutions, state assets and public money as well as any conduct which may seriously harm the interests of the public’. The SIU was established in terms of the Special Investigating Units and Special Tribunal Act 74 of 1996.
In addition to the aforementioned permanent authorities which have jurisdiction to investigate and prosecute corruption bribery in South Africa, another important authority is the widely publicised Judicial Commission of Inquiry into Allegations of State Capture, also known as the Zondo Commission after its chairperson, Deputy Chief Justice Raymond Zondo. The Zondo Commission is a judicial commission of inquiry mandated to ‘investigate allegations of State Capture, Corruption, Fraud and other allegations in the Public Sector in South Africa’. The Zondo Commission has done tremendous work in uncovering the systemic corruption which has plagued South Africa organs of state (colloquially referred to as ‘State Capture’ in reference to organs of state being ‘captured’ by private persons/entities).
The Zondo Commission first sat on 20 August 2018 and is expected to continue running until at least 2021. The Zondo Commission has jurisdiction to investigate bribery and corruption, but does not have jurisdiction to prosecute. It is hoped however that the information uncovered by the Zondo Commission and its recommendations will lead to successful prosecutions by the NPA.
How is bribery defined?
South African legislation does not specifically defined bribery per se, it does however defined corruption in such a way that it includes bribery as a form of corruption. Corruption is defined as an act of accepting or offering any gratification from any other person whether for the benefit of that person or any other person in order to influence the other person to act in a manner that is illegal, dishonest, unauthorised, incomplete, biased or in a manner that results in the misuse or selling of information. This is applicable to both public officials and private individuals.
Does the law distinguish between bribery of a public official and bribery of private persons? If so, how is ‘public official’ defined? Are there different definitions for bribery of a public official and bribery of a private person?
South African legislation does not specifically distinguish between corruption involving public officials and corruption involving private persons. Bribery involving a public or private person/entity is therefore criminalised in South Africa. In addition, both active and passive bribery are encapsulated by the South African legislative understanding of corruption. For this reason, both the act of offering a bribe and accepting a bribe are criminal offences.
What are the civil consequences of bribery in your jurisdiction?
Civil damages claims arising from corruption or bribery are common place in South Africa. The specific quantum of such claims is largely dependent on the damage suffered. As a general principle of South African law, awards for damages are compensatory and not punitive.
A further civil consequence of bribery and corruption in South Africa is that decisions made by organs of state may be set aside in instances where the decision was tainted by corruption, bribery or mal-administration. This process is explained in more detail below and regulated by the Promotion of Administrative Justice Act.
What are the criminal consequences of bribery in your jurisdiction?
Depending on the nature of the corrupt conduct, a Court may impose a sanction of imprisonment and/or a monetary fine.
Contraventions of PRECCA, which encompasses the act of bribery, include:
- A fine of unlimited value;
- prison sentence (the maximum sentence being life imprisonment);
- an additional fine equal to 5x the value of the gratification involved in the offence; or
- Endorsement of convicted person or enterprises on the Register for Tender Defaulters (Black Listing). Black Listing refers to being placed on a list of entities and individuals with which the South African government and public sector is prohibited from doing business with.
Does the law place any restrictions on hospitality, travel and entertainment expenses? Are there specific regulations restricting such expenses for foreign public officials?
There is no express restriction or monetary threshold on gift, hospitality, travel or entertainment expenses under South African law. There is however an appreciation that such expenses may facilitate corruption and constitute bribery. The general rule is that any such expense must be reasonable and proportionate to the business or work performed. Excessive or lavish gifts, hospitality, travel or entertainment could be considered a bribe. It is important to remember that this encompasses both the giving and receiving of such gifts, hospitality, travel or entertainment.
In this regard, companies have sought to develop internal policies that seek to mitigate the risks associated with such expenses. Best practice in this area includes keeping registers of the gift, hospitality, travel or entertainment expenses, and ensuring that the expenses are reasonable in the circumstances.
Are political contributions regulated?
Yes, the Political Party Funding Act has a regulatory framework for private contributions to political parties. Amongst other things it sets limits for the source, size and use of contributed funds by political parties. Political parties are required to disclose all donations received above the disclosure threshold of R100 000 to the Independent Electoral Commission (IEC) every three months and before the general election. The IEC reports to the parliament on all disclosures made. Donors are also required to disclose donations to the IEC.
In May 2020, South African President Cyril Ramaphosa assented to an amendment of the Promotion of Access to Information Act 2000 (PAIA). The amendment provides that information on the private funding of political parties and independent candidates must be recorded, preserved and periodically published. The head of a political party is required to:
- Create and keep records of donations exceeding a prescribed threshold (currently set at R100 000) that has been made to that political party in any given financial year;
- Create and keep records of the identity of the persons or entities who made such donations; and
- Make the records available on a quarterly basis and keep the records for a period of at least five years after creation.
Donations include donations in kind. A donation in kind means: Any money lent to the political party other than on commercial terms; any money paid on behalf of the political party for any expenses incurred directly or indirectly by that political party; the provision of assets, services or facilities for the use or benefit of a political party other than on commercial terms; or a sponsorship provided to the political party. It excludes services rendered personally by a volunteer.
Are facilitation payments regulated? If not, what is the general approach to such payments?
Yes, facilitation payments constitute gratification and would qualify as a form of corruption under PRECCA.
Are there any defences available?
No, PRECCA does not identify defences or grounds of justification when a person is charged with the offence of corruption.
Are compliance programs a mitigating factor to reduce/eliminate liability for bribery offences in your jurisdiction?
Whilst compliance programmes are effective in mitigating corruption risks, they are not mandatory. The law simply requires compliance with legislation and does not require companies to put specific compliance programs in place. To our knowledge there are no instances where South African courts have regarded internal compliance programs as a mitigating factor when prosecuting bribery and other corruption offences.
Private companies have been seen as the main drivers for compliance programs as a means of developing better business practices and mitigating risks.
Who may be held liable for bribery? Only individuals, or also corporate entities?
Both individuals and corporate entities can be held liable for bribery in South Africa. In the context of corporate entities, the entity may be subject to a fine.
Has the government published any guidance advising how to comply with anti-corruption and bribery laws in your jurisdiction? If so, what are the elements of an effective corporate compliance program?
To date the South African government has not published any guidance advising how to comply with anti-corruption and anti-bribery laws.
Does the law provide protection to whistle-blowers?
Whistleblowing in South Africa is regulated by the Protected Disclosures Act, 2000 (PDA), which encourages disclosures relating to criminal and other irregular conduct. The PDA protects whistleblowers from being subjected to any occupational detriment. In order to garner protection in terms of the PDA, the disclosure needs to be made in an instances where a reasonable suspicion exists that an impropriety has occurred, is occurring or is likely to occur. There must also be a reasonably belief that the disclosure is substantially true and cannot be made for personal gain.
While the PDA does not create a legal duty or obligation to make a disclosure, a legal duty may exist under s34 of PRECCA.
How common are government authority investigations into allegations of bribery?
Corruption and bribery are exceptionally topical subjects in South Africa at the moment. There appears to be a major impetus to investigate and prosecute the many allegations of corruption and bribery in the country. Many of these allegations emanate from the ‘State Capture’ narrative and the period in which former President Jacob Zuma was in office. The Zondo Commission of Inquiry is just one example of the active steps being taken to investigate corruption and bribery.
In reality however, there has been very few successful prosecutions and instances where real action has been taken against alleged perpetrators.
What are the recent trends in investigations and enforcement in your jurisdiction?
As a result of the recent failings by government and enforcement agencies to properly tackle corruption and bribery in South Africa, we have seen a dramatic growth of public interest groups and investigative journalist organisations. Such organisations include the amaBhungane Centre for investigative Journalism, the Helen Suzman Foundation, Corruption Watch and the Organisation Undoing Tax Abuse (OUTA). These organisations have taken an active role in uncovering instances of corruption and bribery.
Despite not officially being held to account for alleged instances of corruption and bribery, many companies and individuals have had to deal with the court of public opinion and negative press coverage emanating from these organisations.
We have also seen instances where the findings and work done by these organisations has been shared with enforcement agencies and the NPA.
Is there a process of judicial review for challenging government authority action and decisions?
As explained briefly above, there is a process of judicial review for challenging government authority, action and decisions in South Africa. Government actions and decisions can be challenged under Promotion of Administrative Justice Act (PAJA).
PAJA seeks to give effect to the right to administrative action that is lawful, reasonable and procedurally fair and to the right to written reasons for administrative action as contemplated by the Constitution of South Africa.
Are there any planned developments or reforms of bribery and anti-corruption laws in your jurisdiction?
To our knowledge there are no planned developments or reforms of bribery and anti-corruption laws in South Africa.
To which international anti-corruption conventions is your country party?
South Africa is party to the following international anti-corruption conventions:
- the United Nations Convention Against Corruption;
- the AU Convention Against Corruption;
- the OECD Anti-Bribery Convention; and
- the SADC Protocol Against Corruption.
Do you have a concept of legal privilege in your jurisdiction which applies to lawyer-led investigations? If so, please provide details on the extent of that protection.
Yes, the concept of legal privilege is recognised in South Africa. Specifically, there are two distinct forms of legal privilege, litigation privilege and legal advice privilege.
- Litigation privilege, relates to all communications between a legal practitioner and client or between either of them and a third party with respect to actual or contemplated litigation, insofar as the case is in the process of or preparation for trial.
- Legal advice privilege relates to all communications between the legal practitioner (including in-house counsel) and the client (in order to give the client advice in a professional capacity).
Legal privilege is a negative right permitting a client to refuse disclosing information or documents which fall within the above definitions.
While it has not specifically been adjudicated by South African courts, legal documents and advice prepared in relation to an investigation by an attorney, or in-house legal counsel, would be protected by privilege.
How much importance does your government place on tackling bribery and corruption? How do you think your jurisdiction’s approach to anti-bribery and corruption compares on an international scale?
Despite media publicity and the South African government’s public stance towards combating corruption and bribery, there has been little actionable progress. Whilst South Africa has a sufficient legislative framework with which to tackle corruption and bribery, there have been very few successful prosecutions, particularly in respect of those allegations of corruption and bribery involving high profile individuals or politicians.
South Africa is therefore far behind in terms of developing and executing its anti-corruption and anti-bribery regime to the standards associated developed jurisdictions.
In short, the South African government recognises the importance of tackling corruption but has done little to hold corrupt individuals to account.
Generally how serious are organisations in your country about preventing bribery and corruption?
As explained above, there are a number of public interest groups which take the prevention and combating of corruption and bribery very seriously.
Additionally, within the private sector there is increased recognition for organisations to take active measures to prevent corruption and bribery. We have seen instances where private companies are taking action by developing robust internal regulatory and compliance policies to try mitigate the risks associated with corruption and bribery. In focusing their efforts, private companies are also taking a more risk based approach to on boarding new third party contractors or distributors by conducting anti-bribery and anti-corruption due diligence reviews.
What are the biggest challenges enforcement agencies/regulators face when investigating and prosecuting cases of bribery and corruption in your jurisdiction?
Regulators in South Africa are extremely under resourced, both from a financial and skills perspective.
In addition, many regulators are rendered ineffective due to political appointments and influence. Regulators are also overwhelmed by a large backlog of cases.
What do you consider will be the most significant corruption-related challenges posed to businesses in your jurisdiction over the next 18 months?
While not necessarily a challenge per se, the recommendations and findings from the Zondo Commission are expected to have a significant impact on the implicated individuals and entities, many of whom are current or erstwhile politicians or large multinational companies.
Whether the Commission will make recommendations regarding the current legal framework, remains to be seen.
How would you improve the legal framework and process for preventing, investigating and prosecuting cases of bribery and corruption?
'Not only must Justice be done; it must also be seen to be done’. Echoing the words of Lord Chief Justice Hewart, South Africa requires justice to be done in order to combat instances of corruption and bribery.
As explained above, due to the many challenges facing our regulators, South Africa has seen very few successful corruption or bribery prosecutions. In this regard, we would suggest improvements which seek to remove many of the impediments to the current framework. For example:
- Providing increased funding and resources to regulators;
- Depoliticising regulators ; and
- Developing and improving specialised courts tasks with adjudicating on corruption and bribery related matters.