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South Africa Set to Forge a Stronger Anti-Corruption Stance with Landmark Judicial Matters Amendment Bill

Published January 27, 2024
10 months ago

In a move signaling a robust effort to fortify the legal framework against corruption in South Africa, the Judicial Matters Amendment Bill, which encompasses the noteworthy introduction of a “failure to prevent corruption offence”, is primed for commencement following the National Council of Provinces' approval on December 6, 2023.


The transformative clause 34A, poised to be embedded into the cornerstone of South African anti-corruption law, the Prevention and Combating of Corrupt Activities Act, 2004 (Precca), is envisaged to catapult the country's fight against corruption into a new era. The initiative dramatically reflects the Zondo Commission's influential recommendation and is propelled by UK's Bribery Act comparatives, illustrating the substantial momentum that anti-corruption efforts are gaining nationally.


Clause 34A extends the ambit of liability to include private sector members and associated state-owned entities. It encapsulates the notion that even the indirect involvement via association in bribery practices, with the aim of gaining business or advantage, is prosecutable; a clarity necessary in a landscape marred by nuanced, cross-entity corrupt dealings.


This groundbreaking legislation, while momentous in its potential impact, ushers in a slew of contemplations and directives for South African entities. The proposed legislation galvanizes organizations to meticulously align their governance procedures with what is known as the "Six Principles" from the UK guidance, ensuring a proportionate response to the varying degrees of corruption risk profiles through initial extensive risk assessments.


The "association" concept in the bill casts a sprawling net, calling for a comprehensive reevaluation of risk mitigation controls. The repercussions for businesses will be far-reaching—necessitating the revision of contractual relationships and internal policies to preemptively mitigate corrupt activities from all associated personnel, from employees to third-party service providers.


Notably, nuances such as the absence of deferred prosecution agreements (DPAs)—which have served as encouraging negotiation tools for entities to self-disclose misconduct in jurisdictions like the US and the UK—pose a notable contextual distinction for South Africa. While DPAs remain under the consideration of the South African Law Reform Commission, alternative measures like the Corporate Alternative Dispute Resolution Directive are being employed as provisional instruments.


The advancements herald a pivotal compliance challenge. Entities enfolded within the purview of the bill’s ramifications must proactively architect sturdy anti-corruption compliance programmes, as failure to do so could bear grave legal and financial consequences.


Steering South Africa away from the FATF's 'Grey List' has been a mission rigorously pursued by the government and the implementation of clause 34A is reflective of this objective, contributing tangibly towards international obligations and advocacy for a corruption-free commercial environment.


The introduction of a new “failure to prevent corrupt activities offence” is set to redefine corporate responsibility in South Africa. As organizations brace for integration, the message is unmistakable: robust anti-corruption compliance is no longer optional but a critical mainstay.



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