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Submission to the Constitutional Review Committee

In the Parliament of the Republic of South Africa;

Before:

The Constitutional Review Committee of the National Assembly

_____________________________________________

Submission by Accountability Now concerning the establishment of a Chapter Nine Integrity Commission
_____________________________________________

In the Parliament of the Republic of South Africa;

Before:

The Constitutional Review Committee of the National Assembly

_____________________________________________

Submission by Accountability Now concerning the establishment of a Chapter Nine Integrity Commission
_____________________________________________

  1. Introduction

1.1. Accountability Now welcomes the opportunity to interact with the Constitutional Review Committee on the subject of introducing a new Chapter Nine Institution in the Constitution; a standing commission that is given a mandate to prevent, combat, detect, investigate and prosecute serious corruption. The abbreviation Ch9IC is used in this submission.

1.2. The concept “serious corruption” will have to be given a legislated definition after debate during the parliamentary law-making process. A suggested minimum value of R 5 million in loot has been made in the drafts published and supplied to Parliament and the Executive in August 2021 by Accountability Now.

1.3. The National Prosecuting Authority (NPA) has noted the drafts without commenting on the cut-off minimum value. The NPA will retain its current jurisdiction to prosecute corruption that falls below the minimum value. The Ch9IC will take over corruption cases involving more than the minimum amount decided upon after debate in parliament, including public participation in that debate.

1.4. The Chief Justice has remarked that “an army of prosecutors” will be needed to follow up on the recommendations in relation to serious corruption prosecutions that have been made in the report of the State Capture Commission (SCC) which he chaired. The NPA does not have such an army nor will it be able, with the best will in the world, to muster the expertise, experience and skilled human resources required for successful prosecution of serious corruption cases. ( See paragraphs 11.2 to 11.6 below. )

1.5. Like the SCC, most of the larger political parties accept that there is a need to reform the criminal justice administration due to the ravages of state capture on it and the current deliberately contrived and ongoing dysfunction in it. These missteps were intended and designed to extend impunity indefinitely for those implicated in serious corruption. The NEC of the ANC resolved in August 2020 that cabinet urgently establish an independent, stand alone, specialised and permanent anti-corruption entity. See: https://accountabilitynow.org.za/paul-hoffman-has-anc-finally-had-its-eureka-moment-on-corruption/.   The IFP has been asking for the establishment of the Ch9IC since president’s question time in March 2019  https://accountabilitynow.org.za/corruption-now-more-than-ever-we-need-an-integrity-commission-ifp/.     The DA has joined these  calls in 2022, having initially campaigned for reform of the Hawks only. The DA is in the course of preparing a private members bill (which may become a committee bill) on the topic of creating the Ch9IC.   https://accountabilitynow.org.za/?s=By+George&submit=Search.  

1.6. Civil society actors, the faith-based community  and the business sector all favour reform that addresses serious corruption See, e.g. https://accountabilitynow.org.za/critical-action-needed-to-keep-south-africa-afloat-on-its-pool-of-corruption/

1.7. In what follows in this submission it will be assumed that the reader is familiar with the explanatory memorandum, its executive summary, and the drafts of the necessary constitutional amendments and enabling legislation that were provided to the CRC in August 2021 by Accountability Now. They are all available electronically on the internet here: https://accountabilitynow.org.za/memorandum-on-a-constitutional-amendment-and-enabling-legislation-for-anti-corruption-machinery-of-state-in-sa/.Chapter 9 Institution – Accountability (accountabilitynow.org.za). In short: a cure to the current circumstances brought about by state capture, kleptocracy and serious corruption in SA is suggested by way of the establishment of the Ch9IC. The powers of the NPA are accorded greater independence from the executive. However, the mandate to counter serious corruption currently shared between the Hawks (investigation) and the NPA (prosecution) is conferred on the new Ch9IC . This step would render the system constitutionally compliant in accordance with the binding criteria laid down in the Glenister litigation. This “best practice” reform is required because the current circumstances in SA demand it; the risk of failure as a state will be diminished if the reforms are made; that risk will be increased if Parliament declines to have due regard to the current circumstances of SA as regards the need for countering corruption. The highest court has ordered Parliament to create efficient and effective ant-corruption machinery of state that is adequately independent. What it requires, and what is currently conspicuously absent is the “decision of a reasonable decision-maker in the circumstances”. The current circumstances as outlined in the SCC report cry out for the reforms suggested.

1.8. The Executive has developed a sense of urgency in relation to corruption as reported in the Sunday Times and commented on by Accountability Now here: https://accountabilitynow.org.za/john-jefferys-sense-of-urgency-on-corruption-must-translate-into-tangible-action/. It also has instructions from the NEC of the ANC to move to reform  urgently; see: https://accountabilitynow.org.za/ramaphosa-presidencys-dithering-over-rampant-corruption-is-the-stuff-of-legend/.

1.9. This submission is divided into sections with self-explanatory headings thus:

Introduction,

Problem Statement,

Historical Overview of Corruption-busting,

The Effect of Corruption on Economic Transformation in SA,

The Effect of Corruption on the socio-political goals of the Constitution.

The binding nature of the findings in the Glenister litigation,

The oversight and law-making functions of parliament,

The decision of “a reasonable decision-maker in the circumstances,”

The draft constitutional amendment explained,

The draft enabling legislation explained,

The urgency of the need for reform in relation to:

   The prevention, combatting, detection, investigation and prosecution of serious       corruption,

   The  protection of whistleblowers and

   Non-trial resolution of international corruption cases,

The way forward.

  1. Problem Statement.

2.1. The adoption of the Constitution, in December 1996 in Kliptown, was the culmination of a negotiation process that led to a National Accord, the abandonment of apartheid-era parliamentary sovereignty and its replacement with  constitutional democracy under the rule of law. It was accepted by the vast majority of South Africans that “we the people” prefer to be governed by a supreme Constitution in which  laws and conduct inconsistent with the Constitution are invalid. [Preamble, C 1 and C 2]

2.2. Under the Constitution the rule of law is supreme. Obedience to court orders is a given. [C 1 and C 165]. The state is bound to respect, protect, promote and fulfil the various rights guaranteed in the Bill of Rights which is Chapter Two of the Constitution. Some of the rights are subject to progressive realization within the state’s available resources and many rights are expensive to deliver. [C 1, C 7(2) and C 27, e.g.]

2.3. When the state’s resources are not available because they are looted on a grand scale, its ability to deliver on its human rights and other obligations is stunted with deleterious consequences for the poor. Dignity, the promotion of equality and the enjoy of human rights all suffer [ C 1 C 9 and C 10]. Instead poverty, unemployment and inequality curse our land [Glenister majority judgment March 2011:

“There can be no gainsaying that corruption threatens to fell at the knees virtually everything we hold dear and precious in our hard-won constitutional order. It blatantly undermines the democratic ethos, the institutions of democracy, the rule of law and the foundational values of our nascent constitutional project. It fuels maladministration and public fraudulence and imperils the capacity of the state to fulfil its obligations to respect, protect, promote and fulfil all the rights enshrined in the Bill of Rights. When corruption and organised crime flourish, sustainable development and economic growth are stunted. And in turn, the stability and security of society is put at risk.”]

2.4. The loot of state capture is estimated to be between R1 and R2 trillion.

2.5. As Chief Justice Mogoeng remarked, on behalf of the majority in the last Glenister case in November 2014:

“All South Africans across the racial, religious, class and political divide are in broad agreement that corruption is rife in this country and that stringent measures are required to contain this malady before it graduates into something terminal.\

“We are in one accord that SA needs an agency dedicated to the containment and eventual eradication of the scourge of corruption. We also agree that the entity must enjoy adequate structural and operational independence to deliver effectively and efficiently on its core mandate.”

2.6. The problem is that there is no such agency at present. There are “Hubs” and “Fusion Centres”, “Task Teams” Hawks and prosecutors, even an investigating directorate (ID) in the NPA, but there is no agency that complies with the criteria, the STIRS requirements, laid down in binding fashion in the second Glenister case and confirmed in the third.

2.7. The scheme of the legislation in place is to split the responsibilities of the agency to which the Chief Justice refers between the Hawks, for investigation of corruption and the NPA, for the prosecution of corruption. No Hubs or Fusion Centres, no ACTTs (Anti-corruption Task Teams) were contemplated by the Legislature when it made the laws applicable, being the SAPS Amendment Act of 2012 and the NPA Amendment Act of 2009 which dissolved the Scorpions unit within the NPA. The ideas around Hubs, Fusion Centres and even the ID in the NPA are all the work of the Executive branch of government. The legislation trumps the proclamation of the ID and also the more informal arrangements called the Hub, the Fusion Centre and the ACTT. A veritable tower of Babel has been the result of tinkering at the system.

2.8. What is required by the courts is “the reasonable decision of a reasonable decision-maker in the circumstances”.

2.9. The circumstances that pertain at present are set out in great detail in the report of the State Capture Commission (SCC)

2.10. It is clear from the SCC report that effective and efficient corruption-busting has not been the order of the day for some ten years or more in SA. Certainly not while the current legislation has been in place.

2.11. Under C 55 it is the duty of the National Assembly to maintain oversight of the national executive authority, including the implementation of legislation such as the SAPS and NPA amendment Acts here under consideration. The National Assembly can initiate or prepare legislation under C 55(1)(b).

2.12. The relevant circumstances that inform the need for reform of the criminal justice administration are that the state capture phenomenon came close to destroying “all we hold dear” in SA. The NPA and SAPS are not capable of containing or eradicating corruption, have not done so since the inception of the current legislated dispensation in 2012 and will not be able to do so within the foreseeable future due to the capacity constraints, lack of resources and saboteurs in the ranks. Recruitment of suitably trained and specialised personnel is impossible because suitable personnel do not want to be part of the toxic environments that exist in the corrupted SAPS and NPA ranks.

2.13. It is the constitutional duty of the National Assembly to initiate and prepare legislation that addresses the failures in the criminal justice administration as regards anti-corruption functions[C55(1)]. It must do so while respecting the rulings of the courts that pertain to the countering of corruption [C 165]. The reform of the criminal justice administration in a manner that remains constitutionally compliant is the urgent business of the National Assembly. The groundswell of opinion in the larger political parties supports the need for urgent reform.

2.14. The Executive is not currently in a position to give proper and objective leadership on the issues that impact on the reform of the criminal justice administration due to its compromised if not paralysed status. Far too many past and present members of cabinet belong in the dock in a criminal court. During the Zuma era the state capture project thrived. In the current Ramaphosa led dispensation SA has endured “farmgate”, “covidpreneurism”, even at cabinet level, and has seen the introduction, by presidential proclamation, of the ID of the NPA. The ID is an unconstitutional body that contradicts the scheme of the legislation in place and is not STIRS compliant in that it serves at the pleasure of the president. The ID is no solution to the problem. It should be disbanded. The Hawks are not STIRS compliant and the NPA is infested with saboteurs according to its own leadership.

2.15. In these circumstances the problem is best addressed by radical reform of the criminal justice administration that equips it to deal with serious corruption efficiently and effectively in the manner contemplated by the courts. The fact that parliament is bound by the decisions of the courts is an added spur to reforming the system in a manner that appropriately addresses “the circumstances” set out above and in the SCC report by the current Chief Justice.

2.16. It is suggested that the best practice way of doing so is by establishing, as a matter of urgency, a Ch9IC to investigate and prosecute serious corruption. Petty corruption can be entrusted to the Hawks and the NPA, serious corruption requires a specialist agency of trained experts who are independent of the Executive, report only to Parliament and enjoy secure tenure of office. The agency must be properly resourced in guaranteed fashion.

2.17. It is the task, and indeed the duty, of Parliament to establish, via the decision of a reasonable decision-maker in the circumstances, the type of machinery of state contemplated in the binding decisions of the Constitutional Court mentioned above. The political will to do so already exists, the urgency of the matter demands swift action.

  1. Historical overview of corruption-busting in the new SA

3.1. No useful purpose is served by devoting attention to the position that pertained prior to 1994. Democracy in SA dawned for the first time in April 1994 when the first free and fair election in which all citizens were allowed to participate was held. The post-1994 Parliament is only accountable for the post-1994 machinery of state to counter the corrupt.

3.2. In colonial and apartheid times the SA state was abused by colonialists and those who operated the apartheid regime for the purpose of exploiting the natural, mineral and human resources of SA so as to extract value for themselves.

3.3. Moeletsi Mbeki, brother of the second democratic SA president, has recently suggested that the purpose of the national democratic revolution, which motivates the tripartite alliance that has governed at national level since 1994, has been to continue the corrupt projects of colonial and apartheid times. It has done so for the benefit of those involved in the revolution and in the state capture project that saw its heyday during the Zuma administration.

3.4. What is relevant for present purposes is that the concept ‘corruption’ was not mentioned in the Constitution at all.

3.5. The closest references are those in C 179(2) and C 205(3) in which the general mandates of the National Prosecuting Authority and the SAPS are set out in broad terms that are sufficiently wide to allude indirectly to corruption in all its forms.

3.6. During the Mbeki presidency, as early as 1999, it was recognised that corruption was presenting a challenge to the success of the democratic project in the new SA and steps were taken by the then NDPP, Bulelani Ngcuka, and the then Minister of Justice, Peneull Maduna, to address what were dubbed “priority crimes” appropriately     https://accountabilitynow.org.za/paul-hoffman-has-anc-finally-had-its-eureka-moment-on-corruption/

3.7. This decision led to the passing of ordinary legislation in terms of which the Directorate of Special Operations ( or Scorpions as they were popularly known ) was established as a unit within the National Prosecuting Authority.

3.8. The Scorpions enjoyed a high level of success in their prosecutor-led activities achieving a 94 % success rate in their troika style activities in which investigators and forensic experts worked closely with prosecutors all under one structure. This methodology turned out to be effective and efficient in the countering of corruption. Both the chief of police, Jackie Selebi and Jacob Zuma (then a private citizen following the conviction of Shabir Schaik on charges of corrupting Zuma) were investigated by the Scorpions leading to criminal prosecutions.

3.9. At the end of the second Mbeki presidency a commission of inquiry into the Scorpions, chaired by Justice Sisi Khampepe, recommended their retention despite “turf wars” with the police.

3.10. Upon the election of Jacob Zuma, at the December 2007 Polokwane conference of the ANC, to the presidency of the ANC, an urgent resolution was passed to dissolve the Scorpions.

3.11. This decision was justified by the then Secretary General of the ANC, Gwede Mantashe, in an interaction he had with Helen Zille, then leader of the opposition. He said, in April 2008, that the ANC wanted the Scorpions disbanded because they were a ‘political unit made up of apartheid security branch members who treated the ANC as the enemy.’ Secondly, the investigation of Jacob Zuma was regarded as ‘ an abuse of power’. Thirdly, the ANC would ensure that its Polokwane resolution was implemented. Lastly, the ANC wanted the Scorpions disbanded because they were ‘prosecuting ANC leaders.’

3.12. The dissolution of the Scorpions was duly effected by way of fiercely contested legislation that required the investigative staff of the DSO to be transferred to the SAPS and created the Directorate of Priority Crime Investigation (or Hawks) as a unit within the police.

3.13. The dissolution of the Scorpions survived a challenge impugning the constitutionality of the decision to do so, but the creation of the Hawks did not pass constitutional muster. The most relevant parts of the judgment of the Constitutional Court are collected here: https://accountabilitynow.org.za/what-the-concourt-majority-judgment-found-in-glenisters-case/.

3.14. Remedial legislation was passed within the 18 months allowed by the court and it survived, with some tinkering by the Constitutional Court, further attempts at impugning its constitutionality [ https://www.pa.org.za/hansard/2012/may/23/proceedings-of-the-national-assembly-wednesday-23-/south-african-police-service-amendment-bill-second. ]

3.15. The State Capture Commission missed the opportunity to comment on the failure of the criminal justice administration effectively and efficiently to combat corruption because it misconstrued the binding majority judgment, which it praised, as a minority judgment.

[https://accountabilitynow.org.za/the-evidence-is-clear-state-capture-crime-scene-          number-one-is-luthuli-house/.]

3.16. In order to better understand the lack of efficiency and effectiveness of the Hawks as corruption busters it is instructive to have regard to the statistics. In 2008/9, the first full year of operations by the Hawks the number of new investigations fell by 85% when compared with the work of the Scorpions in the previous year. The value of loot seized by the Hawks was 99% lower in value than that seized by the Scorpions. In reply to a parliamentary question asked on 11 September 2015, the minister of police  released figures which showed that the arrests made by the Hawks had declined from 14,793 in 2010/11 to 5847 in 2014/15. These statistics are described as “startling as well as dismaying” on page 143 of the book “Confronting the Corrupt” that was published by Accountability Now in 2016. Certainly, the ability of the Scorpions to seize assets of R4 billion compares favourably with the R35 million seized by the Hawks and even the R 5 billion of the NPA in the last year.

3.17. The underperformance of the Hawks did not seem to bother the Zuma administration. No remedial steps were taken to address the manifest shortcomings in their productivity. Litigation concerning the security of tenure of office of various leaders of the Hawks, ranging from Anwa Dramat and Berning Ntlemeza to Johann Booysen was contested by the Zuma administration. It is arguable that the disbandment of the Scorpions facilitated much of state capture during the Zuma years. Impunity for corrupt activities became the order of the day. The culture of impunity has manifested more recently in the totally immoral phenomenon of “covidpreneurism”.

3.18. In an effort to address the decline in anti-corruption activities the current president, by way of proclamation in April 2019, established the Investigating Directorate in the NPA. [ https://www.justice.gov.za/legislation/notices/2019/20190404-gg42383pr20-NPA-ID.pdf. ]

3.19. This new unit, which serves at the pleasure of the president, illegally takes over parts of the legislated mandate of the Hawks. The constitutionality of the ID is questionable as it can hardly be regarded as independent when it can be closed down at the will of the president. The illegality and unconstitutionality of the ID have been tolerated on the basis that the unit is not permanent and constitutes a somewhat small step in the right direction.

3.20. The security of tenure of the ID’s initial leader was tested and failed when she was asked to resign and did during 2021.[ https://accountabilitynow.org.za/mayday-the-npas-hermione-cronje-is-navigating-treacherous-waters/. ] [ https://accountabilitynow.org.za/hermione-cronje-npa-resignation-impunity-6-accountability-0-game-and-first-set-to-the-corrupt/. ] [ https://accountabilitynow.org.za/the-ineffable-sadness-of-the-national-prosecuting-authority-as-frustrated-hermione-cronje-resigns/. ]

3.21. The National Anti-Corruption Strategy adopted by cabinet in November 2020 is the product of Zuma-era thinking. It gives the binding STIRS criteria, which ought to be at the centre of reform, no more than a footnote. It also advocates the multi-agency approach that was so ineffective during the Zuma years, an approach now rejected by the NEC of the ANC in its August 2020 resolution calling for reform. [ https://accountabilitynow.org.za/the-road-to-a-national-anti-corruption-strategy-is-paved-with-outmoded-intentions/.

3.22. The current anti-corruption efforts of the NPA are dealt with in an article by DNDPP Anton du Plessis [ https://www.dailymaverick.co.za/opinionista/2022-07-07-npa-is-finally-reaching-solid-ground-to-deliver-justice/. ] He summarises the latest available annual report of the NPA and discusses statistics that unintentionally reveal that  an “army of prosecutors” (to use the phrase of the Chief Justice) is required on the anti-corruption front – an army which the NPA has not been able to muster, indeed, will not and cannot muster. The necessary expertise to deal with serious corruption is not available to the NPA and will not be available in any realistic or appropriate time-frame. [ https://accountabilitynow.org.za/its-not-now-or-never-for-the-npa-its-never-ever/. ]

3.23. Nobody today suggests that the Hawks, given their ever declining productivity, have the necessary sapiential authority to be part of the solution required to counter serious corruption. The Hawks could attend to many other priority crimes if they are relieved of their mandate to investigate serious corruption. They ought to be allowed to concentrate on the categories of crime that they are equipped to deal with. Due to structural and operational flaws affecting independence and security of tenure of the Hawks, and also other challenges in SAPS, they are not up to the task of investigating serious corruption.

3.24. The emerging political consensus (between ANC, DA and IFP) around the establishment of the specialist anti-corruption body, that is clothed properly with the STIRS criteria, points to the way forward from the ravages of state capture and “covidpreneurism” toward a future in which rampant corruption in SA is a feature of the past.

  1. The economic issues as affected by corruption in SA

4.1. It is notorious that half of the population in SA lives in poverty with joblessness at all-time highs and inequality, as measured by the Gini coefficient, the highest in the world.

4.2. The encouragement of new investment in SA is accordingly a priority for government as it has the potential to address the triple threats to the better life for all promised in the Constitution.

4.3. As long ago as November 2020 Accountability Now had occasion to write to the president to highlight the link that corruption has to these challenges:

Dear Mr President,

  1. Your weekly letter to South Africans published by “Politicsweb” on 17 November 2020 refers.
  2. It is both timely and appropriate for you to encourage new investment in SA at this delicate stage in our history, given the ravages of the pandemic and of state capture.
  3. In order to get new investment, it is necessary to build public trust in government institutions and to enhance business confidence in the profitability of making new investments in the post-Covid19 environment the world will enter once vaccines are available.
  4. There is no better way to build public trust and business confidence than by demonstrating that the rule of law is intact and the criminal justice administration is functioning optimally.
  5. It is monotonously conceded by the NDPP that all is not well with the NPA. It is underfunded, short-staffed, lacking in facilities and capacity and incapable of dealing with the tidal wave of corruption both in relation to “PPE” procurement and in general. Adv Batohi has indicated to parliament that the anti-corruption work of the criminal justice administration is like a “pinpoint on an iceberg”. Her metaphor is both accurate and bound to cause consternation in the minds of prospective new investors while also perplexing public trust in government in SA.
  6. As you know, the NEC of the ANC is alive to the problems currently being experienced by the criminal justice administration as a consequence of the ravages of state capture within it. This dysfunction includes  the hollowing out of the NPA  which is thoroughly compromised by the “saboteurs” (Adv Hermione Cronje’s term for Zuma era deployees) in its own ranks. Furthermore, the Hawks have proved to be unsuccessful at replacing the investigative functions previously carried out by the Scorpions, a  NPA unit which was closed down by President Motlanthe in 2009, when he was in office.
  7. The location of the Hawks within the SAPS has not been a successful substitute for the Scorpions troika system of investigation and prosecution by one entity operating free of executive control, influence and interference in a structural and operational environment conducive to acting without fear, favour or prejudice.
  8. You are also very much alive to the dangers of the executive becoming involved in anti-corruption work. You have warned the Leader of the Opposition to “run for the hills” should that ever occur. We agree with you.
  9. The NEC of the ANC has resolved in August in favour of the urgent establishment of a stand-alone, permanent and independent agency to deal with corruption and organised crime.
  10. In so doing it has embraced the “single agency” approach used in many countries that have successfully combated corruption. It has also followed the line taken by the majority of the Constitutional Court in the Glenister litigation in which the criteria for success in corruption-busting activities of state have been prescribed in binding terms. The multi-agency of the Zuma era will be history once the NEC resolution is implemented.
  11. The multi-agency approach of the Zuma era has not worked successfully in performing “diligently and without delay” (C 237) the work now necessary to end the culture of  corruption with impunity that is abroad in the land.
  12. In our respectful view, the best practice way of achieving that which the NEC has resolved be done is to set up a new Chapter Nine Institution, perhaps called “The Integrity Commission” to prevent, combat, investigate and prosecute  grand corruption and organised crime  in the effective manner envisaged by the resolution of the NEC. This approach is favoured by Archbishops Tutu and Makgoba as well as Professor Thuli Madonsela. Adv Willie Hofmeyr has proposed useful tamper-proof ways of appointing and dis-appointing key personnel whose integrity is essential to success in countering the corrupt.
  13. While the envisaged step will involve the removal of the prosecution of those suspected of grand corruption from the mandate of the NPA and a second constitutional amendment to create the Integrity Commission, it is nevertheless apparent that the Hawks will be able to continue with investigation of the other priority crimes falling within their mandate. The NPA will continue to prosecute all other crime. It might even be indicated to fold IPID and the SIU into the new institution in the interests of efficiency and economy in these fiscally straitened times.
  14. The location of the Integrity Commission in Chapter Nine will enable it to function with a constitutional guarantee of independence in the manner wanted by the NEC, (and the courts) namely without fear, favour or prejudice.
  15. The National Anti-Corruption Strategy (NACS), so long in the making, will have to be adapted to take into consideration the NEC resolution and ought not to be published in a form that in any way contradicts the criteria set by the NEC, these are  criteria which happily coincide with those required by law and by the rulings of the courts as well as by international best practice. Having made submissions to the Working Groups tasked with formulating the NACS, we fear that the groups are infested with Zuma-era thinking and a disregard for the findings of the Constitutional Court in the Glenister cases, findings which are binding on the state. The NEC resolution must have come as a shock to many members of the working groups who remain stuck in outdated “multi-agency” thinking.
  16. A NACS formulation that contradicts the NEC resolution (as announced on 4 August 2020) and the law will sow confusion. It will also increase lack of trust in government to do what the governing party’s highest decision-making body between conferences requires of it. Falling around of this kind will also undermine the level of business confidence required by you to encourage much needed fresh investment with success.
  17. It is necessary to ensure that the NACS working groups are on the same anti-corruption mission as the NEC by the time that the next iteration of the strategy is published. It will be hugely detrimental to your investment encouragement efforts if it is not.
  18. The legislation necessary to effect the change to a Chapter Nine Integrity Commission already exists in draft form on the website of Accountability Now. We commend it to your attention as you mull the implementation of the NEC resolution.

4.4. No reply was received from the president and the NACS was published in its Zuma-era format after the letter was written and after the ANC NEC resolution was passed on 4 August 2020.

4.5. New investment has not been attracted at levels that would revive SA’s failing economy. While there are many reasons for the lack of new investment, it is unarguable that the culture of serious corruption, with impunity abroad in the land, has prejudiced the chances of SA to attract new investment. Potential investors regard the risks around corrupt activities as unacceptable.

4.6. There is currently a danger that the FATF will grey list SA which will have deleterious effects on economic growth.[ https://www.businesslive.co.za/bd/opinion/letters/2022-07-19-letter-grey-listing-would-turn-sa-red-with-wrath/. ]

4.7. Experts estimate that GDP falls by 1% in most countries that are grey listed. This is a drop SA cannot afford. In effect it would halve the projected growth of the economy [ https://www.businesslive.co.za/bd/economy/2022-07-21-reserve-bank-signals-sharper-rate-hikes-ahead-as-it-confronts-inflation/.]   [https://www.politicsweb.co.za/documents/repo-rate-increased-by-75-basis-points-to-550–les. ]

4.8. Cabinet could avoid grey listing by announcing its acceptance of the ANC NEC resolution of 4 August 2020 and by publishing bills based on the drafts circulated by Accountability Now in August 2021 with a view to kick starting the process of law making needed to address the need for reform.

4.9. Should cabinet remain paralysed, as it has been since 2020, it falls to parliament to initiate the necessary legislation. The DA has been preparing private members bills since mid-2021 which could be converted into committee bills if the necessary political will and co-operation is generated.

4.10. The apparent paralysis of the Executive branch of government may be explained by the high number of compromised members of cabinet and factionalism in the ANC. This unfortunate fact is good reason for Parliament to exercise its own law-making capacity as conferred in C 55 (1)(b).

4.11. While poverty, joblessness, inequality and the threat of grey-listing stalk the land, it is incumbent upon parliament to alleviate the situation by initiating the legislation urgently needed to reform the criminal justice administration so as to better equip it to counter serious corruption. The loot of corruption is a severe drain on resources of the country better spent on poverty alleviation, job creation and the promotion of the achievement of equality. These steps are all constitutional goals the achievement of which will remain elusive while serious corruption runs rampant in SA. An Arab spring is predicted by both Thabo Mbeki and Julius Malema  https://www.youtube.com/watch?v=AFFlKRuRm_s

  1. The effect of corruption with impunity on the socio-political goals of the Constitution.

5.1. It is variously estimated that the looting involved in State Capture in SA has, in a mere four years, cost the country between R1 and R2 trillion.[1]  [ https://www.dailymaverick.co.za/article/2019-03-01-state-capture-wipes-out-third-of-sas-r4-9-trillion-gdp-never-mind-lost-trust-confidence-opportunity/. ] [ https://ddp.org.za/blog/2020/10/06/implication-of-corruption-on-economic-growth-in-south-africa/ ]

5.2. The national debt in SA is roughly R4 trillion, so the effect of the looting is marked, whatever its finally determined amount may be. Recovery of all of the loot could halve the national debt! [ https://www.statssa.gov.za/?p=11983&gclid=EAIaIQobChMIy_DnwYOe-QIVRe7tCh02mwMMEAAYASAAEgI_qfD_BwE. ] As of 2021/22 total South African government debt was R4. 3 trillion. The country’s debt to GDP ratio in October 2020 was calculated at 82.76% of GDP by the International Monetary Fund.

5.3. A trillion is a difficult concept to visualise. A billion seconds is about 31 years. A trillion seconds is 31,688 years. By way of contrast, a million seconds is equivalent to 0.031709792 years . In short, R1 trillion is a great deal of money which SA can ill-afford to allow the corrupt to retain.

5.4. When corruption takes the form of State Capture then it is fair to describe corruption as “Theft from the Poor.”

5.5. Judge Navi Pillay put it well when she said:  

“Make no mistake about it, corruption is a killer… The money stolen through corruption is enough to feed the world’s hungry 80 times over… Corruption denies them their right to food and, in some cases, their right to life.”

5.6. Kofi Annan, when he was [2] Secretary General of the UN put it thus:

“Corruption is an insidious plague that has a wide range of corrosive effects on societies. It undermines democracy and the rule of law, leads to violations of human rights, distorts markets, erodes the quality of life and allows organised crime, terrorism and other threats to human security to flourish.”

5.7. The socio political goals of SA are clear. They are spelt out in the Preamble and the first chapter of the Constitution.

5.8. The Bill of Rights provides that the state must respect, protect promote and fulfil the rights guaranteed to all in it. [ C 7(2) ]

5.9. Honouring human dignity, promoting the achievement of equality, and enjoying those human rights are all fundamental to the constitutional project in SA. [ C 1 ]

5.10. Poverty, unemployment, corruption and inequality (PUCI) all stalk the land in 2022. A former president, Thabo Mbeki, complained in July 2022 that the government has no plan and no social compact to deal with PUCI.

5.11. About half the population lives in poverty, the unemployment rate is over 34%, corruption with impunity remains largely unaddressed and our Gini co-efficient, a measure of wealth disparity, reveals SA as the one of the most unequal societies in the world.

5.12. SA has been ranked as the country with the lowest level of income equality in the world, thanks to a Gini coefficient of 63.0 when last measured in 2014. That said, in 2005, the Gini coefficient was even higher, at 65.0. In South Africa, the richest 10% hold 71% of the wealth, while the poorest 60% hold just 7% of the wealth. Additionally, more than half of South Africa’s population lives in poverty. [https://worldpopulationreview.com/country-rankings/gini-coefficient-by-country.

5.13. The former president’s complaints seem to be well-founded. [ https://www.dailymaverick.co.za/article/2022-07-22-thabo-mbeki-slams-anc-for-failing-on-unemployment-poverty-inequality/.]

5.14. The many and varied challenges posed by PUCI will not be adequately addressed while corruption with impunity is allowed to continue. It follows that the “better life” for all envisaged in C 198 will not be secured until reform aimed at countering serious corruption are put in place.

5.15. The “resolve of all South Africans, as individuals and as a nation, to live as equals, to live in peace and harmony and to be free from fear and want and to seek a better life” are, in effect, unattainable while serious corruption with impunity remains unaddressed [ C198(a) ]

5.16. The founding values of accountability and responsiveness in governance are also hamstrung in any situation in which serious corruption is not tackled with vigour and determination. The words of Chief Justice Mogoeng Mogoeng, writing for the majority in Glenister 3 in November 2014, when the term State Capture was not yet used to describe the lot of SA, are apposite:

… corruption is rife in this country and stringent measures are required to contain this malady before it graduates into something terminal.

“We are in one accord that SA needs an agency dedicated to the containment and eventual eradication of the scourge of corruption. We also agree that the entity must enjoy adequate structural and operational independence to deliver effectively and efficiently on its core mandate.

 The socio political impact of unchecked corruption is also dealt with in the joint judgment of Moseneke DCJ and Cameron J in Glenister 2 in March 2011:


“There can be no gainsaying that corruption threatens to fell at the knees virtually everything we hold dear and precious in our hard-won constitutional order. It blatantly undermines the democratic ethos, the institutions of democracy, the rule of law and the foundational values of our nascent constitutional project. 

“It fuels maladministration and public fraudulence and imperils the capacity of the state to fulfil its obligations to respect, protect, promote and fulfil all the rights enshrined in the Bill of Rights. 

“When corruption and organised crime flourish, sustainable development and economic growth are stunted. And in turn, the stability and security of society is put at risk.”  

5.17. A basic income grant, the stimulation of job creation and the improvement of health and educational services in SA will all be unaffordable while serious corruption is allowed to persist.

5.18. It is a socio-political imperative that reform of the criminal justice administration be effected to better equip it to deal with serious corruption. At its July 2022 policy conference the ANC debated reform of this kind. Its spokesman, Pule Mabe, announced on the eve of the conference that: ““the NEC Peace and Stability Committee and the NEC Constitutional and Legal Affairs Committee are together considering the recommendations around a new anti-corruption agency, the protection of whistle blowers and deferred prosecution agreements, among others.”

5.19. It is not entirely clear which recommendations Mabe is referring to in his media announcement. His attention will be drawn to the suggestions made by Accountability Now.

  1. The binding nature of the findings in the Glenister litigation.

6.1. The main features of the judgment of the majority in Glenister II that are relevant to reform of the criminal justice administration are collected here: [ https://accountabilitynow.org.za/what-the-concourt-majority-judgment-found-in-glenisters-case/. ]

6.2. The orders relevant to the work of Parliament are clear in their terms:

5.      It is declared that Ch 6A of the South African Police Service Act 68 of 1995                          is inconsistent with the Constitution and invalid to the extent that it fails to secure an adequate degree of independence for the Directorate for Priority Crime Investigation.

7. The declaration of constitutional invalidity is suspended for 18 months in order to give Parliament the opportunity to remedy the defect.”

6.3. The purpose of giving Parliament 18 months to remedy the defect was to afford Parliament sufficient time to consider the ramifications of independence for anti-corruption machinery of state and its ability to function in accordance with the values and principles that are set out in C 195(1) and in particular in C 195(1)(b).

6.4. Corruption, especially corruption in the state itself, cannot easily be countered when the corruption-busters are subject to influence, interference and impedance by the executive branch of government. Influence: when they are dissuaded in various ways from doing their work properly either in selected cases or at all. Interference: when steps are taken to stop a particular line of inquiry, attacks are made on faithful and loyal corruption-busters and disciplinary steps are abused. Impedance: when resources and budget necessary to function optimally are denied to corruption-busters. All three were present in abundance during the height of State Capture. The current need for reform is recognised by the majority of parliament.

6.5. The process on which Parliament embarked between March 2011 and September 2012 was designed by the executive to result in as little tinkering with the existing struck down legislation as possible to render it constitutionally compliant. Despite further tinkering by the majority of the Constitutional Court in November 2014 in the HSF/Glenister case, it is safe to observe now in 2022 that the scheme of the legislation has not been a success and that interference, influence and impedance continued to the detriment of independence and to the cost of the state in respect of the loot of State Capture and the damage done to the fabric of constitutional democracy under the rule of law since 2011.

6.6. The manner in which the legislation currently in place has been implemented leaves much to be desired. Oversight by Parliament of the implementation of the legislation has not ensured the effect of addressing the rampant serious corruption issues still present in SA to this day. The initiation of replacement legislation by Parliament is long overdue.

6.7. In terms of  C 165(5) “An order or decision issued by a court binds all persons to whom and all organs of state to which it applies.”

6.8. Parliament is accordingly bound to ensure adequate independence of corruption investigators[3]  as it is the organ of state that has been ordered to put in place the necessary remedial legislation.

6.9. As an organ of state Parliament is also bound to “assist and protect the courts to ensure the independence, impartiality, dignity, accessibility and effectiveness of courts.”  [C165(4) ]

6.10. When a court order aimed at achieving adequate independence for corruption investigators is not properly implemented the consequences are dire, as can be seen from the report of the SCC and its recommendations. It is fair to suggest that State Capture would not have taken place or would have been nipped in the bud had there been full and proper compliance with the orders quoted above from the judgment in Glenister II.

6.11. It should also be noted that SA is obliged to comply with its international treaty obligations as regards the countering of corruption. This topic is dealt with in the joint judgment of March 2011 in the Glenister II case. It is clear from the SCC report and the activities of FAFT that SA has been in breach of these international obligations for years

7. The oversight and law-making functions of Parliament.

7.1. The National Assembly may initiate or prepare legislation, except Money Bills, under the powers afforded it by C 55(1)(b).

7.2. Committee Bills and Private Members Bills are the form that legislation prepared or initiated by Parliament usually takes. It is for this reason that Accountability Now has suggested the two drafts that address the dysfunction in the criminal justice administration insofar as countering serious corruption is concerned.

7.3. The National Assembly must ensure that the Executive is accountable to it and must maintain oversight of the implementation of legislation as well as oversight over organs of state. [ C 55(2) ]

7.4. In EFF v The Speaker the Constitutional Court held that the National Assembly is the voice of all South Africans and “… the watchdog of State resources, the enforcer of fiscal discipline and cost-effectiveness for the common good of all our people. It also bears the responsibility to play an oversight role over the Executive and State organs and ensure that constitutional and statutory obligations are properly executed. For this reason, it fulfils a pre-eminently unique role of holding the Executive accountable for the fulfilment of the promises made to the populace through the State of the Nation Address, budget speeches, policies, legislation and the Constitution, duly undergirded by the affirmation or oath of office constitutionally administered to the  Executive before assumption of office…. No doubt, it is an irreplaceable feature of good governance in South Africa.”

  1. The decision making process for devising adequate independence

8.1. It is plain that the legislation currently in place which reserves the investigation of serious corruption to the Hawks and its prosecution to the NPA is not working optimally. Some might argue that it is not working at all.

8.2. The circumstances in SA are now different to what they were in 2011. There has been a pandemic, unemployment is higher than it has ever been, great expense has been incurred both directly and indirectly as a consequence of the pandemic, the economy of the world is in turmoil due to conflict in Ukraine and State Capture  was attempted in SA on a widespread and ruinously expensive scale. Covidpreneurism has also taken its toll.

8.3. The Constitutional Court does not prescribe to the National Assembly. Instead, it has enjoined Parliament to make the  “reasonable decision of a reasonable decision-maker in the circumstances”

8.4. It is now, with the benefit of hindsight, plain that the decision making in response to the court order is no longer the decision of a reasonable decision-maker, given the change in circumstances that has occurred in SA since 2011.

8.5. The implementation of the legislation aimed at countering the corrupt has not been effective and efficient as required by C195(1)(b).

8.6. The question is how does Parliament comply with the type of decision making process that the court requires? The answer was given by the court itself, in the context of administrative decision making in the earlier decision in the Rail Commuters Action Group case in which O’Regan J wrote the unanimous judgment of the court. She put it thus:

[88] What constitutes reasonable measures will depend on the circumstances of each case.  Factors that would ordinarily be relevant would include the nature of the duty, the social and economic context in which it arises, the range of factors that are relevant to the performance of the duty, the extent to which the duty is closely related to the core activities of the duty-bearer – the closer they are, the greater the obligation on the duty-bearer, and the extent of any threat to fundamental rights should the duty not be met as well as the intensity of any harm that may result.  The more grave is the threat to fundamental rights, the greater is the responsibility on the duty-bearer.  Thus, an obligation to take measures to discourage pickpocketing may not be as intense as an obligation to take measures to provide protection against serious threats to life and limb.  A final consideration will be the relevant human and financial resource constraints that may hamper the organ of state in meeting its obligation.  This last criterion will require careful consideration when raised.  In particular, an organ of state will not be held to have reasonably performed a duty simply on the basis of a bald assertion of resource constraints.  Details of the precise character of the resource constraints, whether human or financial, in the context of the overall resourcing of the organ of state will need to be provided.  The standard of reasonableness so understood conforms to the constitutional principles of accountability, on the one hand, in that it requires decision-makers to disclose their reasons for their conduct, and the principle of effectiveness on the other, for it does not unduly hamper the decision-maker’s authority to determine what are reasonable and appropriate measures in the overall context of their activities.”

8.7. It can be seen from the various headings of the sections of this submission that the relevant circumstances are sketched in broad outline and not as a comprehensive list.

8.8. It is certainly not reasonable to do nothing and allow the current unsatisfactory situation to persist.

8.9. It is for Parliament to decide upon the reasonable decision of a reasonable decision maker in the circumstances and for the courts to determine the constitutionality of the decision actually made, if it is challenged or impugned for want of constitutionality.

8.10. Hindsight shows that the decisions made to separate investigation (police) and prosecution (NPA) have not worked optimally and in the interests of the people of SA.

  1. The draft constitutional amendment explained.

9.1. The amendment of the constitution is required in order to afford the new anti-corruption entity the protection of the status that comes with being a Chapter Nine Institution. Under the Constitution it is impossible to close down or change such an institution without a two thirds majority in the National Assembly.

9.2. As “secure tenure of office” is one of the binding STIRS criteria, it is both necessary and important to fashion the law in such a way as to guarantee secure tenure of office. Any entity created in terms of an ordinary statute, such as that which set up the Scorpions and the Hawks, is vulnerable to dissolution or curtailment of its activities at the behest of a simple 50% plus one majority in the National Assembly. This disadvantage has the effect of limiting the security of office of the entity and of rendering it less effective and efficient due to the need to “look over one’s shoulder” when tackling well connected and politically exposed persons.

9.3. There is no mechanism, short of Chapter Nine status, by which the entity can be insulated against the influence and interference that is possible if an ordinary statute is used to create it. The experience of the Scorpions teaches us that this vulnerability in inherent in an entity created by way of an ordinary statute.

9.4. The fates of individuals within the Hawks and the NPA illustrate the lack of secure tenure of office in the current dispensation. Dramat, Sibiya, Booysen and even Ntsemela are good illustrations in the Hawks. Vusi Pikoli, Glynnis Breytenbach and Hermione Cronje are all leading former prosecutors who have been eased out of office instead of enjoying secure tenure of office as required by the judgment in Glenister II.

9.5. The adjustments to C 179 set out in the draft constitutional amendment are aimed at curing defects in the independence of the NPA. This topic has been publicly debated in the columns of the Daily Maverick and elsewhere.  See https://www.dailymaverick.co.za/article/2022-06-20-its-now-or-never-for-the-national-prosecuting-authority/. And https://accountabilitynow.org.za/its-not-now-or-never-for-the-npa-its-never-ever/. See also:

https://accountabilitynow.org.za/no-more-npa-tinkering-paul-hoffman/ and

https://accountabilitynow.org.za/is-the-npa-really-independent/.

In essence, the “final responsibility” of the minister of justice and the fact that the Director General of the justice department is the accounting officer of the NPA render it less than truly independent. Adequate independence is the hallmark of a true and useful anti-corruption entity and of all prosecutors. Answering to the executive and being accountable to the minister are not optimal measures for ensuring the independence of the NPA. If it is to heal from the drubbing it took during the State Capture period, the NPA will have to start reporting to

Parliament, not to the Executive, and it will need to find its own accounting officer, not have one imposed on it by the Executive from outside its own ranks.

Effective corruption-busting requires a level of independence which neither the Hawks nor the NPA currently enjoy under the existing dispensation, hence the need for reforms of the kind suggested by Accountability Now in its drafts.

  1. The draft enabling legislation explained

10.1. At the inception of the democratic project it was plain to the founders of the new SA that it would take some effort to bed down the new institutional arrangements that replaced the parliamentary sovereignty of the apartheid era.

10.2. The population was habituated to a system in which passive subjects bowed before an authoritarian regime. In the new arrangements, the Constitution is regarded as the supreme law and active citizenship of a participatory nature is encouraged. Politicians are constrained by  the constitutional requirement that all laws and conduct have to be consistent with the Constitution.

10.3. In order to help bed down constitutionalism institutions were created in Chapter Nine as new mechanisms for supporting constitutional democracy. Protection of the public, promotion of human rights guaranteed in terms of the Bill of Rights and an independent Auditor General are the main Chapter Nine Institutions. They serve to counter maladministration, prevent violations or threats to human rights and ensure that public money is well spent.

10.4. There is no specialist Chapter Nine Institution which has the prevention, combatting, investigation and prosecution of serious corruption as its mandate. Despite the need for specialists to deal with corruption, these functions have been left to the police and the prosecution service in the 1996 final Constitution.

10.5. The Constitutional Court has identified the need for a specialist body in the Glenister litigation, one that is STIRS compliant and sufficiently independent to effectively and efficiently counter serious corruption.

10.6. The suggested enabling legislation drafted by Accountability Now has regard to the way in which enabling legislation for other Chapter Nine Institutions has been fashioned and legislated.

10.7. The draft addresses the need to appoint staff of probity and integrity. The leadership of the Ch9IC is to be of impeccable standard and protected against executive interference and will report only to parliament. The mandate and functions of the Ch9IC are spelt out in the draft as are the manner in which it will function. Appointment procedures are designed to ensure that the right people are appointed and are able to withstand pressure, interference and malign influence.

10.8. The explanatory memorandum which accompanied the drafts when they were first published in August 2021 contains details about the enabling legislation which need not be repeated here.

10.9. The drafts are a suggestion, the task of finalising the reform of the criminal justice administration is that of Parliament. It must be guided by the STIRS criteria set in Glenister II and is bound by the decisions in both Glenister II and Glenister III. Parliament  is required, by order of court, to make the reasonable decision of a reasonable decision-maker in the circumstances. The relevant circumstances are contained in the report of the SCC, The Sandy Africa report on the insurrection in July 2021, the reports of the Nugent and Mpati commissions and in the reported work of the SAHRC, AG and OPP.

10.10. It is clear that the FATF and OECD have given attention to the situation in SA. The ratings agencies have also given SA a series of downgrades that make recovery more difficult in economic terms.

10.11. The reality is that until corruption is effectively and efficiently countered in SA the attraction of new investment that stimulates economic activity will be difficult. The necessary trust in government and the business confidence required to unlock new investment will remain absent and elusive until steps are taken to address corruption with impunity in SA.

10.12. It is accordingly the urgent business of parliament to fashion laws that better address the incidence of serious corruption with impunity in SA.

  1. The urgency of the situation as regards countering serious corruption in SA

11.1 It is convenient to consider the manifest urgency of the situation under three headings. Firstly as regards reform of the criminal justice administration to establish a Ch9IC urgently, secondly the alleviation of the current plight of whistleblowers and finally the introduction of Non-Trial Resolution (NTRs) of bribery and corruption matters.

11.2. Of the three, the introduction of a Ch9IC is clearly the most urgent. This is because the loot of state capture will be dissipated or further hidden before the current administration is able to muster the specialised staff, the effort and the necessary expertise required to get on top of the preparation required to rake back the loot. The contribution of Andrea Johnson, the new head of the ID in the NPA to a recent conference at US is instructive. See: https://www.dailymaverick.co.za/article/2022-07-28-pigmentation-has-nothing-to-do-with-lack-of-progress-in-steinhoff-case-investigating-directorate/.

11.3. Johnson is quoted as saying:

“What it’s about is the extent of the corruption, the levels at which it took place, the period over which it took place, the sophistication with which it happened and the time and resources required to actually uncover the scheme that was Steinhoff. It is not an easy matter.”

11.4. Johnson said that when law enforcement agencies try to build cases of this nature, they run up against the problem of the small size of the talent pool available — in terms of the tiny number of investigators and prosecutors with the relevant financial knowledge and experience.“Here’s the travesty: we are all fishing in the same gene pool for the same resources: the ID, the Hawks, SAPS, SARS … any law enforcement in the country,” Johnson said.

11.5. An additional problem is that the relevant individuals are ageing, without the necessary “new growth” in the development of these skills in the next generations.”

11.6. A single agency solution that does not have the baggage of the current criminal justice administration will be able to attract those in the private sector and elsewhere who are prepared to serve with honour and integrity in a new institution which is not haunted by the ghosts and saboteurs of State Capture.

11.7. A Ch9IC would be attractive to many in the private sector and to former Scorpions, top members of the ID, the SIU and the Hawks. An elite body with the necessary esprit d ’corps can bring back the success levels that the Scorpions enjoyed prior to their dissolution. It is not that the talent does not exist in SA, the skills are out there, they are simply not attracted to joining the current dysfunctional system, as is admitted by Johnson above in paragraph 11.2.

11.8. With cross party co-operation in the parliamentary system it will be possible to complete the legislative process properly in a matter of months, as was done with the floor crossing legislation in the past.

11.9. Establishing the new Ch9IC ought to be the number one priority of the current parliament.

11.10. The lot of whistleblowers in SA is not a happy one. Yet, they are the lifeblood of corruption investigations and without their evidence prosecutions for corruption cannot succeed. The draft enabling legislation contains some suggestions, but others are working on the matter with greater dedication and expertise than Accountability Now has been able to muster, given its limited resources. Attention is drawn to the publicity received by others active in the field of improving the lot of whistleblowers in SA in Daily Maverick: https://www.dailymaverick.co.za/article/2022-07-31-activists-gather-to-remember-babita-deokoran-and-demand-a-protection-action-plan/? It is at the same time plain that whistle-blowers are still regarded as impimpis by some in authority. See: https://www.politicsweb.co.za/politics/dr-tim-de-maayer-gets-written-warning-for-his-open?utm_source=Politicsweb+Daily+Headlines&utm_campaign=ebb63e976a-EMAIL_CAMPAIGN_2022.

11.11. Cynthia Stimpel, the SAA whistleblower, of Whistleblower House and Accountability Now who has written a chapter in the KAS sponsored book titled  “Countering the Corrupt”, https://accountabilitynow.org.za/countering-the-corrupt/, has also contributed to this submission.

11.12. It is urgent that attention be given to improving the legislative framework for the protection of whistleblowers. This step does not require a constitutional amendment but it does require engagements with those mentioned by Mark Heywood in his article referenced in paragraph 11.10 above and especially with the “White Paper” produced by GIBS.

11.13.It would be sensible to study NTRs around the world and especially their introduction in developing countries like Kenya before embarking upon the legislative reform that is necessary to add NTRs to the armoury of the criminal justice administration in SA. A great deal of careful research is required to get this novel methodology in place on a basis that is successful in SA. The work of Colette Ashton and those who interact with the OECD at Primerio is of relevance to the consideration of NTRs. See https://accountabilitynow.org.za/graft-settlements-time-for-south-africa-to-join-the-global-movement-towards-non-trial-resolutions/. And https://mg.co.za/opinion/2022-06-12-taking-aim-at-corruption-and-bribery/

11.14. The contributions of Stimpel, (whistleblower protection) Ashton and Primerio (NTRs) to this submission are attached marked “A” and “B”

  1. The way forward

12.1. The final paragraphs of the explanatory memorandum that accompanied the drafts published by Accountability Now in August 2021, while still valid, require some amplification.

12.2. In the last year there have been developments that justify accelerated attention to the reform of the criminal justice administration to better equip it to counter serious corruption and to rake back the loot carried off by the corrupt, including those who were involved in the serious corruption of State Capture.

12.3. The sub-committees of the NEC of the ANC are giving attention to recommendations for reform, as was announced by ANC spokesman Pule Mabe on the eve of the ANC policy conference held in July 2022.

12.4. The text of the media announcement made by Mabe is available here: https://www.politicsweb.co.za/documents/anc-will-deal-honestly-and-openly-with-zondo-commi. Of particular relevance in the current context is his statement that:

“ the NEC Peace and Stability Committee and the NEC Constitutional and Legal Affairs Committee are together considering the recommendations around a new anti-corruption agency, the protection of whistle blowers and deferred prosecution agreements, among others.”

12.5. It is hoped that the suggestions by Accountability Now have received the attention of the two sub-committees. The have been emailed to Mabe with a request that he make them and this submission available to the members of the committees.

12.6. The DA has moved ahead from its earlier position on the necessary reforms and has given instructions to the parliamentary legal drafting team to prepare its version of the reforms which hopefully ought to be not unlike those offered by Accountability Now. https://accountabilitynow.org.za/by-george-shes-got-it-the-das-breytenbach-lauded-for-supporting-radical-reform-of-the-npa/.

12.7. The EFF continues, in line with its manifesto, to decry corruption https://www.britannica.com/topic/Economic-Freedom-Fighters.

12.8. The stance of the IFP in favour of the Ch9IC suggestion by Accountability Now remains steadfastly unchanged.

12.9. The economy of SA has changed for the worse in the last year. Inflation is higher than it has been for fourteen years, stoked by higher fuel and food prices. Poverty and unemployment are at record levels and a former head of state, on whose watch SA made more money than was spent, warns against an “Arab Spring” in SA due to the dire state of financial and social distress in which the poor and the vulnerable member of SA society find themselves. https://www.youtube.com/watch?v=CkJApgpJ15w. Recouping the loot of state capture could be used to alleviate poverty or even fund a basic income grant.

12.10. The FAFT has placed an October 2022 deadline on action needed to avoid grey listing of SA How it happened that the Guptas may actually end up in… (dailymaverick.co.za). And https://www.businesslive.co.za/bd/opinion/letters/2022-07-19-letter-grey-listing-would-turn-sa-red-with-wrath/.

12.11. The national cabinet appears to be paralysed or at least dithering in the face of the recent developments and perhaps because of pre ANC election manoeuvring and factionalism https://accountabilitynow.org.za/ramaphosa-presidencys-dithering-over-rampant-corruption-is-the-stuff-of-legend/.

12.12. Recent developments around the protection of whistle-blowers and the development of NTRs in SA are sketched in the documents attached to this submission marked “A” and “B”.

12.13. The National Assembly is under a constitutional duty to act urgently to reform the criminal justice administration by taking steps for the necessary legislation and constitutional amendment to be prepared as rapidly as is humanly possible in order to arrive at a best practice solution to a long-standing problem. As all major political parties that are represented in the National Assembly are ad idem that there is a need for reform, the debate concerning the form of the new legislation is overdue with such steps as have been taken lacking in urgency and penetration. It is two years since the NEC of the ANC instructed cabinet to attend to reforms urgently.

Accountability Now, August 2022.   

(www.accountabilitynow.org.za)


ATTACHMENT A

CONSTITUTIONAL REVIEW COMMITTEE – SUBMISSION ON WHISTLEBLOWER CHALLENGES AND
PROPOSED REMEDIES – Author: Cynthia Stimpel


Problem Statement:
Growing accounts of corruption across South Africa’s public and private sectors have highlighted the
role of the whistle-blower, an actor who often lies at the core of uncovering unethical corporate or state conduct. The accounts of whistle-blowers in the civil and criminal courts, the media and at investigations like the Zondo Commission along with the tragic assassinations of whistle-blowers like Jimmy Mohlala, James Nkambule and, more recently, Babita Deokaran show what is at stake for both whistle-blowers and society. It is arguable that without the impetus of whistle-blowers, the detailed investigations, the evidence of witnesses and experts, the laying of charges, the judgements of courts and commissions, the findings of innocence and guilt, and the (lamentably infrequent) prosecution of those responsible would have been stymied. (GIBS Whitepaper,2021)

Repercussions for Whistle-Blowers through the deficiencies in the PDA Legislations

Whistle-blowers all too often suffer the extreme repercussions of society once they blow the whistle. They become the pariahs, outcasts, treated like lepers. Many avoid their company and even speaking to them. They are made out to be liars, disloyal to their peers, colleagues and places of employment; charges against them are trumped up, they are alleged to have committed misconduct, they are ‘gas-lit,’ labelled as troublemakers, non-team players, poor performers etc.


The plight suffered by whistle blowers can be extreme: Some have lost homes, lost jobs, lost both current income and future income. Whistle-blowers lose self-confidence; they start doubting themselves. Many go through mental depression and have to consult trauma counsellors, psychologists and psychiatrists. Some lose friends, families, spouses, children. Some never recover and some even commit suicide. Some are assassinated – killed for speaking the truth.


Through surveys and research conducted by universities and civil society organisations, and through speaking to many whistle-blowers, in South Africa in particular, one finds that the whistle-blowers are indeed faced with challenging situations as listed below. They are not fully protected by the current Protected Disclosures Act.


Here are some of the shortcomings:
There is no dedicated whistle-blower NGO or Section 21 or Chapter 9 organisation specifically set up to deal with disclosures. There is no platform or agency.

The Protected Disclosures Act of 2000 and the Amendment of 2017 are still inadequate. The
PDA and PDAA has not served their intended purpose. It was designed as a “workplace
remedy.”

There is a lack of accountability in the PDA for corporate entities if they fail to implement the measures to alleviate the plight of whistle-blowers. There are no consequences for the perpetrators.

The legislation lacks a mechanism that can oversee the implementation of the law.

There is no confidentiality for the whistle-blower or diligent handling of reports and keeping
their anonymity.

Industry regulators need to take a stronger, clearer stance on ethics and compliance.

There is no whistle-blowing ombudsperson or regulatory body with jurisdiction over companies to ensure they do the right thing.

The majority of companies victimise and intimidate whistle-blowers. The big companies
always win.

There are no support systems – The whistle-blower suffers in all spheres of life: Health –
physical and mental; financial, rejection, depression, ostracisation, loss of dignity, loss of
self-worth, their place in society.


The contentious issue is financial support for whistleblowers. The tendency for disputes and legal cases to continue for months into years, the costs of the small person fighting the bigger corporates, has a long-term impact on their financial resources. The legal fees continue to accumulate and their debt is increasing while their employers drag the matters to courts and adopt delaying tactics at every turn.

The legal process is skewed towards the employer. It is only when organisations such a OUTA, PPLAAF and Corruption Watch enter the fray to assist whistle-blowers, that they are able to cope with the financial strain of the legal battles.

Many have experienced that besides the legal support, without a fixed income they lack the finances to continue to live and provide for their families. They not only need money for lawyers, but also a support structure:

Suggested Solutions and Recommendations
The research undertaken by the Gordon Institute of Business Science (GIBS) in their published white paper in November 2011, motivated ten recommendation which are listed below:

Prioritise and focus executive attention on actively building an ethical culture that welcomes whistle-blowing

Actively involve non-executive members of the board

Prioritise organisational communication and training on whistle-blowing

Make it easy and safe to blow the whistle

Take steps to avoid whistle-blower abuse

Monitor and manage investigations

Take action against unethical conduct

Regularly communicate the outcomes of whistle-blowing management

Support NGOs dedicated to working with whistle-blowers

Honour and celebrate whistle-blowers

In a recent study and survey completed by Corruption Watch (Daring to Act, Dec 2021), they recommend that the findings of this study should be used to inform and improve systems, policies and programmes that could lead towards the eventual reduction of corruption in our society. They therefore recommend the following:
• Implement and establish an agency, in line with proposals contained in the National Anti- Corruption Strategy, to advise and support whistle-blowers. This mechanism should provide whistle- blowers with legal, financial and mental health support. It should also assess the security risks faced by whistle-blowers and make recommendations to law enforcement agencies on the necessary protection that is required.
• Leading to the establishment of the above-mentioned agency, in the meantime the South African government should allocate money from the Criminal Assets Recovery Account Fund towards financially supporting whistle-blowers who are seeking legal, security and mental health support.
• Steps should be taken to ensure that individuals or institutions who are found guilty of intimidating or harassing whistle-blowers for their disclosures are criminally sanctioned, and/or are subject to paying personal fines towards a whistle-blower support fund, or organisations established to support whistleblowers. Similarly, law enforcement agencies who are found to be derelict in their duty of protecting whistle-blowers should face penalties, and officials overseeing these matters held personally liable.
• Serious conversations should be held on and consideration given to compensating whistle-blowers for their acts of public service, and
• All sectors of society need to take responsibility for embarking on public awareness and education programmes related to whistle-blowing, as well as actions that would de-stigmatise the act of making disclosures.

Defend our Democracy hosted the conference on 1-2 July 2022, for democratic renewal and change.
The conference envisioned a new politics that would enable people’s power. A declaration was adopted in the presence of individuals and representatives of over a hundred organisations at the conference.

Extensive discussion was held regarding the findings of the State Capture Commission , and hence the following plan of action has evolved on tackling state capture and corruption(DOD Conference 1- 2 July 2022):
Advocate for civil society to have a comprehensive and coherent response to the Zondo Commission’s report and recommendations before October 2022.

In consultation with other civil society organisations, develop a monitoring and tracking system on the implementation of the Commission’s recommendations.

Pledge support to the National Prosecuting Authority (NPA) as well as step up pressure on the need for prosecutions.

Work with all whistle blower organisations to finalise a plan to support and protect whistle-blowers.

Develop popular versions of the Commission’s reports and recommendations for usage by civil society organisations in public outreach work.

Engage the private sector on reforms needed to eradicate state capture from its own ranks.

There should be a special focus on the companies implicated by the Zondo Commission report.

Legislation and support in other countries:
The United States of America, have the False Claims Act and the Securities Exchange Commission of the United States (SEC), which is authorised by Congress to provide monetary awards to eligible individuals who come forward with high quality original information that leads to a Commission enforcement action in which over the amount of US$1, 000,000 in sanctions is ordered. The range for awards is between 10% and 30% of the money collected.

United Kingdom – Compensation is assessed on losses suffered by the whistle-blower; there is no reward for disclosures. Requirements must be met, including that the disclosure is of a type that is protected. The whistle-blower must have a reasonable belief that the disclosure is made in the public interest. Large pay-outs are possible in the UK depending on the nature of the losses being claimed. The other type of claim is for suffering detriment, for example, being denied training opportunities, demotion, or refusal of a promotion. Compensation for injury to feelings can be claimed under detriment but not unfair dismissal. Notwithstanding this, if whistle-blowers are suing for unfair dismissal, then they can also seek compensation for injury to feelings by pursuing an additional claim for any detriments they were subjected to before or after dismissal.

Whistle-blowing in the UK is less lucrative than in the US. Essentially one system rewards for whistle-blowing and the other compensates for losses. Some argue that the U.S. system is preferable because people are rewarded for coming forward rather than compensated for the adverse consequences of whistle-blowing.

In mid-April this year, the German Federal Ministry of Justice published a draft bill – the Whistle- blower Protection Act (Hinweisgeberschutzgesetz / HinSchG) – which should be in place by the end of this year. Its aim is to expand the protection for whistle-blowers, which is currently considered insufficient by both EU and German legislators. (EU Directive -Germany, 2022).

The HinSchG stipulates that in addition to these internal reporting channels, an external reporting channel must also be established by the federal authorities. Thus, a separate unit is to be created at the Federal Office of Justice (Bundesamt für Justiz), which is responsible for the receipt and processing of reports from whistle-blowers. It will serve as a central contact point for whistle- blowers, check the validity of whistle-blower’s reports as a first step and then initiate further follow-up measures with the employer. In Schleswig-Holstein a ombud to protect whistle-blowers exists to preserve anonymity of whistle-blowers ( see Countering the Corrupt by Paul Hoffman page 87).

SUMMARY, OBSERVATIONS AND CONCLUSION

Reviewing the research and studies published on whistle-blowers, their plight and the gaps in the
current PDA legislation, there has been a consistent recommendation to establish an independent
Whistle-blowing Commission, which should enjoy the protection of its independence by having a
Chapter 9 status, as defined by our Constitution.

The recommendations made by the Active Citizens Movement to the SCC in March 2021, specifically
makes a recommendation to have this commission operate similarly to the Competition Commission.

In light of the aforementioned portions of the Competition Act, and when drawing a parallel to the
shortcomings of the PDA, it stands to reason that the PDA is in desperate need of legislative transformation to achieve the establishment of an independent commission. However, in utilising an established model such as the competition commission and tribunal, there is a practical solution to resolving the shortcomings of the current whistle blowing legislation.

The PDA lacks an independent mechanism for implementation and enforcement, and there is a collective view that the establishment of a framework similar to that of the Competition Legislation or a Chapter 9 Institution, will ensure that the object and purpose of the PDA is achieved.

A whistle-blower ombudsperson or commission should have the protection of its independence by
having Ch 9 status.


REFERENCES

GIBS White Paper on Whistleblowers -https://www.gibs.co.za/news-events/news/pages/cfbe-%20whistleblowing%20online.pdf
Corruption Watch Research – Dare to Act -https://www.corruptionwatch.org.za/wp-content/uploads/2021/12/Whistle_Corruption-Watch_FINAL_9Dec2021.pdf
Defend our Democracy Conference http://defendourdemocracy.co.za/wp-content/uploads/2022/08/Final-Programme-of-Action-Defend-our-Democracy.pdf
Active Citizens Movement Submission to SCC on 30 March 2022
Countering the Corrupt – https://accountabilitynow.org.za/corruption/
https://www.employmentlawworldview.com/implementation-of-the-eu-whistleblowing-
directive-in-germany-latest-position/
Active Citizens Movement Submission to the State Capture Commission – 30 March 2021
Recommendation on a Commission like the Competitions Commission: Advocates – RBG Choudree SC, Jazmina Singh, Sanjuri Naidoo.
https://lhllaw.co.za/whistleblower-protection/ A critical analysis of the ACM’s submission to
the Zondo Commission

Countering the Corrupt by Paul Hoffman
https://accountabilitynow.org.za/?s=countering+the+corrupt&submit=Search


ATTACHMENT B

ACCOUNTABILITY NOW REPRESENTATIONS TO THE SOUTH AFRICAN CONSTITUTIONAL REVIEW COMMITTEE AND JUSTICE PORTFOLIO COMMITTEE:

NON-TRIAL RESOLUTIONS (NTRs)

Authored by

Colette Ashton (Director, Accountability Now), Michael-James Currie (Director, Primerio), John Oxenham (Director, Primerio)[1]

Abbreviations

Anti-Bribery ConventionOECD’s Convention on Combatting Bribery of Foreign Public Officials in International Business Transactions
DPADeferred Prosecution Agreements
NPANon-Prosecution Agreements
NTRNon-Trial Resolution
OECDOrganisation for Economic Co-operation and Development
OECD Recommendations2021 OECD Recommendation for Further Combatting Bribery of Foreign Public Officials in International Business Transactions
SA NPASouth African National Prosecuting Authority
State Capture CommissionJudicial Commission of Inquiry into Allegations of State Capture, Corruption and Fraud into the Public Sector Including Organs of State
UNCACUN Convention Against Corruption
WGBWorking Group on Bribery in International Business Transactions

Introduction

  1. After a period of stagnation, which has left South Africa behind international trends in anti-corruption enforcement, South Africa now has an opportunity to join the global movement toward increasing anti-corruption enforcement rates. Serious corruption is a uniquely difficult crime to prosecute in a complex globalised economy in which beneficial ownership can be concealed using multi-layered chains of inter-jurisdictional corporate structures. Innovative legal tools are required to address the challenges of prosecuting serious economic offences in a 21st century globalised economy – making more effective use of the SA NPA’s limited resources, while maximising the net gain for the South African Treasury.
  2. A gap in South African law that we wish to address is ‘the absence of a law, meaningfully enforced, which incentivises companies to enforce effective internal compliance measures at their own expense’.[2] This is out of step with international best practice and has arguably resulted in a corporate culture of non-compliance with anti-corruption rules and norms.
  3. Most notably, the implementation of what we term a non-trial resolution (NTR) framework is, together with other tools such as an enhanced whistle-blower framework (which is discussed further in attachment “A” to these submissions), essential if South Africa wishes to meaningfully combat corruption.

Importance of public-private cooperation in anti-corruption enforcement

  • Articles 12, 13, 37 and 39 of the UNCAC encourage States parties to offer various forms of leniency to cooperating persons, including reduction in punishment and/or some form of immunity from prosecution in line with the law of the States parties.
  • Public-private cooperation is the “invisible foot” method of combating corruption, which targets the weak points of corrupt networks.[3] Weak trust exists in these networks, partly because corrupt bargains cannot be enforced using the legal system, and partly because members of these networks are aware that their co-conspirators are inherently untrustworthy. Law enforcement authorities should exploit this weak trust by providing strong incentives for people to come forward with information. This is the rationale for the UN’s endorsement of public-private cooperation as a method to combat corruption.[4]
  • As discussed below, NTRs enhance public-private cooperation.

Calls on South Africa to Adopt an NTR Framework

  • The use of NTRs is a key recommendation contained in the State Capture Commission.[5]
  • NTRs are also a central feature of the recently published OECD Recommendations.[6]
  • The OECD Recommendations serve to “address challenges, good practices and cross-cutting issues that have emerged in the global anti-corruption landscape since 2009.[7] As a Member State to the OECD Anti-Bribery Convention,[8] South Africa would be well advised to implement the OECD Recommendation
  • While South Africa is not a member of the OECD, it is signatory to the Anti-Bribery Convention. As a party to the Anti-Bribery Convention, South Africa would be well advised to implement the 2021 Recommendation.
  • Parties to the Anti-Bribery Convention undergo a rigorous peer review on a regular basis, to measure Member States’ adherence to the Convention and its Recommendations. Through these examinations, the Working Group on Bribery prepares evaluation reports which are publicly posted on the OECD website. In recent years, the Working Group has focused its reviews on Member States’ enforcement of their anti-corruption laws.  Importantly, a Member State cannot veto the reports formulated by the Working Group.
  • Drago Kos, Chair of the OECD Working Group, has commented that the Working Group is satisfied with the anti-corruption and bribery legal framework in South Africa as well as the institutions responsible for the detection and enforcement of such cases, but that it is deeply concerned about the lack of enforcement. 
  • In 2018, the Working Group recommended that “South Africa significantly step up efforts to detect, investigate and prosecute foreign bribery”. [9]
  • Per the Recommendations, Member States should consider using a “variety of forms of resolutions” in the resolution of “criminal, administrative and civil cases with both legal and natural persons.[10]

What Are Non-Trial Resolutions?

  1. NTRs are ‘any agreement between a legal or natural person and an enforcement authority to resolve bribery cases without a full trial on the merits of the allegations either before or after conviction (e.g. plea deals) or a non-conviction mechanism (e.g. non-prosecution or deferred-prosecution agreements)’.[11] Non-conviction-based NTRs are a system of structured, differential incentives for legal and natural persons implicated in corruption to voluntarily disclose corrupt conduct, disgorge and remediate.[12]
  2. NTRs are defined by the OECD Recommendations as “mechanisms developed and used to resolve matters without a full court or administrative proceeding, based on a negotiated agreement with a natural or legal person and a prosecuting or other authority.”[13]
  3. There are five main forms of NTRs which countries may consider in the creation of formal NTR policies:
    1. Termination of an investigation without prosecution or other enforcement action with imposition of sanction and/or confiscations (i.e., a declination/NPA-like resolution);
    1. Suspension, deferral or withdrawal of prosecution or other enforcement action, subject to the fulfilment of specific conditions (i.e., a DPA-like resolution);
    1. Resolution resulting in a decision imposing sanctions without criminal conviction (i.e., civil/administrative-like resolutions);
    1. Resolution with conviction or tantamount to a conviction, but without an admission or finding of guilt (i.e., a Patteggaimento-like resolution); and
    1. A Plea agreement, or equivalent resolution, which requires the defendant’s admission of guilt (i.e., plea

Benefits of NTRs for Enforcement Agencies

  1. NTRs reduce government resources spent on lengthy investigations and prosecutions.
  2. NTRs allow for resolutions to be concluded simultaneously in multiple jurisdictions, which multi-jurisdictional resolutions are impossible without them. The use of NTRs would give South Africa a seat at the negotiating table at which decisions are made about the division of global penalties, which regularly amount to billions of US dollars.
  3. Peter Solmssen, former general counsel for Siemens, a German multinational conglomerate involved in the first multi-jurisdictional resolution in 2008, says: ‘The power to allow the defendant to settle without a finding of guilty is a powerful card in the hands of the prosecutor. They can use that power to extract concessions from corporate defendants. The potential collateral damage from a finding of guilt can be so enormous that any corporation given the choice will accede to many things that prosecutors want in exchange for being allowed to avoid a guilty plea.’[14]
  4. Companies which receive NTRs typically disclose the results of their internal investigations to prosecutors. This information can be used to prosecute responsible individuals.
  5. NTRs improve anti-corruption enforcement rates, strengthening the rule of law.

Benefits of NTRs for Companies

  • Companies prefer to avoid a finding of guilty, which may give rise to: (1) breach of financial covenants in loan agreements; (2) difficulty in obtaining ongoing finance; (3) exclusion from public procurement contracts (particularly if multilateral development banks debar a company and other multilateral development banks exercise cross-debarment rights); (4) shareholder class actions based often on loss in share value due to any public findings of corrupt conduct; and (5) for individuals, declaration of convictions with travel and visa issues.
  • Providing companies with several key benefits including:
    • providing corporations with certainty, by allowing them to resolve cases of corporate crime timeously. 
    • enabling companies to resolve matters across multiple jurisdictions at once, avoiding the problem of double jeopardy.
    • providing a framework which allows a company to cooperate with enforcement agencies.
    • reducing a company’s exposure to bad publicity and reputational harm.
    • rewarding companies for investing in effective anti-corruption compliance systems.

International Trends and Examples of NTRs

  • NTRs first arose within the ambit of the global anti-corruption discourse in the early 2000s when the US Department of Justice innovated a new method for enforcing corruption charges in terms of the Foreign Corrupt Practices Act. Since then, other countries, including the UK, the Netherlands, Brazil, Argentina, France, Israel, Japan, Chile, Canada and Australia, have also developed a legal framework to provide for NTRs. NTR-type instruments are also used to settle corruption cases out of court in countries including Malaysia, Norway and Germany.[15]
  • France was a country which was constantly criticised by the Working Group for failing to enforce its anti-corruption laws until it implemented an NTR framework in the form of the Convention judiciaire d’intérêt public.[16]
  • Research by the OECD[17] and UNODC[18] states that NTRs are increasingly important in resolving corruption cases. The graphs below, studied together, suggest that the use of non-conviction based NTRs is a driver of increased global anti-corruption enforcement.

Figure 1: NTRs are a driver of improved anti-corruption enforcement

Source: OECD, 2019.

Figure 2: The use of NTRs for legal and natural persons

Source: OECD, 2019.

  • Well-known examples of NTRs include the Siemens AG NTR concluded between the United States and Germany in 2008, the Standard Bank NTR concluded following self-reporting in 2015, and the Rolls-Royce NTR concluded between Brazil, the UK and the USA in 2017.
  • According to the 2019 OECD study, the ten largest foreign bribery enforcement actions among parties to the Anti-Bribery Convention are as follows:[19]

                                    Source: OECD, 2019.

  • Each of the countries listed in the table above was able to use some form of NTR to reach a global settlement with the company at issue and share in the significant monetary recovery.
  • Some noteworthy recent penalties paid following the conclusion of an NTR, include:
    • Goldman Sachs Group Inc.: $3.3 billion in 2020.
    • Airbus: $2.09 billion in 2020.
    • Petrobras: $1.78 billion in 2018.
    • LM Ericsson: $1.06 billion in 2019.
    • Glencore: $700 million in 2022.

The Position in South Africa and Way Forward

  • Currently, South African law caters for one form of NTR, the guilty plea. Guilty pleas are governed under section 105A of the Criminal Procedure Act 51 of 1977. Non-conviction based NTRs would be a valuable addition to a prosecutor’s toolbox, suitable for companies that are capable of reform.
  • In a recent Masters thesis at the UN-founded International Anti-Corruption Academy, a researcher concluded that:

“South Africa should adopt a NTR framework for legal and natural persons. Such a framework should be carefully calibrated to maximise practical efficiency, while embodying constitutional values of accountability, openness and responsiveness. This would require a transparent framework that harnesses all available forms of NTRs, from administrative enforcement to DPA-type instruments

Evidence yielded in NTRs should be made available to prosecute primary beneficiaries of corruption. Some successful prosecutions to trial and jail are essential to the legitimacy of a broad leniency framework. This imperative should be balanced with a healthy dose of political realism – a balance needs to be struck between accountability for corruption and political stability in a young democracy. ‘(I)nstitutional changes cannot be implemented if their implementation pushes political stability below the tolerance limit of that society (Khan, 2018, pp. 636-655).”[20]

  • There are several different models that South Africa could consider:
    • UK-style Deferred Prosecution Agreements in terms of the UK Bribery Act, used in conjunction with statutory provision for automatic criminal liability for companies implicated in corruption; or
    • French-style administrative enforcement in terms of Sapin II, in conjunction with an agency that provides guidance to companies on effective anti-corruption compliance systems; or
    • Brazilian-style administrative leniency agreements for legal and natural persons in terms of the Clean Companies Act; or
    • A range of US-style NTRs, including Non-Prosecution Agreements and Declinations, in terms of US Department of Justice policy and the Speedy Trial Act.
    •      UCT academic Lauren Kohn proposes the introduction of an administrative NTR system, ‘inspired by the

widespread international adoption of various species of non-trial resolutions (NTRs)’ but ‘anchoredwithin the SA context’.[21]

  • The choice of appropriate model should be based on empirical research on what could work best in the South African context, given the unique types of corruption prevalent in South Africa, our particular socio-economic context, political history and legal dispensation.
  • The Recommendation 6 Network of experts from civil society, academia, business and the legal profession, developed a list of principles which should govern the use of NTRs, summarised below:
    • NTRs should embody principles including transparency, fairness and accountability.
    • Countries should develop a clear and transparent framework for NTRs.
    • Information about the contents of NTRs entered into between authorities and legal/natural persons should be published.
    •  Authorities should engage in public discussion and evaluation of NTRs. 
    •  Criteria for voluntary self-disclosure of misconduct; cooperation with authorities and remediation measures should be clear and published in advance to satisfy the principle of the rule of law.
    •  Authorities should publish clear information regarding advantages that may be obtained by alleged offenders entering into NTRs, to serve as incentives for corporations to self-police and self-report.
    •  Sanctions must be ‘effective, proportionate and dissuasive’ in line with Article 3 of the OECD Convention.
    •  Countries should consider remediation for victims of corruption.
    •  NTRs must be subject to appropriate oversight and review.[22]
  • Any NTR framework introduced in South Africa will have to comply with the strict precepts of our Constitution. NTRs should be underpinned by principles which promote legitimacy and should be premised on transparency, fairness and accountability.[23] These principles must encapsulate “individual accountability, due process, non-derogation from fundamental freedoms, transparency and access to information about the settlements reached.”[24] There should be clear criterion for the voluntary disclosure of misconduct, cooperation with authorities and the advanced publishing of remedial measures in order to satisfy the rule of law.[25]
  • Another important principle that underpins the efficacy of any NTR framework is the oft quoted ‘carrot and stick’ analogy. NTR systems will only be effective in countries which have the capacity and ability to carry out enforcement actions and effectively prosecute wrongdoers. As explained in the OECD Report, “the carrot is only as enticing as the stick is menacing.[26] If a NTR framework is implemented in South Africa, businesses must be alive to real risk of prosecution by the SA NPA. Business must have an incentive to enter into an NTR.As such, an effective NTR framework goes hand in hand with an effective prosecuting agency. If effective investigation and prosecution is compromised, businesses will have little incentive to settle matters and instead take their chances in fully defending a matter.
  • An NTR framework that is poorly structured has the inherent risk of undermining the deterrence of corporate crime and may erode the public’s already tainted perception of the criminal justice system and NTRs should meet a certain criterion to be legitimately recognised amongst the public.
  • An effective system for NTRs should cater for judicial oversight in order to ensure complete transparency, accountability and separation of powers in enforcement agencies.

Conclusion

  • NTRs may occur at any stage of an investigation or prosecution of an offence and may impose significant sanctions on parties, including financial penalties, disgorgement of profits, compliance and reporting obligations for a multi-year period, disbarment, and any other relevant sanctions. Importantly, NTRs do not rule out the possibility of prosecution and imprisonment entirely and enforcement authorities may still impose criminal sanctions on individuals. They are simply a mechanism to resolve a matter before trial.  As the Working Group has noted, adopting a form of NTR often allows a country to significantly increase its anti-corruption enforcement efforts, particularly with respect to legal entities, and has the additional positive effect of encouraging companies to cooperate with law enforcement and turn over evidence that can be used to prosecute individuals who engage in the wrongdoing.
  • South Africa is urged to implement an NTR framework as contemplated in the Zondo Report and in the OECD Anti-Bribery Recommendation. The use of NTRs is not only consistent with international best practice, but the empirical data demonstrates the clear and tangible benefits of NTRs for prosecuting agencies.
  • South Africa’s anti-corruption framework does not adequately cater for the different forms of NTRs required in order to ensure objective, transparent and effective public-private cooperation in order to tackle bribery and corruption.
  • While the precise scope and mechanics of an NTR framework in South Africa would need to be carefully tailored to ensure it is suitable – taking into account South Africa’s socio, political and economic climate – there are fundamental principles which should underpin such framework to ensure its efficacy.
  • Finally, an effective NTR framework will be somewhat dependent on an effective whistleblowing framework and therefore consideration of a whistle-blower framework should be considered in conjunction with an NTR framework.

*****


[1] The authors would also like to thank Frank Dorey (Past Director, Cape Law Society) Tyla Lee Coertzen (Primerio) for her assistance with review and research for this chapter.

[2] Ashton, C.F. and Spalding, A. 2020. The use of Non-Trial Resolutions to prosecute corruption in South Africa. At p 3.

[3] Lambsdorff, J. G. 2015. Preventing Corruption by Promoting Trust – Insights from Behavioural Science. Working Paper. Passau: Universitat

Passau at pp. 1-16. See also Lambsdorff, J. G. (2007). The Institutional Economics of Corruption and Reform: Theory, Evidence and Policy.

Cambridge: Cambridge University Press.

[4] UNODC; UNICRI, 2009. Technical Guide to the United Nations Convention Against Corruption, Vienna: United Nations at p. 118-119. Available at: https://www.unodc.org/unodc/en/treaties/CAC/technical-guide.html [Accesed 2 February 2021].

[5] Part VI Vol IV of the State Capture Commission Reports explicitly recommends that “government introduce legislation for the introduction of deferred prosecution agreements…”. Deferred prosecution agreements are the most common form of NTR framework that the South African legislature may consider implementing in South Africa.

[6] OECD, Recommendation of the Council for Further Combating Bribery of Foreign Public Officials in International Business Transactions, OECD/LEGAL/0378.

[7] Ibid at 3.

[8] By way of ratification as of August 2007 <https://www.oecd.org/daf/anti-bribery/WGBRatificationStatus.pdf>

[9] https://one.oecd.org/document/DAF/WGB(2018)42/en/pdf

[10] The OECD Recommendations at XVII.

[11] OECD. (2019). Resolving Foreign Bribery Cases with Non-Trial Resolutions: Settlements and NonTrial

Agreements by Parties to the Anti-Bribery Convention. OECD. Available at:

https://www.oecd.org/corruption/Resolving-Foreign-Bribery-Cases-with-Non-Trial-Resolutions.htm

[12] Ashton, C.F. 2021. Dismantling ‘the Machine: A Role for Non-Trial Resolutions in Anti-Corruption Enforcement in South Africa? Masters Thesis. International Anti-Corruption Academy. At p. 204.

[13] Ibid at 9.

[14] Solmssen, P. 2020. Electronic mail.

[15] https://www.dailymaverick.co.za/article/2022-07-06-corruption-amnesty-south-africa-must-look-to-non-trial-resolutions/

[16] See https://www.oecd.org/newsroom/france-s-achievements-in-the-fight-against-foreign-bribery-need-to-be-preserved-through-legislative-reforms-and-a-reinforcement-of-resources.htm.

[17] OECD. (2019). Resolving Foreign Bribery Cases with Non-Trial Resolutions: Settlements and NonTrial

Agreements by Parties to the Anti-Bribery Convention. OECD. Available at:

https://www.oecd.org/corruption/Resolving-Foreign-Bribery-Cases-with-Non-Trial-Resolutions.htm

[18] ‘Alternative legal mechanisms and non-trial resolutions, including settlements, that have proceeds of crime for confiscation and return’ note prepared by the Secretariat. CAC/COSP/WG.2/2021/CRP.1 (August 2021) available at: https://www.unodc.org/documents/treaties/UNCAC/WorkingGroups/workinggroup2/2021-September-6-10/CAC-COSP-WG.2-2021-CRP.1.pdf

[19] Ibid at 119.

[20] Ashton, C.F. 2021. Dismantling ‘the Machine: A Role for Non-Trial Resolutions in Anti-Corruption Enforcement in South Africa? Masters Thesis. International Anti-Corruption Academy.At p. 111.

[21] Lauren Kohn ‘The National Prosecuting Authority as Part of South Africa’s Integrity & Accountability Branch and the Related Case for an Anti-Corruption Redress System’ (2022) 12 Constitutional Court Review

[22] Recommendation 6 Network. 2018. Explanatory Notes Addressed to the Working Group on Bribery. [Online]
Available at: tps://www.nhh.no/globalassets/centres/cce/recommendation-draft-final.pdf

[23] Colette Ashton (2021) Dismantling ‘The Machine’: a Role for Non-Trial Resolutions in Anti-Corruption Enforcement in South Africa?’ International Anti-Corruption Academy, at 65.

[24] Ibid.

[25] Ibid.

[26] Ibid at 82.

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