The US earned a reputation as “being alone out there” in combating bribery of foreign officials when it enacted its Foreign Corrupt Practises Act in 1977. The introduction of the OECD Anti-bribery Convention in 1997 provided solid support and a strong impetus in the fight against corruption, binding signatory countries to criminalise the bribing of foreign public officials and setting a global standard. The OECD proudly stated that it is the first and only anti-corruption instrument addressing the “supply side” of the bribery transaction. The Convention entered into force in South Africa in 2007.
The Exporting Corruption report is Transparency International’s first update since 2015 and it provides for interesting, albeit (for some) alarming information and statistics. As a report on South Africa, it clearly highlights our country’s failure to meet its international commitments in combating corruption. Some might even conclude that the report identifies South Africa as a haven for international syndicates specialising in global crime and money laundering.
The Exporting Corruption report categorised 44 countries, representing more than two-thirds of global exports. Forty of these countries are signatories to the OECD Anti-Bribery Convention. The additional four are all major exporting countries: China, Hong Kong, India and Singapore. The report provides for four categories of enforcement, starting at the top of the scale with ‘active enforcement’ and ending, at the bottom of the scale with ‘little or no enforcement’, with ‘moderate’ and ‘limited enforcement’ in the middle. South Africa finds itself in the third category, “limited enforcement”, in the company of France, Greece, Hungary, Netherlands, New Zealand, Portugal, South Korea and Sweden. If one, however, compares the 2017 Transparency International Corruption Perceptions Index scores, one finds South Africa, compared to the other 8 countries in this third category, with the lowest CPI score namely 43. The CPI serves as a measure of perceived levels of public corruption, a score below 50 is indicative of a country struggling with corruption.
Summarised, Transparency International, utilising its two measuring tools, categorised South Africa as ‘corrupt’ with ‘limited enforcement’ against foreign bribery. Is this an accurate and fair reflection of South Africa in the world of anti-bribery and corruption, one might ask?
Comparing previous performance, one notices that the CPI score in 2016 was 45 and the Corruption Export Category ranking in 2015 was ‘limited enforcement’. Criticism for showing little improvement in the past three years seems fair. South Africa has, however, always been considered a leader in Africa regarding export value. Last year South Africa ranked first with USD88.3bn in global shipments, comprising 19.1% of the continent’s shipments (despite showing a decline of 7.2% within four years). This dominance is the reason the OECD expects South Africa to raise its standard of compliance.
The 2018 TI report has an historical basis and cannot simply be ignored as being unfair or too critical in naming and shaming offenders. The 2012 TI report categorised South Africa as a country with ‘no enforcement’ with no cases or investigations. The 2015 TI report specifically recorded that South Africa’s safeguards to protect the Central Anti-corruption Bureau from politicisation were insufficient. In March 2016 the OECD Working Group on Bribery raised concerns about South Africa’s lack of enforcement actions and it also noted that few steps have been taken to address concerns that political and economic considerations may influence the investigation and prosecution of foreign bribery. In the 2018 TI report, after considering the preceding compliance gap and issues raised from 2012 to date, it is recorded that, South Africa has no history of convictions for foreign bribery to date.
The report further raises concerns about the ease with which settlements and plea bargain arrangements are entered into in South Africa: 41 out of 42 corruption cases have ended with plea bargains and reduced sentences. Further concerns are that, despite the introduction of the Protected Disclosures Amendment Act, awareness of whistle-blower protections remain limited with no concrete steps being taken to ensure that reporting can occur without fear of reprisal.
Perhaps South Africa’s current weak rating is not surprising taking into account that South Africa was one of only two countries that failed to make a single ‘new commitment’ at the UK Anti-Corruption Summit in London in 2016. The four-page country statement yielded only one commitment stating that the country ‘was working towards the redrafting of a National Anti-Corruption Strategy’. According to Transparency International’s report assessing the Summit, “South Africa’s country statement was generally considered the weakest by civil society representatives.”
Media reports abound on South Africa’s increasing global risks as a result of political interference in the economy and legal system. The Reserve Bank and the Special Investigative Unit (SIU) have been complaining publicly of a total systemic failure in prosecuting reported cases. An improper relationship between politics and capital has the risk of eroding the rule of law, ultimately affecting legal certainty. Transparency and proper corporate governance is not negotiable. If South Africa fails to heed the call of global watchdogs like the OECD, it might find itself at the mercy of more money laundering syndicates. Fortunately, the judiciary has held its own and the State Capture Commission has the potential to usher in a return to the rule of law with a restoration of public confidence in the administration of justice.
There is, however, a new sense of optimism sweeping through the nation and one can only hope that South Africa will implement the 2018 TI report recommendations, including, among others, to:
- Dedicate adequate resources to anti-corruption enforcement agencies;
- Increase institutional capacity to detect, investigate and prosecute foreign bribery and systematically publish enforcement data;
- Improve coordination between investigating and prosecuting authorities;
- Ensure that investigations are free from political interference;
- Strengthen whistle blower protection; and
- Improve internal compliance programmes and corporate governance in SA companies that conduct business abroad including those not listed on the SA Stock Exchange.