This blog was co-authored by Caroline Cotton, Candidate Attorney.

Employers to put in place “adequate procedures” to prevent corruption

It has been almost one year since the establishment of the offence of failing to prevent corruption in section 34A of the Prevention and Combating of Corrupt Activities Act, 2004 (PRECCA), which came into effect on 3 April 2024. Since then, companies in the private sector and state-owned entities may be guilty of an offence if anyone associated with them gives, agrees or offers to give a gratification to secure business or a business advantage for that member.

There is a defence available to those alleged to have failed to prevent corruption: no offence is committed if the organisation has put in place “adequate procedures” to prevent such conduct.

Having had almost one year to bring your organisation’s anti-bribery and corruption policies and procedures up to standard, would your organisation escape liability under section 34A of PRECCA if, for example, an impropriety is discovered in a procurement relationship?

What are “adequate procedures”?

The courts have not yet interpreted what constitutes “adequate procedures” to prevent corruption for purposes of section 34A of PRECCA. There are no published guidelines, and regulations have not yet been promulgated to shed light on practical steps an organisation can take to guard against a conviction for failing to prevent corruption.

The language of South Africa’s offence in section 34A of PRECCA is largely based on the UK Bribery Act of 2010 and, therefore, organisations can look to the UK’s six principles for preventing bribery for guidance on what constitutes “adequate procedures” to prevent corruption under PRECCA.

Those six principles are:

  1. Adopt proportionate procedures in accordance with the organisation’s size and level of risk
  2. Ensure top-level commitment
  3. Conduct risk assessments periodically and document these.
  4. Carry out due diligences on any agents, intermediaries or suppliers
  5. Communicate prevention polices clearly and regularly with all stakeholders.
  6. Monitor, review and improve the organisation’s procedures based on new learnings and development.

Conclusion

With the failure to prevent corruption becoming an offence in section 34A of PRECCA, organisations should act immediately to ensure that they are taking reasonable measures to prevent corruption within their organisations. While the full scope of “adequate procedures” is still unfolding, businesses can start by using the UK’s established anti-bribery principles. By putting in place practical, proportionate measures, demonstrating leadership commitment, conducting regular risk assessments, and fostering a culture of clear communication, education and monitoring, organisations can protect themselves from legal risks and build a reputation of integrity. Addressing corruption proactively not only ensures compliance with the law but also strengthens the organisation’s reputation and long-term success.

Norton Rose Fulbright South Africa Inc assists clients in providing strategic and practical advice on designing, reviewing and implementing anti-corruption policies and procedures. Where there has been impropriety uncovered, NRFSA assists clients in investigating and taking appropriate remedial action to protect the organisation’s interests.